To pull out of house purchase so close to exchange or gazunder?

[TitaniumBev]

Totally miserable - any advice/views/abuse welcome!

We're FTB's, both 30, scrimped for years to get deposit together. We both grew up dirt poor & wanted to have a bit of security before children so are keen to get going now and sick of private renting.

Offer accepted on house end of Jan, the asking price was kite flying given location (Croydon). They wanted 460k we settled on 440k, only now due to exchange next week after delays (both sides, minor errors).

Since then though all the news around the economy & housing especially around London has been terrible. Monthly drops of around 1 - 3.6%. Terrible rics reports & rightmove data etc. Similar properties in the area are coming on for less but there is not a lot coming on so hard to judge. Properties hanging around for a long time.

I now feel the agreed price is too high, a lot has changed in 4 months and I think it's best to walk away. I know this will screw over the vendors & the chain but don't like DH's suggestion of asking for a reduction so close to exchange. He thinks we should at least give them the chance. (How lucky!!!) Prices seem to be down around 6% he reckons split and ask for 3% off. (£13,000 ish)

Its such a big transaction, the market looks soooo bad and its not dream house or anything. Should I walk or offer lower? I'm not going to over pay for a house just to be nice/honorable unfortunately.

URGH!

Btw OP, the stuff about EAs black listing you is baloney. In RL people know that buyers re-evaluate the market bedore exchange. Especially FTBs post Brexit, you’d be mad not to.

I’d carefully consider whether you actually want to buy this place though, because a £13k reduction is pretty insignificant, they may well agree it.

@stressed3000 ‘twas ever thus, in London. People not being able to afford the next rung and moving out. We did. The prices are eye-watering now but the demand is still there. The prices were eye-watering 10 years ago too, in comparison to 10 years before that.

It’s shit for FTB, no doubt, but I just don’t believe London will drop so significantly it can be called a bubble bursting.

I’m at americanlife being a LL and thinking property prices are a disgrace, though!

If you were buying in Scotland you wouldn't be able to do it this late in the game, if you did you would be responsible for all your sellers fees that occurred as a result of your decision. Much fairer system if you ask me

I don't want to derail, but how did this bizarre system develop in England in the first place, and why has there been no movement to change it?

I'm in the US in a state where you have to put a deposit down when you make the offer. There is a binding contract as soon as the offer is accepted. Pulling out at last minute would be breach of contract and often very expensive for the defaulting buyer.

The issue is that London is relying on first time buyers to keep the whole pack of cards from toppling and as a home owner I am ok with it toppling because I think it is just unsustainable that average homes are now costing almost half a million pounds

What planet are you on? Average homes in London cost a million.

risk taking a big hit & ending up in negative equity
as a PP has stated: Croydon housing market is most likely to flourish with the new Westfield and other gentrification happening so the chances of negative equity unless you are taking out a 100% loan are pretty much nill

i don't believe renting is dead money, we'd still be housing ourselves You are paying someone else's mortgage for them which is dead money when it could be paying off your own!

as planning to move abroad after 4 years (job contracts ending) would be free to do so.
You are drip feeding and here is the truth - you want the flexibility of renting till your contracts end. Well, you should never have offered on this home in the first place then.

£440K is a lot of money so you've saved well and obv earn a good whack whatever your background. My kids haven't had any financial help from family either and are unlikely to get any in the future. It's very unusual for parents/grandparents to be in that situation especially with the costs of care for elderly people now.

tatiana if a home is a flat then £500K for 2 bed new build would be an average London price. If it's a 3 bed house then you are correct at £1 million.

I’m surprised more PPs haven’t mentioned interest rates. I would be going for a fixed rate mortgage now. These low rates won’t be around on a year’s time and even a couple of percentage rises on a big mortgage will cost a bundle more than £13k.

I also echo PPs advice that Croydon is up and coming.

I genuinely don't know if this op is someone who really is as clueless as she is making out in terms of the housing market and actually believes the stuff she is posting, or she is just very scared to make a decision and frightened to commit so making crap up to justify her fear And knows deep down it's not true.

I mean surely she knows she can still move abroad, she would just rent thr property out. Surely she knows house values in croyden have not dropped 6 percent. Surely she knows mortgage rates may increase. Surely she knows spending the next year paying her own mortgage is better than paying someone else's.

