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!

OP - start a thread that asks “Did you feel nervous before buying your first property and was it justified?”

We bought an overpriced flat that needed work. I wished a few tones we hadn’t. We made an absolute fortune by buying it and keeping it over 10+ years. The market fluctuated massively but ultimately over the long term went up massively. In the first few years however it didn’t increase much at all. We only had a 5% deposit so it was worrying.

Propert is a long term investment.

Well clearly she's not looked at the government reports on house valuations Because her six percent decline is mind bogglinglu wrong.

But you do get people like this. They are always on the look out for the best they can get, too scared to commit, looking for reasons not to, and then they look back and think fuck me, why didn't I just get on the property ladder.

She wants to rent for another year. It says it all.

Well as long as you’re ok OP. Never mind all the other people’s time and money you’re about to waste. I know you are legally allowed to do this but this post has made me feel sad. You started your post saying how miserable you are. If I was a betting person, I would say there is a good chance you’ll be miserable in a years time. Whilst you are doing the financial calculations, remember depending on where it’s held, your deposit may not accrue much interest. And if you think house prices are falling rapidly at the moment, you should see how quickly they can rise too. Good luck OP - I think you need it.

OP if you are still reading the thread, don't do this.

It happened to someone I care about and we lost him too soon because it had such a negative effect on him that he didn't really recover.

Don't do it.

I had this happen to me. A few days before exchange the couple buying my house demanded another £20,000 off the asking price (I'd already reduced by £30,000 for a quick sale), as the housing market had crashed. I was in hospital recovering from a C-section and was in no state to deal with all this crap. The EA basically told them not to be silly, they were already getting the house at a bargain, and that £20,000 on the mortgage wouldn't make a significant difference to monthly mortgage payments. They grumbled, but bought anyway.

But it is a crap thing to do.

Huh I don't agree at all with the pp. Do any of you live in London? I've had buyers ask to reduce the price on 2 of 3 sales. I wasn't offended. It's not a 'disgusting' thing to do. It's worth asking if you think the market has dropped. They can ask up the chain. The market isn't increasing in London but I don't agree it's dropping. You'll always be better off owning than renting in London if you see it as a long term investment/can do improvements - extension/knock through etc.

Good luck!

Sounds as though a lot of posters here have only ever seen a rising property market OP.

A lot of posters here have long experience of the London property market...

Another one who has lived through fluctuating markets and been in neg equity before. It’s one of the reasons we stayed put as long as we did, before we finally moved to a larger home.

Your excuses are transparent - you have simply changed your mind about the house and that’s all it is.
Be that piece of shit then.

@bearbehind 😂😂 sorry auto correct!!

Only a person with no conscience or thought for other would do what you are suggesting, OP.

Don't be surprised if someone pulls the same trick on you later on.

This is why the Scottish system is better. It simply doesn't allow you to be a selfish wanker and screw over all people in the entire chain due to your greed.

I really don’t understand why you would walk away?!

You will lose the money you’ve spent on surveys etc (even though you say it’S not very much).
The house market hasn’t gone down that much, and also, a 4 month fluctuation is nothing!!! If you plan on living somewhere at least 2 years ( ideally 5) these sort of short term fluctuations don’t mean anything in the long term.

In a years time there will still be uncertainty about house prices. We bought 9 months ago, in an area outside London where house prices had been static for a year.
We plan to be here at least 3 years so we went for it.

So it really boils down to whether you want to buy or not!! And if you don’t, the sooner you pull out the better (and yes, it is very bad karma).

Look, Croydon is getting a Westfield and a new theatre and arts complex. Plus transport is getting better and better with overground extensions etc and TFL concentrating on improving links to the south and east of London.

If you found a house nice enough to buy, buy it. No house is perfect. It's likely to increase in value. If it doesn't, you still own a house in a convenient bit of London.

And you won't be a massive twat.

