Advice on accepting an offer

[Fearforfriend]

Hi all,

I’m about to (hopefully) sell my first house and was hoping you all could offer some wise words on which offer to accept of the top two I’ve had.

offer 1 - £500 higher. Buyer has sold their house subject to contract to a first time buyer. Their sale is at an early stage (survey booked but not done yet). Once their sale is complete they will be a cash buyer. Have a 50% deposit regardless.

offer 2 - first time buyer so no chain. Has 10% deposit and mortgage in principle. The keenest and constantly ringing.

I am moving in with family so no onward chain of my own so I’m keen for a quick-ish sale if poss.

My concern really with the first time buyers is that they can often overreact to survey issues and may already be at the top of their budget. (The house is over 170 years old so there’s bound to be something on the survey). On the other hand the other buyer’s chain could fall through.

I’m really indecisive so any thoughts will be greatly appreciated.

My gut instinct would be to go with the higher offer. If they are sold SSTC, they are in the stronger position and hopefully their sale will go through as planned.

£500 is neither here nor there in terms of house prices. I wouldn't let £500 more or less factor into your decision

Go confidence on completing. So you are balancing no chain FTB vers short chain but more experienced home buyer.

FYI, a two house chain is still a very short chain. Are you buying yourself? If you are, you cannot know how long the chain will end up extending after you.

Is that right? - only £500 difference. It's not enough to swing the decision on.

Has your EA checked them out to ensure that their financial situation is as they say?

Seeing it's so close, have you gone back and asked for a 'best and final' price?

Thanks all for your thoughts.

Estate agent says these are their best and final offers. They have checked progress of buyer with a chain, can they do anything to check the mortgage in principle exists for the ftb?

I know £500 is negligible in the final scheme of things. I’m really choosing between no chain vs short chain and ftb vs some experience. Mortgage vs potentially cash.

I’m not buying anywhere so I’m chain free.

The agent can ask to see the agreement in principle. They could also ask for bank statements and proof of savings. The FTB doesn’t have to hand them over but if they’re keen they’ll want to prove that they’re sound.

Someone who is constantly ringing might be a nightmare. ( Shudders at the memory)

The FTB is keen (or says they are). The other sale is only at an early stage.

You have no new house so getting rid of furniture, white goods, etc might be a problem. FTB probably hasn't got furniture, white goods, etc. You might make back the £500 there.

Go FTB.

We're currently selling to FTB. They're super keen and before accepting their offer, we said we wouldn't be renegotiating on price if anything came up on the survey. Now, of course they could have still gone for a renegotiated price but they haven't, so that's worked for us.

On the other hand, lenders seem to be very nit picky with FTBs at the moment. We're ready to complete and their lender is still asking questions and hasn't given final mortgage offer, which is strange as we've had ours since April! Couple of friends who've also sold to FTB have said the same thing, that you're always waiting on their mortgage to be finalised until the last minute. Not that it means it won't go through, but it's a bit stressful.

We warned - we sold to someone who was almost at completion - 24 weeks later we are no nearer to exchange as their buyer has fallen through twice and we are now on our third chain with them. I wish we had gone chain free with first time buyer.

I think you're confused by inferring 1. They aren't cash buyers (nor have the potential to be, from what you describe).

50% deposit means the rest us mortgage. Ergo, not cash buyers. Even if they were mortgage free, chains usually all complete at the same time. So Buyer 1 would not have thr deposit for your house until the day they sold. Unless they have agreed beforehand that they will go into rented accommodation, the assumption is they will complete on the purchase of your house on the same day the sale of theirs completes.

PPs point about FTB being willing to buy furniture and electrical goods off you is a good point. You could make more than double the £500 back on this, depending on what you are willing to leave them.

can they do anything to check the mortgage in principle exists for the ftb?

Have the FTB not been required to demonstrate that they have MIP as part of the prep/ID checks?

I'm afraid I would go for experienced buyers over FTB who can be skittish.

Hmm good points, particularly in relation to the white goods. To be fair it’s an integrated kitchen so hadn’t considered taking them but could be a bargaining point later in the day. Fridge freezer is less than 6 months old….

in relation to buyer 1 they do already have the 50% deposit, it’s the remaining 50% which is to come from sales proceeds of their house. I think this is why estate agent said cash. I do take people’s points about chains collapsing though.

Did you do the viewings? I'd go for gut instinct on who you prefer.
There is little to choose between the offers, and the advantages and disadvantages of each potential buyer is as you've outlined.

If it's integrated then I would expect them to be included, but perhaps other furniture can be negotiated.
I think I would be tempted by the first time buyer to be honest. Chain free saves a lot of potential hassle, and not all first time buyers are scared by surveys.

Our FTB got every survey under the Sun, for a house that was about 20 years old! I know some raised issues (in a potential future expense, rather than dangerous way) and I was sure they’d use these to renegotiate on price, but they didn’t.

Also to remember, there’s a FTB (or equivalent) in the other chain too.

Another thing to consider is the sale price of your house. If the ftb only have a 10% deposit and are stretched to the maximum, if their mortgage lender down values your house (which seems to be happening a lot lately) they may be refused the mortgage or try to renegotiate price? Obviously this only usually happens if the buyers offered more than it was marketed at or it was overpriced in the first place which may not apply in your situation! Happened quite a lot round here according to our broker as people were offering way over the odds as demand was so high.

The first buyers are NOT CASH BUYERS - they are still relying on the sale of their house to proceed. I would go with FTBs who are enthusiastic and have no sale which could fall through.

I really wouldn't consider that a cash buyer at all. A cash buyer isn't reliant on a sale for their purchase ie you don't have to worry about a sale falling through, so these are really just people with a high deposit and short chain. I'd be pissed at the agent who is positioning them as cash buyers to be honest

There are FTBs in both scenarios so either could get the willies and pull out, which would impact scenario one as they can't proceed without selling theirs

Having said that I'd go with one, purely so you don't have to deal with the eager beaver FTBs

Buyer 1 isn't a cash buyer. They'd only be a cash buyer if they sold their house first, had enough equity from it to buy yours without a mortgage and were living temporarily elsewhere (eg in rental or with relatives). So, they're in a chain.

To be a cash buyer they need to show the EA evidence the money (all of it) is sat waiting to be used to buy a house now.

If they are claiming to be cash buyers or prepared to move into rental to become chain-free then it needs evidencing. Get it in writing if they're prepared to move into rental - it's easy for people to say but a lot harder to do! Our vendor offered to move into temporary accommodation then changed his mind!