Help, gazundered!

[RachQ86]

We put our flat up for sale last year and just into the new year we accepted an offer from a young couple for £5k below our asking price which was £450k. Everything was progressing and we were due to exchange just before lockdown happened and everything went on hold until this week.

We have now heard from our agent that our buyers have now sent a revised offer for £390k as they claim they need to add more to their deposit from the mortgage. I don’t understand, how does bringing the price down increase their deposit?

We bought the property for £410 a few years back so there’s not a chance they are getting it for less that that, how should we approach this as we don’t want to lose them as a buyer as it took long enough to get the offer in the first place, but we’re furious they would offer a price and then change it!

Depends on how badly you want/need to move. You could offer to drop the price a little but not as much as they’re asking.

Accepting such a hit now, when the market is in a difficult spot and the ops next property likely hasn't got the memo yet would be a mistake. Either renegotiate amicably on both sale and purchase if possible, or hold off for a while.

Surely if they can no longer afford your property they should be looking at cheaper ones.

Where are you moving to, is there a chain, could you get a reduction on the house you are buying?

Or do you have to move right now? can you stay put?

Honestly, if I was your buyers one be tempted to pull out altogether. They could potentially get a hel of a bargain over the next few weeks and months.

What you do depends on your circumstances. If you can afford to hold on to your property for a couple of years then you might get back to £5K off your asking price but before then I think you need to drastically change your expectations. The economy a few years back when you purchased might as well be a different planet compared to right now.

Are you also buying, could you negotiate a drop up the chain?

Perhaps they have a reduced income &/or the banks have tightened the criteria. Perhaps they are chancers. Did you have any other interested parties? You could try negotiating but they may have their hands tied. If you cannot accept lower then don't sell but I think realistically you may have to wait a bit if your holding out for a particular price.

Why is your house worth 40-50k more than you bought it for a few years ago, it is older and has wear and tear presumably, or have you refurbished it?

Why is your house worth 40-50k more than you bought it for a few years ago, it is older and has wear and tear presumably, or have you refurbished it?

Good question. This crazy house price inflation has to stop. Three cheers for "chancers" (I'd flip that around to define sellers with £££s in their eyes) for doing their bit.

A friend of mine has had this from a buyer and has shunted it straight back on the market and has several viewings in the next week from keen buyers. I’d hold my nerve.

If you are forced to sell you could just say 'no' and wait and see what happens. The buyers might still really want the property and come back with a better offer that is worth negotiating around.

The bank has obviously offered them a lower LTV, and is likely to do the same with the next potential buyer who pops up? You could find a cash buyer maybe, but smart cash buyers don`t overpay for property.

This is just the start, when peoples pay/bonuses gets cut, mortgage conditions get more stricter and we are about to go into a recession like no other, things will be coming down alot more, people and banks won't wont to be taking a chance when there is almost half a million on the table at risk

The country, indeed the world, is entering the biggest economic depression in modern times, one that will make all, yes all prior depressions look like peanuts. Basically every economist on the planet is in agreement on this.

You should factor in a drop in house prices of a minimum of 40%. Given the scale of economic destruction, job losses, poverty, forced sales & repossessions etc. it could be much, much deeper.

A 40% drop would leave you with a property worth £270k. If it was me I would bite their hand off right now for 390. In 18 months time you will likely be rueing the day you rejected such an offer.

Take the modest loss right now, and bide your time as prices ride the express elevator to hell, going down.

if you paid few years back a fair price (not overpaid) then the appreciation of 40k is reasonable.
the buyer is chancer, pull out and wait until the hysteria is over.

I can understand why you feel the way you do OP. If you have conveyed everything they told the EA then it's all about them and they haven't referenced market changes.

I would guess that the mortgage deal they were looking at is no longer available and that this is their last-ditch attempt to buy the flat as what they can afford has changed. Or, they really need to pull out, but don't have the balls to do that, but by reducing their offer they've deflected the decision to you.

Unless you desperately need to move then don't for now and see how things pan out.

Any FTB’s now who aren’t revising pre-lockdown offers down would need their heads examining.

Personally I think people banging on about waiting a few months and the market recovering have their heads in the sand. The only ‘professional’ entities predicting this are doing so to give people a sense of security because they have a vested interest in the property market not plunging.

The economic shit storm due to CV hasn’t even begun yet. If you want to move any time in the next few years I’d bite their hand off.

It really isn’t the case that every economist in the world thinks that. Many of them have created forecasts where the worst case scenario is pretty bad, but many of them also think it may be a pretty sharp down and up again. Stop trying to trigger panic.

Mumsnet is a bed of hysteria isn't it. I bet that very few who are predicting all doom and gloom actually read the Financial Times or the Economist...

Unless you're desperate to move I wouldn't drop that low, that's a joke. Maybe go slightly lower, so you still have enough profit, but they might be the type to mess you about anyway. It probably would be better to wait because over time if prices come down, it will all be relative, whereas at the moment there will be people trying to take advantage of the uncertainty.

@kelethon You're telling me. Fact of the matter is, since Brexit we've apparently been facing an impending doom. There are some people that have been 'waiting' to purchase since then. They'll be 'waiting' a very long time.

Just get on with your lives. Be sensible, obviously don't purchase a property with a mortgage which means you'll be on beans on toast for most of the time. Have reserve funds in case you lose your job etc etc.

@RachQ86
Have you already put in an offer on another property.
Could you revise this down so that the transaction can still go ahead

I'd say that it's very likely that the value of your house (and all houses) has fallen dramatically in the last few weeks. How you react to their offer does depend almost entirely on whether you feel the same. If you think your house is worth the same as it was, then their offer is clearly ludicrous and you'll need to find other buyers who are prepared to be more realistic and pay the correct price.

The mortgage company will have reduced the value or their incomes ha w changed so it means their mortgage offer has been reduced.

Just reject if you don’t wish to sell at that price, but do check the value of the property now if you need to sell urgently. If not take it off the market and ride this drop out.

If it's to do with LTV then they are chancing it because they can no longer afford your flat. How much to you need to sell to them, now? What price would you take? Yes things will are are dropping, but that's a huge drop.

The only ‘professional’ entities predicting this are doing so to give people a sense of security because they have a vested interest in the property market not plunging

True, but you’re talking about the government, Bank of England etc, who are very good at maintaining property prices if they so choose.

The fact they have a vested interest only makes it more likely they will.