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

500k flat that will be un-mortgageable due to the short lease and needs a cash buyer with half a million pounds in the bank plus tens of thousands of pounds extra lying about to extend the lease and do work on it? Yeah take the money and get rid.

I'd stop giving advice until @LondonSeller comes back and explains why this flat is part of a sale of 5 bed house!
Sold as a freehold 5 bed house or with 2 converted flats.

Can you go back and offer less of a reduction? 4k? Otherwise it is annoying bit they have got you over a barrel

I think the OP has said she will be accepting the price but given that the whole building is apparently being sold, the new buyer will have to deal with the new freeholder although maybe the buyer is actually buying the entire property.

@LondonSeller this is probably more of a moral issue than anything. To want a reduction on the day of exchange is really mean, especially when there has already been a big reduction on price negotiated.
On the other hand you have an ideal buyer in the current very challenging market. There's no guarantee that prices won't fall even further particularly in the market for flats.
Only you can know how important that £8K is to you. If the principle is the most important thing, you will need to call their bluff or counter the reduction. And be prepared to market again with a different agent.
Otherwise, let things proceed and draw the line. Easier said than done I know, but your circumstances don't allow you too many options.

I very much doubt @LondonSeller was aware the EA was trying to sell the house when her DF’s flat, that they were also selling, had yet to be sold.

The estate had no money, but a 500k flat?

I've been in your exact situation. Take the money because it's a guaranteed sale - you don't know how long the house will sit if you refuse the offer, nor what you will end up selling for.

You're right to be pissed off, it's really poor form on the buyer's part. But, take the money.

The issue for flats in the south east is that there are few buyers because the rental reform and added tax burden means many landlords have fled the market, others have theirs for sale and frankly it is just not worth it to earn more in the UK at the moment.

I know landlords who have or are doing this, and in most cases the capital is going overseas - US equities, foreign property etc.

There are just very few buyers. I’d be unhappy but would proceed OP.

Looks livable but very few original features for that age house which would put me off totally. If I buy a Victorian house I want some Victorian in it! But the lease is short, relatively, and if they have clocked up 20k in unpaid service charges they must be high. Take the money and run.

That makes no sense.

The house is advertised as having two flats.

So anyone wanting to buy it could view the flats.

I agree. I’m just saying that’s what we did.

I didn’t do it because I thought I’d get a higher offer. It was out of principle. Even if it was only £500 I would have still pulled out.

It was just a normal house with no service charges. Our only risk was losing our onward property.

is that unusual @nevernotmaybe?

There are a large proportion of the population whose home is their only asset, surely?

Why does this surprise you?

Didn't she also say there was £100K outstanding on the mortgage, which I find hard to understand unless her parents died young and had no insurance to cover the mortgage.

OP's outgoings-

Agent fees 10K
Legal fees 3K
20K in service charge arrears build up during parents ownership and for last 18 months whilst probate granted
1K removal van costs
100K to bank mortgage that remained

Same with my mum’s. Reduced several times, very slow market, financially draining. It’s made me super aware of what I might be burdening my own kids with in the future if they can’t sell easily.

OP looking at the recent updates it appears the freeholder is selling the house as a whole including your flat.

AND it appears to be “under offer” thus this changes your position greatly giving you more power.

You need to ask the EA WTF is going on!

1/ Ask the EA does the freeholder own the upstairs flat?
2/ Demand the EA reduces their commission commensurate with the sum the buyer is asking off you.
3/ Tell them there is clearly something underhand going on.
4/ There is surely a conflict of interest so EA should be sucking up the £8k

They didnt necessarily die young, mortgages often go on into your 70s now, not everyone has insurance.

The estate I mentioned upthread just had the flat, it was also zone 2 and on for 500k, we took 475k, this was an ex council flat around 4 years ago now when it finally was finalised and no other assets. Short lease as well.

Great idea! Glad you've decided to accept it. You won't regret it!

I don't think that's particularly unusual? Lots of people on modest incomes bought a cheap enough property decades ago that happened to balloon in price over the intervening period, but never had high incomes themselves so also didn't build up significant savings.

The estate will have needed to pay for a funeral, any outstanding bill and OP later goes on to specify that the service costs here are really high. Even if they'd had a reasonable nest egg, say 15k (example made up for illustrative purposes) easy to see how it might have been eaten up in the interim.

I'm guessing the buyer of your flat is the owner of the other flat in the building and will now own the whole property and wants to sell as a freehold rather than just selling his own flat. But has started marketing the whole property before he’s actually acquired the whole freehold which would surely mean the EAs are breaching their duties by marketing a property that the seller doesn’t have the right to sell? The OP’s parents’ property clearly states share of freehold.
Maybe OP can draw their attention to this and be firm on the 500k price given that she knows the buyer is keen to dispose of the freehold. My guess is both flats have similarly short leases and would go for low prices but the owner of the second one figures that if he can get the OP’s one for cheap, he stands to make a profit of a couple of hundred grand.

Lifetime mortgage (equity release) type situation is pretty common. No life insurance stipulations on those (understandably as it would be unaffordable and not profitable for an insurance company to sell).

The plot thickens.

Surely it’s got to be the freeholder that owns the second flat and is now selling the entire building.
As long as both flats aren’t tenanted the entire building can be marketed/viewed as one house/or two flats

Is the buyer of OPs flat the freeholder?

@LondonSeller You have 'inherited' your parents' debts- the outstanding service charges and £100K mortgage.

Why were they still paying a mortgage in old age and was there not insurance covering this?

Or is this some kind of reverse where the OP is either the freehold owner or the EA trying to advertise the flat???