I can't call it. Complete ignorance or total fear. Either way she's in a bad place and is doing herself no favours.🤔

I find it bizarre that people are so vocal about how shitty it is to pull out- if it was a marriage you would be told to walk about before sealing the deal if that's what you wanted to do. It's a huge amount of money and you shouldn't go ahead to save face.

Equally you shouldn't offer less- that really IS shitty.

Btw OP, the stuff about EAs black listing you is baloney

My siblings an EA- not in London- and they absolutely do warn their sellers off people who fuck about. Why wouldn't they?

How dreadful of you. You really do come across as a horrible, smug, idealistic, selfish worst type of FTB. House buying may be a business transaction, but you’re meddling in other people’s homes and lives.

We moved last year after living in the same house for 15 years. Our buyers (FTB) were pains in the arse, dragged their feet at every opportunity, tried to demand money off for non existent problems. I developed a tic due to the stress of it all and knowing that even after negotiating all of their bullshit, they could still pull out on a whim.

It’s true a flat is technically a ‘home’ but the OP is about a house and that’s what I was referring to.

OP. Can I ask what you & DH do? 440k is a big amount to come up with by 30 with no family help. Not relevant at all I'm just nosey!

NoSquirrels

I still think something has to change. I was born & raised here so my parents house that was 60k in the 80s is now worth 2m, I don’t see how that’s sustainable.

Average homes cost 1million

The big difference is that very few paid a million for that property in relation to their jobs. Most people get to having a house worth a million by equity, that’s the bit I think has changed now.

Btw OP, the stuff about EAs black listing you is baloney

Yeah, my ex NDN was guzundered at a similar point and the estate agent was complicit as they didn’t want their chain to fall apart.

London is far too big, far too many EA for anyone to care.

Btw OP, the stuff about EAs black listing you is baloney
not exactly true, EA earn commission on the sale, so don't really care about proportionally "small" price differences. In a sellers market, with no lack of buyers, they will strongly encourage going for the "safest" offer. A time waster cost them time, commission, fucks their targets. They don't care if you sell for £10k less, but they do care if they lose the sale.

ikeep- I agree there is nothing funny about screwing people over. But the OP’s not doing that any more than her seller was by asking for £440k.

Markets change, buyers get nervous. In RL sellers are usually grown up about it and either take the (in this case insignificant) hit, or go back to the market.

its not a game op-u didnt change your mind about a dress and want a refund-youre goin to mess up alot of peoples lives

nice that youre not losing money though good luck to you-and maybe fuck off abroad sooner so u dont fuck over anyone else

I think it is absolutely crazy that something that can produce such moral outrage is legal. Because most of the time we are not left to police ourselves through gentlemen's agreements.

In works OK because doing the right thing is usually in our best interests where the property market is concerned, we are not acting selflessly.

If the OP's best interests do not coincide with the chain, then I don't think moral outrage is appropriate. We are not acting morally or selflessly when we buy property.

what a lousy thing to do to the vendors. Have you no honour? My word is my bond? You were happy enough at the time. Just because you now think you could get a better deal is a low life way to negotiate house purchase

I do know the London market. We are landlords of a place in a suburb and honestly I hope the market changes because it is disgusting that a young coupe in their 30's are being lambasted for having doubts about buying an ordinary home in an ordinary commuter town outside London

Oh the irony.

a) Croydon is London for all intents and purposes

b) prices are being driven up by people who buy property and rent them out- like you americanlife

Pretty much exactly what I thought. Walk away, don't reduce

Are you reading the same thread, OP?

You seem fairly unfazed by dozens of posters saying that you should not shaft all the people counting on you to simply honour your own agreement.

Some people live by a basic 'do the right thing' code of behaviour, others don't. It's all falling on deaf ears isn't it?

Thanks for the responses. Pretty much exactly what I thought. Walk away, don't reduce.

OP, what responses have you been reading?

You already know what you're going to do. Fuck the sellers over. Not sure what you came on here for.

Oh, and shame on you.

You would feel comfortable with doing this? You obviously don't as otherwise you would not have asked for advice from this group. No one knows what the house market is going to do, even the experts won't commit. Nothing is going to change that drastically, I don't understand why you would think you are paying over the odds to be honest, seems like the market rate.

So op the real reason is that you can now afford a house in the area you actually wna to be in?