Difficult seller

[MartinaD]

Hi

We are first time buyers in need of advice.

The duplex has been in the market since May 2022. Initially advertised for £320000 then reduced to £300000. It's on the market with three different estate agents. We offered £310000, refused. We increased to £315000 and accepted.

The flat has a 84 years lease left. Owner said it'd cost £5000 to renew as he had an offer already form the housing association. So our offer was conditional to the Premium being £5000.

Once offer accepted we requested the property is removed from the market with the other two agencies and marked sold stc with the current agent we are dealing. However, the seller's saying that he's requested the flat is removed but these agencies are apparently advertising it still against instructions and that we shouldn't blame the seller for it and holding up the process. According to the agent he's seen his emails requesting they remove the flat from their sites and that should be enough to appease us. We are being pressurised to instruct solicitors whilst the property is on Rightmove and Zoopla with other agencies but we are not prepared to incur costs until the property is removed.

Another issue is that the lease offer from the landlord expired in January 2023. We've asked the seller to obtain a new offer confirming the premium. He won't do so until exchange because he doesn't want to incur costs of the valuation in case the sale fall through given it happened before already that the buyer pulled out after he got the lease offer. we however are not prepared to take all the risks in this transaction. We will also be incurring surveyors costs and solicitors costs that may be lost if turns out there are issues with this flat or the premium has increased too much.

Are we being unreasonable to be ready to walk if our only two conditions aren't met?

You are being totally reasonable and depending on where you are, with the current market for flats and with a short lease they are very lucky to have an offer over current asking price.
It’s possible the cost of lease extension has gone up as the remaining term has reduced and it’s getting close to 80 years. The seller needs to start the extension process otherwise you can’t for 2 years. If they won’t do it until exchange then you need to make it a condition that any cost of extension beyond £5000 is deducted from the purchase price.
Regarding the agents, it’s absolutely the seller’s responsibility to ensure their instructions are followed and it’s removed from the market. You are in a strong position, the flat has been on the market for nearly a year, the seller should be bending over backwards to keep you on board.

I'd walk away. We had a similar experience, albeit different issues but two days before exchange seller decided he wasn't selling and we had incurred costs of survey, solicitor etc by then. He was difficult from the off and we were desperate for the property so tolerated him. In the end we walked away but not before we'd lost a couple of grand. He sold months later at a lesser price than we'd offered!

Wow! I'm sorry you've had this experience. May I ask why you think the seller walked away so close to exchange?

Thanks for your input. Especially the suggestion of a compromise that anything over £5000 is deducted from the purchase price. I didn't think about that and that's a reasonable request in my opinion. We'll definitely go with that.

You need a good solicitor with experience in leaseholds, beware of online conveyancers even if recommended by the agent (they are not all bad but my experience with a buyer using one has been dreadful). Check reviews and get personal recommendations if possible.
Good luck!

Just my view, but I think you're at risk of significantly over paying for the property and potentially incurring much larger costs on the lease extension.

A family member was in a very similar situation recently in terms of buying a flat that required a lease extension. It was less value than yours and they wanted £25k to extend the lease, so not sure why yours is only £5k?

Be careful, he's trying to keep you on the hook as I suspect he already knows that it's going to be a lot more than £5k.

With the current property market, I'd wait another 6 months or so and see what house prices are doing then. You don't want to be trapped in negative equity and as FTBs, as long as you can afford a mortgage, you're in a good position to wait and see what happens.

Thank you! We've seen the lease offer for £4600 which expired in January so that isn't much of a concern but I agree with you that we are being rushed to progress when we are not comfortable in doing so given none of our requests are being met as if we are the ones desperate to buy which we are not.

Until you instructed solicitors it is fairly normal for a property to stay on the market, usually you make an offer, it's accepted, you instructed solicitors, property is taken off the market or listed as under offer. This is a slightly confusing overlapping few days but if youreva serious buyer you will have to spend some money.

The lease is an issue but you've made your offer based on them confirming the cost of extending so its a conditional offer and in the sellers situation I'd keep it on the market until that condition was met or another offer materialised. With a conditional offer you've muddied the waters so to speak and in this case I'd simply say sort the lease and we will proceed. The agents will probably have told them this anyway.

He’ll never be able to sell it with such a short lease, and should have already extended it himself. Any prospective purchaser will want a valid quote.
I would not progress without the new offer about renewal.
And as the PP said, I’d be very cautious offering over on a flat that has been on the market so long. Does it have a good balcony and garage?
What are the service/management fees? Is there a sink fund or how are repairs managed?
Is the building well maintained and is there any major work coming up?

Thank you!
It's a duplex maisonette with a private front garden and communal rear garden and a small garage. The service charge is very low compared. We need a surveyor in to advice on any potential issues. The kitchen will need some work but there is new carpet throughout, recent plastering and painting, new boiler. The EPC is very poor but could improve with some ££ investment. All in all we like the potential of it but we are not in love with it because it needs a lot of work.

@C4tastrophe

Makes some good points as well about offering over the asking on a property that has sat on the market so long.

Also, as suggested, take a very good look at the management company if there are service fees. Are they in a good financial position? ask to see their last financial report and list of works carried out. How much have service fees increased over the last 3 years and are there any plans to increase again in the next 12 months. Can you talk to neighbours to get a feel for what it's like living there?

Personally I'd walk away but if your heart is set then do more digging and set the terms to meet your needs.

The duplex has been in the market since May 2022. Initially advertised for £320000 then reduced to £300000. It's on the market with three different estate agents. We offered £310000, refused. We increased to £315000 and accepted.

Can I asked why you offered above the asking price on a property that had been on the market quite a while (with 3 agents!) and had been reduced in price? It was on at 300k and you offered 310k? Be careful you're not overpaying. Prices have fallen generally since last year and as first time buyers you don't want to waste the advantage that gives you.

