AIBU to walk away from this house purchase?

[Quandaries]

Will try to keep this short.

Viewed a house and loved it 6 weeks ago. Ticked all the right boxes and was very good value for what it was. Offered asking price and it was accepted. Survey done, solicitor engaged etc so at the stage where it’s cost us some money.
Booking deposit has been paid but is refundable (not in Scotland).

We have a large deposit and mortgage is ready to draw down. We’re not in a chain.

Our solicitor was chasing theirs for contracts.

On Thursday I got a call from their agent to say they’ve allowed another viewing from a very insistent couple who are cash buyers and offered £8k more.

Agent now wants us to reoffer and increase on the new buyers’ offer so we’ll be paying £12k above what was agreed. He insists that the house will go for even more if it goes back on the market and says that houses are being snapped up before they go on the market as more people are working from home and this village is very popular for those with just an occasional commute.

I’ve had a look at Right Move and can’t see any evidence of anything other than price drops in the area. I accept that there may be houses selling before hitting the market and I don’t have this data.

My heart loves the house. It’s in a stunning village and really ticks all the boxes in terms of schools etc.

My head is saying we’re actually in a better position than the cash buyer as we’re 100% ready to go and can sign this week whereas they will need to have survey done etc.

Head is also telling me that if the sellers are going to screw us for £8k (for context, that’s a bit over 1% of the purchase price we had agreed), they’ll be a nightmare to deal with and it’s only a matter of time until they come back to us either with a new offer from the other bidders, or pushing to put it back on the market.

I’m also guessing that house purchases slow down a bit in winter, and it’s an area where more Covid lockdown measures are likely so putting it back on the market may mean there aren’t many viewings.

For additional context, we can afford to increase our offer. I’m just loathe to get into a bidding war due to how the vendor has sprung this on us.

But I love the house.

YABU- up my offer
YANBU- walk away

We had this too,offer in on a house,and at last minute they claimed cash buyer offered more
We walked away. No discussion, no histrionics.
The Vendor House remained unsold, cash buyer changed their mind.funny that.days later, numerous calls from EA asking us to reconsider
We didn’t

Can anybody answer, why isn't gazumping illegal?

I vaguely remember having read that it was going to made illegal many years ago. Did I imagine it?

I'd call their bluff, OP.

The house should not have been available for viewings if you are at the point of exchange nearly. The EA and the vendors have behaved badly there. Plus they are asking you for more money on top of the other offer, not even to match it.

Personally, it would upset me and I would walk away from it. Who is to say that they won't do it again, or demand more money on the day you exchange?

I would tell the EA that you will not increase on the offer, and that if they want to exchange at the end of the week you are ready, but if not, then you are no longer interested.

I know it is sad if you have fallen in love with the house, but even if you can't see it at the time, you will find something better. I fell in love with a brand new house, but the builder had made it unmortgageable. I was devastated, but we ended up with a lovely detached property with driveway and garden, in a quiet road, where my daughter was able to play in the street with her friends. We would have had none of that with the first property.

If you do proceed, then you need a guarantee that it is off the market and no further viewings will be taken

@Chicchicchicchiclana

I don't know why everyone is blaming the agent. It's the vendors who have allowed the viewing and now want to renegotiate. None of this is worth the agent's while. 1% of 1% of the sale price (or whatever fee the vendors are paying) is not worth the extra risk and hassle to them. They would have wanted the sale to continue with OP.

Not necessarily so.

Agents may have pushed them into doing the viewing so they could start a bidding war.

Or just to see how high you would go and there is no other offer.

Tell them you are prepared to stand by your offer and are ready to go ahead but it needs to be off the market now.

One other thing I'd ask the EA to point out to the seller if you go back with an increased offer....

The fixation with a cash buyer is silly.

It only matters in the sense of there being no chain. You also have no chain.

Additionally, you have proof, from a reputable 3rd party that you have the funds to buy the property in the form of a mortgage offer.

A cash buyer has no such proof. They are only a cash buyer because they say they are.

In reality the seller has no idea if they have the funds to buy the property outright and they are taking a risk that it might come to light further down the road that this is not the case.

As such if you match their offer you are actually the better buyer not just based on already having surveys done but also because there is no doubt you can fund the purchase.

Ultimately, I think you need to treat this like it’s a business/financial transaction (which it is).

How much are you prepared to pay for the property and if this increase is in your budget (and you said it was when making your initial deal) are you prepared to lose it (and your existing financial investment in searches, solicitors etc) over a principle ? Are you going to be cutting your nose off to spite your face and losing the house because you don’t want your seller to “win” ? Do you really care if they do, so long as you also win ?

Only you can answer how much you’d pay for it and how much you want the house (or how easy it would be to find another you want).

Yes they’ve behaved badly - but if you’re so close to exchange realistically they don’t have too much time to try much else on.

I’ve never once bought a house from (or sold to) people who didn’t behave badly in one way or another - trying to renegotiate, leaving the place filthy etc... I (sadly) expect it - not that that makes it right. These people might be trying things on or they may have a genuine offer - but (despite what people say) I don’t think there’s many people out there who turn down a price bump if they hadn’t exchanged contracts.

