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!

A secondary school teacher in London can easily be on 40k & my 2 friends who are docs were on 45k in their late 20s. Only saying it was quite believable.

In reality it's unlikely to drop hugely in a year and you'll more likely find yourself getting similar or less for your money. Currently interest rates are amazing so a cheaper home at a higher rate seems a pointless move to me!

I hate flakey people in general but you're very naive. The "bubble" has been spoken about for as long as I've been an adult but no one can predict the future. Our last house was in negative equity for a couple of years but when we came to sell we'd made £35k. The year before we had anticipated making £10k if we were lucky.

It’s obvious that the OP absolutely does not care who it fucks over.

It doesn’t matter if it believes in karma or not, but karma will bite it right square in the arse one day.

not if they were a junior doctor and a main pay scale teacher but i assume they are in more senior positions.

By the age of 30?

I wouldn't if you don't the contracts withdrawn and property remarketed...

Wow I wish buyers ive dealt with IRL had the morals of you lot! We've been shafted many times over the years but it's a crap system that you have to play. I personally don't agree with it but if house prices have genuinely dropped since agreeing a sale and you're thinking about pulling out at the last minute, you've really got nothing to lose by reducing your offer. Just be prepared to lose the deal altogether.

I think you are a very inexperienced first time buyer. Understandable if you haven’t bought a property before. Prices are not dropping and Croydon is a hub. Wouldn’t be my choice but more affordable than other areas. Do not believe your own hype as you are the ones that will loose. But if it is more down to you have changed your mind and want another area be honest about it.

Our buyers did this to us but only because it had happened to them down the chain. We didn’t do it to our sellers despite it being a huge stretch as a result because I like to sleep at night.

“Interesting that one of the posters defending the OP is someone who has done this themselves. I can assure you that asking for a price reduction once a sale is agreed is every bit as greedy and grasping as if the seller decided at the last minute they actually could do with another ten grand. Deluded yourself if you like but it’s shitty and greedy.”

It was neither, we were just paying too much. We explained that we really liked the house, that we’d sunk the survey costs and would likely lose our own sale, but just couldnt justify the price and would walk without the reduction.

I’m sure our seller didnt like it at the time, but we remained on good terms and the EA was fine about it.

People get far far to emotional about house buying/selling, it really is a business transaction.

No it isn't just a business transaction, it's peoples everyday lives. They may be moving by choice, or through work commitments or any other reason but yes emotions are involved. If a buyer pulls out but a seller has to move for work, then a family may be split up for a while, whilst the selling process is gone through all over again. Kids may have just got used to the idea of a new school only to then stay put, have to go through the upset of saying goodbye to friends again. New school places may be lost.

How is this just a business transaction?

SuttonHooHoo , it's a transparent justification I think... seems to me the OP has decided this is the wrong thing for them and that, to me, is that, like leaving someone on the altar..

I am definitely leaving my own experience colour my view I know but we went ahead, didn't know how to listen to my constantly churning guy, and I spend my nights walking the old house in my mind.. it's hell. I've spent most of my life being a pleaser and it's not healthy. I can only hope despite no remorse shown, the OP gets that they've made a big mistake here 're the vendors but.. it's too much of a big deal to follow through if it's not right. As I said I know people who go sale agreed and openly keep looking, seems to be accepted by many that because the system allows it, it's allowed.

People get far far to emotional about house buying/selling, it really is a business transaction. I work in property

You work in property so to you its business but to the person selling a property that has been their home for X years and buying another one it is extremely emotional. Of course it is. Also the OP is not seeing it as a business transaction, if she were she would offer the lower value not pull out completely. Financially there is no sense in pulling out before trying the lower offer and she can't be hoping to save the vendor heartache. That leads me to conclude that she wants to pull out. As for waiting another year why if you know prices have already dropped in the area you like? Do you really honestly think that they will continue to drop for the next year then increase for the following three years? (the post brexit years) it makes no sense to wait until next spring. Either wait longer(but then throw 20 or 30k+ down the drain in rent) or bite the bullet and carry on with this purchase.

