Potential gazunder

Incisor

ess0two wrote: »

Welcome to MSE..............stay any further and no doubt you'll be talked out of buying.
This place is full of bitter wannabe homeowners and second guessers.

Not me in this case. I warn off ftb's who have no deposit or who think 'renting is dead money' is a universal truth or who think that shared ownership on a new build is their way on to the property 'ladder'.

But with good equity and income to support a mortgage, why not if the deal looks right? In this case, I too am in favour of giving the vendor a deadline to submit papers and another to exchange. As buyer has everything in place [including surveys?] I would go so far as to require vendors to submit a timetable to completion for approval.

GDB2222

HouseBuyersOH wrote: »

There seems to be a preconception here that anyone conceiving the idea of a house purchase is a !!!!less financial dunderhead who has spent their deposit money on wall to wall plasma TVs.

Whilst not appropriate in all cases, as preconceptions go, it's actually quite well founded. A rather large proportion of people posting questions here are indeed financial dunderheads, representing a cross-section of the population unfortunately.

kunekune

Well, given that I am NOT one of the people here who specialises in 'don't do it posts, can I explain why I got involved?

You said that you had plenty of income and could easily afford this house. And then posted some information about what that income was and what the likely repayments were that suggested otherwise, at least to us cautious mse-ers. Given that your response to our questions was that it was no problem, everything was just hunky dory, I don't think it's inappropriate to ask a few extra questions. Especially when, as you accept, the take-home pay from your salary is rather less than what most people with that salary are taking home. If it is do-able, I'd love to see you make it: I'm pretty keen to purchase too, and for similar reasons (other than the fact my current OH is the only OH I've ever had, but that's just luck). But having been scared and scarred other occasions, my current view is that it's immoral to stay quiet.

HouseBuyer_2

kunekune wrote: »

Well, given that I am NOT one of the people here who specialises in 'don't do it posts, can I explain why I got involved?

You said that you had plenty of income and could easily afford this house. And then posted some information about what that income was and what the likely repayments were that suggested otherwise, at least to us cautious mse-ers. Given that your response to our questions was that it was no problem, everything was just hunky dory, I don't think it's inappropriate to ask a few extra questions. Especially when, as you accept, the take-home pay from your salary is rather less than what most people with that salary are taking home. If it is do-able, I'd love to see you make it: I'm pretty keen to purchase too, and for similar reasons (other than the fact my current OH is the only OH I've ever had, but that's just luck). But having been scared and scarred other occasions, my current view is that it's immoral to stay quiet.

One earns more than the other. That should be easy to work out instead of implying that we were lying about something.

We have spent a long time working out sums and making a decision, only to have a full fledged world financial meltdown in the middle of it!

If we sound self assured by our postings, perhaps some posters could benefit from thinking that we know what we're getting into, instead of jumping to asinine conclusions. It's these sorts of posts that detract from the original question of what we are unsure of and doesn't allow for the more helpful and relevant posters who have given us excellent food for thought and helped us come closer to a decision on what needs to be done.

HouseBuyer_2

HelpWhereIcan wrote: »

How effective gazundering will be as a tactic will depend on the property and the area.

My experience of it in the current market in my area is that it is counter productive unless the vendors have found a place that they have set their hearts on. even then it can be dangerous if you gazundering means that they have to approach their vendor for a reduction.

However, you mention that this is an estate sale. To me that can mean one of two things:

1. Family who are keen to get rid - especially if the house needs some modernisation (the typical Granny's 1950s kitchen etc)

2. Family who will disagree about what to do in response to your offer. I had a sale go on for 18 months at the height of the market because one of three siblings kept inisiting that they ask for more as the value of the house rose. The market has reversed but you may find that there is a brother who thinks they should keep it until the market improves and a gazunder will tip the whole thing over the edge.

If your aim is to speed things along, you are best calling your solicitor and insisting that they contact the vendors' solicitors and set a deadline by which they will complete or you pull out (as has been suggested).

If it is to get some off the price, then you are entitled to offer whatever you like - just be prepared in case the reaction is less than favourable and have a plan B.

You could get a combination of both by giving them a week to exchange or your offer reduces by say 5%.

Just remember that you do have the upper hand really. If they pull out they have to find a new buyer, wait for their survey, wait for their mortgage approval, wait for their searches etc etc. How much is avoiding the financial/emotional pain that could cause worth to your vendors do you thin,k?

Good Luck, not an easy choice to make in any market.

It's a bit of a weird one
1) it is a typical granny house, mismatching wallpaper across the whole house, the original fitted kitchen and bathroom from new (house is from 1950s).

2) originally, we didn't realise there was another sibling (half) and they had some complications, so we are not sure how much is her involvement in the sale.

