To think the buyer’s risk in house prices is not my problem?

[Eeksteek]

I’m selling a buy to let house to an investor. They offered below the asking price back in August, and so far as I can see, no progress has been made on the sale (I thought we were waiting for a survey, but last week they moved to a cash offer and now they are deciding if they want a survey)

The buyer emailed me yesterday to ask for a ten percent reduction on their offer, citing a potential 10-20 percent decrease in property prices and asking me to view it as ‘splitting the risk evenly between buyer and seller’

Firstly, the risk is not my problem. As an investor, it’s hers to take, or not, as she feels comfortable. Why should I share it? If I wanted to take risks like that, I’d be keeping the house. Secondly a ten percent reduction on the asking price is not a ten percent reduction on the offer, lady. And thirdly, a ten percent reduction in agreed price is an ACTUAL HIT to me, not a potential one. It’s not a even comparison!

She has also said that if I accept she will instruct her solicitors to proceed ‘as expeditiously as possible’. Well, why hasn’t she done that already? I’ve instructed mine, and paid them, and completed all the paperwork. She also smugly reminded me that she is a cash buyer, and not affected by interest rates.

I feel like writing back and saying:

1. The risk is hers to take or not. It’s neither my business or my problem.

1. If she wants to reduce her offer by ten percent then say so. The asking price is neither her nor there, as she didn’t offer it.

1. Inflation is running at around ten percent and forecast to rise. Her cash is already losing 10%. She swapping an actual 10 percent depreciation rate which will always be a depreciation, for a potential one which will likely be a gain over time. I am doing the reverse. (Although I suppose she could counter that with interest rates)

1. She is also benefitting from a (I think) five percent reduction in stamp duty. Shouldn’t we be sharing that, as well?

Obviously, I can choose whether to accept or not, and ultimately is doesn’t really matter why she’s reducing her offer. I do have some bargaining power. I bloody hate this sort of game, but I really, REALLY need to sell this house. God knows if I’d get another offer. It’s making an ever increasing loss, and is on a variable rate (couldn’t fix, as selling). Should I just suck it up, negotiate, or continue being silently indignant (which is obviously not very productive!). I really do need this money. I’m widowed and this business supports me and my child. It’s not paper money. Or just not having a holiday or a new Range Rover!

They are taking you for a ride. Pull out and sell to someone else. Marketing at 10% lower if you have to.

@Eeksteek YANBU

So you take the actual hit to your current value so she can avoid the potential hit to her future value.

Nope - don't do it.

She is trying you on, your EA has definitely indicated her that you want to sell.
It depends how desperate you are to sell and where you are. I don’t anticipate any price drops any time soon in my area, good family houses are like pure gold here.

Do buy to let investors save on stamp duty?

I had this done to me a long time ago. I agreed to it as had a job secure and had spent money on the new house purchase. Trouble was they did it again on the day of exchange. !! Don’t trust them. Walk away and re advertise

The trouble is, her not buying your property, whatever the reason, is your problem if you NEED to sell it.

With the mortgage market the way it is and fears over interest rates I’d think long and hard about losing a cash buyer.

A new buyer may also offer less in the current climate

Unpopular opinion but the market has changed dramatically affordability has reduced. I’d proceed with caution especially if you’re around the first time buyer/ buy to let price range.

She’s being cheeky but a house is only worth what someone is willing to pay for it. By all means pull out and put it back on the market but be aware the market has slowed significantly and it might take some time to shift.

If you really think you will get another buyer with the same bid then put it back on the market.
If you think this buyer is your best bet then I would think carefully.

That’s really bad behaviour. And now they’re trying to bully you. They’ve watched the mortgage market change and are trying to work out how to profit from it.

So much depends on how badly you need to move, but you’d be a fool to simply agree.

Communicate via the estate agent and lay out the facts. I’d say something like a below asking price offer was accepted, the seller considers the price fair, and will not be offering a further discount in addition to the reduction already given. Can the buyer please advise asap whether they are in a position to proceed or whether they are withdrawing from the purchase.

Also this.

It's a risk and depends how confident you are to sell at the price if she pulls out. I a lot of places the market has spun to a buyers' market, you have to weigh the odds for your situation especially if it is the type of house that sits at buy to let or fab end of the market as things are sticky and it may any bird in the hand and all that.

Real estate is a good hedge against inflation. They are being cheeky chancers. Don’t give her a 10% discount.

If they don’t honour the existing agreement put it back on the market. I would hold on now and not sell as going through this bumpy ride. Rates will come back down again and prices will be less volatile.

Haggle.

Accept no more than a 5% reduction.

The housing bubble is about to pop. Take your money now.

what @muchprefersummer said.

If you're feeling brave, say you won't accept a reduced offer and tell your EA that, if you don't get an offer at this level from the current buyer, or another buyer, you're going to pull the property off the market altogether and wait for a better time to sell.

