Feeling bullied, should we pull out?

[DobbieFreeElf]

I’ve come here to get some opinions from people removed from the situation.

We had an offer accepted on a house in September, the house fits our, very specific, needs and although we would like to improve it over the years (new kitchen, bathrooms, maybe extension) we would be planning this to be a home for 20 years.

The house is an adjoining paddock, a couple of acres, which is ideal as I have always had horses (prior to kids) and when the little people are bigger I would like to get another.

We were all set to exchange on the Monday before Xmas when our solicitor calls to say that the sellers want to impose an Overage clause (also called uplift/ clawback) on the land. In essence this means that if planning permission is granted on the land we must pay a percentage of the increase in value to the sellers. We felt completely blindsided as we had never even heard of this before that date.

Aside from potentially building a couple of stables in the future we have absolutely no plans to develop the land. (Why would we, we love the house because it is rural).

I can’t decide if we should cut our losses and walk away now.

Now the seller is threatening to put the house back on the market next Monday. We feel backed into a corner and bullied.

Initially we were dead set against the overage (especially as it was dropped on us at the 11th hour) but having had time to look around at what else is on the market (nothing that meets our needs), thinking about the 15k extra we will have to pay on another property (as it’s doubtful there would be a house we would complete on before the SD holiday ends), the £2k+ we’ve already spent on conveyancing, searches, surveys, inspections etc. and many other factors we had decided that we would be open to the overage (as long as we negotiate terms that we are ok with)

Are we stupid, should we walk away, is this fate giving a massive warning sign...

I don't know much about overage so can't comment on that.

It's the fact they're being arses about it all now that would bother me. The lateness of it. The refusal to allow proper time to get legal advice. The refusal to budge on the 40 years. That to me says arsehole vendors and I would be anxious the whole time they'd pull another unreasonable demand later on in the process after they know you're well and truly invested. They have nothing to lose.

For that reason I'd back out.

Sorry. New year. New opportunities. Best of luck whatever you do

Just a suggestion......offer an extra £10k for no overage. It maybe they want to repost for more in lieu of any overage. In other words something has happened to make them believe they have under sold because of potential for developing so they want more for it or the overage. If you offered a bit more for no overage could that sort the issue out perhaps?!

For what it’s worth I do think you’re being played but if the house is worth it and for 20 years plus of living there then £10k or even £20k is nothing if you can afford it.

I'd call their bluff and say that you will leave your current offer and 20 year overage on the table for 14 days and they are free to proceed straight away or remarket and see how they get on. However after 14 days you will only proceed with no overage and will start to view other options

I’d offer them this too

I really think that the fact that they have given you a ridiculous deadline, combined with the fact that it's the Christmas and new year period so solicitors etc shut, shows they either a) Don't want to sell the house to you or b) are totally unreasonable.

I would also be wondering what else will be pulled. I would be walking away. I doubt you could get the legal advice you need by Monday anyway.

FWIW the seller on our current house did something similar at the last minute (demanding an extra 10k for every single fixture and fitting or they would gut the place).

We completely ignored them (making sure the solicitor knew what should be listed) and it went ahead as planned, despite similar bluster to about pulling out.

I really would not make the counter offers which have been suggested- you have already counter offered (despite them behaving poorly) and they have not wanted to compromise.

Just remain silent, don't contact them. They have either decided to sell or not and offering more and more won't change that. What they are doing is just Trumpian negotiation.

This is such a red flag. It’s almost like you’re being given time to stop and reconsider the purchase in totality. I’d walk away. Good luck to them selling at a higher price with such onerous terms in the current climate (when the prospective new buyer will also be facing the additional stamp duty). Hope your other dream home appears soon OP!

They might not be on the ball and the clause could see you pay out on getting an insignificant planning and then falling away.

For what it's worth I would negotiate the period down to 20 maybe 25 years and carve out what you want to do to the property (or at the very least have an agreed maximum valuation if you obtain
Planning in the next 2 years for the stables).

They feel they have undersold. That's all that is going on. Shit way of dealing with it though.

OP: talk to your solicitor and hold your nerve.

An overage clause isn’t unusual where land could be developed for profit, but 40 years sounds ridiculous.

Check that stables would be allowed (wooden ones would, anyway, I think).

If this land has been agricultural the chances of pp being granted for housing or other commercial use are restricted.

Land and house, an overage term you are happy with or you walk....

In due course, depending on the future of new developments/ green belt / agricultural land you might yourself want to impose an overage clause.

If you’re not going to develop the land and increase its value, then what’s the harm? You’ll never actually have to pay them anything, and would it not have a long stop date anyway (it wouldn’t sit there in perpetuity??) I would be asking them to foot the costs of the extra legal work for both parties though.

