How to approach renegotiation?

[theblueflowers]

We're now a few months into our purchase of a property and have decided that we would like to renegotiate on our offer price. We are serious buyers but believe that the house has been overpriced from the outset. Our mortgage valuation came back at £30k below our offer and there is around 3k of work that the survey suggests needs to be done.
We already knocked them off 35k of the original asking price of 825k so are concerned that we might piss them off. However, my DH and I have agreed that due to the current market and above info, it would leave a bitter taste in the mouth if we didn't put another number forward. The house needs work so the extra money would make a difference. We have no chain ourselves so are in a good position.

We can offset the mortgage valuation somewhat, so were looking at dropping the price by 20k. We're really not looking to do one over on our sellers, so is there a way to put forward a renegotiated offer that doesn't look like we doing just that?!

Link it directly to down valuation of mortgage and say you can only afford to make up and extra £10k of the now £30k shortfall and can they meet you a bit further down

It's fine to offer, but make sure you consider what you'll do if they refuse. That will show you how much (value wise) the house means to you. If they refuse and you'll still pay what your paying, then you need to accept that this is it's worth to you even though its overpriced.

When we moved, the buyer asked us to drop by £25k. We know they overpaid for ours by around that much - but they offered, so it was worth that much to them.

Anyway, we refused. What our buyers didn't know is that the seller we were buying from was being a dick and we'd reached the limit of our patience so didn't care if our buyer pulled out.

On the basis that we were so definite - we will not budge, the price is take it or leave it, they tried offering £25k drop, £15k, £10k, £5k - we just kept saying no. They even asked for £3k, which was laughable. At that point we told the EA that if they come back to us again for a discount, we are pulling out.

In the end, they paid thr full amount we offered, our seller continued to be a dick but we did all eventually complete.

The bottom line is, they over paid but the wanted the house. So therefore they didn't really overpay because it was worth that much to them.

Yeah you have to have the power of your convictions. We are going to haggle on the house we're buying, but that's because they've messed us around so much, and obfuscated so many problems that are still appearing late in the conveyancy process, that I'm quite prepared to walk away from the purchase. It's my partner who wants to keep hanging on. So I'm going to do the negotiations and they'll know I mean it. Then it's up to them whether they want to try their luck with others buyers or not.

Nasty thing to try a few months into the purchase. I couldn't go back on an agreement like that.

I agree with @seethingmess, it's a nasty trick to pull. If you think the house was overpriced from the start, why did you even offer that much? Calling it "renegotiation" is just a way to try and pretend this isn't just screwing a vendor over.
If as a vendor I felt I had no option but to accept something like that, I'd be immediately looking at ways to claw that money back - all goodwill would be gone, along with everything that I could take from the house - curtains, white goods, light fittings, garden sheds etc. Minimal effort applied to clean or maintain garden etc. Definitely no making good of walls where pictures had been hung or any other low-level damage.

You can try and link it to the mortgage co valuation .

But ask yourselves, what is your bottom line? If they say no, will you pull out?

@seethingmess yeah I don't see it as nasty at all, just responding to the more information that we now have that we didn't when we first put the offer in?
It's the system that's at fault, but unfortunately that's not our problem. They can of course say no and we can pull out, but we are not prepared to pay more money than we think the property is worth- why would we?!

@Tupster I would suggest that putting yourself in breach of contract is worse than our position.

Not cleaning and taking everything you can is not breach of contract. Obviously one wouldn't clear out the stuff that is part of the deal, but the point is that the goodwill of your vendor counts for a lot. No-one has to clean or make good before they leave, they just do it out of respect for the buyers. Just as you can change the price, they can change what is included in the property information form. You said you were concerned you'd piss your vendors off - and the answer is that you WILL piss them off and that is very likely to come back to you.

OP if you were happy with the price you paid originally why change it now? Down valuing is so common and usually, especially at 800k, won't make a difference equity wise. Valuing at higher levels is often much harder for EA, vendors and banks so I really don't see it as a reason to reduce price. If they'd down valved at 100k, you might rethink but 30k at over 800 is expected.

You knew it needed work when you originally offered so why would you now, just before exchange, ask for a reduction?

Beware that the vendors may not be in a position to drop the price because of onward purchase etc. You have no idea how it would affect them. Arenyou prepared to lose the house if they pull out?

