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!

Oh and just to add, pulling out at this stage is equally shitty.

When was your mortgage valuation done, OP? They are normally only valid for three months. If so you may need another. Then the valuer can decide whether your agreed purchase price is still realistic.

In my opinion, a lower re-valuation is the only acceptable reason for reducing your offer at this late stage.

If you don't need another valuation then you have to consider the following if you pull out

1. you will lose what you have spent on searches, solicitors, etc.
2. you'll probably be blacklisted from the estate agent you're buying through so will limit what you can buy.
3. you might not find anything else you like (have you actually had a look?)
4. you might end up spending the same or more on a different property
5. you'll have to start from scratch again with mortgage offers etc - do you want to spend another 3-4 months in the hell that is a buying chain?

Now consider this - are you still wanting to buy this property? Can you afford it? If so then go ahead as agreed.

The property value will always be fluctuating. This is only an issue if you have to sell again. It's a risk you have to take if you buy a property.

Those stats are annualised price falls, OP. The house hasn’t dropped in value by £13k in the space of four months.
The equivalent figure for the period would be £4K. Personally I wouldn’t risk losing a house I liked and could afford at this late stage for the sake of £4K.

Also Rightmove is asking price data not sale data. Very different.

Monthly data is more noisy and also often not seasonally adjusted so should be relied on less. The SA Nationwide regional index has London rising in Q1 2018.

You really don’t know prices are down by 6%. You said yourself not much is coming on the market and so comparison is hard to make. Rightmove and RICS max 3.6% according to OP.

So yes - you’d be wrong to gazunder. Pulling out - up to you, but as FTB you cannot possibly imagine the stress this will cause others. Not necessarily your problem, but karma may yet bite your ass in the future.

When you first buy, and at such eye-watering London prices, it’s very very natural to get cold feet.

Ask yourself: will we stay for 5 years or more? If so, you now need to stop your habit if checking house prices and Rightmove and estate agents. You can’t predict the market over a longer term - if you need and want a house, make your decision and stop worrying.

You do realise even if they were to agree to a reduction you would need to ask for a revised mortgage offer

Sounds like you were already going for a house right up to your limit, never a good idea, should always factor in rates increasing, unexpected expenditure etc

Pp's are right,estate agents do share experiences of problem buyers/sellers, a close friend is one.

My view is what's an extra 13k when you're already spending that much? Unless youre both in fact chancers of course.......

Tell them that you want to pull out and why. If they are willing to drop the price they will say so.

What could you get instead??

God I hope you are not in my chain. Nasty behaviour.

shitty thing to do.

I have had buyers pull stupid stunts very close to exchange and have said exchange at the price or it goes back on the market. Honestly I wouldn't hesitate to put back on the market especially if I was selling in places similar to Croydon.

You risk losing all the money and the house by offering lower. If you are happy to do that then go ahead but don't expect to simply get accepted on another house straight away as you will have up go through all the process again just like you did with this one. I would factor in how much you will lose with costs as well as continuing to rent.

Thanks for the responses. Pretty much exactly what I thought. Walk away, don't reduce. We didn't pull put earlier as news has been getting worse month by month. Seems to have reached a head just now. Hopefully the vendors will find another buyer but market has slowed

I think you need to be sure that you want to buy it at that price.

I would look at what else is on the market between 400-440 and very truthfully establish ALL things considered whether it is worth £440 - school catchment, transport links, potential to improve.

If it truly is no longer worth £440 and after the money you have already paid out and what it would cost to redo all searches etc on a new property decide whether you wish to continue.

It's a horrible situation to be in but you need to make a decision and fast, it's a home you're buying so over paying be a few k isn't the end of the world however if it's more like £40k then perhaps you need to walk away but that also has its risks.

Surely it only matters if you’re planning to sell again in a year or two?

Its been four months, I think its fair to ask for a lower price.

12 weeks is average for a purchase to complete. 4 months is not a long time.

So if you pull out and find another house what will you do in 3/4 months time if prices have dropped a bit more? Pull out another sale?

The reality is you could end up in exactly the same situation on the next property you put an offer in for.

Are you going to perpetually walk away?

Think about what that's costing in rent. Think about what you've already invested in fees.

The biggest issue here is timing. You're a week away and anything you do now will reflect badly on you as a buyer.

House prices fluctuate constantly. That's the nature of the market. If the value had increased how would you feel about being asked to increase your offer a week before exchange?

It's up to you, but frankly I think your perspective is wrong. It's a home not just an asset. Unless your a developer expecting to turn a profit in 6 months, the short term fluctuations in the market are not generally hugely significant over 5 years of living in a property.

If I was the vendor I would be praying for karma. And that you find a house you absolutely love and they shaft you.

Sorry. It's a shit thing to do and if you're planning on staying in the house for some years you will recoup your money and more.

Go through with the purchase (or waste your money that you've spent + renting for many more months + all the expenses all over again.)

No the majority responses were don’t be so selfish, not walk away.

When we were buying our first house the seller pulled out the morning of the exchange. It's an absolutey shitty thing to do.

At least in your situation it's you losing the money. We lost thousands through no fault of our own.

Do what you want OP, but don't try to justify it by telling us how dirt poor you used to be and how you scrimped to get the deposit together.

If you can afford/be accepted for the mortgage on a £440k property then frankly it's disgusting and insulting to genuinely hard off posters that you'd trot out reasons like that as your excuse to want to save a few bob.

pp's are right,estate agents do share experiences of problem buyers/sellers, a close friend is one.

We sold a flat via an open day. 4 offers at asking price & 1 above. Our estate agent advised us to reject the “above” offer immediately, as the buyer had previously failed to complete in a previous purchase...

Omfg.

Those poor vendors, and because if the type of person all the local EAs ignore.

Are house prices in your area really that much lower? The economic outlook with Brexit isn't great but this isn't a super new thing. You need to look at see if you could buy a property that is as good for an amount that makes sense, covering your expenses on the property you are not going to buy and additional rental expenses. You have noted there is less property on the market, people won't want to take a hit on price so you may well have wait to see if market recovers post leaving the EU. It isn't a great time to be making a large purchase but you have to weigh up if it is worth waiting in temporary accommodation for another year or so while waiting to see what happens. 13k is about the price of a new kitchen, so leaving aside any morality is it worth all of the extra time and hassle with no certainty of a better outcome?

I'd be wanting to take out a fucking contract on you to put it bluntly.

Completely out of order behaviour.