Oh ignore my post, things are clearly way more advanced than I realised from only reading the OP

To those suggesting offering extra money to go ahead without the overage, they said they would take an extra £35k 🙄 very generous of them.

We’ve not done anything more than tell the estate agent that we now need to take legal advice and reminded her that the solicitor is on holiday until the 4th.

I’ve also lined up a couple of calls tomorrow with a couple of friends of friends who are agents or work in property (not involved) in the local area so we can try and get an educated input on the hard facts.

I still love the property but I still can’t fathom an overage that lasts 40 years!

(I’m also taking on the points raised about how the sellers have acted so far and how they could pull more tricks out of their hats. Just so frustrating when genuinely everything had been done (building survey, septic tank inspections, electrical inspections) the solicitor even has our deposit!!)

That’s awful how they’ve sprung this on you at the last minute, OP. We had a seller mess us about when we were just about to exchange contracts. It’s such a shock when you’ve spent months imagining yourself living somewhere and doing all the surveys etc. Hope they negotiate, but if they don’t, using the house in Wales for a while and seeing what happens might turn out for the best. We ended up living in a friend’s house for a few months and in the end we found a much better house with sellers who actually wanted to sell and be reasonable!

I’d walk away at this stage. If you capitulate now then who knows what else they will “have forgotten” next? It’s not with it. No house is.

You should find a member of the Central Association of Agricultural Valuers and ask them. A normal estate agent isn’t the best person to ask here. www.caav.org.uk/Find_a_CAAV_Member.aspx

Just walk away and let them relist it. Be sure to let the agent know they have a duty to let potential buyers know upfront that there is an overage clause before they put in offers and progress the searches. I suspect they deliberately witheld that information from you until the 11th hour to force you into a corner. If the land has development potential, a developer would have bought it at all cost. Goodluck.

£35k for a paddock seems very low. An overage usually is to make up for hundreds of thousands. Honestly if you like the house I'd pay the £35 and be done.

Walk away!!

If you offer them the £35k they will carry on insisting on the clause. If this was just about money they would have just upped the price and not made these ridiculous demands which they could have no guarantee would bring them any money in the future.

Besides which, if you buy this house you will never be able to sell it given that there is a clause on the land which gives money to someone else in the event the new buyers want to develop it.

I know you say it’s an investment but a lot could happen in 40 years. 40 years is long enough that if one of you needed to go into a carer home you might have to sell the house, and then wouldn’t be able to.

Or one of you could lose your jobs and wouldn’t be able to afford to live there, then you’d be stuck with a house which you couldn’t sell.

Even giving them more money at this stage is madness. They really won’t stop there. They know that if you developed it would be for more than 35 grand, so why would they capitulate?

They think they have you over a barrel, because they think you're not willing to walk away.

I suspect you're not willing to walk away.

If you really want it, just pay.

What I mean is, you want them to stop being twats. But they are twats. You have to decide your own bottom line.

I would walk away.

So basically you’ve reached the point of exchange and they’re asking for a further £35k?

It’s poor behaviour of course but I wouldn’t let your buttons be pushed. You need to step back and think rationally whether this still represents a good deal for you in the current market, given your position, the property itself and the availability of other options.

Our buyer demanded a further £40k off at exchange to reflect price drops due to Brexit. We thought the price had fallen about £25k so agreed that.

So they would proceed as planned without the overage for an extra £35k.....Clearly something has happened where they realise they potentially undersold the value of the land. It goes without saying a piece of land is worth so much more with planning permission than without it, but it’s also worth a lot more with the potential for planning permission.

What they have done is sneaky and very cheeky and if I was in your position I’d probably want to walk away too however they have done nothing wrong at this stage. Something or someone has made them aware they have sold the land for less than it’s worth and if that’s the case then I think most in that position would probably be looking to reevaluate the deal infront of them.

It’s a really difficult one but I can sort of see the other side of it too.

Besides which, if you buy this house you will never be able to sell it given that there is a clause on the land which gives money to someone else in the event the new buyers want to develop it this is just not the case.

£10k/acre is bottom end agriculture land value and pony paddocks, adjacent to houses can be worth up to 4 times that value, so I reckon someone has said they are selling it for too little, hence the overage (which is very common, but 40 years duration excessive) or an additional £35k. However they sound like total shits, especially giving you so little time to think about it at this time of year.

So to a certain extent they are not being unreasonable, it’s the timing that is. I would have expected their estate agent/solicitor should have covered all this when the house was first marketed.