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!

@Lightscribe
The delusion of posters on here is dumbfounding. We are facing the greatest recession/depression seen for 100 years and people are sticking their fingers in the ears going 'la la la' at the thought that their two bedroom terrace shitbox might go down in value.

Your tone is quite horrible, and doesn't belong here. By all means discuss the issue raised but don't be gratuitously abusive. None of us knows exactly what will happen in the housing market, as with many other areas of life. It seems that there will be price falls, but how much, and for how long, is something that none of us knows, and it doesn't help to pretend otherwise.

But if those people aren’t looking to move from their shitbox and they can afford to live there why should it bother them if houses prices go down or up.

They’ve asked for a 15% reduction So you go back and say, no, 10%, (£45k less) on condition you can negotiate a reduction upfurther up the chain. So you ask them for 15% reduction, they say no and offer 10% (Say 60k if it’s 600k property.)

At the end of this you are 15k up. Actually double that because 15k in mortgage costs 30k over 25 years. And you probably saved a few hundred in stamp duty fees too.

The actual people who will lose money is the people at the end of the chain. But they probably bought the house for 30k in 1978 so haven’t really made a loss anyway.

Don’t fixated on what you paid a couple of years ago for your flat. It’s meaningless as you never paid it off anyway

@GrandAltogetherSo
A drop of £55k? Fuck that for a game of soldiers.

I think posters should calm down a bit. If the buyer has come back with a reduced offer then it's a negotiating position. If the seller accepted the reduced off without hesitation, the buyer would have a cardiac arrest.

There's nothing to stop the seller from agreeing to a reduction of £5K or even £10K, but if the buyer isn't budging then I'd politely say cheerio.

@Winederlust
Funnily enough I've just read an article on Rightmove which says new estate agent enquiries are already pretty much back up to pre-lockdown levels which suggests the demand is still very much there. They say this also suggests there might not be as big a house price slump as predicted (although it could also be people thinking they can swoop in, take advantage of the situation and grab a bargain!).

This is a little naive on your part. Rightmove and others who benefit from higher property prices are always full of positive spin. The fact is that a week or so ago, we too registered with several estate agents and did a lot of Rightmove searching for the first time in ages and for the very reason that you suggest at the end of your message. I'd never think of buying property as "swooping in... to grab a bargain" it's far too protracted a process for that. But absolutely, yes -- just as you might visit some shops you never normally go into because there are big "SALE" signs in the window, we have registered our interest because it looks like the next few months could be a good time to buy.

LakeDweller why naive? I never said I agree. Just said I'd read an article. An article which refers to stats and suggests something which might or might not happen. Same as every other study, article or news story PP have mentioned that predict the future. Purely posted for balance to the discussion.

And as for the swooping in and grabbing a bargain comment, again, I wasn't suggesting that you specifically were or would do that, just that some people might.

Not everything is about you.

I thought the Rightmove article was just passing on info that estate agents are now getting enquiries similar to pre lockdown levels.

It isn’t comparing how many are just looking at Rightmove as a site.

I do think there is going to be a huge amount of places up for sale.

Even before lockdown there was a section of people who were looking to put their homes on the market this spring. During lockdown the DIY stores doing just click and collect had a steady queue of people.
The B&Q site was virtually impossible to get on and I would regularly find nearly 500,000 people ahead of me in the queue just to access the site.

I think a lot of those people might be thinking of moving after this has all calmed down too

I do think people will be looking to sell.

But for a lot if they think prices are falling unless they see the house of their dreams I think they will probably sit it out and wait.

What I am noticing is auctions that are going ahead even without viewings are not going down in prices being achieved

A few I have looked at and put a value on have either gone what I thought was a realistic figure to going for a lot more.
and I have only seen one place that I thought was a bargain but that was quite far out in terms of where we are looking and in a very niche area. It was an expensive place (in terms of auction properties) and was immaculate inside and out.