Urgh this is disgusting behaviour. You’ve had months to think about whether this is the right thing for you, god knows how many other people’s lives may be screwed up by you walking away. If you didn’t love the house and want to live there you shouldn’t have offered in the first place. It’s such a shitty thing to do and you sound extremely entitled and unconcerned about the amount of other people who may be affected by your bad decisions. I hope I never have the misfortune to come across you in real life. I’m in a chain and waiting for an exchange date - I have to put in my primary school choices in September for my dd - if someone in my chain pulled out now it may severely affect which school my dd ends up going to next year. I hope to god no-one in your chain is in a similar situation.

Pretty much exactly what I thought. Walk away, don't reduce.

If that's what you think this thread has said then you really are seriously deluded.
It's a completely shitty thing to do. So you've only lost £400, but you are going to waste an awful lot more renting, and you have wasted the time and goodwill of a family member doing you a favour, all on the off chance that you could buy better in a years time. A lot can happen in a year, house prices, interest rates could go up or down, you could get made redundant, your landlord could decide to sell up or increase rent. Just remember karma and don't come back bleating if things go tits up.

Legally of course you can do this, no problem. Financially it won't cost you much (but local agents will remember you and advise potential future vendors to be wary), so again no problem.

Morally it would make you despicable.

Somebody pulled out on us on the day of exchange. I was 6 months pregnant with twins and we were relocating. We lost the new build house we were buying. DH had to move as planned for work and sofa surfed. I was left hundreds of miles away in late stages of pregnancy, with a toddler, working and trying to deal with selling & buying again.
I am still very angry with the scum who did that to us and the rest of the chain behind us.

Their 'market info' was a pile of crap too because we sold the house again a few weeks later for about £50k more than they were insulting us with and the market subsequently rocketed.

I think your information is just one side of opinion, there is plenty of info out there to say the opposite, but I think you're just focussing on the negative.

I think it may depend how long term a home it's going to be. If it's going to be big enough for you to bring up a family in and you're going to be there for the longterm, forget about the market and buy it.

If it's a one-bed that you'll outgrow within a few years, maybe it's a risk to buy it.

DH and I bought our first place together in summer 2007. We knew it was the top of the market, and indeed it started to fall in not long after. However we still sold it for over 50% more than we paid for it 8 years later. An agent who valued it told us that things were a bit slow for 2008-10, but basically things were otherwise heading upwards after a slight drop.

Waiting for the market to fall/holding on if it's the top of the market is never a good tactic if you're looking for a long term home. If that were the answer, the market falling wouldn't be a problem as all the people priced out could just hop on, but it doesn't work that way - mortgages get harder to get, things don't come on the market and so on. I'd say if you like the place, buy it - if you are just grasping at something you can afford but don't really want to live there, don't.

I don't think we are headed for a sudden crash, but it's definitely been a bit stagnant last year or two.

Just plain nasty. You must have been living in the back of beyond if you hadn't worked out that prices were coming down by February. Doing this a week before exchange is nasty and I'm not buying that it's not intentional to get them to reduce the price.
Awful behaviour!!!

Stick to what you agreed. House prices in Croydon are likely to rise over time.

Stagnant, yes, but we all know valuations have held in the last four months in that area.

She's wanting to hold out for better, she's forgetting mortgage rates and she's forgetting pricing could escalate.

To con these people for four months she was going to buy it. To have a chain in place, is just awful, and the thought of her and her partner thinking of reducing price by 3% on a drop they have simply made up is horrifying.

The poor bastards who accepted her offer.

Just ask yourself how you would feel if, in the future, your buyers did this to you, potentially losing you the next house you wanted to buy. I doubt you would have such a cavalier attitude then.

Brexit has the propensity to screw things right up in areas which could be heavily affect by the loss of say car manufacturing, but London is always going to prosper, rightly or wrongly.

If house prices start to drop they'll be propped up by foreign investors taking advantage of the exchange rates.

Which is worse, taking a hit of £13k in the short term on a property in a London which, barring great catastrophe,, will come right in a few years, or paying rent you know for sure you'll never see again.

Pull out.

I didn’t when the market was crashing in 2007 and still regret it to this day. I didn’t feel warm and fuzzy and honourable for not pulling out. I felt fucked. The place I bought recovered ok after almost a decade. But had I pulled out, I could’ve afforded another area I had originally been priced out of. Prices there have fucking more than doubled in last decade.