Would you gazunder in these circs?

[Claliscool]

Due to exchange on house this week.
Property market has obviously dropped.
No chain.
I'm a ftb buying my landlords property.
Price negotiated pre covid was inflated due to initial brexit bubble.
Would you gazunder?

Yabu - no I wouldn't in these circumstances
Yanbu - yes I would in these circumstances

[hydroxychloroquinegate]

Go for it. They can only say no. It's a business transaction - they'll understand. Sounds like you are in a good position and saying no would mean them marketing it etc. A man would.

[MuchasSmoochas]

I would try and stall it if you can. Keep it vague, something like you have reservations about your future income and could you continue to rent for a few months. We don’t know what’s going to happen with the housing market. You can only ask! Have you asked your lender if they are confident with the existing valuation?

[domesticslattern]

We don't know if the landlord could get new tenants with ease tbh. Round here rents are not softening, due to lack of stock. Good properties (especially with outdoor space, in good school catchment areas) are still very much in demand. I am sure it varies area by area.
Also if this FTB loses this property and needs to rent elsewhere as she completes another purchase, that means a few more months of potential mortgage payments being lost in rent.

[Fredthefrog]

Just be aware you would need a new mortgage and may not get it this time as the banks are getting jumpy.

[Aragog]

Dh is selling a property for his clients.
Estate agents called today to say that the buyer - who had had an asking price offer agreed pre-Covid - has withdrawn offer and new offer is £40k less.

Dh has advised the clients to drop the offer entirely and put the house back on the market. They're in rush to sell and they don't need to buy another property. His clients had had other good offers previously so they're willing to take time to get a better price.

The estate agents may not have given these buys the best advice as it turns out.

[sirfredfredgeorge]

Do you mind losing the property purchase and also losing the place you currently rent?

It's a pretty low risk though surely? The landlord is not in a position to get new tenants with any ease, they'd be taking an even larger hit in doing so, and current rental rates are well down in most places certainly anywhere that had any Airbnb volume or Student volume of properties due to the glut of those coming onto the general market.

But yes it's a risk, but not a particularly large financial one to balance against the risk of thousands of pounds of equity disappearing.

[Claliscool]

Thank yiu for all the advice - on balance I won't gazunder for the reasons everyone has given! Thank you

[domesticslattern]

It's a risky strategy and leaving it until the week of exchange even more so.
Do you mind losing the property purchase and also losing the place you currently rent? Worth also taking into consideration your knowledge of the property and its pros and cons from living there. That counts for a lot. If you have to move out, rent somewhere else and then start a purchase of a new place from scratch then you won't know about eg dodgy neighbours etc.

[bogfi]

The economy will recover however people have lost jobs that some won't get back, we have a huge debt to pay back, potential negatives to more people working from home. It took about 10 yrs to recover from the 08 recession & a lasting legacy of that was wage stagnation. The op is right to be cautious.

[bogfi]

Wrong forum to ask because here ever rising house prices & even gazumping is fine but lowering your offer & being anxious is sacrilege.

How desperately do you want it?

[reallifegetsintheway2]

YABVU

DH is an estate agent. He is doing lots of viewings. Offers coming in. On house above asking price, another house full-asking price offer. Buyers who are serious and want/need to move will make serious offers. You don't sound serious.

He also believes in karma - if you act crappy, it will come back and bite you on the bum. He is often right.

[Rebelwithallthecause]

R2519 - no evidence of 2nd wave though from any other country that exited lockdown so far

[Divebar]

I think you should honour your initial offer unless you’ve had specific information that tells you the property is overpriced. My friend recently ( before lockdown ) re negotiated an offer because the valuation came in much much lower than the agreed asking price. ( more than £50k I believe) which seems reasonable to me. However in that situation they weren’t living in it so weren’t risking their home in the same way. It may be that if the landlord has several properties that they will just accept it as a standard negotiation but I think lots of people would consider it shady and find it dishonourable.

[ShirleyPhallus]

I think this is really shitty behaviour if you’re due to exchange this week. Why didn’t you discuss this previously?