A lot of places on Rightmove seem to exist in a parallel universe or the owners don’t realise you can see what their next door neighbours property sold for a few months before.

I regularly see houses that need gutting up for £100,000+ more than the price the immaculate and pristine house a couple of doors down achieved a few weeks before lockdown.

I can see how it could be thought that the asking prices might have to be reduced by 25%+ but is that because some people aren’t being in the least bit realistic in the first place

@LakeDweller
I make no apologies for my tone. I speak bluntly because it cuts through the delusion of people burying their head in the sand.
I’m a realist, I’m not one to say ‘there, there everything will be back to normal, by next year’ when it won’t. I do apologise if you’re upset by that.
The BoE are now warning that we are facing the worst recession/depression in 300 years. BoE don’t tend to want to say sensational headlines to scaremonger. I get that people don’t want to face up to that, but to say ‘no one knows what’s going to happen’ is pure naivety.
You may not of realised what has been happening the last few years, but lots did. That’s why my children's savings are in a stocks and shares ISA in gold and silver miners and have increased dramatically. My pension was all in cash last year, and I moved it to the FTSE 100 tracker when it crashed below 5000.
The virus was just a catalyst. The treasury yield curves went negative last year that has predated every recession in history. 2008 was also never ‘fixed’ we will now have to deal with effects of delaying the inevitable of that also.
All in all house prices should be the least of everyones worries going forward. But keep thinking of cupcakes and rainbows if it makes you happy.

" Just a catalyst" is bang on IMO.

Lightscribe

Having read the article.

Yes it will be pretty dire but they are not predicting a long term downward trend but a very quick V shaped recovery

@Oliversmumarmy

www.bbc.co.uk/news/business-52752172

Are you now saying the BoE have it wrong?

@lightscribe
I’m a realist, I’m not one to say ‘there, there everything will be back to normal, by next year’ when it won’t. I do apologise if you’re upset by that.
You seem to think I disbelieve there's going to be a prolonged recession and house price falls. As someone looking to buy, I'm delighted to read about the prospect of a drop in prices. But insulting people by talking about their 2-bedroom 'shitbox' just undermines your argument by making you look like some sociopathic troll from HPC.

@Lightscribe I happen to agree with you. Once the numbing effect of furlough is removed, we will see the impact more clearly.
You sound like you know what you are doing financially. Where would you put a substantial pot of money presuming you may need it for a house purchase in future? (For the sake of argument, let's say 150-200K)

There are advantages to Brexit for the EU - it gets to abolish overbearing regulation previously imposed on it by the UK. The Germans and the French are currently planning to do away with MIFID2 - regulatory red tape written into EU law entirely by the British (see Today's FT). And, if the UK doesn't follow suit, it will be at a competitive disadvantage. It's all working out nicely!

@Oliversmumsarmy
Nope, I'm just reiterating that V,U,L shaped recovery terms are 'buzzwords' but they all agree that we're heading into a financial shitstorm regardless (not just us but the global economy).

@NOTANUM
If you are after a safe place for a house deposit short term, then premium bonds are about your safest option with current interest rates.
Long term investment monthly savings wise a diversified portfolio in an ISA. (e.g stocks and shares ISA over a 5-10+ year period) like a passive FTSE 100 tracker (low fee like Vanguard). At the current drop its a good point to invest monthly averaging out any further drops in the market.
The main aim is to beat inflation long term and you certainly won't be able to do that in a 0.1% savings account.

We were in a very similar position to the OP - we had accepted an offer of £525k on a 2 bed flat we were selling for £545k which was ready to go just before lockdown. We exchanged today at the agreed price.

Our EA is run off his feet since reopening with new properties coming on and new buyers.

I do feel sorry for the OP - that is a totally unacceptable reduction - you should just turn it down. If they can’t afford it they need to look at cheaper properties.

Hope the OP comes back and tells us what she did...

busy with a new buyer, rightly so :)

Yes, grab their offer with both hands IMO.