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.

Agree with everyone that it is especially horrible to gazunder at the last minute like this - though to me it is plausible that a mortgage arranged in principle three months ago might no longer be available. If this 25k really is a reduction below the fall in the local housing market, you should be able to find an alternative buyer. You could speak to other local estate agents to find out whether or not that is the case.

I would be wary of the letting it out option - both letting and renting can involve a lot of hassle and if you go down that road you are commiting your family to an insecure lifestyle. You may be forced to move on your landlord's whim and you are also liable for sudden costs as appliances break down and repairs need to be made on your old flat. If you do decide to do that make sure you do your research, it is not a decision to be taken lightly.

Renting for six months to a year while you find yourselves a better deal is much less of a problem as you are at least in control of your own home.

I agree with upwind, fwiw. It's a horrible situation for you to be in and I'm very sympathetic. BUT there is no way that your property is worth today what it was worth 3 months ago. So I can see how the purchasers are nervous as well. Why would they want to pay more for a property than it's worth?

And I don't think that the stories about what happened to some posters in 2005/2006/2007 are that relevant anymore is it was a completely different market.

I'd try to reach an agreement with the rest of the chain in order to keep your transaction going through. Best of luck. it's really a terrible time at the moment.

the total % drop would be 25%.

our agent has spoke to buyer (daughter), who refused to speak to him. said she wants negotiations to go through solicitors, and she doesn't want to deal with it.

he's now trying to get hold of solicitors.

as someone said, think he really could pull out if we don't compromise, as he could get another flat for less in a few months time.

... and this situation is such a good example of why the property-buying process should be changed in England and Wales. In almost every other market in the world, once you agree to buy/sell a property, it becomes a binding contract. off my soapbox now.

luckily (or not?) the chain is just us, our buyers, and where we're buying. Have been talking to both agents, to see if we can pass on any reduction down the chain. waiting to see.

had already started packing. now we're in limbo

I agree with everyone who is saying don't cut off your nose to spite your face. But should you decide to go ahead I would invite one of the removal men to leave a huge removal man-sized turd in the loo and ensure all windows are not only closed but locked. You will post the window keys to them a few days later saying "Oh I forgot these!"

I think I would do anything rather than take a £25k hit from these barstewards. Say no!

To me, it doesnt matter what the property was worth 3 months ago, the buyers have entered into a contract with MamaChris and to suddenly change the goalposts after 3 months is despicable. It is just as immoral as vendors suddenly wanting 20K more cos the market has risen. The whole thing is about greed and it stinks!

steps off soapbox

Having said that, totally agree that you will prob need to compromise, however it's weird that she wont speak to the EA.

i'd walk away from that and find a place to rent.

the rental market even here is pretty glutted, however, so renters have more of a choice now.

agree with interstella71 wholeheartedly.

I'd seriously consider renting and buy later on.. No, the market may not have risen (probably will have fallen further) but what people don't seem to realise is that where there are drops in value across the board it makes more expensive houses relatively cheaper. eg if yours was on the market for 100K and you dropped by 25% it would sell for £75K, but a £200K house dropping by 25% should drop by £50K.

wouldn't trust EA's any farther than I could throw them, either, especially in this market they are desperate for a sale.

but if this person is buying for their child they're just taking the piss.

stuff 'em.

i am minded to say you will drop £5k only. Your agent will be having kittens because its likely his only completion this week. Use him hard and turn the screws on him to earn his fee. He is the one who is negotiating on your behalf so make him do it NOW!

good luck

I have to disagree that it's wrong of them to do this. Maybe wrong to leave it until the day before exchange but market forces really do dictate house values.

We seem to just assume that house prices always go up so if our neighbour sold for 450k last year we cannot stomache selling for 400k even though that's what the house is worth in the current market. In a rising market would you say oh next door only got 450k so I couldn't possibly accept 500k?

I'm not saying it's morally just but it is a business transaction and everyone is out to get the best deal they can. The market has dropped in the last 3 months when you probably agreed a price. Your flat could be worth 50k less next spring, who knows? It's only worth what a buyer is prepared to pay for it and unless you think another buyer would pay more because you had lots of interest when it went on,then what thry've offered is its value.