I think you are scared because it's such a big decision but honestly you will feel that way whenever and whatever you are buying. Property prices rise and fall. Property is always a risk in the short term.

house prices havent dropped that much though she has her figures wrong

sweeneytoddsrazor in teaching its very possible to be in senior leadership by 30 if you are capable and ambitious. I can't speak for the medical profession but they certainly seem young on holby

Wow, just wow. I just don't understand your obsession over negative equity, unless you are planning to sell virtually straight away.

I mean think about it, say in 4 years you sold the house for the exact price you are buying today and say you are taking out a repayment mortgage, once you have sold you will have your deposit money back + the amount of capital money you have left over could be circa £20k+ depending on your repayments. SO whilst you will have no additional profit than you are no worse off, infact surely you'd be better off as the money you pay for rent now pays someone else's mortage that you don't get back but paying your own mortgage you would see that back.

£1.4bn was given the go ahead by the Mayor of London to be spent on regenerating Croydon including Westfields. There was been millions sepnt improving the Fiveways Junction. All the stations are due to undergo major renovations (East Croydon, West Croydon, Brighton Mainline). a new tram platform and new tram loop. The borough want Croydon to become the London Borough of Culture so money is being spent there to improve public spaces. New schools, new GP surgey/ health centre.

With so much change and improvements coming along it would take a serious recession to really take a knock on house prices. I purchased my house in a town next to Croydon 5 years ago and I only came this far out because the market was going crazy that in 6 months of looking in zone 2 house prices were going up £10k everytime one was sold such was demand. As people are priced out zones 1 and 2 and even 3 more people look further afield. Exactly what I did, but now 5 years later there is absolutely no way I could afford my house now.

4 years is such a long time who knows what will happen to your own circumstances and that of the economy etc.

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

Yes. But she clearly hasn't looked at any financial matters other than the one idea that suits her, the alleged 6% drop. That's actually the worst of it - if this couple stopped to think, or if they'd never got involved in this purchase, everyone would be so much better off.

OP I don't believe in karma either but I'll be interested to know how you feel about this decision in future. I still think 30 minutes of looking at finance properly would mean you carried on with the buy. It can only be that you were uncertain time wasters in the first place.

If you really weren't keen on Croydon, you shouldn't have let things get this far.

Why would you think about spending almost half a million pounds on a house you didn't like very much, in an area you liked even less?

You must see how immature that is. Your conveyancing might have been a freebie but nobody else's will have been, so your sudden realisation will cost everyone else in your chain hundreds, even thousands, if it all falls apart.

Morally you should be obliged to pay everyone else's costs, if only to stop you being so selfish again.

Take away the morals or lack of them, the OP doesn’t understand the financial aspect and is quoting all sorts of rubbish.

They are going to make a big mistake and loose a lot of money aswell as the likelihood of being able to afford a house in Croydon by this time next year.

Why would you think about spending almost half a million pounds on a house you didn't like very much, in an area you liked even less?

Because that’s all you can get for that price in London.

To get a nice house in a nice area you like you’d be looking at £1.5million minimum.

TatianaLarina and the OP's risking being priced out of Croydon too. Lots of posters with knowledge of the area have said so. If they wait until next spring who knows what might happen by then?

OP has said their preferred area is now more affordable - presumably the real reason for pulling out

I actually don’t think Croydon property will rise loads more in the next year. But happy to be proved wrong & not a gamble I have to take.

Thanks for answering OP. If you read between the angry shouty posts there are some quite insightful posts. I don't think people on here get HOW much the market has changed in London & the sentiment has taken a dive off a cliff for people in our age group.

That a doctor & teacher can't afford to buy much in London by age 30 should TERRIFY everyone here. Stressful, hard, necessary jobs & can't afford to house themselves further in than zone 5! No wonder they're off

I wonder if a lot of the emotional responses on here are from worried homeowners who don't like the idea of a dropping market & are suddenly becoming very moral. Did they all protest this much when gazumping was in fashion? Did they fuck!

It may not be in range in a year and they’ll be a year’s rent down.

I speak as a recent FTB who got lucky with inheritance who was looking in the same area the OP is!

Westfield is not 100% yet & likely it won't go ahead if economy tanks further. Boxpark is not doing well (loads of units closing) I actually really liked the area still but if you can get preferred area do it!

Your vendors will live, it'll be disruptive & miserable for them for a few months but you knew from post 1 it was dog shit or cat shit. Stay strong