Feels very selfish tbh and like you're just out to get something for nothing. Especially since they dropped the asking price by £35k already. Are you really expecting a 55k reduction?

Behaviour like this is why people find buying and selling houses so stressful.
Not cool.

What goes around, comes around.

I wouldn’t entertain this as the seller. A survey identifying issues that need rectified is one thing. Buyers deciding a few months in that they just want to pay less is another.

Yes, this is shit behaviour. You decided what you were happy to pay, having seen the house.

Changing your mind months into the process is shit. As a PP said, you will lose the good will of the sellers, which can really come back and bite you.

I’d personally say no and tell you to f**k off if I were the seller, but if they have no option but to accept, it’s even worse behaviour on your part.

This is why the process is so stressful - people behave badly

I agree with @drowninginsick that a revised offer needs to be directly linked to either a down valuation or poor survey.

The minute I got a down valuation of 30k I would have been telling the EA that some re negotiation would be required.

Do not pay more than the valuation unless you absolutely must have that property for some reason.
You have a strong and fair reason to renegotiate.

Yes I wouldn’t be down valuing unless new information came to light in the process. We’ve had serious issues shown up in our searches which will require a significant renegotiation if our lender will even lend on this property anymore.

I do see your point, but it’s not something I would do at this stage.

Are you close to exchange? I know if our buyers were to do this to us within a couple of weeks of exchange, we’d say no (it would impact our onward purchase) and would just stay put until such time as the market felt right to put the house back on the market again.

Have you thought about what you’ll do if your sellers say no? Will you pull out? Is it a home you really want to be in and see yourselves there long term? Will you be living locally? For me, a long time home and good neighbourly/local relationships would be worth sucking up the price issue, but only you know that value to you.

Thank you for your mostly helpful replies- lots to think about!

The down valuation has spooked us, and we have been advised by an estate agent friend that we'd be stupid to buy a house higher than what it has been valued at.

The reason we didn't go straight back to the EA with the mortgage issue is that we didn't have the survey or searches back- still don't have the searches. What if that comes back with significant issues? I don't see the point in having all these processes before completion if you can't then do anything about it? Are the people saying we're in the wrong really telling us we have to just suck it up? Why should we?

We have not yet set a completion date.

Judging by some of the more emotive replies, it seems that we are approaching this more as a business transaction. We are prepared to walk away if needs be. We just don't know if we'll feel bitter if we go ahead without doing anything. Being fair works both ways.

If you are going to walk away , then just reduce your offer based on the valuation. Going back and forward, then still paying what you originally offered would only stress everyone out. But if you’re clear in your mind you aren’t going to purchase the house without the deduction, speak to the EA asap. That way, the sellers can get their house back on the market now if that’s their decision, rather than even further down the line.

My DS is currently in the same situation. He forwarded the survey to the seller, apparently many people sell it to them.
The survey is new information and he and the seller agree that they need to renegotiate but haven't agreed a figure yet. It is not a nasty thing to do.

It is ok I think to renegotiate when you have the information available.

But if you sit on the information for a long time (which sounds like you have been doing) only to pull out near the exchange date that is not nice.

In my opinion anyway.

You mention that you see it as a "business transaction". But even business transactions are negotiated in good faith. "Good faith" to me is always doing your best to progress the transaction, and making people aware of changes as soon as you know about them and not waiting till the last minute to try to impose changes because you have leverage.

Also a 30k down valuation on a house worth 825K is not exactly a large %, 4% ?

House value is subjective, so you are always going to get a spread in valuations, probably at least +/-5% or so from different valuers.

You will need to link the renegotiation to the down valuation of 30k and the work that the survey has identified. It's unclear how long you have waited after the mortgage valuation/ survey to try to renegotiate. The longer the time lapse, the more annoyed the sellers are likely to be. Having said that, I agree with your friend that it would not be a sensible idea to pay more than the valuation, even if you can find the extra cash from somewhere. It sounds as if you are prepared to walk away if they don't agree to the reduction which is definitely the attitude that you need to have.

You're a few months in - when did you get the mortgage valuation? If you had it months ago and only now are deciding to use it to get a further reduction, that looks to me much like an attempt at extortion. If you've only just got it, why has it taken so long?

This is a business transaction, but there's nothing magic about business transactions that means norms of decent behaviour don't apply. They are just one kind of social interaction, that's all. Calling it 'business' doesn't suspend ethics.