First time buyer - baby on the way

MrChips

Thanks to everyone who has replied to this thread over the last few weeks

We are nearing crunch time and after a long discussion with my wife last night (rolling over into breakfast this morning) we are going to offer 507500 and leave it at that. There aren't many other no chain offers around at that price level. That offer would be subject to no funny business about "personal agreements" and getting approval re chattels covering the additional 7.5k etc. What other conditions should we attach - take house off market, anything else? My wife is keen to attach some sort of condition about moving before Christmas, but I'm not sure how this would be workable as, to some extent, it is outside the control of us and the vendors. Perhaps we could add something about "best endeavours"...

If time wsn't an issue, we would probably stick to our guns like so many of you have advised. However we have been looking for a place for over 2 years and this is the first of approx 100 places we have seen that ticks most of our boxes so we are keen not to miss out. We also have the issue of wanting to move in time for the baby being born as well as a good mortgage deal with HSBC which expires on 31 October! So, we are willing to make some compromises, and £2.5k in the grand scheme of things seems worth it...

westlondonbuyer

MrChips wrote: »

£2.5k in the grand scheme of things seems worth it...

I agree the additional £2.5k, £5k or even £10k is (almost) immaterial.

It's the 4% stamp duty you pay on top of purchase price at this threshold. Personally I wouldn't be happy paying £20,300 to the taxman when I'd have got away with £15k for stamp duty if I'd waited a couple of weeks.

westlondonbuyer

Sorry, missed the bit about your mortgage offer expiring. Worth phoning up to see if it can be renewed - AIP deadlines are fairly arbitrary (in fact so are AIPs, but that's a subject for another day...)

westlondonbuyer

Mr Chips,

Have just noticed you're a neighbour of mine in Hammersmith!

Is the house you've offered on in the same area? If so, could you name and shame the agent? I've got to know all the agents in the area very well through my selling, buying and renting adventures of the past two years so could probably tell you if they're to be trusted or not...

MrChips

Hi - no we are moving to North London. The agents are local to that area and I'd be reluctant to name them yet as it would be pretty easy to work out which property I'm talking about! Being new to this game, I'm not sure what to make of them. On the one hand they are quite personable and (in spite of my prevous moaning) I think they are being relatively straight with me. On the other, they are suggesting "cash transactions" - is this par for the course?

Don't know many of the agents in Hammersmith, although Lawsons & Daughters are arranging the search for replacement tenants for where we live now and they've been quite nice to deal with from our perspective.

We get quite a lot of junk mail from other agents telling us that the big 4 accountancy firms are really keen to move some of their employees into our street (why?!) and that we should call them to find out what sort of rent we could secure. It is often personally addressed to me so I have been quite tempted to ring them up, string them along and then tell them at the end of the call that I am trying to arrange a sublet as I am renting it myself!

MrChips

In response to your previous points...

1) Re stamp duty, we are quite clear that our offer is £500k for the house (and no more), plus we are willing to negotiate over chattels or any other legal ways of side stepping the stamp duty issue (subject to max £7.5k extra)
2) It's not our AIP that expires, rather HSBC's best buy deals which are currently available. £99 arrangement fees, and 1.69% over base rate tracker.

westlondonbuyer

Understand about not wanting to name your agent. Most EAs are personable (they want your money, after all). Hard to tell whether they're honourable, though this agent has strung you along nicely in the background whilst (supposedly) securing two other higher offers, so is certainly playing well on the vendor's behalf.

I find the whole stamp duty scenario baffling, if I'm honest, if not downright fishy. I really doubt you'll find chattels worth anything like the sums of money being discussed - most contents insurance policies assume *total house contents* of £20k, unless you tell them otherwise. I'm also frankly AMAZED that an estate agent has been able to obtain 3 offers over the SDT at an AP of £530k, even in London.

I see what you mean about not wanting to lose out on HSBC's new mortgage deal. I guess it depends on whether losing out on this deal is worth more than the £7,500k (plus...) to you. With interest rates as they are, I would have thought not, but obviously don't know your finances.

MrChips

Either they did get other offers or they are out of my league when it comes to playing hardball! They took the property off the sales part of their website and put it down as under offer. I assume they wouldn't go that far unless they had an offer accepted.

I had a chat with the main agent this morning (I usually deal with one of their junior staff) to talk though how the theoretical £510k offer would be structured. She said it would be £500k + £5k (or whatever the chattels are worth) + the difference I give to the agent in cash to pass on to the vendor!!! And she tried to dress it up as standard practice. When I dug my heals in about this, she suggested I pay the agents fees, but I was prepared for that one and told her that would usually be considered a chargable consideration by HMRC (and sent her some links to prove it). Now she has offered to go to the house herself tomorrow to agree an itemised list of chattels.

Meanwhile we are sticking to our guns saying our offer is £500k + a reasonable allowance for chattels + we will consider any other legitimate suggestions (with the emphasis on legitimate) subject to max total being acceptable to us.

I have also restressed that they won't find buyers in a better position than us (no chain, big deposit, mortgage agreed in principle, incentivised to move asap). After having one chain break on them, they should take us seriously!

Re your final point about £7.5k, we would lose this anyway if we rented for another few months!

westlondonbuyer

MrChips wrote: »

I had a chat with the main agent this morning (I usually deal with one of their junior staff) to talk though how the theoretical £510k offer would be structured. She said it would be £500k + £5k (or whatever the chattels are worth) + the difference I give to the agent in cash to pass on to the vendor!!! And she tried to dress it up as standard practice. When I dug my heals in about this, she suggested I pay the agents fees, but I was prepared for that one and told her that would usually be considered a chargable consideration by HMRC (and sent her some links to prove it). Now she has offered to go to the house herself tomorrow to agree an itemised list of chattels.

Dodgy as hell. Good on you for sticking to your guns.

MrChips wrote: »

Re your final point about £7.5k, we would lose this anyway if we rented for another few months!

This one depends on so many things. Don't fall into the trap of thinking renting is a waste of money, as you're paying for a service. Someone else is taking the investment risk - and it may not pay off. The house I'm currently renting has lost £60k in value since I started renting it earlier this year.

giddypenguin

Is it worth reporting the EA to HMRC? Would have thought that they would be interested to know.