Buying A Repo! Reducing My Offer

ChloeRadshaw

Ok - To cut a long story short I ve had an offer on a flat in London accepted.

I offered 125K on an asking price of 130K which was accepted - Now the property cannot be mortgaged because it has a short lease of 55 years

It also needs 600 pounds of roof repairs which I just found out today


I am a cash buyer so this is not a problem but does anyone know the process behind me reducing my offer?


I know I can walk away from this flat but if I wanted it could I reduce my offer by 2K?

What would hapen if I did?

Advice appreciated!

MissMotivation

Firstly, How do you plan on justifying a 2k reduction for £600 worth of work?

Secondly, are you prepared to lose the flat if they say no?

Chinkle

Find out how much it will cost to extend the lease, add that to your roofing costs and then ask for this amount as a reduction - simple.

They say yes, you buy the flat - they say no, you walk away or try to get them to agree to meet you half way.

MissMotivation

Chinkle wrote: »

Find out how much it will cost to extend the lease, add that to your roofing costs and then ask for this amount as a reduction - simple.

They say yes, you buy the flat - they say no, you walk away or try to get them to agree to meet you half way.

But if she already knew that the lease had only 55 years left to run I don't see how she can justify 2K reduction for £600 pounds worth of roofing works.

I would imagine that the flat was being sold at a reduced price because there was only a limited number of years remaing on the lease.

Fire_Fox

£130K sounds low for a flat in London, I suspect that includes a reduction for the hassle of extending the lease. You do know you need to have owned the flat for two years before you can apply for an extension?

soulsaver

Your offer to buy is not binding until exchange: whatever your reasons you may just revise the offer downward in a letter or call to the vendors representatives. If you have good reasons then it would be polite and advisable to state them. The vendor equally may reject your offer, or accept it. Be aware they can also accept it and then agree to accept a 'better' (higher, equal or more reliable) offer elsewhere. They are obliged to publicise the offer and to consider all offers up to exchange to mitigate the financial impact on the dispossessed owner. So the fact that your offer was accepted wasn't game over anyway.

cattie

Fire_Fox wrote: »

You do know you need to have owned the flat for two years before you can apply for an extension?

Not quite correct. You can apply for a lease extension at any time of ownership but the freeholder doesn't have to agree to your request for an extension of the lease untill you've owned a property for the 2yr qualifying period.

DVardysShadow

Fire_Fox wrote: »

... You do know you need to have owned the flat for two years before you can apply for an extension?

OP should ask vendor to obtain extension - and be prepared to walk away. OP is buying an unmortgageable property and if she needs to sell, she will have the problem of selling it unmortgageable. Plus as time goes on the freeholder has more and more leverage to up the price of an extension.

cattie

As it's a repo I doubt very much that vendor will be interested in starting lease extension process. All they will be interested in is selling the flat as soon as they can.

As Firefox mentions, £130k does sound incredibly cheap for a London flat, unless its ex council in a grotty block/area, so the cost probably does reflect the short lease.

Have you estimated cost of lease extension by using calculator on the www.lease-advice.org.uk website?