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!

What do you want to achieve out of the purchase? I do think the days of buying a property & it going up 300k in 4 years have gone but it’s still a good long term investment.

Don't kid yourself that what you're doing is ok. It's not, and I don't believe for a minute that you really give a flying toss about anybody else in the chain.

You are bad people.

OP " I have to say I am very impressed at the morals of all of you who would risk taking a big hit & ending up in negative equity."

Everyone who ever bought property took that risk!

Plus there's a lot of questionable data in your decision but from further posts it sounds like you were never serious buyers anyway.

You have to live with this decision, not the people concerned about your karma. I think it was a little pointless starting this thread (in two places no less), but the response has shown the naked fear of buyers like you who ultimately aren’t prepared to prop up a market showing long overdue signs of drifting back to reality.

I'm not going into the morals of what you're planning - I had a buyer come to me three weeks before exchange asking for a reduction having already got one at the start because they were in a good position (FTB). I spoke to the estate agent to say I was not going to be held hostage and to get potential buyers lined up then I told the buyers to do one. My chain held on for me and I had a full asking price offer within a couple of weeks so the little shit did me a favour. I have no idea what happened to the FTB - never asked, didn't care.

But you say two strange things. You're concerned about getting negative equity. Negative equity is only negative equity if you plan to sell. If, like we have now, you live in your home for ten years your area will have gone down and up in percentage changes. It's all on paper. It means nothing until you come to sell and any upward trend is reflected in the house you then buy so, unless you're down sizing, you'll never 'make money' - it'll all go on the next house. So forget negative equity unless you're planning a move very soon.

And, if you're leaving the country in four years why not just rent until you go? You could buy next spring and get a real house price collapse three years later which means you'd be in negative equity at that point. Our house has probably gone up 20% on what we bought it for, but that's in ten years. Three years is not a lot of time in a housing market if you're looking for a sudden increase in property prices (a lot of which will be swallowed up in selling fees). But there can be a significant drop in that time and if you've not put a huge amount of equity in as a buffer you could find yourself sitting on a property that hasn't gained much, if anything, in that short time.

And negative equity doesn't matter unless you're selling.

Pull out OP. Don’t spend almost half a million quid on something you’re not sure about.

Honestly I think you should pull out and then come back in a couple of months and tell us how your new move is going.

I will bet you that 1) you are still renting 2) you are absolutely kicking yourselves 3) you still can’t afford the area you first wanted (remember others will be wanting that same area thinking what a bargain it is, do lots and lots of competition) 4) you lost a house that you now can’t afford at all because the improvements to the area and inflation to house prices mean you have been priced out. 5) you have some bad fucking karma coming your way.

Good luck bit please do keep us posted. 🙄🙄🙄

Buying a house now knowing you have to sell it in four years is a pretty risky thing to do - cutting it down to three would be madness. It's standard advice that you should really be looking at staying for at least five years when you buy a property. If you pull out of this one now I think you're going to find yourself renting until you move abroad, so you need to think about whether that's what you want to do.

Every one of your updates shows you to be a complete c*! Saving your sympathy for the real people in the chain - never heard such bollocks - and now it transpires you are planning to move abroad in 4 years- why are you even bothering with all the hassle. People like you may well be acting legally but sadly morally you are at the bottom of the pile.

If you were only going to keep the property for 4 years max, then perhaps you should not be buying asthats not a long time to ride out fluctuations in the market.

However, 3 years is even less.

I think you should do some more thinking about your priorities and why you wanted to buy at this point in time.

Well if you're off abroad in 4 years and you believe renting isn't dead money (total idio!) then why not just rent for 4 years and stop fucking people about?

If you're planning to wait another year before buying then you're looking at even shorter term ownership than you are now and the market could alter again for reasons you couldn't possibly foresee. That's the nature of home ownership. There will always be a 4 month gap between offering and buying, that's how it works. You have no evidence at all to support your supposed 6% drop in prices in Croydon in the last 4 months other that you read it somewhere and you want it to be true to justify your cold feet.

You're astonishingly naive for someone of your age, but I guess I'd owned 3 houses by that point (gained on 2, lost on one). We paid asking price for the house we're in now and I wondered if we'd overpaid in desperation at the time. Probably did, the value has gone up & down over the years, but its current value is double what we originally paid. It's all meaningless anyway because nobody ever buys/sells in a vacuum.

I can't read this any more, one of the nastiest most entitled and selfish OP's I've seen.

