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 We also benefit from stamp duty freeze at the moment which I think will be withdrawn if we start again.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. 

I would have done what you’ve done OP although I’m sorry it didn’t work out for you. I’ve been through similar - and at the time was very sad to lose what I thought was my ideal home. But I much prefer the house we ended up buying (been in it 19 years now!) which was a far better buy financially. Hope something you love even more comes up soon x

@ftb30

Seller has rejected offer and said they will not go lower than £330k. They have asked EA to put it back on the market tomorrow.

You’ll find a better house.

Tell the estate agent you’ll leave the offer on the table at £321K for 2 weeks. After 2 weeks do give you a call as you’d still be interested at £315K.

And get looking in the meantime. Something better will show up with a more reasonable vendor.

I owned an ex la property and my direct neighbour was a council tenant. It had no effect on the mortgage availability. The value of the houses were slightly lower, but not significantly.
I was selling a house and the valuation came in lower than the agreed price, and we met in the middle (not as wide a difference as yours). I would ask the vendor to do the same, as they are unlikely to get another higher valuation from a different buyer, and presumably they are trying to complete on their ongoing purchase too.

Try to console yourself that you may have dodged a bullet if the sellers are that intransigent. They might well have given you other unreasonable grief at another stage that scuppered the whole thing.

House buying/selling involves 100s of 1000s of pounds, so that 20 grand or whatever doesn't sound much proportionally. But you wouldn't draw out £20,000 cash from the bank and hand it over to a stranger just because they wanted it.

It's happened all for the best OP in these uncertain times and this is a blessing in disguise.

Something more reasonable will come up. It was and remains overpriced.

Don’t be sad OP honestly you’ve dodged a bullet there, just don’t be too smug when its still on the market in 12 months time, especially if the market has dropped too. (Well maybe a little bit smug).

I agree with this suggestion (but only if you really love the house. If it’s a bit meh, definitely look for something else):

“You’ll find a better house.

Tell the estate agent you’ll leave the offer on the table at £321K for 2 weeks. After 2 weeks do give you a call as you’d still be interested at £315K.

And get looking in the meantime. Something better will show up with a more reasonable vendor.”

I think if this was going to be your forever home OP, you would need to have to increased your offer to £330k. Since it’s not, it’s not worth that amount.
Out of interest, how long was the house in the market before you made an offer? Trying to figure out what makes the vendor think they can achieve more than you are offering. Is it a popular area? How much have similar houses on the street sold for recently? It is a sellers market, and is likely to stay that way due to lack of supply of good housing, even though ex LA houses are not the most popular type. So you could wait and see what happens with this one and leave the offer on the table.