WWYD re: house purchase

[ftb30]

Posted for traffic as I really need to make a decision today and my heart is ruling my head.

Property was advertised at £352k, offered £340k and this was accepted. Property is a 3 bed end of terrace in Essex and this seems a fair price looking at other properties on the market. It is ex-LA but has been privately owned for over 30 years and improved/extended. The next door property is privately owned but there are still some LA owned properties in the road.

Mortgage valuation has just come back at £315k. Reason for lower valuation was the mixed social housing and fact the property is ex-LA. Our mortgage provider not willing to re-evaluate and estate agent has told us that there are few mortgage providers that will lend on ex-council (I had mo idea about this!).

We can just afford the extra £25k but it will move our mortgage into the 90% LTV bracket and eat into funds we'd hoped to use for improvements. We also benefit from stamp duty freeze at the moment which I think will be withdrawn if we start again. We've paid for survey and incurred legal fees already.

We would stay in house at least 6/7 years. We are TTC and getting married (hopefully - postponed!) and the house is large enough to grow our family by two kids before we'd need to consider a move!

Seller will not lower price according to Estate Agent.

AIBU to ask WWYD?

1. Reduce offer to closer to £315k and pull out if seller won't accept
2. Reduce offer to closer to £315k but continue with higher LTV if seller won't accept
3. Continue with higher LTV
4. Just walk away now

TIA. 

If you bought the same property after 31 March, the stamp duty would be almost £6k. I guess you could could offer up to £320k and be no worse off than if you pull out.

Option 1. Don't pay more than the house is worth.

@EwwSprouts

Go back to the vendors and say not going over the mortgage value.

You say more will use up your improvements budget. So you risk end up in a not sorted house that you cannot sell on for the same value. It's high risk in the current economic climate. There will be more job losses.

This is my thoughts exactly when I first read your post OP.

Sorry but another vote for Option 1, I wouldn’t be paying a penny over 315k. We had friends that were in negative equity for years. Trapped them and caused so much stress and upset, I would certainly not recommend it.

@Ffsffsffsffsffs

Can't understand why you offered £15k over asking price in the first place, unless it was OIEO price, I've never heard of anyone doing that.

It's a big chunk extra to pay and you may not recoup it in equity quickly, plus higher LTV bracket.

You've had 2 surveys stating lower valuation (which is closer to where I'd have put an offer in tbh) so I'd go for option 1. Buyers market at the moment, they're going to benefit from stamp duty reduction too.

It was up for £352k we offered £12k less than asking price

Option 1.

You don't know what the market will look like in a few years. Prices might go up, or go down. You either make more of a profit, or less of a loss if you reduce the price. If you don't, you lower your profit and increase your loss.

Don't buy it for more than its worth.

@lidoshuffle

You say the vendor was a knob for not negotiating

But then you say you found a better property that * I love this one so much I was prepared to take the hit if it came back downvalued.*

So surely the previous vendor may well be hoping for a buyer that loves his property as much as you love your newly found one as is “prepared to take the hit**??

@Sethy38

I am always shocked you how definite posters are with their advice on such scant information.

Your approach should be led by what you know re the venders

Probate - likely they won’t be in a rush to sell. So if you love love life the property - increase your offer

If they are in a chain - more bargaining power. Worth negotiating

If it was a buy to let - do same as probate

And so on

They have another property they are buying but they need to make improvements and turned down an offer of £335k a couple of weeks before our offer (EA told us)

Thanks all. I have emailed EA to say we need to reduce our offer - haven't given a figure yet.

I think we are going to reduce to £321k - it's the valuation plus a bit more to cover what we might lose in stamp duty and fees if we pull out.

Fully prepared for them to say no and is be stuck in my mum's spare room another 6 months

Don't pay more than mortgage valuation

Do you really, really want this house op. I know you have laid out cash but the valuation is a warning to you and the lender. The house is too expensive and you do not want to be trapped there at some time in the future wanting to move, stuck in negative equity.

