Advice for first time buyers possibly going into a closing date...WWYD?

[calialilly]

Hi everyone, I am looking for some advice that you would give to a young couple (first time buyers) buying a property/going into a closing date.

We viewed a house back at the beginning of March and put an offer in about 3 weeks later, which the first week of lockdown. The offer was well below the asking price and it was rejected (which we knew was going to happen) but thought we would offer it anyway due to the uncertainty of the whole lockdown situ.

There has been no contact between us and the EA since the offer was rejected as we assumed nothing would be happening due to COVID, however the house became available for online viewings.

Fast forward to today, we received a call this morning from the EA saying 2 other buyers are interested. In the last hour, the EA has just confirmed the closing date is Thursday 12pm.

Would you be skeptical about the other 2 buyers... could the EA be bluffing? . We are in Scotland and the EA's only opened back up yesterday, so the 2 other buyers would be putting on offer in based on online viewings!

At this point we have no idea what to offer based on what is going on with house prices as a result of COVID. The property ticks all boxes for us except one but this can be easily rectified.

It is on the market for o/o 190k, HR valued at 205k and the sellers* purchased it in 2018 for 180k.

We plan to sell after 3-4 years with the intent to buy DP's family home - which at the moment we cannot afford (and DP's parents not ready to sell). We are worried about buying this property, spending 30k+ to renovate for a new kitchen, bathroom and to re-decorate then in 4 years time when we try and sell we will be at a loss!

*Sellers are moving to Australia as both have jobs lined up. They put their house on the market a couple of weeks before lockdown but obviously due to travel restrictions they couldn't go anywhere so were possibly holding out for better offers. We have a feeling that they've been given the go ahead to travel and are now in a position where they would like to sell ASAP!

I am feeling particularly deflated as although we are in no rush to move (living in my family home as parents now live abroad) we would like somewhere of our own. I'm worried that properties will not come on the market due to falling house prices and wonder if we don't buy this house, how long will it be before we buy. Having said that, I am also worried about buying -on a whim- and seeing houses crop up over the next week and wishing we hadn't rushed into it!

Thank you for taking the time to read this very long post . WWYD? Any advice would be welcome and much appreciated.

• Would you wait to see what came up or would you offer?
• How much would you offer given the market today?

£30,000 is a lot of money to spend for the sake of a few years, if you have no intention of staying in it. Seems backwards to spend money when the purpose in buying it is to save money... If its not liveable as is, then I wouldn't buy it.

Ask your Solicitor how much over valuation properties are selling for in the area you are looking in / about the local market. Where I live it's not unusual for houses to sell 20% over valuation and I can't imagine many folk sell for less than valuation.
If it's gone to a closing date, there will be at least 3 interested parties.

There is going to be a great big scary recession. Lots of people are going to lose their jobs. There isn't a great deal of potential upside for house prices over your timescale but. You don't need to buy and you don't want to live long term in this house. You are taking a massive chance for no discernible benefit and lots of risk. The obvious advice is you should stay where you are and save. But I appreciate that probably doesn't seem a very exciting option

You seem determined to buy so I'm not sure why you've asked for advice and I mean that kindly. As a pp says, the mother of all recessions is coming and house prices will, at the best, stay stagnant. I wouldn't rush to buy until your parents need their house back - you could save like mad in the meantime.

@Veterinari We weren't too sure about the legality/ins and outs of the EA setting a closing date, so thank you for setting that straight. I think DP and I can fully accept we have been naive!

@ChicCroissant Yes, its o/o 190k for a quick sale due to sellers needing to relocate abroad this summer.
DP is very keen to buy as he feels living under my parents' roof that he cannot do things that he would if it was his home. He is extremely meticulous when it comes to saving and has worked hard to ensure the deposit is sizeable, I guess he feels that now is the right time. DP is extremely respectful that ultimately this is their house so he doesn't feel right when inviting friends over here for beers/watch football etc. DP is keen to have a garage where he can set up a golf simulator/have a home gym and set up and place where he can train on his road bike, unfortunately this is not possible at my house! Thank you very much for your advice. X

@thinkingcapon Yes, our mortgage has been provisionally ok'd by the bank. Thank you for your advice, it really is a bit of a minefield and we are complete novices.

@LaughingDonkey Thank you for that link, I will definitely have a look tonight.

@Sewinginscotland, @MamaFirst, @JamMakingWannaBe and @nomdeguerrrr Thank you all for your advice, really appreciated by us both.

I should probably clarify a few things:

• The house we are looking at is definitely liveable but does need modernisation. 30k is the maximum we would are looking to spend on doing everything from the kitchen, bathroom, walls/flooring and soft furnishings.
• It is priced under the asking price as the sellers require a quick sale due to relocation abroad.
• Houses in the area have sold for more than 190k so we would buy in the hope that when we come to sell we are not at a loss.
• Finally, the intention is to live there until DP's parents are ready to sell and we have enough money to buy. It is not our forever home but who knows how long we will live there - DP's family want to keep the house in the family but haven't told us when they are willing to sell so only time will tell.

Gosh, I feel absolutely clueless now. Lots of thinking to be done tonight and we will speak with our solicitor tomorrow. Thank you all again for replying, DP and I appreciate all of your advice massively

Gosh I need to go to bed, sorry about the errors in my last post !!

-it is priced under the HR*

My only other point would be to ask what you want @calialilly ?

You're buying now even though a shortish-term buy including expensive renovations is likely to lose you money over the short-medium term because your BF feels uncomfortable inviting friends over.

You're planning your financial life around the possibility of buying your BF's parents home because his DM has decided it must stay in the family, even though you can't afford it, and selling your existing house to buy it could possibly lose you equity depending on when they decide you should buy...

There's a lot of what your BF and his family want in this situation,even when it doesn't make great financial sense. What do you want? Are you and your investment financially protected?

I am going to slightly counter previous poster a say go with your gut. Your gut will determine how much you want it. It doesn’t sound like you do hugely as you know you intend to move again soon for something you want. I am on move three and each time gut instinct told me it was right, I just knew. Good luck whatever you decide.

@calialilly

Another tip - I was 1st time buyer and sellers really wanted to sell asap (no chain), hence I offered 10% below asking price with condition that I will buy straight away (to exchange and complete in the same week minimum if not the same day). It was accepted and I paid extra £100 (or was it £150?) to my solicitor to prioritize my purchase. Plus I spoke directly to my bank and funds were available the day before completion date. Additionally my mortgage broker and her assistant was involved (extra £50) to chase all the documents asap.

However, like I said before (plus majority of PPs) I would not buy now in your position. Wait a year/6 months and do your research!

Good luck

Now is not the time as a first time buyer to be buying unless you get it for well under price at this time.
Look up negative equity.
We have not even started on job loses and the forthcoming recession.
And rule of thumb if an estate agents mouth is moving they are lying