Installing a pergola is not “structural alterations” you need to make

[FizzyGreenWater]

If you have a good deposit, why are you buying a house which is in a bad state but priced that if you renovate it will be over ceiling price for the street?

The only sensible reason should be: because you love the place and want to keep your home there.

If so - go ahead with the purchase.

If not - you should be looking for something else anyway.

If the latter, I would pull out saying you've had bad news on the work front and are no longer in a position to buy, in order to not ruin your relationship with the landlord so that you can continue to live there until you find a house which is more of a reasonable price.

NB- remember if the house is in the £125k bracket, the costs of moving would probably cancel out any saving you make/ceiling price problem etc. If £500k bracket, not so much.

[R2519]

@Rebelwithallthecause
And in July when we have a 2nd wave and places have to shut again and the markets dip again....what then?!
The next 12-24 months are going to be rocky for all financial transactions. Paying over the odds for a property valued before the market downturn is ludicrous.

For example, my investments have dropped on average 10% since early March, all CV related. it will take a long time to claw that loss back. The same goes with property so why pay over the odds for something that is worth less today. You wouldn't buy shares in a company today based on their value 12 weeks ago would you! If you did you would be rather stupid!

[TrickyKid]

Depends how much you want it. If I were the seller I'd probably pull out. Houses in our area haven't dropped. Two friends have sold theirs at pre lockdown price this week.

[Rebelwithallthecause]

Have you seen the stock markets this morning? Massive spike due to news of things starting to reopen

Yabu

[R2519]

I have sympathy with OP and those saying 'if i was the landlord id kick you out etc' are just being stupid.

FTB typically have the smallest deposits available so if the housing market drops by even a few % if can put them in a very difficult position considering most FTB are probably buying the property to get them on the ladder, not to buy their forever home to fit their needs for the next 20 years. Therefore, i think its only prudent to make sure you are not setting yourself up to get into negative equity.

The reality is the property market has taken a small slump nationwide, however there are areas where that slump will be greater than others. Only OP can decide if the area they are in has dropped by an amount likely to cause them problems in a few year time should they come to sell.

My advise OP is weigh up how long you plan on living there (factoring future needs etc), whether the property market has stagnated where you are and dropped in value and whether other properties around your one have sold for less. Then you can decide if taking 5% off the offer price is justified. All that said, it also completely depends on what deposit you are putting down. If its 30% for example then that's a very different matter.

[sirfredfredgeorge]

I would withdraw entirely, the risks are too high against almost no benefit, the price of properties will certainly not be higher in 6 months.

[NikeDeLaSwoosh]

Thing is, if a vaccine is announced tomorrow, the economy will bounce back fast and house prices were rising at the start of the year

No, this isn't the case, irrespective of if/when a vaccine is found, the £62 billion debt that we ran up during lockdown will still be there and still need to be repaid.

The damage is already done I'm afraid.

Also

Gazump = Put in a higher offer on a property where a sale has been agreed with another buyer so that you 'pinch' the property from them.

Gazunder = Where you agree a sale at a given price, and then you drop your offer, usually a new days before exchange.

In this instance, OP used the correct term - gazunder.

[Claliscool]

Sadly I inherited so I have quite a bit for a deposit so not worried about LTV ratios.
I need to do a loft extension and install a pergola / outdoor living spade as the garden is grotty so I guess these are structural alterations I need to make

[rattusrattus20]

Yeah, I woud certainly be tempted drop out or lower my offer [things have absolutely changed], but try to behave as well [giving as much notice & explanation etc as you can] as possible.

[Tedgy]

From what I'm seeing on lots of ftb groups, is that there are a lot of buyers lining up eager to buy as soon as the mortgage companies start lending again.

[Talulahoopla]

I'm in the process of selling my flat. Having spoken to surveyor and estate agents, lenders aren't expecting valuations to be reduced and at the moment there's sufficient demand (in the area I'm selling in anyway) that sellers are unlikely to find themselves without a buyer. My flat is going on the market at the valuation given before lockdown. If you tried to reduce the price at this late stage, I'd pull out and go to to someone else willing to pay.