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!

TitaniumBev

What part of Croydon may I ask?

Haven't read the whole thread as this is a raw subject for me. We've just lost our house on the point of exchange after being fucked over by both our buyer and then our vendors. It has caused untold upset and stress. After our buyer's actions caused us to lose our vendors and for the whole chain to unravel (after 6 fucking months) I was so angry and upset it actually made me ill. You've got an agreement. Morally you should stick to it unless there is an absolute imperative reason why you can't. Legally you can do what you want. More's the pity.

However annoying it is for the vendor, you have to think of your own circumstances. If you have concerns, you would be foolish to go ahead. You presumably had every intention of proceeding: paid for a survey, have paid for a solicitor etc but now have cold feet. (This is normal, by the way.) You will be judged harshly, but should go with your instincts.

Oh, and we were not expecting to make a "profit" when we offered but can't afford a loss

How will you make a loss unless you sell immediately and the market collapses? You're planning to live in this house right?

I have to say I am very impressed at the morals of all of you who would risk taking a big hit & ending up in negative equity.

This is not a big hit. If the property market crashes it won't matter if you got 13k off your house you will still be risking negative equity.

Also thank God most of us do have the morals not to do this. Honestly most people would exchange because most people realise they have a moral responsibility to the other people in their chain. I genuinely would feel great guilt and wonder how much damage and hurt I had caused. You may be damaging the sale for a woman whose baby is due in weeks or a family who are desperate to emigrate to be with their elderly loved one. (deliberately emotive examples) You have a responsibility to these people, they are real people. I hope the EA blacklist you and I hope that property prices increase in the time you waste. This is FTB nerves and normal but really you are talking about loose change when it comes to a London home.

I'm wondering if it's really your DH who's got the cold feet and you're putting a brave face on things.

Not sure what your update adds OP. What you are suggesting is absolutely disgraceful and any decent person wouldn't do it.

Whatever happens I will come back and update for anyone who is interested

Why? Gloat? Tell everyone that you screwed over a chain of people? Turned people's lives upside down out of greed (because whatever someone's foster aunt says about the property market, this is about screwing more money out of someone, isn't it?)? Seriously, don't bother with the 'update.'

How much will your mortgage cost be compared to renting? Save the extra. Then the negative equity won't matter.

It's a shitty shitty thing to do, especially this late.

After skimming it does seem like people in/around London seem to be more cautious. I also think there are a lot of unrealistic posters who don't really believe property crashes can happen or don't understand what it's like to be buying at these prices in this era.

I live in S London zone 2. I've bought and sold in the last two years.

Does not change my response - just because various indices say prices are dropping, this does not mean you will be able to buy another comparable property for whatever percent less.

Also, to me, you stick your commitment at this point.

Chavtastic. Going through life oblivious to the impact your actions have on others. Only thinking about yourself. Geezus.

Scumbag antics

Sorry

I dont know if I'm a pessimist or if its different because I'm in Ireland, though it sounds like the same system, but I hear of this happening a lot- by vendors and buyers- goinv sale agreed and later jumping ship. I know someone it happened to on moving day, and another a few weeks beforehand - both were devastated but both knew the vendor/seller could and that no one can do something so huge if it's the wrong thing for them. It's the system that allows this non-committal 'commiting' to selling/buying. This is why no one sees it as a done deal until it is, and that includes land registry/deed issues etc- all of these things should be sorted before sale agreed is allowed.

OP if you were my friend I'd say go with your gut. No it is not ideal but having spent the last 6m regretting a house sale, I'd never advise someone to go through with something they didn't feel was right.

Given the rampant greed displayed by sellers since the boom started, all this talk about decency is unintentionally hilarious…

DH is a secondary school teacher, I'm a doctor

With morals like yours OP, I hope I never encounter either of you professionally or personally.

don't do it, my best friend had that happen to her with all her furniture on the moving van. It seriously affected her mental health, she still hasn't got over it. It was the person at the bottom of the chain, there was someone else too. She doesn't know why, there may have been a good reason, someone might have died, but to do it for no good reason, dreadful

YABU and dicks

Any money you think you can save, you’ll waste paying rent and another set of fees when you find a new property which may end up being the same or higher price.

