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    • enthusiasticsaver
    • By enthusiasticsaver 15th Jul 17, 8:03 AM
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    enthusiasticsaver
    Strange offer received on flat
    • #1
    • 15th Jul 17, 8:03 AM
    Strange offer received on flat 15th Jul 17 at 8:03 AM
    We are selling a flat with lovely views in desirable development and it is up for sale for £280k. It has been on the market for a few months but we recently changed agents. It is a family flat in name of myself, brother and sister so used mainly for family visiting us in Cornwall. I am local so dealing with sale.

    Last week someone viewed it and is so keen according to agent he has offered us a £10k non refundable deposit plus £280k when he sells his own flat. He only put it up for sale yesterday after viewing ours. Alternatively he has offered £1k per month until he is in a position to complete which could take a while. Condition is we take it off the market and he says he wants to do it above board through a solicitor. Our gut reaction was not to accept it and continue to market either until he is in position to proceed or we get buyer in better position.

    Has anyone ever received offer like this before and accepted it? Views on whether you think we were right or wrong to turn it down?
    Debt and mortgage free and saving for early retirement
Page 1
    • Westminster
    • By Westminster 15th Jul 17, 8:09 AM
    • 743 Posts
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    Westminster
    • #2
    • 15th Jul 17, 8:09 AM
    • #2
    • 15th Jul 17, 8:09 AM
    You need to collectively decide between you whether you want to entertain this offer.

    There are no right or wrong answers.
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    • glasgowdan
    • By glasgowdan 15th Jul 17, 8:34 AM
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    glasgowdan
    • #3
    • 15th Jul 17, 8:34 AM
    • #3
    • 15th Jul 17, 8:34 AM
    Not sure why he's acting so desperate given it's been for sale for a few months. I'd respond with acceptance on usual terms and go through the motions of any normal sale.
    • Bossypants
    • By Bossypants 15th Jul 17, 8:59 AM
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    Bossypants
    • #4
    • 15th Jul 17, 8:59 AM
    • #4
    • 15th Jul 17, 8:59 AM
    In your shoes I would try to ascertain why he's so keen to have this exact flat. Maybe it's right next door to his ailing parent or something, in which case his eagerness to secure it makes sense. If his answer is just that he really, really likes it, then I would find the whole thing weirder, and would make me worry about his ability to make sensible decisions along the line.

    Once you've determined what his motives are, you can sit down with your fellow sellers and determine whether it's worth proceeding. It's probably also worth looking at his flat, especially whether it is realistically priced.
    Jul-Dec Cookie Jar Goal: £70/£600
    • cjdavies
    • By cjdavies 15th Jul 17, 9:03 AM
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    cjdavies
    • #5
    • 15th Jul 17, 9:03 AM
    • #5
    • 15th Jul 17, 9:03 AM
    Also the question is if you accept how long do you wait?
    • glentoran99
    • By glentoran99 15th Jul 17, 9:06 AM
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    glentoran99
    • #6
    • 15th Jul 17, 9:06 AM
    • #6
    • 15th Jul 17, 9:06 AM
    Id take the grand a month
    • eddddy
    • By eddddy 15th Jul 17, 9:18 AM
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    eddddy
    • #7
    • 15th Jul 17, 9:18 AM
    • #7
    • 15th Jul 17, 9:18 AM
    This would be a 'lock out agreement'.

    You can google 'lock out agreement' for lots of info. There are lots of pros and cons.

    Perhaps the first challenge is that it can take a while to negotiate and agree the terms of the agreement. Do you continue marketing the property until the lock out agreement is signed?
    • enthusiasticsaver
    • By enthusiasticsaver 15th Jul 17, 9:24 AM
    • 3,647 Posts
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    enthusiasticsaver
    • #8
    • 15th Jul 17, 9:24 AM
    • #8
    • 15th Jul 17, 9:24 AM
    In your shoes I would try to ascertain why he's so keen to have this exact flat. Maybe it's right next door to his ailing parent or something, in which case his eagerness to secure it makes sense. If his answer is just that he really, really likes it, then I would find the whole thing weirder, and would make me worry about his ability to make sensible decisions along the line.