None of which is likely to be true or a good idea but it might incentivise your estate agent to earn their fee and stop the buyer from mucking around. No EA likes to lose a sale.

A house is only worth what someone will pay for it.

You are desperate to sell and the market is probably about to tank. She faces the risk of overpaying at the top of the market, you face the risk of not being able to sell and eventually accepting an even lower price. Maybe it’s a game of chicken and she’ll blink but don’t kid yourself that you’re not also facing risks.

Thanks you all for your thoughts. I sent the following. I wanted a mix of we’re-all-women-of-the-world-here reasonableness and I-didn’t-come-down-in-the-last-shower-so-don’t-try-it-with-me.
^^
I do appreciate that we are experiencing very different conditions to when they offer was made. I can well understand that the buyer may be experiencing some misgivings due to the expedited interest rate increases, and possible falls in housing prices.
^^
However, the falls in housing prices and rises in interest rates have long been predicted. Any potential falls in house price are likely to be short-medium term, and as the buyer points out, interest rates will not affect a cash buyer. I’m sure the buyer is also aware of the 5% reduction in stamp duty that they will also now benefit from.
^^
As a gesture of good faith, I am prepared to accept a £2,500 reduction in the offer price to reflect current conditions. This represents close to 1 percent of the offer price, and with the 5 percent reduction in stamp duty, seems a reasonable spread of benefits and risks between buyer and seller.

I expect her to come back asking for 5% which is tolerable (although I’m pissed off about it. If I wasn’t desperate to sell I’d have flatly refused to engage in this rigmarole. An off is an offer). I shall agree, so long as she agrees to exchange in four weeks, and my conveyancer is convinced she’s committed. I agreed this offer almost six weeks ago, and we’re nowhere. I think she has been holding off especially to try and negotiate down. (My conveyancer actually snorted when I told her about the risk splitting nonsense! She lovely, very efficient and made my day. I shall never use anyone else!).

Well, seeing as you really, really need to sell, she has you in a corner (especially if she knows). I'd have been inclined to offer her a 5% reduction but only if you've exchanged/completed by a certain date (offer a short but achievable time frame). Meanwhile instruct the estate agent to remarket it as 'under offer'. You could tell the buyer that, and if a better offer comes in before exchange you will be taking that instead.

Buyer is a timewaster ; cut your losses. I'd instruct my solicitor to inform hers that you refuse the reduction, and as the buyer clearly is unwilling to proceed the sale is void and property is going back on the market.

DO NOT engage in personal bargaining with buyers.

OP, I think your response was way too wordy! Have sold prices in your area actually dropped by that kind of percentage, because your buyer is purchasing the property under the current conditions, not potential ones - so that's what you need to deal with.

I'd put your property back on the market.

🤷🏻‍♀️

tbh - if I was her I’d be being much more hard nosed about it. It’s a quarter of a million quid purchase. A few months ago, someone could have funded that for £1000 p/m with a mortgage. Now it’ll be 1500.

But she doesn’t need that. And quite frankly I think she’s probably overpaying given the level of disparity between asking prices and actual current affordability for anyone other than cash buyers.

All that said though, you hold the asset. And you should only sell for what you are comfortable with.

I would put it back on the market if your offer isn't accepted

As a BTL purchaser, they will probably not be eligible for the stamp duty saving

However, other buyers now will, so worth a try

I hope it works out for you op but I agree with a pp that your response was too wordy. It contained speculation and opinion, rather than the cold hard fact of:

It’s either take the £2.5k reduction or don’t.

Nothing else is relevant. You are too nice. Those of us who aren’t learnt the hard way!

Someone on MSE was selling their late Mum's house to a developer who had just asked to reduce their offer by 9% before exchange. The seller's EA recommended they go back with a counter offer - the developer lowered their offer even more, and the seller is remarketing.

Have a look at the House Buying, Selling forum on MSE if you have a minute.

It's a difficult situation and I'm in a similar position to your buyer right now, although buying from a developer and buying a property to live in.

Do I want to pay £500k for something that will probably only be worth £4-450k in 12 months time? I'm tempted to go back to the developer and renegotiate. I'm also willing to walk away if I think that the risk is too big but I know that it would create a problem for my buyer who is a first timer and has funding in place at a good rate and won't want to lose that deal. I don't want to create a problem for her but that can't be my primary concern.

I also understand that the risks to me aren't as bad as for many - the difference between sales and purchase price is c£150k and so that is what I am really risking as the value of my current home will also drop. I will also have a fully offset mortgage and so will pay no interest.

It's now a buyers market. She has every right to ask but you have every right to refuse and look for another buyer. I'm also not sure that the investor will benefit from lower stamp duty as I don't think that it was cut for owners of multiple homes.