Is it common for the chain to reduce prices to cover shortfall?

lossofbargain

Hi all.

we accepted an offer a week ago on our property, found one to buy (end of chain) the next day.

Our agent discovered at the beginning of the 7 long chain that the buyer (a FTB) had pulled out. Nobody else in the chain knew this and our agent had to tell our buyer that she was not good to go.

Talking to the agent yesterday, the first property in the chain has received an offer 10k below asking price and the seller is not accepting it. There was talk he would accept 5k less. However the FTB wont pay a penny more. (i dont understand people who offer or look at properties out of their budget and expect the seller to accomodate them)

Anyway, our agent suggested everyone in the chain give up some money to fund the 10k shortfall, however:

a) why should the first seller get his asking price yet everyone else has to pay
b) how does it work, does the given up amount get passed back down the chain to the FTB?

Given the property we are selling has had 50 viewings and one offer, i feel i must bow down to this. Grrr

We have kept the property on the market and a FTB came back for a second viewing last Friday so we await to see if they make an offer, though in a good position they will probably come back and say the would like a BMW but only have the budget for a Lada.

Emmzi

a) so everyone else can move; you don't have to agree but if you don't you could be waiting a while. If you aren't in a rush/ are willing to lose the house say no
b) yes, sort of. Net effect is evveryone selling gets a wee bit less for their house so FTB can afford to move.

You know, if everyone moved to a fixed price system, life would be simpler. You aree blaming the poor FTB a lot here, it's possible the seller is way over priced and unrealstic about the value of their house. Happens all the time. If it were realistically/ bargain proced, he'd have more than one potential purchaser with a decent offer on the table. Trouble is peop;e can be so daft about the price they put on their home (10% over seems to be common atm) how is a poor FTB meant to know what is going on?

tyllwyd

I've not heard of this before, but, without worrrying about whether it is fair or not for the two at the end of the chain, I can see the logic. How much money will everyone lose on solicitor's fees, surveys etc if the chain falls apart now - and that money will have to be spent out again when you find a new house. It might be less stressful to chuck, say, £500 into the pot now to keep things on track.

I think Emmzi is a bit optimistic saying that a seller could have more than one offer on the table to choose from - are there really that many FTB out there at the moment?

zappahey

lossofbargain wrote: »

(i dont understand people who offer or look at properties out of their budget and expect the seller to accomodate them).

I would agree, if we could be confident that every seller was realistically priced.

getmore4less

New buyer sees the chance for a bargain at the bottom of a long chain.

Everyone above chips in £1k each,

Chain completes everyone happyish.

Whats it going to cost if there are more delays.

Ask all the agent in the chain to drop a bit of commission as well they want this completing as much as anyone else

Wee_Willy_Harris

Are we to assume, from your dislike of discounts for FTBs, that your offer and those of the rest of the chain were all for the full asking price?

stevieboy308

lossofbargain wrote: »

Talking to the agent yesterday, the first property in the chain has received an offer 10k below asking price and the seller is not accepting it. There was talk he would accept 5k less. However the FTB wont pay a penny more. (i dont understand people who offer or look at properties out of their budget and expect the seller to accomodate them)

the ftb could have a budget twice the amount of what they've offered, but the offer is all they're prepared to pay for that house. its not about expecting a seller to accomodate them, its about making an offer, the seller can either except or decline it.

of course people view houses out of their budget, due to not many houses being sold for the asking price, its a given that there will be room to manoeuvre.

stevie

milliebear00001

I'm a chain-free (although not FT buyer). I am routinely viewing houses about 10% above my budget. I want a good deal, and believe many houses are overpriced in my area. Your house is worth what a potential buyer is willing to pay. 50 viewings and one offer suggests it was overpriced. You were lucky you could wait to sell - many can't or don't want to.

Henry_P_Chester

FTBs are a rare breed at the moment and have a lot of bargaining power. I'm sure everyone would love to sell their house to a chain free flexible FTB. IMO almost everything is overpriced at the moment and in the current market they would be mad to pay the full asking price, especially as a FTB.
If you don't like an what's being offered you are well within your rights to decline it and wait for another offer. Buy a house is only worth what someone is willing/can afford to pay and that my be well below what your estate agents are telling you it's 'worth'.

silvercar

This used to happen in a good market. People were more relaxed about paying a couple of thousand more - it was the same a s buying in a few month's time when the property would be "worth" more.

It all comes down to whether everyone will agree and whether the people agreeing will support the chain when others don't. So if 7 people need to agree a £1k greater differential between the selling and buying price and a couple of people refuse that leaves others having to offer a greater differential to keep the chain together. Then there follows big discussions on whether everyone should be chipping in £1k or whether it should be a percentage of buying price, so the guy paying £1m and selling for £750k pays in say £2.5k rather than £1k.

Jowo_2

lossofbargain wrote: »

Anyway, our agent suggested everyone in the chain give up some money to fund the 10k shortfall, however:

I think this is an appalling suggestion and I don't understand how they could have joined the chain when the offer wasn't accepted by both parties.

It is ridiculous for the other buyers to fund the tight fistnedness of the buyer or greed of the seller.

Personally, I would be extremely reluctant to subsidise a property transaction between two other strangers!