    Once you've determined what his motives are, you can sit down with your fellow sellers and determine whether it's worth proceeding. It's probably also worth looking at his flat, especially whether it is realistically priced.
    Originally posted by Bossypants
    Yes we wondered given that there are three flats in same development up for sale albeit with different views, layouts and price. We have reduced the price by £10k so it is the middle priced one with the lower priced one just £5k under ours. Ours has the best view out of all three and we have a lift, first floor flat and separate utility room with windows in kitchen/utility. The other flats kitchens have no separe utility or windows in kitchen. I think the price is ok given the others prices.

    I think it is the area which has sold him and the fact it is a gated exclusive development. His daughter lives in the same town and at the moment he lives about an hour away.

    I am waiting to see what his flat is like when it goes on the market next week.
    Debt and mortgage free and saving for early retirement
    • enthusiasticsaver
    • By enthusiasticsaver 15th Jul 17, 9:25 AM
    • 3,647 Posts
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    enthusiasticsaver
    • #9
    • 15th Jul 17, 9:25 AM
    • #9
    • 15th Jul 17, 9:25 AM
    This would be a 'lock out agreement'.

    You can google 'lock out agreement' for lots of info. There are lots of pros and cons.

    Perhaps the first challenge is that it can take a while to negotiate and agree the terms of the agreement. Do you continue marketing the property until the lock out agreement is signed?
    Originally posted by eddddy
    Thanks. That is exactly the sort of info I need.
    Debt and mortgage free and saving for early retirement
    • tori.k
    • By tori.k 15th Jul 17, 9:29 AM
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    tori.k
    Is it in a coastal area ES? If so it will be because we are coming into the summer holidays the market will pick up once again with people looking into purchasing second homes, most likely he hasn't been seriously house shopping just keeping an eye on the area he really wants to live in, and your place ticked all his boxes, hence the rush to get his own place on the market.
    What area is he selling from as you will know the market has been pretty stagnant in some areas of pre owned, mostly down to the massive amount of new builds and there help to buy offers. I'd personally have more confidence in the offer if he was selling a freehold property rather than most likely a leasehold flat himself. Your savvy ES go with your gut feeling.
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    • ScorpiondeRooftrouser
    • By ScorpiondeRooftrouser 15th Jul 17, 9:33 AM
    • 1,698 Posts
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    ScorpiondeRooftrouser
    A £10K non refundable deposit won't leave you any better off at all unless he pulls out, in which case it wasn't worth it. If you take it, he could take two years to complete and you would end up taking the same amount of money as you would have off anybody else.

    Is the £1K a month meant to be deductable from the final purchase price? If so, same thing.

    I just can't see that this is at all to your benefit.
    • ProDave
    • By ProDave 15th Jul 17, 10:42 AM
    • 170 Posts
    • 237 Thanks
    ProDave
    We are in a slightly similar position that when we tried to sell, there was no interest other than one person who wanted to buy but would not be in a position to do so for 2 years.

    Eventually after no more interest in the property, we are renting it to that potential buyer on a short assured tenancy. The expectation being that gradually the price will reduce by the net (after any tax due and expenses) rent we receive. So if she is true to her word, in 2 years she will buy it for less than todays price. If not, we have still had the rent and it will go for sale again.
    • enthusiasticsaver
    • By enthusiasticsaver 15th Jul 17, 3:30 PM
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    enthusiasticsaver
    Is it in a coastal area ES? If so it will be because we are coming into the summer holidays the market will pick up once again with people looking into purchasing second homes, most likely he hasn't been seriously house shopping just keeping an eye on the area he really wants to live in, and your place ticked all his boxes, hence the rush to get his own place on the market.
    What area is he selling from as you will know the market has been pretty stagnant in some areas of pre owned, mostly down to the massive amount of new builds and there help to buy offers. I'd personally have more confidence in the offer if he was selling a freehold property rather than most likely a leasehold flat himself. Your savvy ES go with your gut feeling.
    Originally posted by tori.k
    Our flat is on the coast Tori but he is selling a flat inland. The agent said he did not want to put his flat on the market until he found somewhere which ticked all his boxes. If we accepted his offer I just worry we would be waiting forever for him to find a buyer maybe missing out on a buyer in a better position. I know leasehold flats are maybe not so easy to sell. Ours though has a share of the freehold. My gut says steer clear of this type of agreement.
    Debt and mortgage free and saving for early retirement
    • moneyistooshorttomention
    • By moneyistooshorttomention 15th Jul 17, 5:00 PM
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    moneyistooshorttomention
    I'd be investigating further in your position.