Op, I wouldn't even bother trying a lower offer. I would walk away. Sadly lender's attitudes to ex LA homes indicate a harder to sell property as well. You will find something else.

[quote Sethy38]@lidoshuffle

You say the vendor was a knob for not negotiating

But then you say you found a better property that * I love this one so much I was prepared to take the hit if it came back downvalued.*

So surely the previous vendor may well be hoping for a buyer that loves his property as much as you love your newly found one as is “prepared to take the hit**??[/quote]
I never said that at all - get your facts right.

1 then 4

Good luck OP

I agree with Ffsffsffsffsffs - why did you offer £15K over asking price in the first place? I'd go back at valuation or valuation plus £5K.

I had a similar situation. I lost my buyer and then got a lower offer. My vendors of the place I wanted to buy wouldn't reduce. They went back on the market and then finally, when I managed to get more out of my buyer, accepted a lower offer. They had to get real.

Be prepared to walk away. Its not a good investment to pay way over valuation.

Option 1. I wouldn’t want to be in negative equity at the moment, and I’d be reluctant to take out of the pot I would use to do the place up.

Sorry!

I mean @LividLoving

@Sethy38

Sorry!

I mean @LividLoving

Sorry too Sethy - I quickly read it and thought you were saying I'd written that the Op was a knob!

Oh heavens no!!

Tricky one as depends how much you love the house. Personally I’d pick option 1 but depends on the house.

Why are people saying that OP offered £15K over the asking price when she states in her OP Property was advertised at £352k, offered £340k and this was accepted and she also says it again later! So OP paid £12K UNDER the asking price.............

OP, when I was in a similar situation several years ago, I sent them a copy of the valuation and offered what the valuation said it was worth. They did accept my reduced offer thankfully.

I see that you have now emailed a reduced offer, so it will be interesting to see what they do.

@Bouledeneige

I agree with Ffsffsffsffsffs - why did you offer £15K over asking price in the first place? I'd go back at valuation or valuation plus £5K.

I had a similar situation. I lost my buyer and then got a lower offer. My vendors of the place I wanted to buy wouldn't reduce. They went back on the market and then finally, when I managed to get more out of my buyer, accepted a lower offer. They had to get real.

Be prepared to walk away. Its not a good investment to pay way over valuation.

We didn't. We offered under the asking price by £12k

EA has replied to say we will discuss tomorrow but she has spoken to vendor today and they will put back on market if we reduce offer below £330k.

I'm not sure if she's supposed to tell us but she said she thinks they are being unrealistic but can't force them to sell their home.

I'm going off for a large glass of wine and to trawl Zoopla... again.

Option 1, and then 4 if necessary. Why would you pay for the improvements to their new house (by overpaying on this house)? They will lose out by having to pay stamp duty on their next house if they don't sell to you.
FTB don't pay Stamp Duty on the first £300,00 , so end of March is almost a red herring, you will only pay it on £20,000.
I am another one who is not sure that lenders have a blanket refusal to lend on exLA property, but I can see that they might chose not to lend on specific former LA estates. I would be suspicious if this was a lender not associated with the Estate Agent and the agent suddenly found you a lender who would agree with the higher valuation......

@iwishiwasatcentralperk

Why are people saying that OP offered £15K over the asking price when she states in her OP Property was advertised at £352k, offered £340k and this was accepted and she also says it again later! So OP paid £12K UNDER the asking price.............

OP, when I was in a similar situation several years ago, I sent them a copy of the valuation and offered what the valuation said it was worth. They did accept my reduced offer thankfully.

I see that you have now emailed a reduced offer, so it will be interesting to see what they do.

I think it's a simple mis-read of the digits in the asking price: misreading 352 as the rounder number of 325.

Don’t offer more than you have said . You are a buyer not in a chain so in a good position. Stick to your guns.