Help, my buyers have reduced their offer!

[LemonadeFromLemons]

This week I negotiated a new asking price on my next house (I’d agreed the original price before lockdown and the market has changed quite a bit with the economic outlook).

The buyers of my house have today lowered their offer. I was kind of expecting this and would have thought they would be a bit silly not to! My issue is the amount they are asking for! They’re asking for a 12.5% reduction 😐). Obviously I’ll be negotiating them down from that! My question is by how much? I got a 8% reduction on my next house, I was hoping to keep some of that!

So
YABU - you should give them the same reduction as you’re getting

YANBU - this is a business transaction you should counter with a lower reduction, say 5%?

For context, they are first time buyers living with parents. I’m concerned they might pull out altogether.

@ConcreteUnderpants I totally agree with your post.

@S0upertrooper do I really have to explain why?

I don’t think it’s a moral issue, it’s just about what the market forces are and how much you want to move / how easily you could replace the buyer at the same price level.

YABU

And people say house prices won't fall

Yesterday was a tense day.

I went back to my buyers with 6.25%, they said no and came back with just over 9% and said they wouldn’t take the risk otherwise. So I’ve accepted. And yes I know I could have held out for other buyers but I am worried about what the market is going to do especially for how many first time buyers there will be out there to sell to.

I think you did the right thing. They don’t have to buy so could have walked. Sounds like you all found your common ground.

The housing market hasn’t crashed yet. If you want to move now then people should expect to pay current market value. You don’t need to reduce the price to save your buyers a bit of money a few months down the line if/when the market does crash.

If anyone is that concerned about house prices they shouldn’t be moving or buying an asset. The majority of people won’t be able to make an accurate estimation as to what percentage house prices may fall by. They’re just guessing.

Cross posted, sorry!

You don’t need to reduce the price to save your buyers a bit of money a few months down the line if/when the market does crash.

So the OP in your opinion was wrong to ask for 12% reduction? The market will crash only a fool would offer full asking price.

What’s the 12% based on? It’s a guess. Yes if you want to move now then pay the market value or whatever the lender values the property at.

My point actually is don’t be moving right now until you know what the market is doing if you are concerned about house prices.

Apologies ,the OP got an 8% reduction. Her potential buyers wanted 12.5%. So you think both were wrong to ask for reduction in price?

As I said you would be a fool to offer the full asking price at the moment.

People deciding the market is going to crash and acting on that, is what will make the market crash. People aren’t simply pulling out because they can no longer afford to, they are pulling out because they think they will get a better deal if they wait.

Strange to be pissed off just because someone else is a better negotiator than you.

I’m in the US and the housing market here seems to be booming despite everything.

DH and I have just sold our houses for asking price (minus small seller’s assistance on one) and purchased a new one. Our agent seems very busy actually.

I think it will drop here, but not yet. Especially think commercial real estate is going to take a huge long-term hit. People that can are working from home. Why pay for brick and mortar buildings if it’s not necessary?

You could offer a reduced price of 8%, 12%, higher even and then house prices still fall by double that (unlikely!) or they could fall by just 3%. No one really knows.

I don’t think wrong is the right word, you seem to want me to say they are wrong but they aren’t, these are difficult circumstances. I did say though that you don’t need to reduce the price to benefit the buyer and the buyers predictions which can’t be based on much fact. Even the “experts” are disagreeing on what the impact will be. Both have offered a fairly large reduction and this indicates to me that they are concerned about house prices and they should consider whether now is the right time to make this investment.

I’ve not seen much difference in house prices lately (not an agent but involved a bit further up the process chain) and I had expected a hit already to be honest. As a result I do think more or less asking price at the moment is about right IF you want to move right now. People won’t take a 10% hit in their equity at the moment just in case house prices fall and the buyer ends up in financial difficulty because, without wanting to sound callous although I know it sounds it, that’s the buyers problem.

I think you’re talking from a buyers viewpoint and I’m talking from a sellers. If I were talking from a buyers viewpoint I wouldn’t be advising anyone buy right now if it’s not their final home!

The market has already crashed, it's just a question of how far things will fall. RICS have already issued their guidance to valuers on instant drops and this is going to be updated weekly which shows how fast moving the situation is (and it wont be upwards !). Tory donors in the housebuilding industry will soon exert pressure for stamp duty to be suspended or vastly reduced to help stem the collapse which will be about as effective as King Canute. If you are selling and can complete a sale do it now. If you are buying keep your powder dry.

Construction of new builds will stop surely, so less coming into the market which will help slow it.

Construction of new builds will stop surely, so less coming into the market which will help slow it.

Nope. Apparently building can continue 7 days a week, for longer hours per day, in order to catch up.

There was an article about the risks of gazundering in The Times today. I don’t know how realistic the risks would be, but I found it interesting:

Well done @LemonadeFromLemons, I'd say that's a good deal on the sale side 👍

Take. The. Emotion. Out. Of. The. Transaction.

It's that simple. All this "morally you should"....christ, really?

You need to be realistic and make sure you don't lose someone that is a factor in your next move. But you also don't want to be a charity either.

So, negotiate. Accept you're not going to get some full-blown windfall you were expecting, but keep to whatever threshold percentage it is in your mind that you need to make this a good transaction for you.

P.S not at all directed at you OP but whyyyy do so many people type "loose money" when they're talking about a transaction. "Loose"....it's more popular than the actual correct spelling on here.

@LemonadeFromLemons I think you did the right thing. First time buyers in rented have very little to lose and could hold out for the house price crash that is inevitable. Plus with the reduction you’ve got you haven’t lost out at all so it’s not worth losing the sale for and potentially being forced to sell your house at 30-40% less which is what is being predicted.

Construction of new builds will stop surely, so less coming into the market which will help slow it.

A decrease in the number of mortgages, especially 80% plus LTVs, will stop buyers (especially first time buyers) from buying. Whether they want to buy or not.

Good news for disaster capitalists though. And they thought brexit was going to be good!

Good news for disaster capitalists though.

The housing market has been a disaster for quite a while now.