Scared about buying house, should I reduce my offer? :(

[falaff]

Hi all,

I've had my offer accepted on a house. I love it and it ticks all the boxes. I paid over the top end of the asking price but I'm in a very competitive area (last house had 40 viewings!). I plan to live there long term (at least 5 years). My job isn't at risk, I'm a first time buyer with a 60% mortgage, and it's vacant posession so most things can go ahead in line with the government guidelines.

I'm not too worried about losing money in the long term, but I am REALLY struggling with the decision whether to proceed. My friends think I'm mad to buy now when I could wait for 3-6 months and potentially buy a similar house for 30k less. I don't know whether to listen to them. I feel like perhaps prices may not drop so much in a high-demand area, and if I don't buy now I could be waiting a year for a similar house to come up.

I was thinking of perhaps reducing my offer and discussing sharing the risk with the vendor, so for example if prices may crash by 30% then to ask for a 15% reduction. But there were 5 other people with offers in too, one of which was higher than mine. I don't know if any others have as good a deposit though. I've been burned before by being cautious and lost out on another house as I didn't move fast enough, so I've felt really pressured.

I have saved hard my whole life to have a 40% deposit and I would be gutted to think that I could have saved tens of thousands and used that money in a better way.

I can be a very impulsive and emotional person, so whilst it's ultimately my choice, outside advice is important for me to get some perspective.

Any advice? If I try and renegotiate could I will risk them withdrawing the offer?

The government have just announced people should not move over the next 3 weeks, I know that you are not in this position yet but this will make the house market nose dive, if I were you I would wait, house prices are going to drop like a stone.

I was thinking of perhaps reducing my offer and discussing sharing the risk with the vendor, so for example if prices may crash by 30% then to ask for a 15% reduction.
So this vendor accepted your offer over someone else who offered more and you are now considering reducing your offer by 15%? You are very lucky they did that for you.

I would say pull out if you want to and let the vendor have the opportunity of seeing if any of the others who offered for it are still prepared to purchase it.

How would you feel if it was you?
What if they accept your offer then someone offers them more and they decide to take it ? How would you feel then?
What if prices don't fall by 30%?

The estate agent advised them to take my offer because of my deposit as I am in a stronger position to buy. I don't consider that lucky; I've worked incredibly hard and gone without a lot to save enough to have this deposit.

This is really hard for everyone and I don't want to mess people about. If it was this simple I would just pull out and wait for a different house, but I don't want to do that. I love the house and it ticks all the boxes, and I am so weary of the stress of nearly a year of house hunting in a really competitive market where everything goes for tens of thousands over the asking price.

Equally so, I don't want to be stupid and just plough on regardless if house prices will plummet. I appreciate your reply but the tone isn't particularly pleasant and I am simply trying to be sensible in this very difficult time.

I have bad anxiety and am already having sleepless nights about it; I should be really happy but it's just so worrying. I know that potentialy overpaying by tens of thousands will make me feel awful for a long time. But so will losing a house I love. That has already happened once because I got bullied by the crappy estate agent. I feel completely stuck.

I don't want this to be happening. I am dreading the 'I told you so's' from people on either side of the fence.

Would discussing a potential reduction really be that bad? Surely if the market drops then discussions like this are expected?

Gin96 - the house is vacant (previous rental) and I don't need a removal company, so it would be possible to proceed given the current guidance on gov.uk around moving house. It's not really the logistics, it's weighing up whether I should either proceed as normal with a price that I was happy with before the pandemic but which may now be too high, or to try and get the price to something that is fair IF the market plummets, or whether I should just walk away. I would like to go with the middle option but I don't know how.

I would really like an honest discussion with them about it but there is an estate agent in the middle and I don't want them to just snatch the offer off me.

