Buyer wants £8k off parents' London flat just before exchange

[LondonSeller]

Parents flat for sale as they passed away in london - Took 18 months to get probate sorted out but finally got it - Property listed with agents and it is in dated ocndition and needs work - Also has a 70 year lease. EA told us not an easy market

After five weeks advertising price agreed at 500K which was a bit lower then we had hope for but EA told us buyer is known to them and this would be very quick sale

Was meant to exchange on Friday and EA has come back and said buyer is ready to exchange, has sent deposit monies to his solicitors but wants a reduction of 8K. EA has said this is less than a 2% drop so not massive and believes we wont get better if we reject the offer

Buyer is cash purchaser investor so quite rare and I worry that if I dont accept property will be stuck for months for anothr cash buyer who might offer lower.

I live in Scotland and the flat is in London so I am miles away - Paid to have the place emptied and solicitor fees so am already down. By contrast buyer has not paid anything other than a few hundred for solicitor fees - No mortgage, no survey fees nothing

Whats the best angle here - Call buyers bluff and risk losing the sale or take the money and run. Feel quite cross as this money was going to be used for real stuff and to clear debts

This thread is an interesting example of the endowment effect. People place a much higher value on things they already own than the market or objective reality. As long as you don't sell you will be the owner of a Zone 2 London period apartment which must be theoretically very valuable (£600k+).

The failure of the market to recognise this value is the fault of the estate agent and prospective buyer and not because the market has declined and the property has inherent shortcomings (lease) that will cost a lot to fix. Mix this up with grief, loss, debt and I can see why it is very hard to remain objective about what it's really worth. There's also the false belief - nearly 20 years after the credit crunch - that London property is only on an ever upwards trajectory.

You need to decide what is the priority - is it to ensure the flat hits a price that you find acceptable regardless of other costs or is it to realise the value in cash? Inflation and property costs are only going up and property values are definitely not.

Cash Is King OP!
Given the short lease the flat isn’t currently mortgageable so you have less people available to buy it.
The buyer has you over a barrel unless you have time and money to throw at the problem.
£20k won’t pay for a refurb. The kitchen will cost that alone.
You’re likely looking at £70k+

You said yourself that you tried to negotiate with this buyer before but didn’t get anywhere. You are not going to win this battle.

If you want to sell this property, take the £492k and by this time next week you never have to think about it again.

2 bed flats in London are 10 a penny. No one wants a doer-upper with a short lease that needs extending. Legal fees have gone up, tradesman costs are through the roof.

The only purchasers for a flat like yours are cash investors. And those are dropping like flies following the rental reforms.

You are extremely lucky to have found one that wants to buy your flat. He/she knows that.

@LondonSeller They are marketing the house that includes your DF flat. I just called the agent and the Saturday girl confirmed. I would take screen shots and the link of the sale.

Out of interest when did you do that, and what sort of property was it? Because there are lots of circumstances more conducive to refusing the offer and getting a higher one than those OP is currently in...

Given the 70 year lease (a red flag to many and will be a hassle + £££ to extend) I think I’d agree.

Though I have been in this same position myself (no reason except that they thought they’d try it on) and I told them - slightly more politely - to get stuffed. The sale did go ahead.
When looking at flats to buy, almost the first thing I needed to know was the length of the lease.

If you look on Rightmove, almost every single 2 bed flat in SE22 has been reduced.

This happened to me with my dad’s bungalow. I couldn’t face putting it back on the market so I sucked it up.

Agree with this. I had in my mind that the refurb of my property would be around £30K. Costed it up online and it's easily £70K+ without any extras that might turn up. Will be selling it as a doer upper.

who do you think is going to buy it though - with a short lease? It’s East Dulwich not Dulwich and it’s got a limited pool of buyers.

