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!

i will understand if there's properties for sale at moment,people won't buy,price will drop.
however, there's no properties for sale and for people who need to move for many reason won't wait.
any reasonable property comes on market and able to proceed with surveys,valuation will get snapped up.

I don't blame you at all. Play them at their own game on this. Of course house prices have taken a knock and you don't want to be in NE. The cards are all in your hands.

Refuse the counter offer, pull out and watch it go back on the market for less than your lower offer and even then they'll struggle to sell.

Hopefully they'll realise this and agree to your revised offer

@ChicCroissant you didn’t say what you’re basing your opinion on. I’m reading a lot about the economic results of the pandemic (related to my job in professional services) and I can’t find anything that supports that view so I’m wondering what I’ve missed.

You are being a CF

OP is not being CF. They are being smart.

And the smarter money would pull out now and sit tight for 6 months before committing to such a purchase.

@Luci459 Terrible advice!

1. Banks aren’t lending because their existing assets (loans, mortgages etc.) have gotten a whole lot riskier due to most of the economy shutting down and and they don’t want to sell even more high risk products (high LTV loans). “Cannot do valuations” is an excuse. When you see a bank turn down lending, especially on a high revenue product, it’s time to be afraid.

1. If people cannot get mortgages, guess what, prices WILL FALL. Because it affects demand and therefore pricing! The simple reason house prices went up significantly over the last 10 years was due to high LTV loans, the lowest interest rates ever and schemes like “Help to Buy”. If we were to move to a paradigm after the recession where even in a period of economic stability banks only give low LTV loans (unlikely unless interest rates are raised), prices would correct themselves in such a way the OP will be able to buy the same house with a lower LTV.

1. This is most definitely a recession. And plenty of “social issues” lead to recessions (wars, pandemics etc.). This recession, by all economic indicators, is ALREADY an order of magnitude worse than 2008.

@CatAndHisKit No, I think there will be a 10-15% drop in property prices across the board over the next 2 years (the impact of what’s happening now will take time to work through) and therefore, if you can buy at a 15% -ish discount today, it’s not a bad idea as you’ll eventually be back on top in the long run. Buying at today’s market price is a recipe for disaster imho.

OP - I would pull out. It isn’t CF as Mumsnet loves to cry (and those that do in this instance have absolutely zero grasp of economics). The housing market is going to take a massive knock, you’d be foolish to buy anything right now and once this is all over if you are still in a position to buy with a good deposit and a job then you will be able to buy but at much reduced prices. No one really knew with Brexit (and we were in transition) but all experts agree that this is a massive knock on an unprecedented scale. Pull out and reassess when this is over. Don.’roses put good sense out of the window for some weird moral code.

I think you’re the one taking the piss here!

You are being a CF
Yeah how dare you be questioning spending hundreds of thousands of pounds during a global pandemic 🙄

Walk away and save your money until the Covid crisis is over. If house prices drop significantly you would regret buying now and if they don't a delay of a few weeks or months won't matter in the long run.

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 if you buy, depending on what deposit you have out down you will probably face negative equity. A real crash in these circa would prob be 30-40% but because of the continued lack of housing stock then I suspect 15-20% might be more like with not much house inflation for a few years

If your job is secure I would pull out and start looking later this year when we have added 1 million to the unemployment list from this economic vandalism from which some people will always win. You could be one of them

This is why I no longer entertain entitled first time buyers 🙄 Put the vendors out of their misery so they can move on and find a better buyer.

@CrazyCatLover explain why the op is entitled? Because she's asking for a reduction against the completely normal backdrop of a global pandemic & the associated very likely recession?

Op in the real world as a homeowner myself I wouldn't be surprised if I was selling & our buyers asked. Likewise I would carefully consider what I was buying.

I've come to the conclusion that many property boards are full of people heavily invested in property as they seem incapable of thinking rationally.

@CatAndHisKit 🤣

I was so tired and breastfeeding but I couldn't walk away without saying something. It's the best I could do 🤣

@newbie111

It is not an excuse! Valuations cannot currently be done on houses!

Come on! You clearly don't work in this sector!

@Luci459 Come on, tell us your predictions (since you know so much) & we can come back in 6m-1 yr & see how right you were? 🤔

@CrazyCatLover and you don't think the seller is acting entitled by insisting on sticking with a price that is no longer relevant?

I agree with @mochajoes - don't take to advice from people who are desperately looking to sell their properties at the moment knowing full well that they won't see these prices for another 3 - 5 years.

@Luci459 I don't work in property but I do work for a global bank and have done for the last 14 years :)

Valuations cannot be carried out at the moment but that alone wouldn't stop every major bank from pulling high risk products.

Agreed that they're pulling high risk products!

It seems like you’ve had a very difficult time finding a suitable place to buy, but as a FTB you’ll be in a good position when things start to move again and you may find you can afford a 3bdrm for the same price that you can look at being a long term home?

No one knows what’ll happen, but I suspect a lot of people will be forced to sell and I also expect a lot of landlords will sell rentals I suspect it’ll be a buyers market & lower prices. Personally I’d wait.

Negative equity is a bastard (not just for single mums though )

I don’t blame the buyer for not wanting to drop the price, a lot of people haven’t quite faced up to the reality if this situation yet and they’re entitled to hope the bottom doesn’t fall out if the market.

It’s your choice to offer what you think it’s worth to you now, it’s their choice whether to accept or not. I don’t think you’re being cheeky -I think you’re doing what the stupid law allows you to & being sensible & they’re certainly not being cheeky! (Foolish maybe, time will tell), but not cheeky, no

Bottom line. In your position I’d pull out if the sake & hope to find something better at the same price afterwards (assuming you feel your ability to get a mortgage then is pretty secure). If you don’t I’d buy this one one at the best price I could get it.

Buying your first house is ysusally a bit stressful & you worry you’ve paid too much -it’s a right of passage!!

Good luck deciding!, let us know what you decide

Unless it’s completely unbearable at your parents place then I’d pull out.

Normally I would say you are the one being unreasonable. A deal is a deal. But the world has been turned on its head. The economy is in freefall. The housing market will crash. The prices of a couple of months ago no longer apply. I would want to feel I was getting value for money or I would pull out.

I’m afraid it’s you that is taking the piss here not the sellers.

I know a lot of people who bought in Ireland in 2006 / 07 just before the crash in 2008. To this day even though the country has recovered none of those properties ever reached the same value again.

Buying a house is probably the biggest investment you will ever make and it needs to be done sensibly with your eyes wide open. On that basis I would hold back for the moment. While there is a small chance it might hold its value, it is not going to increase in the near future.

It is likely the only place that will be available for you to buy in the next few months. So if you really like it and really want to move and will stay there for >5 years I'd still go for it.

But if you are ok staying with you parents for another year and then buy a different place you'll save a lot of money.