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

The EA probably doesn’t care whether the seller achieves 500 or 492 if the flat is sold and they get their commission. That makes their stats look better in terms of sales and by the time new people looking to sell / choose an agent can access the information about the price achieved rather than the price advertised things will have moved on.

The buyer will pay
500K to buy
42K on lease
20K to improve flat
Totalling 562 and its worth 675 - So more than 100K in profit - And they still want another 8K
You have forgotten transaction costs - not least the Stamp Duty. of about £35k.

Thats what i worry about - The EA is simply wanting their fee and not acting in my interest to get the best price - I called an auction house before I started and they were talking about 450K as the max they would expect to sell so that why we went with large agents Winkworth

What about the buying costs for them, stamp duty plus legal fees and estate agent fees if they do up and sell.

20k for London refurb is low, are you talking painting and carpets only or kitchen and bathroom? Also the buyer has "cost of money"..as in if he took the 500k and invested in s&s in a year he could make 40k.

Dirty tactics. Very annoying but the London market is tough right now. There will be other flats available so he can quite easily pull out and find another.

Try a £4K compromise but be prepared to take the drop if you want to secure the sale without any potential further delays.

I'd be annoyed though. It's not very nice behaviour. However, the estate will still have a good value and I'm sure your parents would have encouraged you to take the most straightforward route with dealing with their estate.

You would soon get the reduction of 8K back in interest and if you refuse this and the property sits around for ages the lease looses more time and thus the property looses value. It is not mortgageable and needs a refurb.
Just grab the sale and move on.

Say no.

Well it’s your decision.

Perhaps work a quick discussion with other EAs to see how much they think they could sell it for.

I agree this would be the best approach

So you’ve been told that realistically 450k is the most you could get for it, but you’re convinced it’s actually worth 675k and don’t want to let it go for 492k?

We can agree with you that they are being a CF OP and you are right to be annoyed by this.
I can only go off what I've seen on MN but the consesus is flats in general are harder to sell, harder still in London let alone with a short lease!

I'd go ahead with the sale!

Take the money.

I guess the reason they are asking is because the market for flats has plunged.
There was a recent (this week) feature on this (think it was in The Times, or online.)

No one wants 1 or 2 bed leasehold flats in London now.
Prices are falling and lot of sellers are facing negative equity.

I'd not even blink over a drop of 2% and you're mad to lose a sale when it's either £500K or £492K.

Those ‘we buy any house’ type outfits will definitely screw you over. I don’t think you’ll get an offer of £492 at auction either. A previous poster has just pointed out the buyer will have stamp duty costs to pay too (and solicitors etc) so their costs to buy it and extend the lease will take them up to around the high £500k’s. They probably won’t be able to sell it for loads more than that - maybe a profit if £50K or so for them.

It depends. How keen are you to get your hands on a large sum of free money?

I understand why you are upset, but the more relevant figure is what you would lose if it stays on the market for months and you end up taking an even lower offer.

Sorry for your loss OP.

I think I’d just take it to get it all done. I’d be angry though as it’s diary tactics as someone said and sounds like the EA is in on some deal.

could compromise like PP said. 4-5k?

but after losing parents and having to deal with it all I think I’d one it done and dusted. But equally they probably know this and are playing on your vulnerability

Up to you. I'd be annoyed at the buyer's tactics but I'd just agree.

This is a common developer tactic, so play tactics right back. Say no. And see what they come back with.

If it looks like they’ll walk you can always capitulate.

But say no in the first instance.

I think you may be underestimating renovation costs - gutting and renovating an extremely tiny bathroom nearly 20years ago cost £10k. Recent costs for just painting (no repairs) a 4 bedroom house in South London white cost over £5k. Presumably the kitchen will need updating/replacing, perhaps there are carpets to be ripped up etc.

In any event, it is shoddy to ask for £8k off at this late date, unless something specific has now cropped up in survey results, but I would accept it. It's been a hard market for years and it doesn't look to be improving. While it's sitting there empty, it's costing you in council tax, insurance, electricity, water, etc. In the grand scheme of things, £8k is nothing.

Free money? It's an inheritance. There is no such thing as free money.

100% knock off the £8k. They are in a much stronger position than you. You will be stuck with that flat for a long time if you don’t.

You're vastly underestimating the cost of updating the flat.

are you worried you're letting your parents down by possibly accepting less than you think it's worth? If that's the case then maybe think about how much stress they'd want you to face about it. Would they rather you have the money you've been offered & getting your life sorted out or be under enormous pressure to get every £1 you can?

I think you should stop thinking about the exact sale price & think about what having this completed will mean to you. If you don't take this offer you could be going through this for years, with ggd property declining & ggd lease decreasing, waiting gir snigger cash buyer.

i think you'd be mad not to accept it.

If they were to ask for a further reduction before completion OP could cheerfully tell them to piss off. Once they have exchanged they are contractually obliged to complete at the agreed price.

No that’s not why they’re doing it. They’re cash investors and they know they hold all the cards. This is not a last minute decision it’s a long term tactic to get OP to the finish line, with sunk costs, thus unlikely to refuse as last minute price drop.

The missed interest earned on 492k will probably be a few thousand over the period it would take to relist etc not to mention the legal costs etc you have incurred and will have to re incur.

Like the others I’d recommend a negotiation proposal to split the difference which is what the investor will expect anyhow. But I’d accept the 8k reduction rather than lose the sale