I had a similar situation a few years ago with a London flat where I'd let the lease run down to about 70 years. And the same situation where the buyer dropped their offer (actually by a higher percentage - £10k on a flat worth about £330k). I ended up taking the EA's advice and selling, I'd had no other offers in three months at that point (your time line is shorter, of course). I'd probably do the same in your situation - HOWEVER, the reason I'm posting is that you said upthread that you couldn't afford to extend the lease youself. I don't think you should need to - in my case I negotiated a price with the leaseholder directly and then the solicitors lined things up so that the money would be transferred when the flat was sold. I didn't have to fund it upfront. Sorry if this point has already been made, I've only read the OP's posts so far and thought it worth mentioning just in case.

This exact scenario happened to me when I sold our marital home after a divorce . The buyers knew I was desperate to sell, so they demanded a 5% discount at the last minute. I was so outraged & it was so unfair, I said :
” absolutely not- we’ve agreed a price , that is the price, if you can’t pay the price , don’t waste my time. I will re-list the property on Monday morning. “
It worked . They withdrew their demand , and the sale went ahead .
I never trusted them after that, however.

Wow! What’s going on here? You need to contact the EA asap! They could be letting new viewers into your flat for a start and getting up to all sorts of other shenanigans

Gosh. That is odd.

Sadly my recent experience with estate agents in the area is that they’re all awful but this is very strange!

Sorry - things have moved on.

If you didnt accept it and still had to pay council tax, rates, management fees etc how quickly would that get to £8000?

It would leave a very sour taste in my mouth (and I'd also be suspicious about how much the EA played a role in it) but I'd reluctantly accept it.

To go against the grain I don't think needs an immediate refurb - I mean it looks a bit bland and cheap but clean and liveable. Although there could be horrors lurking.

I saw your later post - £20k in service charge arrears? WTF? I assume they.either had a brutal service charge (which will put buyers off) or had been letting things go on for a long time. I live in a block and our SC includes things like gardening, lift maintainance, cleaning of communal areas etc.. and it would take me.years to build up that sort of service charge debt.

Also you need to sell soon to clear that, the freeholder won't wait forever and it is not fair on other leaseholders.

In short it is a bit of a stinker of a flat and no way was it ever worth £600k.

It's only got 70 years on the lease, which is not long to be paying 500k for and will cost to rectify along with whatever other work needs doing. I'd take the money, 8k is not much off 500k and the market is sticking at the moment and also, the lease is only getting shorter.
I'd have been a bit wary in first place re buyer recommended as known to estate agent - this often means a lower sale...

what is also strange is they are marketing the whole as FREEHOLD.

@LondonSeller I'd be investigating, with urgency.

if It helps, all the local agents are shit but the time flats sold themselves has gone. Estate agents need to work a bit harder these days.

@LondonSeller

I'd be pragmatic & take it.
It's different to selling your own property & affecting an onward purchase.

@LondonSeller Can you explain why the house of which your flat is one flat, is being marketed as one property?

Are you aware of this?

Well this has taken a very bizarre turn!

Is this whole thing as it looks?

Why is the OP selling a flat that is listed as one flat in a house being sold as ) a house with 5 beds or b) 2 flats?

Who owns the house????

Have you done a spreadsheet with what it costs to keep this flat monthly and what your own debt costs to service monthly? Have you looked around at what interest the remaining money might make for you?

Are there mortgage payments also to be factored in to what it costs to keep the property unsold?

20K is a very large sum for a flat like this to be in arrears. Has this prevented essential works being done on the property?

You say the Freeholder is "some old guy". Is he responsive, will he be slow about dealing with whoever does the lease extension? How he is to deal with will also affect the property value.

Were you aware of your parents' financial difficulty - unable to extend the lease (which majorly reduces a flat's value), in arrears, still with a mortgage? It might be hard to learn this while also dealing with bereavement?

Just seen the update on the whole house being marketed - if you didn't know this your complaints about the agent seem valid. It isn't the freeholder who lives upstairs is it?

This in spades.