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!

If I'm reading this right, the rent on the property currently doesn't cover the mortgage- presumably because the interest rate on the mortgage has gone up? If you're selling it with tenants in situ, then it's only really appealing to other landlords, isn't it? No residential buyer will want to deal with the hassle of evicting someone.

Presumably anyone else who needs a mortgage (I'm assuming, given the situation, your mortgage isn't for the fully value of the property) will be in the same situation as you? So your market is really cash investors only- and a lot of them will presumably be wary, and perhaps anticipating a house price fall.

So really, if you really need to sell and can't absorb the losses you're currently taking, you're a bit stuck, aren't you? Hopefully she's happy with the situation, and proceeds quickly now, because if she pulls out, what are your other options? I'm assuming you can't afford to get vacant possession, then market because you can't afford the mortgage?

I'd just be pushing to get the sale as quickly as possible- what happens if your tenants stop paying rent, or there's some damage to the property?

Just BTW, on your comment about corporate landlords, in my experience, they're better at maintaining their properties etc- as they can afford to and want to maintain the value of their asset. As long as you pay your rent on time, they generally aren't that fussed. And they don't run into issues like this. This isn't a dig, just a general comment because a lot of people say things like that, but as a tenant, I've found the opposite to be true.

No, no, and no again.
The next thing will be a reduction based upon something on a survey.

I would say no and be willing to put it back on the market. You would have to find a way of coping if the buyer pulled out without any of this happening so I would look at it like that.

TBF, the buyer has said they will forgo a survey.

Another buyer interested in this property and willing to proceed could take months to find. During which time, the OP sounds like she will be losing money. I don't know how much the OP is losing each month, but if, for example, the tenants gave notice, she could lose hundreds quite quickly in keeping up with the mortgage.

So surely better to be shot of the house now, even at a slightly reduced price?

The rent does (just) cover the mortgage so far, but for ridiculous and boring reasons, it’s on a very high variable rate, up to about 7.5% now, and obviously rising. Contrary to popular belief, there are lots of other expenses associated with properties, so yes, it’s making a loss now. I could have fixed at 3.3% up until a fortnight ago (I have just fixed another property on it) which would have been perfectly profitable, but because I had already agreed a sale, I obviously didn’t. It’s not a poor property to let. They are in some respects poor tenants, and have actually contributed to the problem by over-occupying without my knowledge, thus making me ineligible for a non-HMO (and much cheaper) mortgage, which caused several delays and prompted me to sell and the finance is clearly a very poor deal (for really, really stupid reasons that wouldn’t apply to another landlord)

I purposefully chose an investor (I had higher offers from other buyers) because I wanted the tenants to be able to keep their home if possible, and because I wanted a smooth and quick sale. Had I accepted an offer from an owner occupier, I would have sold with vacant possession. Honestly, you can’t bloody win (and people still think you’re a bastard grabby landlord!)

Good luck op hope she accepts and it goes quickly.

No response. Getting very bad feelings about this.

Sorry to read she didn't accept your acceptance of her revised revised offer... fingers crossed she is simply counting her money again and wondering what to do with it all.

Why haven't you gone back to the higher offers then, rather than drop the price?

It was months ago. She’s going back on an offer that’s been accepted, and I’ve instructed the solicitor etc. She….hasn’t. I dont want to start again if I don’t have to. Everything’s taken FOREVER! I’d expected this to be over by now. Now, I’m not sure if we’ll be done by Christmas. I put it on the market in June.

I’ve chased the estate agent says she has written him a long email (she’s worse than me!) about the cost, risk and inconvenience of sitting tenants, and doesn’t want to take them on. I have responded pointing out that I have exactly the same cost and inconvenience of evicting tenants (which I really didn’t want to do), plus the mortgage payment (with no tenants) and the risk of her pulling out on top, and that there is a cost associated with that. (Almost exactly the same cost as I have agreed to discount if she takes them on!)

If she had raised this two months ago, and I’d had any indication that she was moving things along, then I’d have issued notice to quit. I’m now quite nervous about evicting the tenants, but there’s no way she’s getting a discounted price out of it. I’ve instructed the EA to go back and tell her, again, 5k off with tenants, £2500 without, and if she doesn’t show some progress by Monday, it’s going back on the market, and she can take her chances again current bidders (he thinks current market it will still get the same-ish price. The delays cost me, though)

SO fed up this. I just want it gone. June!

I sold my deceased mum’s house earlier this year. Buyer took weeks to do anything, didn’t have a survey, I chased and chased, after 3 months of prevarication I pulled out as I just felt he wasn’t keen. He never tried to get me to change my mind, that proved it. Within 3 days I’d sold to someone new and sale went through in 6 weeks. I know it was a different market, but there will always be chancers who string you along then hope you’re desperate. Personally I never drop an accepted price unless there is a verifiable survey issue, even then I play hardball. I really feel if they want the house they’ll buy it, and if they don’t really want it push off and stop wasting my time. I also never get involved in chains, I move out into rental as I can’t stand the stress of getting everyone in synchro, then I’m in a better position to buy.

From your latest update, I don't get the impression she's a serious buyer. Even if you agree to drop the price to what she's asking now, there's no guarantees she'll go through with the purchase.

As bad as it may sound to some, I'd put it back on the market and be more open minded to evicting the current tenants if necessary. Especially since they have broken the terms of their current tenancy by over occupying and as a result put you under greater financial pressure.

"Not a serious buyer"

LOL.

What other houses near you selling for...tbh I'd be tempted to pop back on market and refuse to deal with this buyer again but depends if you need to sell....

Also op hate to say this as someone who rented...issue section 21 then easy to sell on. A tenant legally does not have to offer viewings even if in contact ...better all round if property empty. Wish landlords do this as standard.

@Eeksteek how did you get on in the end?

You sound like a lovely person trying to make the best of a bad hand you've been dealt. I hope this was sorted by Christmas for you.

It was, just. Completed on the 22nd. I am SO glad to have it out of my life. I feel like I can finally start living again. I did give a small discount of £2.5k, but she wouldn’t budge on the tenant. I refused to evict them until they had somewhere to go, so it took ages, and she made a fuss about other silly things. but it’s gone now. Thank you all for your good wishes.