Reducing offer price at last minute before exchange

mike5678

Hi all,

I am a FTB in the final stages of agreeing a sale for a 2 bed maisonette for £180k. So close to the end in fact that we were going to exchange today until this one little hiccup came to light.

The property was initially on the market for £198k with 74 years remaining on the lease. We agreed a sale price of £180k without extending the lease. My valuation survey for my mortgage company came back at £180k.

What has just come to light, and I don't know how my solicitor managed to get hold of it, is a valuation survey carried out on behalf of the seller a week prior to accepting my offer. I have a copy now of this valuation and the contents of this are that they valued the property at £170k without extending the lease. They then valued the cost of extending the lease to 99 years as £13.5k and then the price of the property with a 99 year lease at £190k.

We are in the very final stages in a chain 4 sales long (I am the FTB at the bottom) and the whole chain is ready to exchange.

I am not happy to pay £180k for something that was valued at £170k only a few weeks ago by an independation valuer. I have told my solicitor to wait to hear from me until Monday and now the estate agent is constantly phoning me.

My plan is to re-negotiate the price and say that I will pay £175k for the property as it is, not a penny more. This meets in the middle of the two valuation amounts and also brings the property into the 0% stamp duty bracket. The only funds I have spent so far is £320 on my valuation and £56 for environmental search, so no real loss if it falls apart.

I do really like the property, BUT I am also not desperate, I live with my parents and under no pressure to leave.

Would be greatful for anyone elses opinions as I have an angry chain of people chasing me wanting to exchange.

Thanks
:think:

Mr_Matey

They can't make you exchange if you don't want to.

Clearly you're in a strong position to negotiate if the whole chain relies on your exchange, and if you're not happy with the deal as it stands you have the option of renegotiating or walking away.

If I were in your position, I'd tell them the new valuation puts the property at £170k (or £175k if that's what you think it's worth) and you're happy to exchange at that price. That's the point of having a valuation done - to make sure you don't overpay, right?

-- edit --
I don't understand how it can be worth £170k before extending the lease and £190k after when it only costs £13.5k to extend the lease. Renewing the lease is worth £6.5k?

greggymagic

Legally you can pull out any time before you exchange.

Not quite sure how your solicitor got this new valuation from the vendor? What did your valuation say the flat was worth?

cattie

My first worry reading your post is how you & your solicitor came by the valuation carried on behalf of the vendor? Is there a breach of trust here I wonder & if so it's very worrying & unprofessional conduct.

Survey's are expensive things & carried out on behalf of the person commisioning & paying for the survey. If they choose to divulge the contents to another person that's one thing, but if somebody else has made known the contents of the survey without permission then they have overstepped the line.

greggymagic

And would you be happy if on the day of the exchange the vendor asked for 5k more money as his survey just revealed that it was worth more than what you had both agreed?

mike5678

The valuation carried out that I paid for on behalf of my mortgage company valued the property at £180k, he however, already knew the agreed price of £180k before making that decision. That was carried out a couple of weeks after this valuation is dated, paid for by the vendor for his own reference.

The vendor knows that my valuation came back at £180k. He also already knew that his valuation came back at £170k when he put it on the market with his estate agent for £198k.

I am in the driving seat here as I have been pestered constantly by the estate agent as the vendor is very keen to move and the chain is waiting on me to exchange before the ones above can.

I think if I was to say I will pay £170k the sale would fall through as a £10k hit I think is too much for them to absorb. At £175k I think that they would begrudgingly accept due to the urgency.

mike5678

greggymagic wrote: »

And would you be happy if on the day of the exchange the vendor asked for 5k more money as his survey just revealed that it was worth more than what you had both agreed?

I can see the point here about how it is most definately immoral, but not illegal. I'm not willing to pay an extra £5k or £10k to be a nice guy and be moral. I'm more concerned about staying on the right side of the law.

mike5678

cattie wrote: »

My first worry reading your post is how you & your solicitor came by the valuation carried on behalf of the vendor? Is there a breach of trust here I wonder & if so it's very worrying & unprofessional conduct.

Survey's are expensive things & carried out on behalf of the person commisioning & paying for the survey. If they choose to divulge the contents to another person that's one thing, but if somebody else has made known the contents of the survey without permission then they have overstepped the line.

She states that it was disclosed to her by the vendors solicitor. I know that I wouldn't have done this.

ess0two

In light of the current speculation that house prices have bottomed/risen to some extent they may decline.

Mr_Matey

If you're going to lower your offer, I'd go for the full £10k, give your reasons and say you're willing to exchange on that price immediately.

silvercar

That was carried out a couple of weeks after this valuation is dated, paid for by the vendor for his own reference.

Why would a seller, with an offer on the table, pay for a private valuation?

It could be that this valuation was for a different purpose eg a mortgage revaluation based on a quick sale price.

I'm not willing to pay an extra £5k or £10k to be a nice guy and be moral.

Your choice! Your risk if the seller tells you where to go.

If the seller goes ahead but puts a kipper under the floor boards, cement in the drain pipe, takes every last light bulb and the front door knob, warns the neighbours......