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!

You are a time waster OP and I don’t think you really know what you want. No doubt you will do the same thing again and again in the future because the grass will always seem greener elsewhere.

I'm a bit confused by this to be honest.

Both you and your husband would have to have a certain amount of intelligence to qualify in the roles you do. Yet for some reason you posted the absurd detail that you think Croydon house values have dropped six percent in four months, and are weirdly concerned about negative equity.

House values have not dropped six percent in Croydon, just do some research and look at rhe government reports. Are you looking at initial asking prices by estate agents? Because this is not house values.

And why would you end up in negative equity? Are you not planning to keep it a few years?

Overall the two don't link...intelligent professionals posting absurd erroneous facts.

So, let's get this straight:
You are planning on buying a property and retaining it for only 4 years.
You are, it seems, banking on making a profit on its value in that ridiculously short time span.

Most people buying property are doing so for the LONG TERM - value issues are therefore secondary.

If you had been transparent at outset with the EA and the vendor over this, I suspect they would never have treated you as a serious buyer.

You are prepared therefore to completely bugger up some other people's lives because of your fear of a short-term blip in values.

My DS and his pregnant wife were completely fucked over by buyers who made their lives hell for the duration of the sale process and then pulled out at the last minute for equally dubious reasons. He ended up with a serious, stress-related illness as a result and we were worried she was going to lose DGS (she didn't thank goodness).

Wow. I hate to think what your bedside manner is like.

Yep, Bluntness.
Overall the two don't link...intelligent professionals posting absurd erroneous facts.
Particularly concerning given their alleged professions.

If your choices are walk or go lower, then of course you go lower. The vendors at least have a choice that way. The EA may be able to get the loss spread throughout the chain so the vendors don’t take the full hit.

Don’t expect any goodwill from the vendors after this. They will take every lightbulb. Your name will be dirt with the neighbours.

If you decide to walk, be aware the EA will have your card marked. Ex EA here. We do talk to each other. Your chances of getting a low offer accepted anywhere else are zero.

You don’t seem to understand the property market very well, or you would know that crashes are rare but tend to be cyclical, prices do recover, and the trend is always up.

I do hope you’re not a doctor OP. You seem very cold hearted.

You’re crazy to do this. If you fear the market is downwards then you’ll always have this problem.

So you want to offer at the bottom just as it up turns. How many times will you chance it to see if you’ve got the timing right? How much rent and fees will you throw at it

And absolutely a doctor and teacher could be ftb for that amount, sounds about right

Also of course gazundering is looked on as badly as this is - to pp

You don’t seem to understand the property market very well, or you would know that crashes are rare but tend to be cyclical, prices do recover, and the trend is always up.

Tell that to the people in the north who are still in negative equity after the last crash

We bought in a market town in 2007, made numerous improvements and renovations and.. ended up selling for 15k less in 2017. So yeah, forget property as an investment over the medium term ha!

We bought at the height too in 2007 and just sold. It was over double, but that’s London.

See what the EA says about changing the whole chain

I'm glad you're not my doctor, you seem unable to understand words

People are saying it's a shit thing to do and London is sound and that's not what you're taking from it??

Furano The OP and most of the poster here are talking about London and close by. I'm sorry that people in theNorth are still suffering from negative equity, truly, but in this case the cyclical turns in the south east are not the same.

Titanium I've bought my homes in London over the past 30 years at the top of the market; for the first 3 years prices dropped then stabilised and then rose again. Homes are in short supply - you won't lose out and if you want to move away in 4 years time rent your home out. We did this when we moved for 18 months to the States.

This is why I'd be very wary of selling to FTBs. I've bought and sold 7 properties and hate this naive and greedy attitude. Buying and selling is a skill and you clearly are not ready to enter this market.

I've mostly bought in Scotland. If you pulled this stunt there you'd be liable for seller's costs, sadly not the same system in England or you might think twice.

I have heard of chains where the buyer has been asked for more money. I wonder how you'd feel about that OP.