If you absolutely love the place it's worth dealing with a tricky vendor, but keep your eye on what else is available. Bear in mind the market is swinging back to a buyers' market. I have search alerts set up as my daughter is looking to move, and most alerts are now price reductions rather than new to the market.

Can I ask why you offered 310k and then 315k on a flat that was being marketed at 300k and had been on the market since May 22?
If he reduced from 320 to 300 then he obviously wasn't getting any interest near 320 for many months.
The market is falling and expected to continue to fall. As you are a FTB now you are already at potential risk of negative equity and will be more so if you overpay which is what you are proposing to do.
If the seller wants to sell his flat then he will need to put in some effort and £. I think there is a strong argument that he should pay for and arrange the lease extension himself in order to achieve the sale. Any potential buyer will obviously want the extension.
Honestly, I think he has seen you coming. I would pull out as you are overpaying in a falling market and have a tricky seller.

Good points.
The flat is advertised in excess of £300k. We did some research, the seller bought it for £306k in 2016 and made improvements. Some he's making very little if no profit. According to the agents they had an offer for £320k in October 2022 which fell through due to buyers 'personal reasons' so that set the sellers expectations high. They had an offer for £305k just before ours which was rejected, Based on a the above we knew we had to make a competitive offer if we really liked the flat. Ultimately the surveyor valuation is going to tell us if we are overpaying it which is also why I want
To commission a survey in which case we wouldn't proceed without renegotiating the price. The price is competitive judging from the market (have seen flats with no balcony or garage or garden advertised at £320k) but the sellers problem with this one is the lease extension imo.

Walk away.

The flat has a short lease and the seller should have extended it before selling or reflect that in the asking price.

My feeling is that it will likely cost more than £5000.

Housing associations also can be slow and tricky to deal with as freeholders (I used to have a shared-ownership flat with one of the UK's biggest housing association and they charge a lot of money for the admin related to lease extensions on top of the actual extension costs).

Also in this market it is no wise to overpay for a flat when the demand for them is fairly sluggish.

The fact that it had to be advertised with so many agents for so long shows you that it was difficult to find a buyer for it and that it is not a good deal.

I think you are better looking for another flat. You are likely to get a better financial deal and not have to deal with lease extension/dodgy seller.

They saw you coming as a first time buyer and are trying it on.

The flat isn't in a viable state to sell at anything but a rock bottom price because of that lease. Any decent vendor would have sorted that properly before putting it on the market. There's no way I'd be incurring costs until that issue was 100% resolved. I wouldn't even be putting caveats in a contract about deductions. Walk away - there'll be better options around OP. Good luck!

Also I should have added that housing associations make really bad management companies: their services charges are often really high and they are useless at managing repairs to and maintenance of communal parts effectively.

Read reviews about the housing association before you commit to anything. Most of the bigger ones get terrible feedback from leaseholders and tenants...

As an example I used to own a flat and sold with a high lease. A old neighbour has had to sell via auction due to not selling because of the short lease. Property going for £250k with high lease. Guide price at auction £150k. These lease holds are a nightmare. However I would say yours is with a HA with is better then a private company who are just greedy as.

There are a few red flags and you definitely aren’t being unreasonable. They should have been pleased to get an offer at 315k after it being on the market so long and should be doing everything they can to keep you on board. As a minimum, they need to stop the other agents still advertising it and get another quote to extend the lease.
If you don’t love it, I would walk away. This property isn’t going to easily sell with such an unrealistic seller. Who knows, you may be able to get it for 5k less if you wait another month or two for them to come to their senses.

@MartinaD I see, hadn't realised it was OIEO. As you say, the lack of extension on the lease is a significant problem. Clearly, other buyers think it is over priced regardless of whatever else is on the market because it hasn't sold in 10 months on the market. He needs to sort the lease extension and pay for it if he wants to sell. I would continue to look elsewhere.

Run away, the lease is a no go. You will find something better.

I don't think you mention the timescale here- how long have you given them to take it off sale at the other places? They should, of course, but it sounds like you're maybe in a bit of a stalemate and may have to accept you need to instruct solicitors first.

On that, my experience (last month) was I had to instruct solicitors - and in order to do that had to float something like £350 for Searches to them straight away in order for them to consider themselves 'instructed'. But you could tell them not to do any work for you until you give the go-ahead (which I did as I wanted the chain to be complete before starting incurring costs). So if everything fell apart, they had a duty to return that money as they did no work. So- it would be fine to instruct solicitors, tell them to hold, and see that they then do take it off the market everywhere before proceeding and having to fork anything out.

Good luck with it all!

The lease really is an issue here whatever the vendor says. Another year has passed and the lease is reducing which will cost more to extend. The vendor should have extended the lease themselves prior to sale. £5k to extend this lease sounds way off the mark.

You really need to look into this properly and do your own homework and not rely on what you are being told. This lease is seriously low and some mortgage companies won’t lend on it. The lease is the key issue here. Whether it’s still on the market is neither here nor there with this limiting lease. In fact honestly it would be a blessing if someone else took on this problem as it is a problem at the moment.

"According to the agents they had an offer for £320k". Do not believe a word the estate agent says to you.

As many other people have pointed out the lease is the major problem as you are getting close to the 80 year mark, it could end up costing tens of thousands for a lease extension. I don't understand why the seller has not increased this themselves, as you can't do it for at least 2 years.

Also remember lease renewal costs where the "marriage value" which is 80 years is added, are not linear. So on a flat worth 315K the cost to renew with 80 years left is 5-7k, 79 years is about 20k (marriage value added), 70 years 30k, 50 years 65k etc

lease calc