5k reduction.. are they taking the p***

[AniAfri]

Evening all,

Hoping some from advice regarding a recent property purchase.

I had an offer accepted on a property just over a month ago and are nearing completion. For context I am a first time buyer - the agreed sale price pre covid-19 was 323k on a house that has an asking prices of 330k. Despite thinking I’d offered to much, I decided to continue anyway.

I’ve recently gone back to the buyer to request a reduction i.e. due to the economic climate that will follow. I requested a reduction to 309k but was refused and told that the best and final they’d accept is 318k.

Would you continue with the purchase based on this amount? The property is a small 2 bed which is probably stay in for 5-8 years.

I think this is quite unreasonable but I’m a novice in the property field.

Is this the norm? Would you pull out? All opinions welcome!

Why would they accept a lower offer ? As I understand it you no one can move at the moment but you have made the offer and they've accepted. I don't think it's great to agree a price then go back with a lower offer.
Is this acceptable? I don't think it is.

First of all, you thought that you had offered too much in the first place.

Secondly, house prices are going to fall, at the very least in the short term.

I would pull out. I wouldn't commit to buying any property in these uncertain times.

Er, you're the unreasonable one here. You've offered £7k less than asking which has been accepted and now you want them to knock off another £14k?

If you want to pull out, and I wouldn't blame you in current climate, then do so but you can't expect seller to just accept a lower offer!

If I were the seller I'd be concerned you would be gazundering me.

Unless there was a valid reason eg a major problem showed up on the survey that would cost to rectify, there is no way I’d accept a lower offer after a higher one had been accepted. I’d have you down as a time waster.

OP hasn't exchanged - why should she throw her money away for a moral reason?!? Would you spend thousands more than you had to? I bet not.

It's at offer stage. A long way to go. Offers fall through all the time.

Are they taking the piss? Er no, I think you are.
You agreed a price and it’s really bad form on your part to request a lower price due to the current climate. Fair enough if it was following a survey and required work, but if it’s just because you think there will be a property crash then it’s on you to take that risk. Don’t want to? Then pull out.
I think you’re bloody lucky they offered 5k off the price.

Its 12K less than the asking price, I would buy it.

Have you had the survey done? I think it's only fair to renegotiate price based on results of survey - subject to items you wouldn't be able to identify as issues yourself.

If you're planning on getting it surveyed and it hasn't happened yet, I don't blame sellers for rejecting your lower offer as it's likely they'll think you'll knock price down again after the survey.

It's unfortunate what is happening with house prices at the moment but I don't think it's a good enough reason to knock price down on this issue alone.

I would let the vendors go back to market. I bet that there aren't that many people keen to make an offer at the moment.

I’m definitely not a time waster! The survey has been competed, mortgage sorted etc. My only concern is that I’d find myself in negative equity. As a single mother this is something I really want to avoid if at all possible

Well, someone's taking the piss here for sure, but it's not the sellers!

Well you've asked for a 1.5% reduction on the price you'd agreed. Doesn't sound unreasonable to me given we're about to go into a deep dark depression!

Even at that price you'll be lucky to break even in 5 years time.

I agree with @zonkin, the economy has taken a big hit and will take a few years to recover, banks are unwilling to lend and these factors will affect property prices.

If you cannot buy this property at around 15% below the market rate, I would pull out of the transaction. Expect a hit to property values in this range over the next 12 - 18 months as the impact of this crisis propagates.

Whilst they are not in any way cheeky to refuse neither are you, in the current climate, unreasonable to withdraw your offer.

Unless they are downsizing they will be taking advantage of lower prices by the time the sale can go ahead.

Withdraw your offer and start again when the situation improves

I’m so confused! Will things really be as bad as people say? I’m in 2 minds as everyone, including me was of the opinion that property prices would fall due to Brexit. they didn’t.

It's not the norm but these are not normal times. I am usually very judgy about gazunderers but in these exceptional times I think it's just common sense.

I don't think either of you are being unreasonable, but if you can no longer agree a price you're both happy with then the sale needs to fall through. I'm afraid you need to make your own call on whether you are prepared to pay £318. I suspect they need you more that you need them. You don't have a whole lot to lose by letting them go back on the market and having your pick of properties when the market starts up again. But equally, overpaying now might not be awful, when you consider every month you're paying a mortgage you're "saving" on rent, so holding off will potentially cost you several hundred a month anyway. Also negative equity might not be too much of an issue if you can sit tight.

Push any thoughts about CFs out of your mind. Apart from anything else, you're in no position to claim the moral high ground. It's not about people being cheeky, it's just business - whether you still want to buy what they are selling at the price they have set.

No, you are.

House prices didn't fall much after Brexit as we're in the "transition period".

CV-19 is a LOT bigger than Brexit. There will be a global recession. Have you read the business news?

I think you are the unreasonable one. A property is a long term purchase so once an offer has been agreed I think you should stick with it. Prices will go back up in time. How much you are prepared to pay depends on how much you love the house. If you are just looking to make money on it you may as well stop wasting the sellers time and pull out. There will always be noise in the property market as well as the stock market.

The negative equity thing only becomes a problem if you want to move or remortgage.

What was your mortgage? Fixed? Variable?

I think this all depends, if you get stuck where you are is that an issue for you? We got stuck at our last house when the banks crashed but wanted to move for an extra bedroom, want, not need. So we just stayed there a couple of extra years before moving.

Are you renting? Could the landlord wish to sell, or increase the rent?

Have you gone sale agreed and signed contracts etc? If so then you cant really ask for a reduction.

If not then back out because you would be stone mad to buy a house now.

You may find this article interesting.

moneyweek.com/investments/property/601065/what-does-the-coronavirus-crisis-mean-for-uk-house-prices

Why not wait a bit and see what’s happening with the economy before deciding?

I think you were very cheeky. You’ve been mucking them around. If you no longer feel the house is worth what you offered, just pull out.

I agree about being bonkers to buy a house right now.

Don’t buy it OP. House prices will fall dramatically and you’ll be able to afford something better/ offer less for similar.
I understand why they are upset but it’s just business. Don’t throw tie yourself into more debt than you need and risk negative equity (a very real risk in your position).