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

She needs to sell it more than they need to buy it. It’s a buyers’ market now. You might want to read this @LondonSeller.

https://www.thisismoney.co.uk/money/mortgageshome/article-15848715/Why-half-Londons-small-flats-sell-loss-crash-spreads.html

Is your parents’ house in that street?

if not, 🤦🏽‍♀️

It is, as the first poster said, a common dirty trick. Nevertheless, I would probably take it given the market, your situation, and the fact it's just sitting empty.

Since the buyer is known to the estate agent, you could try asking them whether this buyer has done this in the past and what the outcome has been if the cut was refused. But I suspect they will act (illegally but unprovably) in the buyer's interests rather than yours.

Good God this. Is 492k really not enough to clear your debts?!

Take the money and run!!

but EA will know that a flat with equity release on it cannot be rented out and even if the OP managed to do a complicated transaction to get a BTL mortgage to pay off the current mortgage, that would be a major risk to her financial security as a period of tenants who fail to pay would ruin her financially. There are also significant costs to letting out a property that you have to pay to manage from afar.

Look at it this way, you can earn 5% interest in a chase savings account. Put the 492k in there and you will be back to 500k in 4 months. Pull out / refuse and if you end up starting again it probably won't be sold in 4 months

How long will it take to rack up £8k in costs on the property if you don't sell now? You don't have to pay council tax for a while, you say, but what about service charge, insurance, lost interest on the proceeds etc? With a cash buyer prepared to complete in a week I'd personally take the money and run.

Are you saying that as it stands you’ll take £366,000from the sale or £358,000
if you drop the price?
if
so, I’d say a bird in the hand….
I appreciate £8k
is a lot of money to you, but in the grand scheme of things I think £358k is still a reasonable amount to come away with

We had buyers so this. Wanted £2k off a £150k flat (over 20 years ago).

We deeply resented it, but accepted as we had an offer on a house and in all honesty, wanted to see the back of the buyers and estate agent.

It hasn't made a material difference to us and we sort of forgot about it, but the flat didn't have the emotional load of it being parents' home, which makes a difference.

Get out while you still can:

https://www.telegraph.co.uk/money/property/house-prices/london-flat-market-collapsed/

Unless you're willing to extend the lease yourself, then do that and put it back on the market again.

Or walk away for one day and then see if the buyer ups their offer.

If they don't, revert back and offer again at -£8k

But if you want certainty, just sell it now, today.

I'm a Londoner and flats are taking much longer to sell these days.

This article is about new build apartment blocks and cladded buildings, not ground floor period flats like the OP's.

I would get shut of it, yes the investor is taking the pee by asking this and waiting until the day of exchange, but given your situation of living far away and not able to extend the lease, I would just sell it at a slight loss.
I sold my house at a slight loss despite another offer coming in but I had already accepted it. It still gave me quite a lot of money back at the end of it so I wasn't complaining.

I don't live in London but read an article the other day about people struggling to sell their flats and losing out on thousands trying to sell. For 8K and an easy sale, I would personally take it.

I’m in a similar position, OP - put my father’s flat on the market last week. It’s taken eight months to agree tax figures with HMCE and now if anyone wants to buy it I will truly bite their hands off providing that the offer covers the IHT and his bequests to his three grandchildren. I always knew I would have to sell at a loss and am now just about at the end of my tether.

I’d accept. 70yrs is short and I think you’ll struggle to find another buyer.

This one is about all flats.

https://www.thisismoney.co.uk/money/mortgageshome/article-15848715/Why-half-Londons-small-flats-sell-loss-crash-spreads.html

Take it. Given interest rates you can get minimum 4% on your 492k deposit which is 1.6k a month. You will make those 8,000 up within 4-5 months, while you can still be searching for a new buyer with no money

I can't stand people who do this - and absolutely no surprise to hear this is winkworth's too. Do consider that 70 years is 840 months, so the value will keep dropping at a rate of 600 a month in those terms - if it takes a long time to sell, that will start biting. Also think about what the money could do for you in that time. I know you're not getting the whole lot, but if you get a decent rate on it, it will also essentially cost you having it tied up in the flat. 8k is a clever level because it's probably not enough for you to pull out, but it is a big amount of money. Arses.

Exactly the buyer is sophisticated - 8K is the sweet spot where its just right to not cause you to pull out but means an added bonus

If it was 25K you would have said get lost - Even at 10K it sounds a lot more than just 8K

You are dealing with a professional investor (developer/ scammer) call it what you want

Happened to me selling my Mums place.. I told the EA, put it back on the market... we are not prepared to drop again. The Buyer paid the original agreed price

London flats market has tanked. Take what you can get. We have had to reduce one from 560 to 480 to get any offers. If you can afford it, keep it for 2 years so the market can recover!! If you need to sell, 8k is nothing - you'd be mad to refuse the new offer.

We sold our old Maisonette with Winkworth, it was more by luck then any judgement on their part.

Replace the 'i' with an 'a' and you have our nickname for them.

I agree that it's an outrageous amount to pay for a flat anywhere, but that's what the market is, unfortunately. In that area, £500k for a 2 bedroom flat is reasonable. There's a 2 bedroom in a slightly nicer part of the same area with a garage that's going for over £600k.

Goodness, why is no-one is saying that this is free unearned money - why on earth are you quibbling over 2% - greed?