How dire is the situation really for first time buyers?

Gazman07

This is a serious question & the reason I ask is last weekend I put an offer on a house for £155000 which was accepted & up until I started reading these forums I was as happy as Larry, but the last few days I’ve been unable to stop feeling I’ve done the wrong thing.

According to the estate agent the house is being sold by the daughter of the person that lived there who died/went into a home at the end of last year. The property had been on the market since January & had been “sold” back in March for £167,000 (however this fell through due to the buyer being unable to get a business mortgage as they were going to turn it into a nursery.)

Similar houses went for £167,000 & £175,000 in summer 2007, £170,000 in 2005 & £128,000 in 2004. My original offer was £148,000, however the estate agent said the vendor wouldn’t even entertain this offer so we adjusted it to £153,000 the vendor wanted £157,000 & then we me in the middle. However now I’m starting to wish I’d stuck to my guns & insisted he put my offer forward L

After reading various threads on forums on the one hand I now keep thinking about withdrawing my offer or making a lower offer, both of which don’t appeal to me morally however I need to have my own interests a heart. On the other, I keep thinking if I sell it in 5 years for only £155000 I haven’t lost anything I will have some money for a deposit on my next place. Or have I got this wrong?

Advice words of advice, good or bad much appreciated,

Thanks, Gaz.

bluejake

You're a first time buyer.

The seller wanted £157,000. You agreed to pay £155,000.

The biggest house price bubble in the history of the housing market.

'I now keep thinking about withdrawing my offer' - do more of this.

jaype

Your gut instinct is right. How much will you be kicking yourself if the same sort of place is going for 20 percent less in 18 months? What could the money you'd save each month on that sort of mortgage do for you? Now - again - are you still willing to buy?

mcspanna

bluejake wrote: »

You're a first time buyer.

The seller wanted £157,000. You agreed to pay £155,000.

The biggest house price bubble in the history of the housing market.

'I now keep thinking about withdrawing my offer' - do more of this.

I'd second that - Saw our independent financial adviser recently and we were discussing another member of my family who is hell-bent on becoming a FTB this year...the IFA's words (roughly) were he shouldn't even consider it, possibly for upto 2 years...no one has a crystal ball but potentially the market has a long way to fall yet. Having been a FTB myself only a couple of years ago, I know how strong the pull is to 'get on the ladder' but a couple of years down the line facing negative equity (despite negotiating a good price at the time) it's a whole different ball game!

Pelican_eats_pigeon

Hah. The idea of being able to afford to buy anything anywhere near where I live is pretty laughable right now. 2 bed flats at 350-400k when we can rent one at 1k a month, no thanks.

RHYSDAD

It would seem gazman that backing out of a deal, that could probably put you into neg equity in the very near future, is not a deal that you could sit pretty with. Buyers market now though not always a FTB one, what with good mortgage deals few and far between.
We're buying now but ours is a shared ownership place. We're buying to live there, possibly til we snuff it. We are in a !!!!!! HA flat with no garden and one very lively two year old and a soon to be running round baby. We need the space and a garden. If our new place drops massively in value, we'll just get it revalued at it's (at a guess) lowest value and buy more of a share at a lower price. If we were buying outright on the open market i wouldn't even consider it but we're not in a position to be fussy!! We're not living any longer than we have to in our current shytehole what with the druggy scum and thugs that pervade our area.

Debt_Free_Chick

Why not wait for the survey to be done? Might give you some ammunition to reduce the price?

andrewmp

Check what the same house went for in 2004 and offer less than that.

PasturesNew

Some TV watching for you:

1] http://uk.youtube.com/watch?v=0AgnD3pXg-Y - house prices to fall by 33%
2] http://video.google.co.uk/videoplay?docid=-8482518243122067675&hl=en-GB - TV programme from 2003 about mortgage fraud that shows you how prices got to where they are
3] http://uk.youtube.com/watch?v=oZFt46aQyQ8 just for the LOLZ
4] http://uk.youtube.com/watch?v=mFWzs8sChWg - borrowing 5x your salary
5] http://uk.youtube.com/watch?v=_C-Nd_MStxU - a bit more of an academic look, with the housing price cyle explained
6] http://uk.youtube.com/watch?v=oTAr2e1wktI 3 "experts" were asked 3 months ago what they thought ... and now dragged back into the studio to be asked again (July 2008)

So you're not just relying on strangers on the Internet

Cranston_2

Pelican_eats_pigeon wrote: »

2 bed flats at 350-400k when we can rent one at 1k a month, no thanks.

I think you logic is spot on and argues for further substantial falls in property.

To the OP - walk away from the deal.

qolwillclearmydebts

just tell them you've had trouble getting a mortgage, or say the bank valued it at less.