HELP! Due to exchange tomorrow. Buyers want to drop a further 25k. Is there anything we can do?

[MamaChris]

We accepted an offer 50k below asking price on our flat 3 months ago. Buyers have been awkward all the way, and now want to drop a further 25k, the day before we are due to exchange. We can't afford this, unless the next property in the chain takes the hit too, and we really don't think he will.

About to speak to agents, but does anyone have any advice? Is this likely to be a negotiating position or might they really pull out if we say no?

Scared.

just a quick thought on the suggestion of renting your property out; although the market is pretty depressed at the minute and the likelihood of an improvement seems a long way away, property is still consistently the best thing to put your money into in terms of long term returns. Prices will get better (remember the crash of the late 80s) and you will make money on it at some point in the future.

we rented out our old house for nearly three years and it wasn't really any hassle.

"Our agent has said we will have to agree some compromise"

I totally disagree with that. He wants his fee for a sale. You do not have to take any reduction. They are trying it on and you muct not give in to bullies.

it's a buyers' market, isn't it?

you wouldn't go under offer for any more than they are now offering, I expect - market falling fast (despite Brown's efforts to keep the bubble going)

yeah - def a snake at the mo, i think. We have looked at our house rental as being a long-term thing, mainly as we have the advantage of knowing we will now be provided with accomodation until dh retires, so really don't need to worry about owning property until then. There's no doubt that property prices will continue to drop, I guess it depends on what you see yourselves doing in the next few years. I don't think renting short term is a financially sound option at the mo as, like you said, prices will continue to fall for some time yet. But, as we found, buyers are struggling too and will only buy at the right price as it is a big risk for them I guess you have to work out what it is you really want to do and what is important to you. All the best of luck.
P.S. I do think it's out of order what your buyers did. There was no need to spring this on you last minute

Do not do anything that causes you more problems. Why should you? If you take a hit, they get a good deal and you are screwed, for what?

it's called gazundering

I don't even know if this is legal, but can you tell the agent you will give them an extra £500 if they get the buyer to honour the original offer and complete tomorrow as planned? You will still be better off even if it is galling.

what a nightmare.

we are currently selling, and have dropped the price by 40k already. house is now 90k less than what it was valued at last spring (2007).

hope it all gets sorted.

xx

I would call their bluff and be prepared to lose the sale.

And I disagree with whoever it was that said the buyer has a point - he doesn't. He is due to exchange tomorrow, if he has a mortgage then it has already been agreed - the bank won't suddenly have come back and said "oh wait mr buyer, we've changed our mind, you can only have x amount now so you'll have to find the extra 25k yourself."

He's chancing his luck, and as he's a cash buyer I'd like to bet that he probably has a history of doing this. In fact he probably has offers on about 4/5 properties and is just hoping that one will give in to his demands.

I wouldn't drop personally and make sure your agent knows this - he will be advising you to compromise as he needs the sale to go through for his commission!!!

I agree that the market has dropped quite a lot in the past 3 months but a £25k hit on a flat, even in London, is optimistic. I also think that doing it just before exchange is unfair. TBH, I think you will have to reduce a little and then you might find the best thing to do is to go into rented and see what happens in the area you are moving to. Of course your agent wants a sale and is encouraging you to take a reduction but I'm not sure it is entirely self-interested - you might end up having to price at around about what the owner is offering if you wait until after Christmas.

Negotiate a smaller reduction and a longer completion, take the money, spread it over some high interst accounts and sit it out for a few months.

I'd stick to my guns if I were you. Tell them you need the agreed price in order for you to proceed with the one you're buying.

If they're not going to play ball, well then they don't get your house.

You can always rent out yours, so you haven't lost out. In the long term property prices will rally and the house will end up being an investment.

In the meantime if you rent, you will save the Estate Agents fees & can use that money towards a deposit on a rented place.

I've got everything crossed for you, that it'll all turn out alright in the end.

Buyer, I mean, not owner.

People who behave like this are scum. Really feel for you.

see if it was me I would rather sell at the reduced price to someone else than give in to someone who could gazunder me on the day before exchange.

He's known for a while what property prices are doing, waiting till the day before exchange is just wrong and I would rather not move than give in to that - people like that shouldn't be allowed to win.

The agent wants his commission so is not giving you impartial advice. I would call their bluff.

I agree with Wannabe, they don't deserve to buy your house after messing you around like this. Who knows what other aggravation they will cause. Not to be trusted IMHO.

Get your agent to pass on the message in no uncertain terms that you are not prepared to deal with gazunderers and, if they do not exchange tomorrow at the agreed price, you will be pulling your property off the market and renting it out. The agent will be pissing himself/herself that they will lose their commission and the buyers will have had their bluff called. If they do pull out, which I doubt, start marketing the property as a rental.

and another point - i think you said they were buying for their daughter, in which case they are obv in a more privilidged position than most of us here and don't deperately need the property. Therefore, they are likely to take the piss as they can afford to - they are not in a rush to move like you are, with your job commitments. I would be wary of doing anything that puts you in a worse position or means that you lose a lot.

Your buyers are trying it on - don't play their nasty little game. We moved abroad in 2006 and rented our place out from November 06, and rent overseas. In that time I have had a void of 2 months and now have long term tenants who wish to stay there as long as they can. If you can rent it out, you can afford to take a longer term view of what s happening in the market, and maybe find another buyer.

Just say no, and rent for a while, whilst renting yours out.

Don't forget that the rental market is quite buoyant due to the fact that many people cannot get a mortgage to buy for themselves. If you can keep this property in the long-term, you may find that it pays dividends in years to come when the market recovers.

It really is becoming very common. There ought to be a blacklist of buyers who do this and agents and vendors should avoid showing them any further property.

I think I would say a flat "no" to the reduction. The buyers are probably just trying it on, thinking you will be desperate to sell and seeing if they can get the flat at a bargain price. I wouldn't get into any negotiations with them at this stage. If they really want your flat they will buy it for the price agreed, and sign the contract as is.

They're clearly trying it on. I used to live in Finsbury Park so have a sense of how much your sort of properties go for and it seems pretty clear that the total amount they're asking for as a reduction is significantly more than the fall in value in the housing market over the same period. A reduction of £25,000 over the last three months certainly in no way represents the actual decline in house prices over that period. Very simply they're cash buyers and they know you're in a position of weakness.

Unfortunately, the reality is that they are in a strong position, even if they are taking advantage of you. There are plenty of 2 bed flats in that area and they will continue to fall in price. If they pulled out now, waited a couple of months and went back in, they'd probably find a similar property at a lower price pretty quickly (I could be wrong, but there were always plenty of 1/2/3 bed flats around Finsbury Park). They're also not looking for a long term family home, just a place for their daughter to get on the property ladder. I actually think that there is a reasonable chance they might walk away.

The key to this is probably your agent. They are incredibly incentivised to make this happen. As a starting point, I'd be inclined to tell them that very simply, there is no way you can drop your price by £25,000 and not have an equal drop in price of the property you're buying. Unless there is an equal drop in price in both properties, you'll rent yours out and look to rent somewhere. Leave it with them. They'll move heaven and earth to try and find a solution.

What would be the total percentage drop - from the price it was advertised at initially by the EA, to the price that they are now requesting?