I hereby award you the title Gazunderzilla

Finally, i don't believe renting is dead money, we'd still be housing ourselves and as planning to move abroad after 4 years (job contracts ending) would be free to do so.

I’m not sure you get it really... if in 4 years, your house is worth what you paid for it (and in that area that’s unlikely, it’s highly likely to be worth more), you’ve lived there for basically nothing. Significantly less than the cost of renting for four years. Of course you also need to factor in mortgage interest and SDT but let’s be honest, there’s a very good chance you’ll come out on top in several years. There’s also a good chance you will be priced out by next spring.

Our house purchase was very close to falling through because of issues with the house and it was an utter nightmare. If you want to pull out then do it immediately, don’t waste any more time messing people around.

On a moral level - this is not ok.

On a practical level - dropping prices, press coverage, RICS data etc all indicate how the market is going. It does not indicate that you will find a house you like for whatever % it's supposedly dropped by.

This will be your home. Budget comes into it. But buy somewhere you like, not based on what you can get it reduced to.

We did this with our first home when we were buying during the recession (shortly after Northern Rock bombed). Prices had dropped like a stone and we reduced our offer by £10k. I think we got £8k off in the end. Ours was delayed months too but we were still a way off exchange when we had the conversation. If you're really prepared to walk away, do it. It's their choice to take the (fairer) price or put it back on the market.

Also all of this -

*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.*

OP, you might want to keep your story straight.

You started with

sick of private renting

And now it's

i don't believe renting is dead money, we'd still be housing ourselves and as planning to move abroad after 4 years (job contracts ending) would be free to do so.

Just admit you don't have the balls to buy a property, given it's not a guarantee, and move on.

I think that is a hell of a lot for an ordinary home in Croydon. Follow your gut. Prices in London have been overinflated for years and I honestly think there will be a drop at some point. Why should you get burned when no doubt these sellers are set on making 100'000 of thousands just from sheer luck. Pull out and let someone else make them rich.
I say this as a home owner whose home has gone up silly money-it is not fair and the whole pack of cards is going to topple- do you want to be at the bottom of that?

Ok so drip feed away.

If you plan to emigrate is that a permanent move or not?

If it's permanent then, I wonder why you put in an offer in the first place. Save your money for a house in your chosen location.

If not permanent then you're looking at this house as an investment?

Truth either way is that the system of house buying in England is flawed. I'd save my ire for that just as much as those who use it to their gain.

Ultimately you have to make the right choice for you, but you will be incredibly selfish to pull out now.
Our buyer pulled out late in the game, and it has been the most stressful month since then. Constantly worrying we're going to lose our dream house. We found another buyer quickly, but it's still dragging out the whole process.
Should be illegal. Most other countries it would be.

I disagree with bear- it takes balls to pull out of a sale and go with your gut. What you are not doing is following all the other sheep who have contributed to the inflated London prices. Go watch100 Homes and that will seal it for you. 440 K for an ordinary home.....in Croydon. Let some other sucker be a lemming. You grew up in poverty and now you want to saddle yourself with a 400K ish mortgage-go with your gut!!

I'd be interested to know how many of you have written to your MPs vociferously demanding that the English house buying and selling shenanigans needs urgent attention.

Thought not.

Personally, since we have to operate in the system we have, I don't like gazundering any more than anyone else. But we all 'but' into this house price-rise shenanigans, happily, tho it's absolutely non- earned income, so now and then, having the flip-side exposed can't have a value judgement thrust upon it.

In the OPs position, I'd try my luck now (not on completion day!). But I would accept a 'no'.

As for the ethics of EAs.... 😂😂😂😊😂

I'll save my remorse for the real people in the chain.

What absolute bollocks and completely disingenuous. You are not the only person who grew up poor, DH and I were on the bones of our arse for years. It does not give you the right to treat people like shit.

Croydon will keep going up.

Finally, i don't believe renting is dead money

The words of the very foolish.

planning to move abroad after 4 years (job contracts ending) would be free to do so

That will be easy after Brexit...

If you have any financial nous whatsoever - London property rises at a rate that is hard to match in Europe and elsewhere in the world.

If you were sensible you’d buy in London now - if and when you get jobs abroad, rent out the London house to fund renting a house in your new country. Only sell once you’ve decided you’re definitely staying for good.

Otherwise you may find yourself priced out of London completely if you ever try to move back.