    Yep...check out what his existing property is like.

    Give some thought to giving him a written deadline as to how long he has to find a buyer for his place and then proceed as per normal with buying your place.

    If, say, you'd given him 3 months (for the sake of argument) in which to find a buyer for his place and this non-refundable deposit would be yours to keep anyway (ie even if he didnt proceed with buying your place) = I'm guessing you'd not have much to lose and might land up gaining a freebie few thousand £s from this deal.

    I can see why he might be making such an offer in his position - as, if one finds somewhere that ticks a lot of boxes, then I can see why the attempt to lock out anyone else from being able to whip it out from under his nose.
    Last edited by moneyistooshorttomention; 15-07-2017 at 5:02 PM.
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    • LadyGMadameToThee
    • By LadyGMadameToThee 15th Jul 17, 5:34 PM
    • 53 Posts
    • 46 Thanks
    LadyGMadameToThee
    I can't belive the cynicism and suspicious exuded by somthe of the people on this thread. Try to have a little bit more faith in people!
    Lady G


    Life is too short to be serious all of the time. So, if you can't laugh at yourself, call me - and I'll laugh at you!
    • theartfullodger
    • By theartfullodger 15th Jul 17, 6:14 PM
    • 8,772 Posts
    • 11,606 Thanks
    theartfullodger
    I can't belive the cynicism and suspicious exuded by somthe of the people on this thread. Try to have a little bit more faith in people!
    Originally posted by LadyGMadameToThee
    Very true: I have every faith in the person making this offer being treated with the gravest suspicion.
    • tori.k
    • By tori.k 16th Jul 17, 12:17 AM
    • 2,725 Posts
    • 6,066 Thanks
    tori.k
    Our flat is on the coast Tori but he is selling a flat inland. The agent said he did not want to put his flat on the market until he found somewhere which ticked all his boxes. If we accepted his offer I just worry we would be waiting forever for him to find a buyer maybe missing out on a buyer in a better position. I know leasehold flats are maybe not so easy to sell. Ours though has a share of the freehold. My gut says steer clear of this type of agreement.
    Originally posted by enthusiasticsaver
    I wouldn't touch it either, being inland he appeals to a much smaller group of buyers than your own property , a gated development offers more security then a freehold house a good selling point, Inland at the moment there is also as little as 10k difference between a house and a flat at the moment in some areas. If it is meant to be his your flat will still be there when he's in a position to buy.
    Debit to Credit (stage 1) 3652.34 completed 15/10/16
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    • enthusiasticsaver
    • By enthusiasticsaver 16th Jul 17, 7:48 PM
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    enthusiasticsaver
    I can't belive the cynicism and suspicious exuded by somthe of the people on this thread. Try to have a little bit more faith in people!
    Originally posted by LadyGMadameToThee
    It is not really a question of us being cynical or suspicious of his offer which I am sure is genuine. As he is not in position to proceed though we would not like to be in the position of hanging around waiting for him to sell his flat. It could take ages and in the meantime we could miss out on a cash buyer or someone who already has a sale agreed on theirs and a completed chain. It is just a case of us not being happy with the arrangement he suggests. That is our prerogative as sellers.
    Debt and mortgage free and saving for early retirement
    • saajan_12
    • By saajan_12 17th Jul 17, 8:26 AM
    • 557 Posts
    • 360 Thanks
    saajan_12
    Are you actually happy to wait several months or would you have a use for the money sooner rather than later?
    IF you do entertain this, I would
    a. agree a backstop that you can remarket if he is not in a position to complete within a certain time e.g. 1 year
    b. not agree to a £10k deposit or any sums which come off the purchase price, but that the full £280k is due upon completion on top of an agreed monthly amount before that. Otherwise, you have no benefit to offset having to wait for the buyer while you cannot use the £280k and are still paying for the upkeep / running costs of the property.
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