Hi! Me and my husband bought a house 10 months ago.
Firstly, I understand how stressful and scary it is for you. I was there :) It is normal to have all these thoughts/questions rushing to your head - write them down immediately and review in the morning. See how you see those in the light of the new day.
Secondly, there's nothing wrong in asking to reduce the price (just make sure it is not below other people's offers). I did this with my offer and had 10K knocked off as I was ready to buy (I had offered ''speedy'' purchase to exchange ASAP once lawyers were happy - paid £100 extra for this service) and seller really wanted to sell (inherited property). As you say you have sacrificed and saved for a long time, do not take for granted your hard earned money.
Thirdly, there will be/are other houses you can purchase, unless it is ''one and only you truly fell in love with'' and you would be devastated to lose it. Still you can ask question.
Additionally, do not act when pressured - being manipulated into doing something should ring the alarm for you.
Lastly, regarding how seller feels - it is up to him/her/them to let you know if they accept or decline your proposition to reduce the price. If they do decline, you always can come back to the original offer.

Have your mortgage provider completed a valuation survey yet? Those aren't going ahead right now, so nothing is likely to move very far until some of the restrictions are lifted

I would go in with a lower offer or wait 3 to 6 months, the market is going to nose dive big time, the economy is going to take a while to recover, not many people will be able to move as a lot of people could loose their jobs even after lockdown is over.

You'd be crazy to go through with it tbh

Thanks all.

HappyBuyer - thanks for the positive advice and I think you're right that there's no problem asking. Hopefully they will be reasonable about it. I just don't want them to 'punish' me for asking by just giving it to someone else. There were 5 offers very close to mine, and one higher, so it's entirely possible that there will be someone else with a slightly lower offer and an equally good deposit. The EA has been very good with telling me offers etc although I've been told not to believe them...!

rottiemum88 I haven't had this no. I thought that this would still be able to go ahead on vacant properties but I can't find any further details on this. Do you have any info?

pocketem Why do you say that?

You're not going to buy it tomorrow, you bide your time and see what happens. Unless you can see the future there is no way to know what will happen. Prices may tank. Or there may be a pent-up demand over time we are isolated and prices may not be so affected.
Sit tight and wait.

Just wait and see what happens - see what it’s valued at ( have a private survey not just mortgage valuation ) ... the conveyancing will take weeks and you may even have mortgage difficulties at a time like this which might effect everyone - don’t sign the contract until you are sure .

I'm in exactly the same position as you, the difference being that we currently rent the place we want to buy. We had our offer accepted and I had just found a solicitor when the PM announced the closure of all restaurants/bars etc.

I know our landlords want to sell this year and are probably feeling pretty smug that they managed to squeeze us for a top of the market valuation just before all this happened. We're also in the same position as you having saved for years to get a sizeable deposit together. If we went ahead now and then prices tanked we'd feel like we'd been ripped off and it would really affect my enjoyment of having bought our first home.

Our current plan is to try and stall for a few weeks to get a better sense of what's going on and how long all this will last.

I think your proposal sounds very fair x

house prices are going to drop like a stone

This is unlikely. With construction on new builds stopping, there will be less supply are more demand.

OP if I were you, I'd continue, especially if it's vacant possession.

Thanks. To those saying sit tight - the EA wants me to ring on Monday to discuss mortgages etc as they want some sort of commitment. I haven't done anything yet apart from get some more AIPs from those banks who are still offering. I'm hoping to speak to an advisor tomorrow. Any advice on stalling?

@Sunnyhopefulness : "Just wait and see what happens - see what it’s valued at (have a private survey not just mortgage valuation)" - I was hoping to spend as little money as possible until I can make a better decision, but would you advise putting some money forward in this case? I really need to do some more research but do both of these cost quite a lot? Would the valuation possibly consider the drop?

You can pay for a private surveyor for about £500 but I doubt you'll find anyone at the moment. I suspect the government would deem this non-essential work.

Also I'd recommend getting your own mortgage advisor rather than going through estate agents. Mortgage advisors won't charge you anything, they get commission from the mortgage providers.

