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

He’s known to the agent and is splitting the money I bet
ide still take it though

Leasehold and duration likely to be a huge drawback when competing with other, similar properties.

Changes zero.

You didnt lose 75k because of the lease. The flat was worth less because of the lease

If you cant rustle up 42k via secured loans and or credit you cant afford to risk the sale.

Take the offer and close it out

Id do this making it clearto the estate agent that a hard no if they ask any more. What reason did they givefor asking for 8k reduction

This is very close to me and I know the road and local property market well. I agree with others who have said it’s really unreasonable to try to get a further reduction on the price at this late stage but quite honestly I think you would be barking mad not to accept this. Flats are not selling easily round here, let alone with short leases and you have been very fortunate to have got an offer so quickly. Many flats are taking months and months to sell. It really looks like youve got a good price for the property compared with many others in the immediate area. If you turn this down, while you are waiting to get another offer, you will be paying £1700 council tax over a year, plus insurance, water charges, and any necessary maintenance; you will also be losing out on interest from the money you will get from the sale price. Winkworths have got a very good reputation in this area and are very proactive. Don't cut off your nose to spite your face!

£500k in the bank @ 4% (low) gets you £1,666 interest a month.

£8k is worth £26 a month in interest.

Is it an idea to put it wth another agent or in a secure auction type agent?

Trouble is, @LondonSeller, auctioned properties very often go for less and a different EA will have tame developers on board too - possibly even the same one

As so many have said it sticks in the craw, but given this is all money you wouldn't necessarily have had I'd personally take it. I certainly wouldn't accept any "day of exchange" further reductions or the creative stories which go with them though, and I'd be mindful that accepting may signal to some that you're up for being played

Oh and don't bother telling the EA that this is absolutely the last reduction either; they know perfectly well how this works, and the only answer which matters is the one you choose to give

But you’re not loosing anything really. The money was never yours in the first place, you’ve done nothing to earn it, it’s a lovely bonus that you’ve been gifted. You need to change your mindset and think ‘ohh how lovely, I’m getting almost half a million pounds by doing nothing’. Then enjoy your inheritance.

To be fair to the OP, £675000 was her estimate of the value after the lease extension and renovation.

In normal circumstances I wouldn't entertain this sort of shenanigans and have in the past told a buyer to sling their hook when they tried this. That said, in OP's situation I'd take the hit and get the sale completed.

would i be mad to think that all london property sales have their prices trimmed on day of exchange by the logic on this board? The buyer is getting an absolute deal and still wants more as a way of putting pressure on us - If I say no will they really pull out and dissapear ?

Am now thinking of caling their bluff and waiting a week to see if they come back and agree original price

I had similar recently, probate, old house needed gutting as parents never maintained the house in Surrey. Listed at 150k less than a maintained similar property for quick sale. 4 offers first day on market, one buyer known to agent cash sale etc we accepted. Then the fucking around started, would need new kitchen 40k, major garden work etc etc then asked us to pay survey. I told agent we had 3 other offers but to re market house at 20k more to allow for twats. Original buyer went ballistic as we had accepted his offer I said I would not sell to him as too much hassle. It sold at 15k more than original listed price! So I also suspect the agent under valued to begin with. Completed last Monday 12 weeks from listing. Bargains are hard to find these days, depends how desperate you are to unload. We knew our property would go easily.

In that case why don’t you extend the lease, refurbish the flat and sell and nice profit next year?

Because you don’t want the hassle - the profit the buyer makes is the reward for the hassle. Accept it. The flat can ONLY be sold to investors, obviously they’re only going to be interested in places that will make them a profit.

Yes, if 8k is a lot of money to you then 492k is life changing, focus on that.

I get that you're pissed off and I wish this sort of sharp practice didn't happen, but unfortunately it does. Cash buyers are a mixed blessing. I would go back to them and offer to meet them half way as a compromise - that is a £4k reduction. Getting a quick, clean sale actually saves you thousands. Having an empty property still costs you in terms of council tax, any standing charges and insurance. If you are the only beneficiary it won't take long to make up the £8k in interest if you invest some of it carefully. That's true even at today's interest rates.

Absolutely take it. In the current climate, you are lucky to have a buyer, 8k is nothing, not worth the hassle.

If you hold on to your current situation for a year and do not pay down debts (assuming low interest)
The sale price of the flat will net you 20k if poorly/ averagely invested (eg at 4%) if your mortgage is 4% or under and credit cards are interest free you are better growing the capital for a while before drawing down on it.

Half a million is a life changing amount of money based on your jobs. Makes sure you deploy these assets optimally

Stop letting emotion cloud your judgment. Don’t picture 8k leaving your bank account, picture 492 coming in. In a week’s time.

I would do this. The property doesn't sound an easy one to sell tbh.

You didn’t take £75k off for the lease. The flat wasn’t worth that extra £75k because it has a short lease that will soon make it an unmortgageable flat.

it is cheeky practice it isn’t like you’re getting ripped off since it presumably is inheritance that you’re being gifted.

It’s very shady practice but it happens quite often. Im ready to exchange contracts on my house with buyers who have already negotiated two significant price reductions. Im fully expecting that they will try to get a further reduction at the last minute. For the sake of an £8,000 reduction, there’s no way I would risk losing the buyer and probably having to wait many months to find another buyer for what is a very hard to sell flat at a not particularly competitive price.

Sorry, less the agent’s commission and legal fees of course. But they were already part of any deal.

How long has it been on the market in total OP? Rightmove suggests since February. If that is the case then I’d definitely take this offer from the cash buyer (I’d take it anyway to be honest)

I live in a flat and a couple of years ago the lease was extended from about 80 years to 999 years, the total cost to me was less than £100.
In my development all the leaseholders have a share of the freehold, presumably this is not the case with the flat you are trying to sell. My point being that, without a share of the freehold, leasehold flats are very difficult to sell. As painful as it is, it might be better for you to go along with this buyer.

Would i be mad to think that all london property sales have their prices trimmed on day of exchange by the logic on this board?

I can't comment on London specifically, but fortunately it's much less likely to happen with private buyers, whereas developers can tend to be much more ruthless

Trouble is private buyers generally need a mortgage, which could be an issue with the lease, and that's why the place will have been seen as a business opportunity

You could of course extend the lease yourself, but that - and the ongoing maintenance costs - will cost much more than this £8k reduction, providing of course it does stay at £8k