Offer Refused :(

billybear1

For those that may not be aware as to our situation here it is in a nutshell.

We had seen a house that we loved but our mortgage wasn't competitive enough for us to go for it. Today we got something at 75% LTV which suited us down to the ground and we could proceed with, we wouldn't be able to exchange however until 21st May, which would have been a little while but everything could go through for then.

The house is on for 129,950 and is currently tenanted. The tenants have a two month rolling contract and so could be handed notice at the end March for us to exchange in May. AIP is valid for 60 days and the full mortgage would last 6 months so we would be fine.

We went in with a cheeky 120,000 expecting to be knocked back and to start negotiations from then. Our maximum is 125,000 as it is what we went for in AIP and because we wanted to stay under SD.

We are FTB's living with my fiancees parents.

The vendor came back and said we aren't budging from 129,950 as you want to complete in the summer. At that I said well we can't do that so withdraw the offer. The EA asked if we wanted to up our offer and I said no as they weren't budging. They also said they would rather leave it tenanted as they have good tenants in!

I don't know what to do know as it seems the negotiations have become nothing and they won't budge from asking price. Have we blown it now?

Yorkie1

If you can't afford the full price and the seller has said they won't reduce the price at all then you have no choice but to walk away.

Frankly the sellers sound a bit of a nightmare. The standard advice is to wait until you've got vacant possession before trying to sell. Neither you nor the LL have any idea whether the Ts will leave after 2 months' notice has been given, and there is no way on earth that your solicitor should let you exchange until the property is empty and you've inspected it to make sure it's still in one piece. Furthermore, it may be difficult for a surveyor to do a proper job if the Ts are in situ.

I also suspect that even if a survey came back with problems they wouldn't negotiate.

They're not committed to selling; I'd walk away.

newfoundglory

I've got to agree. Last thing you want is a nightmare seller. As its a buyers market, if the seller isn't keen to sell then i'd walk away too (might be hard if you really love the property - but it is just a property)

I suspect as its tenanted, and seller won't budge on price, that this property won't be going anywhere fast.

Keep looking, and it might still be on the market in 6 months time if you change your mind.

billybear1

Thanks, I guess I just assumed that they would be out given the time.

I said to my fiancee they didn't seem motivated if they are not willing to budge, or even negotiate. I cannot believe that in this climate that someone is not even willing to negotiate, I guess that I just needed reassurance that walking from this is the right thing. It is already off on the wrong foot!

missile

You had a lucky escape. I would never consider a property with a sitting tenant. Look elsewhere.

billybear1

Thank you all for your useful input on this. I think it is right, we needed someone to point all this out to us. The house is nice, very nice but has two huge problems. A vendor who is being cocky as my sister puts it, not needing to sell as it is just on the market and has high expectations and tenants in situ that are going to cause us an issue.

I know house buying needs to be as emotionless as possible, but it is such an emotive process. If it wasn't we would all have the same 1, 2 or 3 bed places.

SG27

I don't think your offer was cheeky in the slightest! Sounds like the vendor just isn't keen on selling.

irishcol

When you do find a place that gets an offer accepted, if it's on the market with a different agent, I would be tempted tto go back and make another offer to the first place for full asking price. Do it on a Friday afternoon, don't return any of the EA's calls, then just phone back on the Monday and say you've had a rethink over the weekend and decided not to proceed.

Make the smug vendor think he/she has got a sale, then dash their hopes!

hazyjo

I'd hardly call May 'summer'. It'll probably take around 3 months anyway, so hardly asking for favours. I'd have kept quiet about the May date anyway. It ain't gonna happen much quicker, and you can just push for say 4 weeks between exchange and completion. Could easily have got away with that one. Why that date anyway?

£120k was definitely not a cheeky offer. Less than 10% under. If they think for one sec they'll get more than £125k, they are totally deluded. I wouldn't want to deal with them. Or maybe it's just the agent saying he'll get the £125k figure for them and to sit tight and watch you cave in. It's easy to jump and say £125k and forget how much money even a thousand pounds is - If/when they do come back with £125k, I'd be very tempted to say £123k, or £123,500 or something. A grand or two is still a lot of money. I think they're mad to reject anything between £120-125k! Especially given that it's tenanted. They're crazy... that's YOUR compromise if you go for it. It could take them months and months to get them out, and you're taking a massive gamble on spending money on something with tenants in.

Good luck. Personally, I wouldn't really want to be dealing with them...

Jx

pinkteapot

With the SD threshold at £125k, they are crazy to think they'll get £129,950. At the peak of the market in 2006-07 a few idiots were paying £5-10k over a stamp duty threshold, but no-one is currently.

Properties will sell for £125k until they're worth about £135k plus. At the next threshold, they'll sell for £250k until they reach about £265k. All thanks to the stupid SD banding system. If it was a progressive tax it wouldn't cause these price breaks in the market.

BigAunty

Not a cheeky offer, particularly as the property is on the cusp of stamp duty.

This vendor may get a reality check, either when he receives occasional aggressive offers far under the asking price or when his tenants get sick of viewings and don't cooperate.

Many buyers are deterred from progressing with offers when they find a tenant in place because unless the tenants leave of their own volition after notice is served, it can take months to go through the court to regain possession. Also, I assume the vendor won't want to serve notice to the tenants until the buying process is fairly mature in case their buyers pull out and this will extend the completion date which is also unacceptable to many.

Having tenants in place has pretty much dulled their appetite to sell, they sound like they aren't particularly serious, just really quite casual about it. If their tenants get sick of the intrusion and serve notice on the landlord, you can bet the seller will start being a bit smarter about the market.