I'd definitely say spend a bit of cash - £500 quid is nothing when compared with potentially knocking 10 or 20 grand off the asking price.

I haven't had this no. I thought that this would still be able to go ahead on vacant properties but I can't find any further details on this. Do you have any info?

We're in the process of buying a second property for my mum to live in and were just warned that many lenders are suspending valuations altogether for now. It's worth checking with yours

Yes good point. It's so weird with the money, I am really reluctant to spend £500 but several thousands seems to be a far easier decision. I think it's the difference between tangible cash and an incomprehensible figure on a computer screen. I've been doing mortgage comparisons today and just randomly mashing figures on the keyboard and seeing what happens :/

I'll get an advisor tomorrow. I've done a comparison on Money Saving Expert and Halifax actually look OK. I'm assuming a tracker is a good one to get now?

We’re selling and buying at the moment. Our buyers valuation survey has been done and we had our official mortgage offer today.

I’m worried about prices dropping too. But the house we are buying is in a really sort after area and we plan to live there a long time. I’m wondering if sought after area prices will recover more quickly it won’t drop that far in the first place?. Popular areas won’t stop being sought after places to live. Especially where we are buying as it is a village location with great schools and not many houses.

What are people’s thoughts? Could this be the case for you OP?

I do also advise to have survey done - especially full structural survey. You would be amazed what needs to be fixed/replaced after you have purchased a property. New builds too!!! For example, after the structural survey I roughly knew how much it will cost to renovate and fix the house, and in the end it was much more. And the older the property - the easier it is to run into tens of thousands of pounds, hence the price/offer reduction or/and further negotiations.
In the end of the day - it is the negotiation on price, which can change until you are legally binded to proceed, otherwise you will be penalized (when you exchange contracts). Before that point EITHER of you can withdraw the offer - you or the seller.
This is not one way street - do not hesitate to ask questions!

I believe and, please mind I'm not specialist, that demand to buy houses will drop significantly. The logic here is that the whole country plunged into financial uncertainty and everyone is holding onto every penny they have...
However, I do not think the house prices will drop quickly (maybe give it 6 months) as a lot of sellers will ''wait out''. It really depends on the circumstances of the seller to urgently sell the property or/and being in the chain.

I would wait. January figures were not good before the impact of the coronavirus & it's not like the government can slash interest rates.

We are in a similar position... and I have been looking at market projections today. Best case scenario looks like a short term drop but then a rise of up to 15% over 5 years. Worse case could be 25% drop and a longer recovery.

If you don't buy the house you want now, you may well be very lucky to get exactly what you want in the next year.... so are you happy renting for much longer until you (hopefully) find something else you like? Is this a better use of your money?

I wonder how much is actually going to come on the market (apart from repossessions and probate sales, both obviously very sad but hopefully the former will be as few as possible) as people may be so shaken/financially challenged by everything.

My other thought is mortgages might be more difficult to get... especially if your employment circumstances change...

I think you need to weigh up the costs if you don't buy it (and have rent etc.), and of course can you manage a 25% drop? In our case we have decided it is the house we want (don't come on the market often), at the moment we can afford the 25% drop, we will hopefully have it for years and years so should all balance out eventually.

The next most important question is, is this your 'home'? Do you think you will be happier in this house, rather than anywhere else?

Nothing wrong with asking for a further discount but quite frankly I think everyone is going to end up playing wait and see. It's not like you can do anything much anyway.

And fwiw I don't think there is going to be a huge market crash - Brexit created a market supply problem and prices (outside London/ SE) have increased. This will just extend the supply problem, especially now that building sites have stopped.

There will be some correction, no doubt, but it's unlikely to be as severe as people think.

Is the house you are buying a unique property or is it just a nice, but run of the mill house? If it’s the latter, then another house will always come up and I would pull out, a unique property I would go ahead. Honestly there is nothing worse than paying massively over the odds for a house when next doors house comes up for sale at a lot less money. Loosing money is much harder to cope with mentally than loosing a ten a penny house.