No idea if any background helps but the vendor is early 50s and the other sibling is late 60s, so probably they have seen the ups and downs of the market.

Probably, we will try to do what an earlier person did on this thread and write a letter to them to reduce a price and set a clear deadline. Also going to view some more places at the weekend now.

Thank you to those with helpful constructive advice!

HouseBuyersOH

How on earth is it appropriate to grill anyone about their take home salary when the question is about gazundering? That is, I have to say, a suggestion straight from Planet Ridiculous.

But since you asked about our finances, could you please tell me why you needed a challenge to make £25K for a house deposit, if you have reached the target can you please explain how long it took, if you're not there yet why not? Please provide details of your salary for the last three years with information on how you propose to cope with any unexpected events that may affect your ability to save: long lost aristocratic great aunts arriving and demanding board and lodging for example, meteorites falling on your head, that sort of thing. It is, after all, always the unexpected that gets you.

Unexpected certainly got me. I was expecting this to be answers and opinions on what was quite a simple question, but (apart from the useful considered stuff) it turned out to be a sort of Jeremy Kyle show with an audience composed principally of the editorial team of the Daily Mail and with financial expertise provided by the London Hackney Carriage company ("I 'ad a bloke from the City in the back of me cab yesserday guv, ee tells me there's gonna be a 100 year bear market, no chance of my Lisa selling 'er flat now")

sarkin

andys15 wrote: »

What I would say though in this day and age is make sure you are on a repayment mortgage. At least then you are making up for what the house is losing. In 3 years I would have repaid £10000. which isn't a lot as its the start of the mortgage, but if I have lost £50000 at least I have covered a 5th of that. And then over the years I will be paying more of the capital off. I know to you "dont buy yet brigade" iit wll sound madness talking so easily of a loss in 3 years, but again I didn't go in blind. God willing in 15-20 this mortage will be paid off, so therefore I will own the house outright. If it had cost me £450000 plus to own a house worth £180000 in 20 years then so be it. If I hadn't bought I know I wouldn't have £180000 in the bank in 20 years time, and I will still be renting.

The reason people are holding off is they will get more for their money. Just imagine the house you will have in a years times if you knock off 25% of todays asking price.:)

kunekune

If you want to get personal ...

1. The reason we do not have a lot of money is that TWICE we lost our entire equity due to house price crashes. Carelessness? Possibly, but mostly bad luck. The first time we were able to stay put, and recovered by overpaying for several years. The second time we had just become the parents to a disabled child, needed to move, and had to rent out and subsidise our mortgage payments while renting elsewhere for quite a long time. We have not yet recovered from that.
2. If you look at some of my recent posts, we are in the process of coping with the unexpected. Within the last two weeks, we have found that OH is threatened with redundancy because of the banking crisis and he has just been diagnosed with a progressive neurological disorder which means we now have to plan on the basis of one income.
3. We also have moved to this country quite recently, in order to be able to have contact with elderly relatives, and in doing so went from a low wage-low property price economy to a higher wage-high price culture. That figure you were so rude about is increasing at a steady rate while we rent.

Incidentally, I was not the only person who was puzzled by your figures.

Perhaps I have reason to warn caution. Certainly I am not the holier than thou princess that you seem to imagine. Disasters do happen to people and they aren't funny.

andys15

sarkin wrote: »

The reason people are holding off is they will get more for their money. Just imagine the house you will have in a years times if you knock off 25% of todays asking price.:)

I am sorry but I do not agree. I wouldn't have a house if I waited a year. There are no mortgage deals left. Its fine for people who have had mortgages for years and are moving up. For us FTB its a whole different story. My house was £240000 minus £2400 stamp duty when I bought it. If that is worth £180000 next year, how long would it take to save a 20-40 % deposit which is what is now required(i have 95% mortgage). Whos to say that when I am saving hard for that, house prises dont rise again. Strike while you can is what I say.

GDB2222

andys15 wrote: »

I am sorry but I do not agree. I wouldn't have a house if I waited a year. There are no mortgage deals left. Its fine for people who have had mortgages for years and are moving up. For us FTB its a whole different story. My house was £240000 minus £2400 stamp duty when I bought it. If that is worth £180000 next year, how long would it take to save a 20-40 % deposit which is what is now required(i have 95% mortgage). Whos to say that when I am saving hard for that, house prises dont rise again. Strike while you can is what I say.

Possibly lenders will be a bit more relaxed about deposits once prices have dropped another 25%? No, you're probably right.

Still, it seems daft reasoning to me. Are you saying that you would knowingly make a £60k loss on a property because that way you can get a 95% mortgage? Or are you just rationalising the position you find yourself in?