Ghost gazumping in London

[stargirl04]

Hi,

I've heard a lot about buyers being asked for £10k or more days before exchange of contracts in London and am worried this may happen to me.

I'm a FTB, paying as much as I can afford on the mortgage, and if I am asked for extra money, my instinct is to walk away from the sale. I'd just like to hear others' opinions.

I am chain free and can move literally anytime, and I'm two months into the process, having had my offer accepted in early Feb. Mortgage has been secured and solicitors' searches are presently under way.

1. I paid 10k over the asking price to get the flat as there were several offers on it. But the sellers chose me because I had the biggest deposit (40%)

1. I met the vendor on the second viewing and she told me they had a house they wanted, had had their offer accepted and wanted to move "as quickly as possible", which I agreed to.

1. The mortgage valuation valued the flat I am buying at 5k under the asking price, but I decided not to ask my sellers for a discount as I would rather the sale go ahead - I've been looking for over a year.

1. The lease is 89 years, so will need renewing soon (leasehold property) and the boiler is 9 yrs old so perhaps it would need replacing soon.... ? I don't know much about these things.

1. I am freelance, so my earnings fluctuate and I don't receive sick pay, so budgeting is important.

Bearing all this in mind, if they try to ghost-gazump me (asking for more money even though there is no rival buyer), what are my chances of saying No and still getting the flat? I really don't want to pay anymore, bearing in mind I'm paying 10-15k over the odds already and the lease isn't brilliant.

My bf thinks I should pay another 5k if necessary rather than start over and end up paying more for a similar place but it's alright for him to say!! (Moving in with him is not an option and I wouldnt ask him for the 5k either, before someone suggests it!.)

Thanks for reading!

Oh, and I'm buying in London - zone 4.

If the vendor has already expressed a desire to move as quickly as possible, then assuming they've not lost the property they want to move into they're unlikely to do anything to put this at risk - especially given you're two months into the process. And even if they have lost the property, the longer they delay (assuming prices continue to rise) the more they will have to pay to buy what they want. So I'd say there's a good chance you won't be asked to up your offer.

Just my thoughts. :-)

Good luck!

I agree with Dreamboat - unless the Vendor has had the same thing happen with their purchase or has lost their purchase, then they are very unlikely to want to jeopardise their sale at this point.

If they do try it - say no. Then they will have to choose between starting again with a new buyer or continuing as agreed. I know what I would prefer (to stay with the buyer who has an agreed mortgage/survey done etc. etc.).

Have you found out the cost of renewing the lease? I thought banks don't like to lend if a lease falls below 82 years. Might be a problem if you sell in a few years.

Thanks for the reassurance Dreamboat and Santas.

Sh77 - the unexpired lease is 89 years and I'm waiting for some guidance on when I should renew it.

As far as I understand, as long as I extend before the lease drops beneath 80 years, it will cost me about £7-8k approx to extend, plus legal costs, so about 9 or 10k (?)

I think you have to have lived there for 2 years to extend the lease. The longer you wait after that the more it would cost. Look lease.org that has all the info. You would need to use a solicitor and also pay the freehold legal fee.

Go with your instincts. Why would you pay 5k OVER the price a flat is valued at + have to deal with a leasehold issue etc etc etc. Run away, don't look back.

Skinnyflatwhite, logically, I agree, and if this was a year ago before the market went mad, I would be doing as you advise and running away from this purchase!

However, there is nothing else coming on to the market within my small budget that I would want to buy in terms of location, type of property, etc, and I am priced out of most decent locations. This flat is in a reasonably safe, but not trendy, area and only a few minutes' walk to the station.

Even with the extra cost of the lease extension, and assuming that I stay there for 3 years, it still works out cheaper than renting.

Bella thanks - I'll have a look at that website.

I wouldn't rehearse disaster! I know the market is very kicky but they would be mad to swap you for an unknown quantity at this point, particularly as you are in such a strong position.

I would try and get your solicitors to move as quickly as possible and send an email to the selling agent reiterating that you are pushing things along and how excited you are about the flat.

Thanks Gunpowder for the reassurance.

However, if I were to chivvy along the solicitor, then ring the estate agent to express my excitement, I am concerned that would make me look too keen... Would my keenness not tempt the estate agent/vendor to up the price because they think I'm desperate for the sale to go ahead?

I'm selling a house in London. I want to sell it asap. Our buyers are paying a good price and although the market is rising I wouldn't dream of asking them for more cash at the last minute.

I would simply advise your solicitor to make it known to the sellers that the mortgage valuation has been poor but you are moving ahead in good faith as you are in the lucky position to swallow the difference due to your deposit amount. I would say that you are asking for re-confirmation that they still plan to exchange on X date.

