Walking away from a property

[CountessFrog]

We have put three offers in on a property and they’ve all been declined. The property needs a lot of work but is priced as though it doesn’t. It doesn’t have any heating at all, for example.

It’s been on the market for eleven months without offers or reductions. The EA told us what the seller is looking for, which was 30k more than we think it’s worth. As we did want the property, we increased our offer by 24k, thus coming in just £6k below what he wants., but he still rejected it.

In truth, we could find the extra 6k, and we would save 8k in stamp duty if we bought the property before March, but nevertheless, this is still a property requiring modernisation, even though we’d eventually get that money back. And we think it’s hugely overpriced, which is likely why it hasn’t sold.

Everyone has told us to walk away. I’m finding it very hard to do that and could really do with a good mumsnet taking to!

Opinions?!

We've put in an offer on a flat. Mortgage company has downvalued it by £45k. We can still afford it but it pushes us into a different LTV bracket and our monthly mortgage payment will be higher. (In our case we think that the mortgage company is being overly negative, as does our mortgage broker.)

I know you said you had a large deposit, but a downvaluation is still something to consider. Of course if you do get a lower valuation, you might be able to use the mortgage company's estimate to negotiate a lower price.

My view is that we all spend a lot of time talking about a home being an investment etc and how home buying should be an unemotional business transaction.

To an extent I agree with that. But it’s also a potential home for you. Let’s say you stay there ten years - this extra £6k is costing you £600 a year premium for the home. If you break it down that way, is it worth it to you?

If ever there were a time to consider overpaying on a property now is not it

Post a link OP

Op are you sure it’s over priced? It seems to have things going for it that are unique or rare. Which could bump up the price.

I’m pretty sure it’s over priced for the condition it’s in.

There have been similar houses on the same development that have sold, however, being 1960s houses, they have all been updated and at least have heating or plumbing for a washing machine. And you can see that they’ve been rewired because there are updated sockets, whereas this has two sockets per room, old fashioned looking - no sockets at all in the hallway.

It is selling at a price commensurate with having been renovated, when it’s still essentially a 1960s/70s box. It’s in a nice place, and a good spot, but not the best spot within the development or anything like that. Many of the houses have views and this has a view of the local recycling centre!

And that’s a good point, Lola

That’s how I justify my spending... how long will it last and how much is that a year 😂

If the seller is being difficult and obstructive and slow at this stage, expect it to continue. They are not motivated to move and will make your life difficult and probably wish you had walked away before its over. And yes i agree its unlikely everything will be completed by the end of the stamp duty holiday.

See, Redtoothbrush, every post you make is so full of very good sense, so I’m going to take that as the last word on the matter.

You also seem to know a lot about the part of the world I’m from (on other posts) and I’ve long suspected we have the same hometown, so there’s also that! 👍👍

Give your head a wobble and walk away. Why would you pay £30k over what you think property is worth? You made a very generous offer and vender is content to wait for FAP. Look for something else. Also might be too late to complete in time to save stamp duty now. There is a huge backlog with searches taking weeks.

@CountessFrog

See, Redtoothbrush, every post you make is so full of very good sense, so I’m going to take that as the last word on the matter.

You also seem to know a lot about the part of the world I’m from (on other posts) and I’ve long suspected we have the same hometown, so there’s also that! 👍👍

Im not always as sensible as i should be.

If you are from where im from originally, ive seen some crazy prices there recently.

Absolutely crazy. One just yesterday i looked at and went "are you having a fucking laugh!"

Whether thats a reflection of people moving further out of cities, I'm not sure. Whether its people moving north who have nore money I'm not sure.

The thing is Ive also noticed since September there has been few properties actually selling. And i know that it doesn't tend to pick up again until February / March. A LOT have now had reductions on them in the last few weeks.

If this guy was serious about selling any time soon, he'd take your offer. The fact he isnt suggests either he doesn't want to move or is happy to wait the winter out. He's not going to get a better one this side of Christmas and the end of the stamp duty holiday will merely shrink the pool of people able to buy his house and make it look even more over priced.

I personally dont think thats the wisest move. My suspicion is most of the NW is going to continue under T3 for some weeks after the end of this lockdown and frankly thats going to be an utter disaster for a lot of people from the stories im hearing. The area perhaps will retain more jobs than a lot of other places but its still going to suffer. I can not see prices being sustainable in the area at the rates they are currently being marketed at for long into 2021. I do think that sadly a lot more properties will crop up shortly after Christmas for heartbreaking reasons. More houses on the market in the new year especially with the end of the stamp duty holiday isn't going to help sell his house.

I could be very wrong and maybe a lot of people have saved a lot so they can move but we are looking at a higher cost of living and uncertainty over changes to taxation (especially with second homes) so i dont think that there will be huge amounts of buyers and many mortgage companies willing to loan huge amounts. I don't thinkt there will be a crash in the market but i do think it will settle down and drop below the peak it has been showing.

(I also think that some of the estate agents are somewhat desperate themselves do are trying to inflate prices to increase their margins to make up for some of the months of business they have lost. They seem to be overvaluing in a way they have previously tried to actively avoid. Again this maybe me not reading things correctly, but the prices v the number of properties actually selling doesn't seem to add up).

