Reducing offer price at last minute before exchange

nearlynew

What you are suggesting is called gazundering.

It is neither illegal nor, in my opinion, immoral.

Do it and save yourself some money.

dgl1001

nearlynew wrote: »

What you are suggesting is called gazundering.

It is neither illegal nor, in my opinion, immoral.

Do it and save yourself some money.

Im sorry - but gazundering is highly immoral. I know several people who have tried it and do you know what - their not very lucky people. In the sector i work in, companies/ people who try it aren't around very long. OP - You have agreed to the purchase price, if its too high, why on earth did you agree to it

greggymagic

mike5678 wrote: »

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.

Then why did you ask the question? You must have known that to offer a lower amount is perfectly legal.

Look, at the end of the day do what you want . . reading your other posts you seem like you have already made up your mind. It's symptomatic of the kind of cut throat me me me I deserve everything and screw everyone else culture that we live in today anyway.

Unless you believe that to treat people how you wish to be treated is a better way to live your life.

Rockporkchop

What are you planning to do about the short lease? I always thought you had to own a property for 3 years before you were allowed to apply for a lease extension. I wouldn't have paid more than £175k for the flat anyway (which is probably what they were expecting, given the stamp duty thresholds) but I would definitely try to renegotiate the price, with the sellers extending the lease. Who's to say it will still be £13.5k in the future? You might get really stung.

silvercar

Have you discussed your gazumping plans with your lender? Lenders always lend based on the lower of the valuation and purchase price so if you reduce the purchase price you need to discuss with your lender how much mortgage they will give.

Example: Purchase price 180k, max mortgage 90% = 162k deposit = 18k
Purchase price 175k, max mortgage @ 90% = 157.5k deposit = 17.5k

It is important because letting the mortgage lender think you are paying more and therefore giving you a higher mortgage would be fraud and that is illegal. Of course if your loan to value is low, the lender may still be prepared to lend you the same amount, but you need to find out.

mike5678

I've not discussed it with the lender yet. As it stands I would be borrowing £149k and depositing £31k. I can still offer this £31k deposit at the lower price of £170k meaning that I would only require to borrow £139k.

My LTV bracket is 15%, so if they are only willing to offer me 85% of the sale price of £170k which is £144.5k then this still meets the requirement. I don't intend on lying to the lender.

I've decided I am going to offer £170k in the morning when the estate agent opens. I will tell them that we go ahead at this price or I will continue saving for another year and wait so that I can afford a freehold house rather than a leasehold flat. I'm in no rush or pressure to move, I'd just rather not be living with my parents at 24 whilst earning ~£40kpa.

Worth the gamble.

keith969

mike5678 wrote: »

I am not happy to pay £180k for something that was valued at £170k only a few weeks ago by an independation valuer.

Valuations are not an exact science - somebody else might value it at 160K, another 190K. You believe what you want to believe.

The fact that you were happy to offer 180K and now do not seems to suggest you're not really set on the place - why will you be satisfied if you get it for 170K? Why not just wait until you've found a place that you really like - if you don't want to live with your parents, just rent. That way you won't be causing others grief and hassle to others for your own indecision.

G_M

I've decided I am going to offer £170k in the morning when the estate agent opens. I will tell them that we go ahead at this price or I will continue saving for another year and wait so that I can afford a freehold house

I have no emotional feelings towards any of them, this is a business transaction and nothing more.

True, but you really are messing up people's lives. Not just your vendors, but the 4 others in the chain.

And all a) right at the last minute and b) as you seem not really committed to buying a lease at all!. I just hope I never have to do business with you.

Thrugelmir

I'd more be concerned with an extension to the lease term rather than anything else. Something that should be considered prior to exchange.

Although you are trying call the vendors bluff. They could equally walk away from the deal as well.

Blacksheep1979

oldone wrote: »

What would you have done if this newly 'discovered' valuation had been £200,000. Would you have gone to the vendor and said you want to pay them more.

Bit of a moot point as the lenders will only lend on what their valuation says...