I know that sounds harsh and I do feel for you in your situation. I'd feel pissed off too but we need to remember that this is the nature of the housing market.

Oh and they've said 25k looking for 15k or even 10k. If you can, offer 5k and say take it or leave it. Good luck

stomach

Tell buyer that you are not paying solicitors to negotiate - that's why you pay an estate agent - talk to him or withdraw.

you have a point there, cardigan.

was listening to a report that says not as much is coming on the market, so that means there is less pressure at present for people to sell, they must be able to afford their properties.

fair enough.

but there is plenty on sale here that hasn't sold because prices just aren't as high as they used to be.

our HV and her husband, an engineer, considered selling their old place and buying another, but as she said, banks just aren't lending what they used to, so it's impossible for these vendors to get what they're asking or sometimes, anywhere even close.

that's fine if you can afford to hold onto your property, but if more people get made redundant that might not be the case.

it's an unfortunate set of circumstances for some, but for others, it's the break they've been waiting for.

as regards to renting, so much on the market for rent some folks i know have been able to negotiate some good deals in return for longer tenancy agreements so landlord is assured of having a tenant in to ride out the storm, but this is in exchange for lowered rent, which only works if the place is owned outright or only has a smaller mortgage on it.

Also, they made an offer on your flat, not another one. You have already dropped, so asking for another 25k on top is a total piss take and also dishonourable. They are just seeing what they can get away with...exchange is tomorrow, see if they walk or not.

It's all very well for people to say it's a business transaction, but it's not - it's your home and you that has to take the hit if you drop, and only you know if you can afford to do that and eat.

Renting a property out is not a hassle, I do it from abroad and have a great letting agent who deals with everything for me. the tax return is easy as well....loads of people do it.

If the alternative is weekending, ie one of you works away, well, that's possible too. Lots of Armed Forces families do it, I think we did it for 4 years at one point from various parts of the UK to Cornwall, and we're still married!

When we sold our flat the people buying pulled all sorts of shenanigans at the last delaying completion by 2 weeks in the end. We just kept saying the same thing again and again and left it to the EAs to earn their percentage. Still makes me snarl now!

But Scaryteacher, it is a business transaction. Oh course it's her home but nobody should become relient upon the equity in their house in order to eat. We cannot count on there ever being any equity when we come to sell because buying a house (financially) is just the same as investing in the stockmarket;It can go down as well as up.
Expat, around here,only those (like the OP) who have to sell have their house on the market. Those who can stay put, do. Of course they're all assuming that they're riding it out when, who knows, it may just keep tumbling for a few years yet.

It is so difficult to get a mortgage now. Virtually impossible for first time buyers as banks, when they do lend are only lending 80%. Who has 20% deposit laying around? We bought first house for 38k with 100% mortgage. We'd have no chance now. For some though, mainly those who are childless and have spent the last 10yrs saving like crazy, this is their first real chance to get on the property ladder. Though why we're so obsessed with that in this country I don't know.

'It's all very well for people to say it's a business transaction, but it's not - it's your home and you that has to take the hit if you drop, and only you know if you can afford to do that and eat.'

yes, but on the reverse side it's someone else's home and they're going to have to pay interest on whatever price they pay, so why pay more, IYKWIM?

still, it's a shitty thing to do the day before.

but it happens.

One things that's occurred to me is whether this is connected to the survey they had done? Ours included an assessment of whether the house we were buying was worth what we had agreed to pay? Could it be related to this?

yes, red, there's stuff for sale here, but it's mostly what used to be second/holiday homes or homes that are owned outright by retirees who are now abroad or being sold by the family of the deceased (but have no mortgage).

we have zero chance of ever owning a property here, but our interest in the market comes from the fact that we'll need to rent another place come next August-October and are hoping for the best deal we can get as private tenants.

Our rental market here is flooded yet last August when we were looking for something to rent as we were relocating here, there was virtually nothing. We kept missing out because as soon as something came on it was gone. There's about 4times as much on now and the boards are up for longer. Def deals to be had I'd say.