You asked what he wanted then offered 6k less. He's got a figure stuck in his head.
If I were you and I really loved it with a big deposit, small mortgage, a good idea of the cost of the work and if it's going to be a long term home then for the sake of a few grand, I would be seriously considering going for it.
I wouldn't be prepared to lose a house that I really wanted for 6k.
Otherwise I would simply withdraw the offer and move on.

If there really are no other houses like it on the market in the area, then he knows it too and probably figures it's only a matter of time before someone comes along and offers asking price. A house is worth what someone is prepared to pay for it.

I think your main consideration is whether you can actually afford asking price, considering things may not complete before the stamp duty holiday ends. If it's a risk to offer full whack and then potentially have things fall through because you can't afford it any more come April, I wouldn't be increasing my offer on this particular property. Unless you are not in a rush to move and can take the gamble of starting again with your house search after March.

We bought our house around 25 years ago and paid way over the odds. We knew it was our 'forever' home - our children were toddlers then, and we had been looking for 2 years. We swallowed hard and bought it. Definitely ruled by our hearts not our heads!

All these years later, it's obviously increased significantly in value, but more importantly has given the whole family enormous joy and happy memories.

Really depends what your future plans are - and what's right for your family.

The fact that the house has been on the market for nearly a year and over a huge boom in property over the last few months and still not sold would support your opinion that it is overpriced.
The seller sounds unrealistic about the price and not in any hurry to move. This would probably mean that you would lose out on STLD holiday and therefore pay even more and possibly run into other problems if he, for example, refused to negotiate if the valuation was much lower. I wouldn't waste more time and money on it.

Thanks all.

Red, there were two houses built in my village a couple of years ago at vastly inflated prices. They suffer from motorway noise, small north facing gardens and being on a relatively busy road which became much busier when a housing estate sprang up behind them.

They are also facing a field that is about to be developed into a housing estate.

They are now on the market for a whopping 1/3 mark up on their original price. Not selling, of course, but it’s as though everyone just wants to take a chance.

The thing about stamp duty holiday ending is that we would have walked away from the purchase if the vendor dragged their heels and continued to be difficult to the extent that it looked like breaching the SD holiday. We wanted to buy the house to downsize into at a later date - we were hoping to let it out for 8/9 years until we were ready to do so. So in that respect, we weren’t selling our own home as part of the process.

He won’t even sell to chain free buyers!

Please walk away. If the seller is being awkward now god knows what the property is really like. It could be a real money pit.

I know its hard. One of our houses had an awful seller and nothing in the house was right as it was all done on the cheap. We spent a fortune doing it up only to have to sell it at a loss. We like you were pretty desperate. But honesty houses come on the market all the time and there will be more from March. You will find the right house for you soon.

I will only ever buy from someone reasonable in future

Hi OP, as others have said, if the seller is being difficult now he will be difficult all the way through the process, I'd be very wary indeed. He might end up dragging it out past the stamp duty holiday, or change his mind at the last minute when you've spent thousands. Some years ago I fell in love with a house and soldiered on with the purchase, even though my gut was telling me the seller was bad news. He ended up pulling out the day before exchange.
Also if the property needs a lot of work a strange side effect of lockdown is that lots of tradespeople are incredibly busy; not only are waiting lists long but prices seem to have gone up a lot. We got some quotes recently for work on our house and I was stunned by how much prices have gone up since we last did similar work 2-3 years ago.

I'd also be wary as you say the house hasn't been well looked after and has been used as a holiday let, with the best will in the world no survey is going to pick every single issue up, and I'm sure there's a few horrible surprises lurking for whoever buys it...

I wonder if they really want to sell or are those people who put it in the market and hold out forever for an unrealistic offer, and then even if they get it, pull out after it’s reasonably far along the process.

Sometimes, it’s worth upping your offer when you don’t think it’s really worth it and losing a property for a couple of £k due to pride us daft. I nearly refused to offer an extra £2k on my first flat 20 years ago because an extra £2k seemed a huge amount to me....but I paid up in the end, and that flat increased in value by 75% in the next 3 years, and if I had waited those 3 years I wouldn’t have been able to afford it now. And £2k feels like peanuts now.

But at the same time, you do have to know when too much is too much. You’ve already pushed yourself beyond what you think it’s wor5 bearing in mind all the work needed. You know this isn’t a rising market over the next few years and it might not be a financially sound decision.

But ultimately if you can afford it and thus really is your dream house and as rare as hens teeth and you honestly know the chances of something similar are extremely low over the next couple of years, plus you plan to stay for many years....well you could just choose to swallow it and take the very long view.

Only you can judge if actually there could be other good houses for you in the area in all honesty and how far you’re just caught up in wanting this house and a bit impatient to move, or if this really is an opportunity that won’t come along again for years. If it’s the latter, I might just swallow hard and make the offer he wants. But if it’s the former, you should walk away.

Check you’ve done your sums really thoroughly for the cost of the work, plus decent contingency and all the extra mortgage costs related to worse LTV.....too many big projects go far over budget and mean people bought a terrible deal especially in a markets which don’t rise for several years. Check and double check your sums.

Really well thought out advice, thank you, I appreciate it and will have on board.

If you want it, can afford it and will live there and love it for many years... buy it.