You’re being greedy fuckers and deserve a giant karmic kick in the genitals

Do you get the impression that the OP hasn't read any of the replies??!

I would never do anything this shitty to people. £13k on a mortgage is fuck all. You are not going to be in negative equity because of £13k on a purchase.

OP - you sound incredibly immature and incredibly self centered. I genuinely hope you come back and read the replies of people who have been massively affected by scumbags who have done this to them in the past.

You made a commitment. It's not a £5 chest of drawers on the FB selling sites. FFS. You buy the house. End of discussion.

I'm very uplifted though by the number of people on this thread who agree with me that's it's an incredibly shitty thing to do and you wouldn't dream of doing it. Thank christ there are still decent people in the world.

It should be illegal to do this.

I don't think you understand what negative equity is. Are you taking out a very high mortgage to value? Negative equity isn't a fall in the notional value of the property (and this only ever crystallises at the point of sale/purchase) but is where you owe more in mortgage than the house is worth.

You'll start chipping away at the mortgage with every payment rather than paying that money to a landlord for nothing. This increases your equity.

If you thought property prices were going to crash so far in the next 4 years it would leave you owing more than the average value of a Croydon property why on earth did you start the process at all? Nothing has happened since January to indicate that might be the case. Q1 property values are always slightly lower because most people move over spring/summer. Q2 figures could just have easily floated above what you're about to pay and you're already winning.

For intelligent professionals you don't sound very savvy.

Bad karma follows you around.

If you pull out OP I hope prices go up just to shit all over you. Nasty thing to do. Selfish.

OP - you sound incredibly immature and incredibly self centered

agree with this and it's surprise as you are both in caring professions (assuming medical doctor)

The whole chain will be inflated

Depends if the last house is downsizing or being sold due to death - but if one reduces by 10% and they all reduce by 10% then the final house, probably brought for pennies 50 years ago I'll still be quids in.

Inflated prices only benifits the banks

FWIW estate agents sell houses, they want to sell you a house. Rubbish talk bout agents refusing to deal with you when you have the money to proceed

I wish this wasn’t legal here. I can’t believe it’s possible for parties to pull out after the other parties may have spent thousands and thousands on legal costs, surveys etc.

It can be absolutely heartbreaking as there’s every chance someone in the chain may lose the house of their dreams as well as a huge chunk of their savings wasted on fees for a sale that fell through, through no fault of their own.

Amazingly, parents have been in the position where it’s actually fallen through on completion day! No idea how solicitors let that one happen

As you can see a lot of people have experienced what you are about to do and as you can tell it’s utterly horrendous. It’s such a shame the law will allow you to do this and potentially cause a whole chain to collapse causing massive stress and expense to people because you think your house might have dropped in price slightly. It’s greed, and you should feel ashamed of yourself.

I also think there are a lot of unrealistic posters who don't really believe property crashes can happen or don't understand what it's like to be buying at these prices in this era

Or is it that there are a lot of realistic Londoners who’ve lived through a couple of crashes and know how they affect London property market.

Late 80s - crash followed by recession - London prices plateaued and then continued to rise. 2007 - major financial crisis - prices plateaued and then rose sharply. Houses in central London are selling often now for near double what they were pre-financial crisis.

Do we have another financial crisis in the offing? Nope. Not for the moment. We have a crap economic outlook thanks to Brexit. We have a very naive section of the population ignorant of the consquences of a hard Brexit and a crazy government. A cliff edge hard Brexit could potentially crash the economy. But the demands of the Irish border make a hard Brexit increasingly unlikely, and both parties seem to be wising up to the potential of economic disaster.

There is massive pressure on the London housing market from the sheer volume of people who want to live here, and that inevitably means rising prices.

You would be foolish to sell if and when you move abroad without knowing if you want to return. Far more sensible to rent the house out. Once you step off the London property ladder you’re no longer indexed into London prices which could potentially mean major downsize if you ever need to come back.