Offer letter legally binding if missing 'subject to contract' ?

ADSrox0r

Is it still applicable that in the eyes of the law an offer letter that does not include the words 'subject to contract (and survey)' is a legally binding document meaning the buyer is unable to pull out of the purchase?

We're asking this on the back of an offer we have underway on our property and we're just curious about how binding these things are. Our property is up for quick sale at a reasonable price taking into account the work that needs doing to it (Roof needs re-tiling, probably needs a new damp course, new bathroom and new kitchen required and a few other minor bits and pieces)

We have an offer letter from our buyers stating, "We would like to offer £xxxx for the property in its current condition and also includes the following: (minor points regarding various fixtures and fittings etc)"

It does not state anywhere anything about a survey and no mention of contract. The subsequent 'formal' offer letter/notification from our EA only indicates that it is subject to contract, the survey box is left unchecked.

Our buyers are having a survey done next week (they are cash investors who have bought multiple properties from our EA and we are told they have a survey done as a matter of course for all properties they buy) and we know full well various items will be thrown up as mentioned, nothing horrific but the sort of thing you could negotiate a price on if you wanted to.

We have no indications that our buyers are the type to knock chunks off their offer but am I right in thinking that since their offer was not subject to survey that they wouldn't be able to negotiate if it were unfavourable?

Don't get me wrong we're not trying to be unreasonable or unwilling to budge our price but just want to know where we stand.

Ulfar

Sorry offers are not binding in England, if your buyer wants to pull out or change their offer they do not have to give you a reason just as you don't as the vendor.

The fact that they have put subject to contract or survey means absolutely nothing.

zzzLazyDaisy

The point at which an offer becomes legally binding is at exchange of contracts.
Either party can pull out at any time up to exchange of contracts. (The position is different in Scotland)

ADSrox0r

Ah I see thank you, little bit of Googling was all that was required on my part there.

Although it's not binding, would the fact that the letter states 'in it's current condition' hold any stead for pushing back on a downward negotiation?

zzzLazyDaisy

If the survey comes back with problems that were not apparent when the offer was made, then the buyers are likely to want to renegotiate the offer.

You can use any tactic you like in negotiations, including reference to the wording of the letter, if you so wish, although personally I can't see the point, since the buyer will know the comments are not binding, and if they have reduced their original offer, it will be for a reason.

Ultimately it will depend on how much you want/need to sell the house, and how much the buyer is prepared to pay for it.

PasturesNew

Nothing is binding. If they have a survey and there's work to be done and they want to renegotiate and you don't they can simply pull out anyway.

Doozergirl

It's still negotiation. It is not binding so you can't hold them to buy the property with defects they didn't know about. Presuambly that offer shows that they are happy with the price and so are unlikely to renegotiate. Perhaps they are expecting work. If I put that down then I wouldn't be expecting to renegotiate.

So hopefully that is good news for you but you that letter won't form the basis of a contract. It's advisable that you write 'subject to contract' so that people like you don't try to hold people to it, but the likelyhood of you succeeding is nil. They haven't even said 'will will buy' they have said 'we would like to offer' so the wording wouldn't be right anyway.