At the end of the day - you’re not going to really deal with these people a lot in the future, even if their child is in your kid’s class. I would in no way let that influence my decision making process here.

Just out of interest though, was your offer conditional upon it being removed from the market and no further viewings ? I always stipulate this.

Mum was looking at loads of houses in 500 k range, but then a beautiful 2 up 2 down came on market for 850.

She said “ should I make an offer?”
We said

No! Buy it!
That was 5 yrs ago and prices rose but now are not as giddy.

If the sellers are wankers, they will keep playing you for a sucker.

But if you love it and can afford it... go for it.

But gazumping is horrid. Parents had it done twice with houses they wanted to buy.

Just as a buyer has to prove they have a mortgage agreed to make them proceedable, so a cash buyer has to show evidence of funds. Believe it or not, some cash buyers don’t bother with a survey, I know two people who didn’t.

If the cash buyer exists, they’re as able to exchange next week as the OP if their solicitor moves fast.

I’d say if exchange takes place next week I’d buy at the price agreed. If not I’d walk away.

I hope you Walk Away just on principle. Estate Agents are horrid.

I would offer an additional £2500 on condition that you exchange by Thursday of this week. Otherwise tell them your offer is off the table.

And say if they still choose to go with the cash buyers let them know that if the cash buyers turn out not to be covered in unicorn milk and glitter and the vendors come back to you then only your original offer at the original selling price will be entertained.

Can anybody answer, why isn't gazumping illegal?

because it's never suited any political party to make it so.

English property law is far more scared than criminal law and far harder to change. After all, you wouldn't want the big landowners to suffer would you ? We're not communists after all.

They’re messing you about. And this is quite far into the purchase. There’s no knowing when it will stop. I would walk away.

If you do decide to increase your offer then get some conditions attached to it such as they can't change the price again; if they drop out then they should pay all your incurred costs etc.

They are extremely foolish to lose good buyers over 8k. I'd walk away!

Little wonder that house buying is so stressful.
Even as a child I remember the crushing disappointment of two beautiful houses that parents lost at last min to gazumpers.

If the house is really special, I’d be tempted to pay the 8k if you say it is affordable.
But if just an ordinary house- maybe wait.

Did the estate agent facilitate this viewing? That's very naughty. They have duties to you as well and if the house is sstc they are not supposed to be marketing it.

Having said that, and speaking as someone who took a 5% reduction to get a sale over the line in similarly dodgy circs (survey produced on eve of exchange that was dated 8 weeks earlier!), I would grit my teeth and do it if you love the house and can afford it. The seller isn't the only one who'd potentially be going back to the beginning; you definitely would having paid out for a worthless survey and searches, unless you wanted to sell them to the cash buyer (and thus facilitate their gazumping of your house, because with those if they really are a cash buyer then they'll be ready to exchange next week).

Everyone else has given much better advice than I could but I totally feel your pain and understand why this has pissed you off!

We are in a house where the buyers insisted on an extra £5k. We did pay it and viewed it like a business transaction. It infuriated me for ages - I was really pissed off - but now we are in the house, I'm glad we did it as I would have hated to lose out on it.

But it's shitty, greedy behaviour and it should be outlawed once an official offer has gone in and been accepted.

What I would say, if you are ready to exchange and so are they, is that you will agree to the raised price but on condition that they exchange immediately (eg this week) and then you'll at least not have to wait too long to find out if they are likely to start messing you about again.

I’d call their bluff but be prepared to walk away.

If your offer was accepted why was the EA even allowing viewings. It's a ploy to get more money. I'd ask the EA what their policy is. Especially as you offered the asking price.

Did the estate agent facilitate this viewing? That's very naughty. They have duties to you as well and if the house is sstc they are not supposed to be marketing it.

The EAs only obligations are to the person who engaged them - in this case the vendor, there's an old saying about he who pays the piper and all that.

In theory there should be a code of conduct that should prevent this. In reality when you're getting a %age of the sale price, there's every incentive to get the highest price you can.

I wouldn’t offer an increased offer. Re-iterate your good position - mortgage etc ready go, not in a chain etc. Reply stating your own demands, ie you offered at asking price, it was accepted. If they don’t (re-) accept your original offer by Tuesday (or whenever), you’ll walk way (and want the booking fee refund). Channel your inner Phil and Kirsty!

Bastards. I would refuse to play their grubby little game and not raise my offer. Contact the vendors direct and say you deplore their agents lack of integrity, the agreed price is the most you can afford so there will be no new offer.

    If  they are just trying it on they will backtrack  PDQ.

Can you contact the sellers directly, in case the estate agent is lying to you to up the price?

If this is an £800,000 sale, the Estate Agent will earn a commission of approx £8,000 to £10,000. If the property actually sells for £808,000 the EA will get maybe £80 to £100 more in commission. Do you think they would risk lying or endangering the sale to OP for an extra £80 to £100? They are handling a sale that was more or less guaranteed to go through until the very insistent buyers saw it. Now they've got the hassle of dealing with the new buyers plus OP. And of course there is no guarantee that the second sale will go through. Those buyers might pull out for any reason. I've worked on enough high value property sales to be reasonably confident they wouldn't take this risk unless the vendors were insisting.

The vendors are the ones ultimately responsible for this situation.