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!

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

Yes but she has also said they would wait until next spring not go straight and offer on a house in the other area.

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!

Rubbish.

You might have a moral compass as 'flexible' non existent as the OP's, but other don't. Some people actually care about behaving the importance of honourably when other people's lives and happiness is at stake. Seriously, some people really do.

Don't judge other's by your own standards, maybe?

Kamma89

As a homeowner I completely agree that prices are stupid. It’s a very sad world that for many of the younger generations their futures will be determined by whether their parents owned their own home or not.

I have a behaving in the wrong place there...

If they were thinking of pulling out to buy a preferred house in their preferred area right now I’d say go for it. It’s business decision.

But that area was until recently beyond their budget, and may well be again in a year plus they’ll have thrown away a year’s rent money.

By the age of 30?

'Junior doctor' simply means 'not a consultant'. It would be astonishing to be a consultant at 30. Many if not most doctors are still 'junior' at 35.

That was to kamma ^^

and is should be are...

I give up. I'm tired and people like the OP are just simply fucking depressing.

I'm out.

You clearly loved the house or you wouldn't have made an offer. Stop stressing with your FTB inexperience and follow through with your offer. It is the lowest of the low to back out now. And STOP listening to the doom mongers.

@TatianaLarina

It totally could be BUT I just don't think it will. I've literally just bought in London, we're expecting prices to tank but don't care as long term home. OP not looking too long term & I think market/sentiment variations since Jan have been big enough to justify change of heart.

I do want updates by the way OP. As I said before I'm nosey!

Don't be an arsehole OP.

Kamma89 I’ve heard there are funding probs & Boxpark footfall is low too.

Well call me unrealistic but I purchased in a stagnant market in my area when folk were cautioning not to. Since 2015 the property value has steadily risen 18.5%, you just can’t predict the market. House buying is stressful and you are always always taking a risk.

irrespective of whether a massive shopping centre is being built there is plenty being invest in transport and public spaces so the area is going to continue to improve.

Boxpark ia a pop up mall mostly of food places its hardly going to be a massive reason people go alot so I am not surprised.

Living close to Croydon I can't wait for Westfields, much quicker for me to come and do some proper shopping then having to traipse into central London.

It totally could be BUT I just don't think it will. I've literally just bought in London, we're expecting prices to tank

Well I’ve been living in London for nearly 50 years - you may be waiting for a long time...

We don’t know what area she’s talking about so it’s impossible to say.

My biggest concern & why we didn’t move was the potential risk of a downtown in the next few years. The fact the BoE doesn’t think we can cope with a tiny interest rate rise doesn’t fill me with confidence.

White City/Shepherds Bush and Stratford property prices went up hugely from the arrival of their respective Westfield shopping centres. No doubt the very same will apply to Croydon with the estimated 7000 extra jobs the new project will be creating. And I think only 700 new properties are being built.

If I could, I would buy in Croydon this instant - it has been crying out for regeneration investment for a long time, and it has now been approved. The possibility of negative equity is very unlikely.

Pulling out or changing terms at this stage are pretty nasty things to do so late in the process.

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

Why are your contracts up and you'll be moving abroad then? Sounds odd for a secondary school teacher in particular - less odd for a doctor I guess if you're still training in something.

We are sick of renting and would prefer not to but not at the expense of being locked into a property in neg equity when we need to move. 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.

Or - from skimming you have major confirmation bias because there are a shit load of posters on here saying Croydon is a safe bet!

Either you believe it is worth buying a property in London or you don't.

You have 4 years you wanted to spend in a house you own, building wealth. Unless you have a TINY deposit, the £13,000 (or even £26,000 at your crazy estimate) is going to be nothing much and certainly will not immediately plunge you into negative equity unless you genuinely believe there is a housing COLLAPSE imminent - in which case I would respectfully suggest you need to look at historical trends and area specifics and then make your judgements. Q1 stats are meaningless in this example, as others have said.

The BoE was saying that last time and then they increased it.......and.....nope still waiting for that crash.....

no one wants to pay over the odds for such a major investment

But are you really sure you can get the same for less ?

This is the crux for me. I think it's actually fine to pay less - if there is a demonstrable reason to act for a reduction. A crash in the markets etc.

What OP has is: a few Evening Standard reports on RICS valuations (general) and a relative saying some other sales have fallen through.

None of that equals a 6% drop in prices.

What OP really mean is either a) I am fucking shit scared of this financial commitment or b) I don't like THIS house enough to spend 4 years living in it.

I am sympathetic to a).

I am about b) because they offered, negotiated and accepted knowing they'd leave in 4 years anyway. So things like schools or whatever are by the by - they're intending to go before that becomes an issue.

So either they want a house (for investment and to stop paying rent with its uncertainty) or they don't. A "better" area is totally neither here nor there for DINKYs who are selling up in a few years anyway.

To pull out now is stupid. It's the opposite of forward-thinking and business-savvy.

Why are your contracts up and you'll be moving abroad then? Sounds odd for a secondary school teacher in particular - less odd for a doctor I guess if you're still training in something.

Glad it wasn't just me that found this odd. Especially when OP had said they wanted to have security before having children.

They don't care if you sell for £10k less, but they do care if they lose the sale

oh yes, this is exactly how EAs work - on the basis of "90% of something is better than 100% of nothing"^

I doubt the OP would be black-listed i.e. banned from buying through any estate agents in the area. If it's a one-off justified situation (for example the OP could say something like "our source of funding for the deposit hasn't materialised", EAs will take a pragmatic view.

Clearly if it's one of several time-wasting situations by the same buyer, then it 'marks their card' and they'd have to rebuild trust. EAs like anyone else, have short selective memories.

We were looking for properties in the mid- 2000's around 2007-8 and the prices were being massively inflated in our area - the agents were all talking up the market, saying how buoyant it was - then austerity hit and the market froze and it took several years to correct itself (ie prices adjusted downwards and became more realistic)

In 2008, our dream house was on the market at an absolutely extortionate price. We nearly went through with it, thank goodness we didn't. Thankfully we had greedy vendors who refused to budge on our reasonable offer, thinking they could get more, so we bailed out (we never even got to the point of survey) Had we gone ahead we would now be struggling with a significantly higher mortgage. We were fortunate to find a house with very reasonable vendors. The other vendors eventually sold but had to slash their price!

£13K is a drop in the ocean over the lifetime of the mortgage, if the property is in a good location, (and I know for a fact that Croydon is becoming a desirable area - lots of regeneration going on) - it would be a good investment if the property is sound. However £450K is still a massive price for FTBs to pay. I can't understand why people would buy in London, there are so many other desirable locations with more affordable prices and good amenity.

OP what an utter shitt you are. I sincerely hope someone does the same to you when you are almost exchanging on the next house.

TitaniumBev, what subject do you teach? I hope it isn't English, given your "she say's".

Otherwise, you say: 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 think some of these "unrealistic posters" on here are possibly twice your age and with considerably more experience than you have of buying and selling houses. It's almost like talking to a teenager ("oh, but you just don't UNDERSTAND ME...")