2nd viewing tomorrow without seller there! Property seems too good to be true?

torridonscot

Hi all,

I'm a first time buyer so this is all very scary yet exciting at the same time. Was shown a flat on Friday which is perfect (North London). I'm having a second (very detailed) viewing tomorrow but unless I spot something glaringly obvious I'll make an offer subject to satisfactory survey.

However, a few things concern me.

1. Flat is rented out. Vendor is out of the country and so are the tenants so I'm having to deal with the estate agent only whom I don't trust as far as I can throw them! The property is on the market for £195k and they said at first viewing that the vendor will accept £192k only to backtrack and say right away £193k.

2. The flat has been on the market since March. It's a lovely flat in excellent condition, bathroom recently done up, etc for being rented out (I reckon tenants have lived there for 2 years). I've asked how come it hasn't sold and the agent said there were plenty of offers at £190k but seller wouldn't accept anything below £192k (2 agents marketing this property).

She daid he's not in a rush as the tenants pay the mortgage (rolling month tenancy). To me it seems odd that no one has offered at least £192k on a property in this condition and (only) slightly below the avg price in the area. If it's what the market is like at the moment, fine but I want to rule out other dodgy reasons like something wrong with the property or the seller.

I've given indication that subject a detailed second viewing, satisfactory survey and contract I'd be able to make a formal offer of £192k that the EA said the vendor would accept. Got a call back saying the vendor has changed their mind and wants £194k. I said £193k is doable but not more (my feeling is the EA went to the vendor and advised to ask for more sensing I would pay £193k). To be honest the flat is worth £194k as well.

My concern is why hasn't it sold yet? Since he's not in a rush the vendor may well drag their heels after accepting my offer and hope for a higher offer. How can I protect myself from being gazumped?

I also spoke to the next door neighbour (same building) and the EA's story seems to check out. He said he can't think of a reason why the flat wouldn't have sold as the vendor has spent a couple of years doing it up.

Any tips in advance for tomorrow's viewing and the offer would be greatly appreciated!

martinsurrey

so you’re a FTB buying a flat to live in?

Are you going to evict the tenants or is he?

Will the property be empty before you exchange? If not, you could find the tenant does not want to leave and will make you go to court to get a possession order and instruct bailiffs to kick them out. Or you will find that the deposit was not correctly protected, so you cant kick them out for months.

Does your mortgage lender know that the property is currently rented? And you may be completing with tenants in situ?

Buying a flat with tenants in ti as an owner occupier can be a real pain and fraught with legal trouble, a possible reason it hasn’t sold yet.

I would think long and hard about getting involved.

If the LL is using the rental to pay his mortgage, he wont want to kick them out before completion, but if you go past exchange with them there, there is no guarantee that you will have an empty flat on completion.

Ellie83

Buying a flat with tenants in ti as an owner occupier can be a real pain and fraught with legal trouble, a possible reason it hasn’t sold yet.

When we were house hunting, we refused to even consider places that were currently rented out as we didn't like the potential risk associated with it.

Now it could be that the tenants would be no problem and would leave on time BUT what if they don't?

SleeplessinScandinavia

Like the previous poster, I would also seriously think about this one - in fact I would probably 'walk away',as the vendor seems to have kept changing her mind over the figure she will accept.

Your conveyancing solicitor would draw up a contract, stipulating 'vacant possession' on completion (but as others have suggested, it might not be the best way to start your ownership with having to possibly use the courts to gain that ownership).

Another thing that would concern me is if the flat is leasehold, is the LL also the 'freeholder'? In my experience, if the freeholder is someone else, and your solicitor tells you the lease is defective, (and why), some vendors don't see it as their problem to approach the freeholder and remedy matters.

m0bov

How long is the lease?

PasturesNew

Could be all sorts of things, some of which are covered above. You can also add:
1] Is it part of a local authority site? Or local authority estate (where freehold responsibilities might be spread over the site, not just the building)
2] What's the lease length?
3] Are there any major works in the pipeline?
4] How many storeys is it? Which floor is it on? Is there a lift?

jjlandlord

Negotiation 101:
If at the first viewing the agent tells you that "it's at 195k but the seller would accept 192k" it means that the asking price (hence best scenario) is actually 192k.
So unless you know people are queuing to buy the place, your offer will be less than 192k.

I'm sure you realize that negotiating a 1k discount on 195k is exactly the same as asking for 10p off £19.5.

Finally, any offer you make should be conditional to vacant possession, and you must not even exchange contracts before tenants have left.

Lizling

Have you checked on Property Bee? If it's got a long history of being listed as sold then going back on Rightmove, it would suggest that something's going wrong at the surveys or mortgage phase, rather than just offers not being accepted.

Oh, and you say you don't trust the estate agent, but you seem to believe him when he says the minimum the vendor will accept is £192,000. Remember, he wants you to pay as much as possible, not to give you friendly advice!

torridonscot

Thank you all for your replies. I had no idea there are so many issues to do with buying property currently occupied by tenants. I feel quite ignorant at the moment!

To answer your questions

- yes I'm buying it to live in and yes I'd expect the property to be vacated.

- lease is 96 years

- not part of local authority site.

- first floor flat, - no other stories, only 4 flats in the building (period property).


- I want to be able to let the flat out in the future when I move in with my partner. Ideally I was looking for share of freehold but since this leasehold seems to have no restriction on letting I've considered it. I have said I would not make an offer until I see the leasehold agreement. Also had an informal chat with the next door neighbour (same building, also leasehold, he said his lease has no restrictions on letting it out).


I've just emailed the solicitor I'm going to instruct and see what he says. In the meantime, keep them suggestions coming.

How would I have proof that the property is vacated?

Thanks!

torridonscot

Checked property bee. All there is in the history is a price drop in May from 200k to 195k and a slight description change (couple of words).

I've looked the property up on 192.com and there's a married couple registered there now, and a married couple last year. Didn't look beyond the last 2 years.

hazyjo

Your mortgage provider might not permit you to let the flat out. Chances are, they'll either say no; charge you a flat fee; or insist you switch to a buy-to-let mortgage (more expensive). As a FTB, it might well be the first option!

If you're thinking of moving in with your partner, would it not be wiser to hang onto your money, then buy something bigger (if you both wish) with him later down the line?

Jx