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!

The reality is that it is now a buyers' market round London. (Not everywhere else, although they do tend to follow where London leads.)

Be thankful you are in England, in Scotland pulling out would land you with a bill for re-advertising the house until it sold, plus any expenses incurred.

That’s a really shitty thing to do and if you do pull out or ask for a price reduction I seriously hope that when you come to sell someone does the same to you remember what comes around goes around.

I did a search with stc on it but l don't know if it is the right one of course

If you don’t want to buy the house then don’t buy it - property is a dog eat dog affair! HOWEVER I think you’ll most likely find yourself in the same quandary again....prices fluctuate but they haven’t crashed! It would be pretty shit if your vendors had to lose money to subsidise your learning curve.....it’s way too late to renegotiate and not be deeply ashamed!

I pulled out of a house after we had signed the contract I rang the solicitor and told him to rip it up. It is a very expensive mistake to make buying the wrong house and if house prices continue to decline you are surely going to sit there counting your losses every month . This is a business transaction at the day bugger the estate agents you will soon be yesterday’s problem . I would offer the lower price if that’s what you want to do and give your reasons for doing so the ball is then in their court. You can’t be responsible for the change in market . You have to make the best decision for you .

If there is a crash at the time you want to move and its massively decreased in value, then you can just rent it out which should more than cover the mortgage. I heard of people doing this in the early nineties and ended up making a fortune after the recovery.

You prob wouldn't want to immediately buy in a new area, let alone in a new country, before renting there for a while first anyway.

shes not doing it now for money though she backtracked and says she doesnt like the house

I pulled out of a house after we had signed the contract I rang the solicitor and told him to rip it up

so you lost the 10% deposit due to your seller? (not talking about the mortgage here, different issue). You are lucky they didn't pursue you for the financial loss your change of mind cost them.

The more I think about it, price aside this was never the house for us.

If only you had had these thoughts somewhat earlier in the long process of finding, offering on, negotiating, getting surveys and agreeing dates.

How did you only just come to this conclusion?

You have a seriously bad case of FTB nerves, which is fine - as I said in my first post to you, OP, that is super normal.

Hopefully your vendor will sell again soon for a higher price to a cash buyer.

Do some very hard thinking yourselves about what it is you actually want and need in a house.

If it's no longer worth the money, id try negotiate. It's a huge amount of money.

If local prices have genuinely fallen as far as OP says and this was something that OP kind of rushed into/isn't quite happy about for other reasons then in her position I'd probably pull out too.

Racking up hundreds of thousands of debt in order to move into somewhere that's overpriced and, more importantly, you're not happy with just isn't worth it for the sake of some sense of 'honor' or loyalty or whatever to some person who you've never met. Who's to say that this person would have shown you any loyalty if prices had been skyrocketing like they were during the early 00s credit boom?

Ah I see.

I have to confess I’ve pulled out of a sale. A house we lost with a sealed bid came back to us after we’d agreed price on another. The successful bidder had pulled out - was on the same time scale as you op so we thought we had definitely lost it or would not have continued looking. We were about to do surveys n stuff on the new house we had found but I felt dreadful as they were then in danger of losing a house they loved. It’s horrible. I put my big girl pants on and went round to explain and vendor was lovely although very upset 😢
This is the biggest purchase you ever make so it has to be right. Have to say though op that if this IS the house for you then the other financial reasons you cite are not that valid. It’s quite possible that house prices may drop a bit, interest rates on the up, there is probably a downturn coming - even ardent Brexiteers say it will be a bit difficult at first until all these amazing trade deals come through ;(
On the other hand, there is still a shortage of housing, especially where you live. If you are going to stay and raise kids it will be enough years for the price to recover.

Every single argument here about the market being unstable bla bla is bollox. We are not talking a ten year trajectory - this has been going up up up for thirty plus years.

If there is a crash at the time you want to move and its massively decreased in value, then you can just rent it out which should more than cover the mortgage. I heard of people doing this in the early nineties and ended up making a fortune after the recovery.
Things have changed I think - unless you have a high enough salary to borrow on 2 houses at once, you may struggle to get a bank to give you a second mortgage )for new house), based on rental you expect to get (a friend of mine had a lot of hassle with this, even though he had been paying for the same size mortgage, without fail for years with the same bank already).
You'd also need to convert to a mortgage for rental properties on the old house, which generally have higher interest rates.

Bought and sold quite a few flats in London.
What you are experiencing is normal.
I bought my first flat in a place that is now called Little Venice - in 1990 it was not such a great place, full of squatters. I bought it at the top of the market. I went into negative equity, but it was a home.
Mine. No renting anymore.
A house maybe an investment, a home isn't.
I did the same thing you did on a bigger flat as I was terrified by a crushing market. I so wish I did not.
If you offered it is because you had a good reason.
Go ahead and make it a home.

Well, it's a shitty thing to do and you'll cause people a lot of stress, but equally, do you really want to spend nigh on half a million quid on something you don't really want or like so as not to offend...

Whatever you're going to do, get on with it instead of posting on here!

The Croydon market has not dipped like London’s. With the Westfield confirmation and boxpark opening plus all the development and gentrification you will make money. Plus you’re buying a home not doing a stock deal.
I think you’d be dicks to try to renegotiate plus what else will you buy? Have you seen a similar property for £13k less?

If you do either hope that karma visits you.

It's not 'illegal' in Scotland. So long as you haven't concluded the bargain, and that happens nearer and nearer to settle the these days given the host of conditions to be met, you can walk away. If you have, you might be sued but for most people it's not worth the hassle. Anyway, this situation, it would be appaling behaviour. You offered what seemed fair on the information you had, don't fuck about.

How rude!

The housing market changes all the time. In six month, you could be sitting on a goldmine. Or a money pit. But it’s the same wherever you go.

To back out now without a good enough reason would be totally shitty of you and you could actually be putting yourself back 12 month in terms of getting on the property ladder.

Don’t be shitty.

settlement.

@cannock

Yeah, i was saying as they want to move abroad they prob wouldn't want to sell up as soon as they move anyway. Ie, they could rent themselves and rent out the house to cover the mortgage.

I'm looking to FTB at the moment at the bottom of the market. Like the OP I might have to move again after 4 years or so and this would be my plan. In my case rent would literally be double the mortgage, and so its well worth the risk of the house losing a little value in the relative short term.

IF there was a MASSIVE crash underway, with all houses in the area clearly losing 10% value in a few months, I would understand the OP pulling out, no matter how shitty. But considering this absolutely isn't the case, it would be stupid to pull out, as well as screwing everyone over.