“The OP and most of the poster here are talking about London and close by. I'm sorry that people in theNorth are still suffering from negative equity, truly, but in this case the cyclical turns in the south east are not the same.”

Upthread I mentioned I bought a flat in 2007 that a decade later has finally “bounced” back. It was in negative equity for well over 5 years and it was based in Carshalton, which is way nicer that Croydon and in same area. In comparison, I was priced out of Stoke Newington (then with the crash could’ve afforded it again) which has since doubled in value.

So, in short. You’re talking absolute utter SHITE about house prices in these areas. Croydon is not London when it comes to property prices.

Off to name change once again.

Don’t sell when you go rent it out. Some nice people I know sold a very nice house to live o/s, then returned to buy a flat in the same area. A very nice flat but a big difference none the less.

Once you’re on the ladder in London, hold on and stay on.

Upthread I mentioned I bought a flat in 2007 that a decade later has finally “bounced” back. It was in negative equity for well over 5 years and it was based in Carshalton, which is way nicer that Croydon and in same area. In comparison, I was priced out of Stoke Newington (then with the crash could’ve afforded it again) which has since doubled in value.

Petulant s the right name for you and you're the one talking shite. Carshalton may be 'nicer' than Croydon but it's not a suburb of London so hardly surprising it took so long to climb back in value. And to compare with Stoke Newington? You're having a laugh.

Stoke Newington for those who don't know is pretty central and Zone 2 in London! Prices there may well have doubled since 2007 just as they have in my zone 2 home in south London.

I thought Carshalton became part of London in the same way Croydon did?

It’s not about niceness when it comes to house prices rising. Elephant & Castle a good example

I really do think buyers in the last few years need to be careful with where & what they buy particularly ftbs buying flats, obviously before they offer unlike the op. Record price growth over the last 10 years has been largely driven by low interest rates. I highly doubt a Tooting flat bought for 250k in 2010 that sold in 2016 for 600k is going to be with more than a million in the next 6 years.

I thought Carshalton became part of London in the same way Croydon did?

It doesn't have the same transport links though, does it?

Carshalton may be 'nicer' than Croydon but it's not a suburb of London

Really? It’s in zone 6 with a 020 dialling code and big red busses. Croydon (well, East Croydon station) is in Zone 5. Croydon is a much more urbanised area, but I think Carshalton is the epitome of a London suburb.

MargaretCavendish

I wasn’t aware transport links were a decider as to what counts as London or not?

Sorry, I wasn't saying that made it not London, I was just saying that it makes it not comparable in desirability to Croydon. Ease of commuting to the centre is a huge part of what drives prices up in the satellite bits around London, particularly as the centre has become out of reach for more and more affluent people.

I completely agree that Croydon is better connected & more of hub in its own right & spent plenty of my youth there but I would say the nice areas of Croydon such as SC are quite comparable to Carshalton. I personally wouldn’t want to live in West Croydon.

As an EA I can tell you that we don't blacklist people, however if we're putting an offer forward we tell our client the vendor what we know about the potential purchaser especially if they'd pulled out on a previous property close to exchange. Most Vendors wouldn't agree a sale, so it would be very hard to buy another property.

I think the op sounds very naive, I remember feeling overwhelmed when I bought my first house it felt like a huge amount of money and responsibility. Taking the morals out of the situation it's still a bad idea, you'll spend in rent and even if there is a dip London is always the first place to bounce back.

I'm going to go against the grain and say you need to do what is best for you, not what is best for everyone else in the chain.
This is not worth getting into negative equity over - that could have a massive impact on your whole life. Being locked into one house until house prices rise again could be disastrous for you personally and your careers.
But if you make a reduced offer what will usually happen is that your buyers will go their vendors and ask for a similar reduction and the price drop will be passed down the chain.
Is it shit for other people in the chain? Yes. But you are entitled to protect yourself financially - nobody with any sense would knowingly walk into negative equity.