That way you are demonstrating that you are a serious buyer without looking desperate, but you are also saying don't get greedy, another buyer might not have the funds to swallow the £15k even in a stupid market.
It also puts them in a position to confirm that they won't play silly buggers at the last minute, and that if they are short themselves you are not the solution.

One thing you can do is seek to exchange the minute your searches are back and agree a longstop completion if they are having trouble finding something else - we are in their position iyswim and offered this to our buyers to reassure them. They agreed and we agreed a 6 month completion deadline with 2 weeks' notice if we get to exchange sooner. They know I now can't put the price up (we promised that anyway) and won't benefit from rising equity - they will. We feel more confident that they won't walk away. Might be worth seeing if they would be willing to do this?

I see your point. I'm inclined to believe most people are like Celtic and lessons, and as long as you are a good buyer/not stringing things out, they will honour the agreed price, but maybe that's naive.

We considered pulling out if the sale of our flat, (a combination of rising market and verrrrry slow conveyancing the buying side) but the buyers loved it so much (or at least did a brilliant job of pretending they did) and it would have been such a headache to re-list, that we put up with it.

Don't pull out over extending a lease, we did it and it wasn't that bad.

Although ours was a share of freehold, in the end it cost no more than 2k (can't rememebr exact figure) and we heard stories of 10k lease extensions?! No idea why it would cost that much and when?

Don't impend doom, if they are buying somewhere too, they'll just want it to go as smothly as possible.

Thanks for these suggestions folks. OscarWilde.. we haven't got to the stage where an exchange date has been discussed as my solicitors are still going through the search results, etc, and awaiting information from vendors' solicitors.

I've thought about what you suggested and each day I feel differently in terms of how badly I want the place. It does tick some key boxes for me (given my tiny budget) ie. in a peaceful cul-de-sac but very close to the train station and shops, top floor with a loft and in a safe, pleasant area. It's really just the 89 year lease that bothers me. So I think I will just say No if they ask for more cash, citing this - and the devaluation - as the reasons. I'm still mulling over your suggestion about what to say via the solicitor though...

Lessons, that sounds complicated to a novice like me but I could discuss it with solicitor - however, my vendors have a place they want and their offer has been accepted; consequently they want to move quickly.

Allthatglitters... I guess freeholds are cheaper. I did do a calculation on one of the lease extension websites and apparently mine, as a leasehold property, would come to at least £6k plus legal costs, so not much change from 10k, I reckon.

It's awkward because 89 years is not a "short" short lease, like for example 82 years would be, but not long enough for me to be totally at peace with. I guess it's a compromise. Affordability is my problem unfortunately and with all of the other places I offered on, I lost out to higher bidders with bigger budgets.

One place I do regret missing out on because I wouldn't up my bid was a big two-bed flat in Catford with outside space, but I was troubled by the fact that it was nowhere near a station and the bus route wasn't brilliant. Transport (and safety) is important to me as I work nights and am a single woman walking home late at night etc....

no necessarily greedy, any vendor thinks he could get more, they will ask for.

I wouldn't accept if vendor ghost gazump me. I will walk away and find another . I never know when the vendor will stop ghost gazump ing me!

by the way, what do you think of the property market in coming several years. do you think bubble in property market now?

If your sellers have found somewhere else, I wouldn't worry about it. I am at the other end of the sale, trying to exchange on my flat so we can buy another property we have seen, and honestly, I would do anything to get the sale done!

Celtic, it's comforting to know there are moral sellers around such as yourself, but I've heard quite a few horror stories about buyers having to stump up extra cash just before exchange!

if it helps on the lease extension point, you only "have" to extend to sell or re-mortgage. When selling, you can start the process off yourself, so the price is crystallised, and then hand the process on to your buyers when you exchange with them. This means they pay the £6k or whatever to your landlord and the rest of the price to you. They then buy with the extended lease.

Happened to a friend of mine. Vendor asked for an additional 50k as market have moved on in the 2 months it took to get to exchange. She walked away. Her next purchase she insisted on a lockout agreement and that one went through smoothly.

Stargirl when we sold we had a 73-year lease. The freeholder had agreed on a £20k renewal fee (after negotiation, we started at £12k and she was at £30K).

We wanted the buyers to pay the lease extension for cash flow reasons, so accepted an offer £20k less without lease extension to get them to pay for it. We did exactly what Friday'schild suggested and handed over our rights to extend to our buyers.

One day away from exchanging contracts on my first home and the seller is asking for another £25,000. I said not only do I not have it, I would also have to start the whole mortgage process from scratch and when considering the new MMR mortgage changes they might refuse me. I hope the last 4 months have not been in vain. I'll find out his decision tomorrow. :O

Oh bloody hell. How maddening! I hope they come to their senses. Are they buying somewhere else with the proceeds from the sale?