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

Is this even legal? Agree, gives OP more power to negotiate now.

Hmmm if that is the case and I was the OP I would see if the flat lease could be marketed as a bundle to prospective freeholders. Might make more sense. Or see if the current freeholder wants to buy the lease and sell the whole thing together?

Remember you aren't selling a flat, you are selling a lease that gives the buyer the right to use the flat for 70 years. Other people will be selling leases on similar flats that gives the buyer rights to the flat for 900 years. So you can see why yours looks bad value by comparison.

It must be surely? OP’s flat is being sold as currently having a share of freehold so this would only work if the buyer somehow acquires the entire freehold.

Whats the point of this question now?

But she posted earlier on that the shared freehold was an error and the EA had got it wrong.

Something weird going on here.

I get that, but it's worth pointing out some situations make principles much more expensive than others. Although it may be moot anyway in this case given the updates, not sure wtf is going on there!

I would take it in order to be able to move on and also because the EA advises you may not get a better offer if you lose this buyer.

The point is that whatever OP gets from the sale, diminishes because of her parent's debts but she's not mentioned it more than once, in passing, yet it makes a huge difference to the final inheritance, so that £8K is hardly here or there.

This happened to me, in my case it was a £5k drop. I took it. A 70 year lease is problematic, I personally wouldn't buy a flat with that length of lease. It's a cash buyer so no faffing with mortgages. I would say ok on condition exchange takes place within the next 3 working days, no more delays or the deal is off.

This. My parents own a house worth 600k which makes it sound like they have money. They don’t, it’s a 3 bed house with no driveway. My dad’s car packed up several years ago and they were unable to afford a replacement and have been on one holiday in the past 20 years. House just happens to be in London and bought in the 90s when a bang average income allowed you to get bang for your buck.

Of course she mentioned it otherwise how would you know?

Its irrelevant anyway whether she had the entire 500k or 492k or 360k ish

Yes. Quite common. It's called 'asset rich, cash poor'.

We were in a similar situation with my father's estate. No cash in the bank, no life insurance, no pension. His house was his only asset, and something he refused to sell to downsize as he loved it so much.

Various debts and other monies had to be paid out of the house sale/estate, ditto inheritance tax. My siblings and I were little with very little in comparison to the value of the house.

I think it is this - one person owns the freehold of the whole property plus the lease for one flat, the OP's parents estate own the lease for the second flat. So the freeholder is selling the freehold to a house coverted in to two flats and the lease for one flat insode that house. So any buyer would aquire the freehold to the OPs parent's flat but not the lease for it. The OP could sell the lease to theor flat to a completely different buyer or see if the buyer for the rest of the property also wants their lease.

I would be incredibly irritated but in this situation I would accept it

Oh did she? Thats a pretty fundamental and misleading error for an agent to put in their particulars. I’d be very pissed off. And no way would I buy a property like that without a share of freehold. If OP doesn’t own any of the freehold, I assume the other owner does but the seller of the whole house seems confident that they would be able to sell the whole property with vacant possession as there’s no mention of 70 year leases on flats. It must be that the person buying OP’s flat will somehow then become the freeholder and the stuff about lease extensions will be redundant.

I do think it’s in your interest to be done with it; the market isn’t getting better, flats and short leases are not desirable. The offer is firm, it’s a cheeky last min change but this time next week you can be done and dusted.

What would by the point in her mentioning it? How exactly is she supposed to contact her deceased parents and ask why they didn’t have a life insurance policy in place that covered the mortgage? It is in no way beneficial to OP to ruminate on aspects she can’t change, hence why she has mentioned the element she might have some control over as it’s the only part that is relevant.

Put conditions on it if you accept it.
Tell the agent you are furious with the buyer and also furious with the agent himself who reported that the buyer was a person of integrity. (This will get back to the buyer which is what you want.)

Say you will take £x off as a gesture of goodwill if the buyer exchanges immediately. If he or she doesn’t do so, change agents immediately and move on.

Give the agent an absolute rocket.

Separately, why no survey done by buyer? Odd. Also did anyone calculate lease extension costs? How was the marketing price justified by the agent at the start? Be sure you haven’t been diddled on that. If you like send me the link to the flat.

Remove the emotion from it. Your lease is decreasing by the minute - I'm amazed you sold it at all with a 70 year lease. You are hundreds of miles away and can do nothing. Don't risk it, get shot and try not to look back on what could have been. You're making a huge amount as it is.

I would try and split the difference but I would ultimately take it

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

Yes that would make some sort of sense, @Glowingup, and would also explain why the buyer wants this completed soon - presumably so they can get on with selling the entire thing

We can't know yet if OP's even aware of the "whole house sale", but if the owner of the whole thing really does live upstairs they're definitely not going to want OP selling to someone else

Stamp duty is nowhere near £35K on a £500K property. I’m paying just over £22K for a £650K house.

I was reading this today op
https://www.thisismoney.co.uk/money/mortgageshome/article-15848715/amp/Why-half-Londons-small-flats-sell-loss-crash-spreads.html

Take what agents say with a pinch of salt. The agent isn’t suffering the £8k hit and is totally incentivised to get deals over the line as opposed to maximising the money for the seller.

Separately, why no survey done by buyer? Odd. Also did anyone calculate lease extension costs? How was the marketing price justified by the agent at the start? Be sure you haven’t been diddled on that. If you like send me the link to the flat.

Because the OPs buyer is the freeholder of the property (who also has the other flat)?
No lease extensions to worry about if Freeholder then owns both flats and will sell on as freehold house for £1.2m