To ask seller to reduce asking price due to stamp duty increase

[Ouch12]

Hello,
I am on the deeds for my parents house. They couldn't qualify for a mortgage as they were too old, so I was added to the mortgage.

I am now buying a house for myself - purchase has been ongoing for 2 months.

However, my can't buy me out from their current home - they just don't have the money.

In the Budget stamp duty on 2nd homes increased for 3% to 5%. This means I will need to find an additional £10k for stamp duty, which I don't have.
I will try to increase the mortgage amount to cover the extra £10kz

If the bank don't, I don't know how I will be able to afford the additional £10k. My parents are already gifting me money, so I cannot ask them any more.

Worst case, I might ask the seller to reduce the price by £3k -£5k but I'd imagine they'd be pissed.

Would you be willing to reduce the price if you were selling.

Of course you can ask - the estate agents might be willing to reduce their commission to help too . The seller won’t be happy ( posters on here make that obvious ) but will they want to start again with a new buyer

If I were asked in your vendors position I’d rather go straight back on the market than pay your tax.

The seller will likely be a buyer elsewhere so will already have their own increased costs to deal with, you can’t ask them to subsidise your parents irresponsibility as well.

A former colleague was once in a position where the bank reduced the mortgage offer by £10k on moving day. She was a FTB at the bottom of the chain. Eventually the person at the top of the chain said they'd take the hit and everybody exchanged for £10k less than previously agreed.

Surely the only way it would work is if everyone in the chain reduced by the same amount and I can’t see that happening .

You can ask. I wouldn't be happy though, especially as it's because on paper you'll own two properties. Also, we would have assessed by now what we'd need/want to have leftover for essentials after completion and that might have meant the value of the mortgage being taken out, ie we'd need a higher mortgage and that just can't be sorted like that.

This is quite harsh given you know the budget came out today, effective from tomorrow. Yes, yes, op should, in an ideal world, have budgeted for worst case scenario; but it’s it clear what has caused her to fall short.

@Ouch12 I do not think you should ask the vendors, my suggestion would be to see if you can pay a slightly lower deposit to have a higher LTV - may need to reapply for the mortgage though sadly.

I would ask your parents for the extra amount in order to keep the purchase viable.

Do not be put off by any posts saying you shouldn't have two homes, you are doing what is right for you and your parents.

It is fair because news the 2nd home stamp duty was increasing in this budget was common knowledge

@Startinganew32 you’re quite right. I was over dramatic. I made it personal to me. I absolutely hate people that do this. It happens a fair bit. People offer and agree on price and then near date of completion start negotiating down. I hate it and genuinely would pull out and not trust the buyer any further. I think the OP needs to own up to her own responsibilities and cover it herself. Or pull out and buy a cheaper home.

If you did that to me, I'd shrug and suggest you looked at other properties.

I’m not saying they should reduce. But the “ I’d not trust you” is harsh. It’s clear op didn’t plan properly, rather than anything deceitful.

Unless they were drinking heavily, they are unlikely to be pissed

And I don’t think it was knowledge. Until it’s actually announced it’s still a prediction.

In a lot of countries, being pissed is the same as being pissed off.

Is the mortgage on your parents property now paid off?

But not in UK

Nope. Your parents need to downsize to release you from the mortgage.

Yes - mortgage is paid off.

Why should the sellers pay for your "second home" problem?

I'm sure they won't be pleased about it but f the choice is you pull out then they may well be pragmatic.

No one can really answer this. It depends on so many factors like the length of chain, whether their next purchase is a one of a kind unlikely to come up again etc.

Your best clue might be how long it was on the market and the buoyancy of the local market.

It would be quite a risk for a seller who only got one offer (yours) after 9 months on market to lose a buyer for 3k given the circumstances you describe. We are heading into a traditionally poor period for house sales as the 'in before Christmas ' preference would now be extremely tight.

I think set out your circumstances, that you are serious about completing and seeing what they say.

If you have to borrow more that is a separate application and could take too long anyway.

There must be quite a few people who have a fixed budget for it all and can’t just magic up an extra £10K just like that.

but then I can see if they had given notice there would’ve been an impossible scramble to get things through before the deadline like before.

You could transfer the property back to your parents but that might attract CGT as you are disposing of an asset.

You will also be subject to a shit load of capital gains tax when your parents house is eventually sold by the way. You need to speak to a financial professional asap

Ok so hopefully no large gains in the property?? get a low valuation to avoid CGT and do a transfer of equity to your parents (so gifting them your share of the property) but if there are large gains it he property then it may cost you more in capital gains tax.

So what.

A lot of people would compromise if they don't want the hassle of finding another buyer.