Buyers changing over

[Newyearnewus]

Starting to tear my hair out here…..

So our house went up for sale in March. Had 4 offers really quickly, went with the highest. Also liked them as they were first time buyers and I remembered how hard it was getting on the ladder.

At the time my property was rented out with my tenants due to vacant in August. Buyers were fine with this, happy with the timescale. As it happens however the tenants left early so win win, it meant our sale could get going.

It’s been a slow process. Not ridiculously slow but we’re in a fairly long chain and therefore lots of enquiries going back and forth between solicitors. We estimate an exchange and completion in the next couple of weeks all going well.

Buyers called the agent today and said they are dropping the price by £8,000. No reason other than it’s taking too long (they feel, no previous experience of buying or selling) and they feel the market has changed!

Now, I know they can technically do this until the point of exchange but am I right in thinking this is still totally unfair? We have all budgeted in line with what we are selling and buying for. It’s a shame yes the market is changing but that’s part and parcel of buying property, the market fluctuates. There is nothing wrong with the property, a surveyor has been out and completed a report so it’s not like there’s some sort of issue in terms of the construction. Equally his lender carried out a survey and it was shown to be valued correctly.

What I do? I can’t afford to take the hit just because two people are getting impatient. At the end of the day we all want to get moving and there’s a process that needs to be followed. We are all chasing and in regular contact with our solicitors who are dealing with it. There’s simply no way to speed it up. Help

First time buyers are always a nightmare. But they're entitled to drop their offer and the market is slowing in a lot of areas. They've probably been advised to do so by family members. I wouldn't call it unfair. That's just how the English property market works. It was always a risk with a long slow sale in a falling market.

You have a choice. Say no to them and maybe you have to put your place back on the market (or they might just be trying their luck and they suck it up and pay the original price). Or meet them halfway and offer to reduce by £4k. Or accept their revised offer. It really depends on how much interest you think you'd get from other buyers. If the market is dropping you could end up losing more than the £8k they want to reduce by.

You are the third thread this week in which this has happened. It is becoming standard practice. Do as PP suggests. The alternative is to negotiate a discount upwards so you can still afford it.

Definitely think you will get less than -8k if you tell them to bugger off. Market has changed a lot since March.

FTBs are taking a big risk with negative equity right now. That is why folks will be telling them to negotiate a discount.

Do you know when their mortgage deal runs out? Will they want to risk starting over and losing their mortgage deal?

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Apolgies OP.

Had 4 offers really quickly, went with the highest.
Do you know the current status of the other three, would any of them still be interested? If the FTB know that there is competition then they might stop playing games.
Either way, don't respond immediately. Let the FTB sweat a bit first.

I would offer to meet them halfway as PP suggested, so a 4K reduction.

If they refuse, you could try moving the loss up the chain so you offer 4 or 5k less on the property you are buying. It’s happening a lot at the moment it seems.

It's fair I'm afraid. The market has changed dramatically in 5 months. You need to pass the discount up the chain. Its happening a lot and should not be a total surprise to your vendor. If you can't pass it up the chain you need to absorb it, negotiate or re market. The riskier option obviously being to remarket as you may now get less than the revised offer from your buyer.

I work in property (not an estate agent though) and have dealt with a number of acquisitions and disposals in the last 12-18 months. The market has changed immeasurably since the beginning of this year. The steep interest rate rises have made buyers a lot more cautious and the market is definitely slowing/stalling. Buyers who are still confident are looking for a bargain.

The first time buyers are likely the part of the chain most at risk of negative equity so it is understandable that they would want to reduce their risk. If it was me I would try to negotiate the reduction down a little and then have a frank conversation with the other properties in the chain about everyone taking a small hit. For example if there are 4 properties in the chain in total and you negotiate the discount down to 6K, you ask your buyers to take a 4K reduction and they ask their buyers to take a 2K reduction. That way you are sharing the pain and you're not left taking the full hit. This is where the estate agents all need to earn their commission and sell this to the other parties as the best way of keeping the chain in place and everyone avoiding losing all their sunk costs (surveys, solicitors etc...).

I know it's a rubbish thing to happen but your agents won't want to let the chain fall apart if they can help it so they should pull out all the stops to help you. (Hopefully you are selling with a proper agent not Purple Bricks or similar!)

Good luck!

I think you could try and pass the reduction up the chain everyone takes an £8k reduction to keep the chain intact. The people higher up the chain will hopefully have equity and maybe a bit of a financial cushion. It’s hard being a first time buyer right now.

No way is it fair to do it the day before Exchange.

Oops - wrong thread, sorry

I'm a first time buyer who just completed. My mortgage offer had a six month (ish) limit on it (offered in May, had to be in the property by October). If they got their mortgage agreed in March, then their mortgage offer is probably about due to run out. At that point, to some extent, they've got nothing to lose by trying to negotiate a price drop, and maybe need one because they won't be able to borrow as much?

Perhaps you could ask about the situation around mortgages- if you are able to complete before their current offer expires, then perhaps they'd stick to the original price? If their offer has already expired, then it might be too late for that, but you might be able to save it if YOU are able to complete quickly, whilst waiting for the rest of the chain to sort themselves out? Is there anyone you could stay with for a few weeks?

I do also think the market has changed locally since March (which is about when I started looking) and they aren't unreasonable to bring that up. If you go back on the market, then it could take you a while to get another offer?

I agree that offering to split the difference might help, or pass some of the equity loss up the chain as well (although that will likely slow everything down further).

It sounds like you're not that close to exchanging yet, but worth bearing in mind that if it does get to the six month mark, you may lose them as buyers because they'll likely have to look for a new mortgage offer with higher repayments to meet the original purchase price. So maybe now is the time to speed things up, rather than just thinking it takes as long as it takes?