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!

Nice, glad I don't know you!

PS agreed price are the words here. As in you AGREED a PRICE.

There are people who have been convinced the property market was about to crash for 20 years now. They could have nearly paid their mortgages off while they've been waiting for this mythical crash. Some were even so convinced they sold their houses and rented in anticipation, they're now either living in properties vastly inferior to those they sold or completely priced out.

I hope you never manage to buy, OP. Or you end up buying a complete money pit. It would serve you right.

Your solicitor is warming you about house prices in London/the south east.
Fucking hell - she's good. Prices in London don't go up and down across the board. Some areas do better than others at different times. She's very inappropriate to be advising you like this. I say this as a lawyer. I don't buy a word of it! Utter bollocks!!!

I don't see the market has changed that much in the last four months, it is an uncertain time to buy a house, it has been since it became clear Brexit would go ahead and will be for a good while going forward. OP has every legal right to pull out with cold feet but she can hardly claim the uncertain market has come as a shock to her in the last four months.

Depends how long the long run is. My point was that in terms of current market and my experience the long run may well be beyond a 10 year horizon and that is a long time to be tied down. I would even argue that much of the growth from 1995 to 2005 was in fact just catch up from the 90s. There is a difference between buying at the bottom of the market for the medium to long term and buying at the top.

100% mortgages were not uncommon then! 90% is OK even now.

They are increasing again, but they did decrease significantly after the crash. I’ll get a graph...

Post crash BTLs generally require 25% deposit. Pre-crash you could pick them up for 10%.

Here we are

Depends how long the long run is

The 10 years in your OP is a good enough sample.

The 10 years ‘93-2003 my flat rose from 90 to roughly 340 grand, and I’d paid off almost half the mortgage in that time.

Your money. Your decision.
But yes, why not.

If they could have exchanged quicker there'd be no chance of someone getting ants in their pants.

S0upertrooper - if this happened to DD I would not be surprised or particularly upset - it's all part of the totally crap process we have in England for buying houses.

Until they reform the laws, this will happen and there is nothing people can do. It's pointless getting annoyed at OP - she is only doing what is best for herself within the current system. And she is entitled to do it.

you were buying in Scotland you wouldn't be able to do it this late in the game, if you did you would be responsible for all your sellers fees that occurred as a result of your decision.

As they haven't exchanged yet that's just not true. It used to be the case that exchange of missives happened quickly, but not really nowadays. People can and do pull out.

The difference is that selling times are far quicker as we don't do chains. It gives less time for cold feet.

So you don't want the house at all. Pity it's taken you 4 months to reach this decision and lead everyone up the garden path in the process.

Sorry but that's a piss take. Time to put your big girl pants on and honour the deal you made.

Bear in mind the housing market continually fluctuates. I was told only today that the market is quite buoyant at the moment. I think you should do the right thing and continue with the purchase. It’s a really shitty thing to either gazunder the vendor or pull out and you may well look back and regret it when your rent gets jacked up and you have nothing to show for all that money. Property is still the best investment long term.

We had that happen to us. Refused the lower price. Apparently the buyer had done it before. The EA's knew him! I'd handed in my notice, we lost the property we were buying, it was a mess.
Difficult decision.

Let's get one other thing straight. A "gazunder" is a thing that goes under your bed (or used to in the 1940s - in other words, a chamberpot. The correct term for cheating the people you're buying from is "gazumping".

By the house and stop being a dick. You can add 3% value just by fixing bits and tidying up the outside.

I personally just don’t see how London house prices can continue the trajectory of the last 10 years. There are so many issues in the future.

Living costs eg food have gone up.
Service industry shrinking
Retailers struggling
Graduate debts
NHS struggling
Social care crisis

I wouldn’t be suprised if we see some tax hikes be it income, inheritance or dementia tax. After all austerity has not worked in reducing the deficit. Then we have Brexit.

I believe it will remain very hard to get on the ladder but there will be more growth in the North particularly as more companies relocate or spread offices. I’d rather move to another city & have amenities on my doorstep.

I got gazundered days before exchange. I was offered £5K less. I accepted and went through with the sale. I was in a chain of 5 houses. The people buying the last house in the chain had to do a bridge loan and exchange and complete on the same day so it didn't fall through. It was stressful, we're talking about peoples lives here.

If he had said £13K less, then no way would I have accepted.

Croydon is thriving! It’s a good long term bet. If your mortgage company has valued it ok, yiu will be ok. Property is a long term investment. Croydon is not affected by London drops.

Of course EA will still deal with you. Be selfish. It doesn’t seem like your dream house. If house prices drop drastically you’ll be the one with the negative mortgage. Think about yourselves, not anyone else

You're talking huge sums of money.

We've been gazumped before in a rising market. I would give zero fucks about doing the reverse to a seller in a falling market.

Any house round London will have shot up in price in the last few years - the owners will easily be able to weather the drop, their profit will just be a bit lower (unless they literally bought within the last year or something).

Can't believe all the people telling you you are immoral if you don't overpay for a house by thousands of pounds!

Unless those saying this are offering to stump up thousands of pounds for you to be nice, I'd ignore them.

I'd be honest. Say you're going to walk unless the owners lower the price, because it is now over-priced. (Obviously only do this if you are then prepared to walk.) If they say fuck off, who cares? You will have already fucked off.

It is morally wrong to put pressure on the poorest people in the chain, the ones who can least afford it, to overpay.

carybaz

Gazunder: lower the amount of an offer that one has made to (the seller of a property), typically just before the exchange of contracts.

Gazump: make a higher offer for a house than (someone whose offer has already been accepted by the seller) and thus succeed in acquiring the property.

And round London, house prices are falling daily.

Near me, prices have fallen about 15% since peak, with no signs of that stopping (we were one of the areas that doubled within a couple of years, so I can't say I feel very sorry about their 'loss').

I'd only buy now if I loved it and knew it was right for me for the long term, and was very competitively priced.