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

torridonscot

Thanks hazyjo. Yes I'm aware of the restrictions from my research and my mortgage advisor has advised on this as well and I've built all the contingencies into the cost.

The fact is even with the one-off purchase costs, mortgage interest and extra insurance required as an owner I come out roughly even compared to renting if I keep the property for around 5 years (even if I am forced to take out a buy to let mortgage after the first 2 years, if I can get away with a consent to let then it would be less).

And I wouldn't have to live in a box. Which I would have to do if I rented a studio for £700 per month. That's a big plus for me. Can't put a price on your own mental well being I don't think.

My partner and I are quite independent and would not want to be forced into a decision to move together by financial considerations. For the time being, she owns her flat, I'd own mine.

Thanks for all your thoughts.

DRP

jjlandlord wrote: »

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.

^^agree with all this - buying a property is a big game of smoke and mirrors

all the numbers and scenarios the EA are throwing at you are likely to be bull-sht

torridonscot

Saw the flat again, this time I was shown by someone else who said that

1. I'm the most serious offer they have for this place.

2. The flat is actually vacant. Used to be rented by a Polish couple but the wife died so the husband went back to Poland so the tenancy is over. I assumed the stuff lying around (does look like someone is there only every 2-3 months) was the owners. He said that if he can't sell it, the vendor will get gas/electricity certificates done up to rent it out again.

I hear back from the EA again (the woman who showed it to me first) to say the vendor wants 194k and that's that. I mentioned the fact that it's vacant and she said well, tenants are still paying rent, rolling month basis, so the vendor is happy to wait but they live mostly in Poland (?!).

I don't know where the truth lies.

I said 193k is my final offer based on the fact that it's 3k more than any other offer the vendor has had on it and they haven't had any recent offers either. The thing is I wouldn't even have thought of offering 192k until the EA said that's what the vendor would accept!


Now, the flat is worth 194k based on what's around the area. It's in great condition and well looked after as is the rest of the property. And I love it.

I would offer 194k but that means conceding twice and showing I really want it. What's to stop the vendor from then saying, oh I want 195k now (the flat is actually on the market for that)....

I'm also going on holiday on Sunday so I'm out of the action for a week! I'm thinking of telling the EA that my offer stands until I get back at which point I'm going to make an offer on one of the other properties I have listed.

Any ideas/suggestions?

martinsurrey

torridonscot wrote: »

I hear back from the EA again (the woman who showed it to me first) to say the vendor wants 194k and that's that. I mentioned the fact that it's vacant and she said well, tenants are still paying rent, rolling month basis, so the vendor is happy to wait but they live mostly in Poland (?!).

I don't know where the truth lies.


Any ideas/suggestions?

If rent is being paid, they are tenants, walk away.

torridonscot

My solicitor has said that if I go ahead we'd put a clause in the contract for vacant possession on completion, it would be the vendor's job to end the tenancy and vacate the place. If the tenants are difficult, then it would take about 2 months for vendor to evict them so at worst I'd face a delay being able to move in which is not a huge problem as I've got somewhere to stay.

Any thoughts on this?

jjlandlord

It's best to delay exchange until after tenant has left and the tenancy has cleanly ended, imo.

torridonscot

How would we make sure of that? Is this a clause to be added in the contract or in the offer or...? I'm confused as to the order in which you do things and when you add conditions.

If it's a rolling tenancy, how would I get proof that the tenancy has REALLY ended before exchanging contracts?

I'm sorry if I'm asking dumb questions, this is all very new to me.

Fire_Fox

Place any offer in writing not verbally, include a long list of questions and conditions and ask for a written response. Ask formally about the length of the lease, amount of service charges ground rent and buildings insurance, what the service charge covered, what major works are planned. The estate agent will tell you that your conveyancer will cover this, that is correct but you want confirmation before you shell out of legal fees and surveys. Understand the rights and responsibilities of being a leaseholder here http://www.lease-advice.org/

Is the tenancy really over? Have the tenants or the landlord served notice to quit? If not the tenancy is still active and you may not even have permission to view the property or access it for valuation/ survey. If the tenants are still paying rent that is a strong indication the tenancy is not over. You should write in your offer that it is subject to confirmation that the leaseholder has vacant possession BEFORE exchange not by completion. Your conveyancer will know how to ensure this.

The situation is more serious than having somewhere to live. If the tenant is still in situ at completion your lender may not release the funds because they are invariably conditional on vacant possession. So you may end up exchanged but unable to complete, with you and the vendor in breach of contract - messy.

AFAIK all long leases have covenants about subletting. DO NOT take the neighbour or the leaseholder's word for it - nine times out of ten they are talking out of their backside. Generally you need the written permission of the freeholder, sometimes this is easy sometimes not. Even share of freehold properties often have covenants about subletting in the long lease, if so you need the consent of your fellow leaseholders OR the management company/ board.

You have massively put your foot in it by indicating what you are willing and able to pay. The estate agent works for the vendor, they will lie to get the most for the property and they know you are naive. Look at sold prices - not for sale prices - for similar properties in the block and local area and base your offer on that, NOT on what you think is acceptable to the vendor. In this market a first time buyer with finance in place should get a lot more than a couple of thousand off the asking price of a £190K flat perhaps 5-10%.

Angie_B

torridonscot wrote: »

My solicitor has said that if I go ahead we'd put a clause in the contract for vacant possession on completion, it would be the vendor's job to end the tenancy and vacate the place. If the tenants are difficult, then it would take about 2 months for vendor to evict them so at worst I'd face a delay being able to move in which is not a huge problem as I've got somewhere to stay.

Any thoughts on this?

Just a quick point (as I don't want to scare you). I am a FTB as well, although in SW London so other side of the river to you.

I put in an offer on a 'chain free' flat in late January and since then the vendor has had nothing but trouble getting the tenants out. Notice was served and 6 months later it is still with the courts trying to get a judge to sign the order (and the tenants haven't even put in a defence!). The London county courts are all horrendously backed up, partly due to the recession and landlords selling up and partly due to LL who tried to evict tenants in order to try their luck with 'Olympic Rents'. So, just to warn you it may be significantly more than 2 months.

Definitely ensure that your offer is conditional on full vacant possession and do not exchange contacts until you have this. I believe most mortgage lenders will insist on this anyway.

Also, once the vendor / EA has confirmed vacant possession, make sure you go round to the property personally to check before confirming to your solicitor that exchange can go ahead.

Good luck with your purchase!

torridonscot

thanks for your thoughts. I definitely made my offer conditional e.g. flat must be vacant before contracts can exchange. I've discussed with my solicitor about the possibility of adding a clause in the contract stating that if it takes more than what's considered to be a reasonable time to vacate the flat there will be penalty clauses for the vendor. We'll see what happens.

Can someone tell me just how do you confirm that the flat is vacant? Just go round and confirm it's empty? (it's more or less empty now as the tenants live mostly in Poland).

So you are still unable to move into the property? What about pulling out to seek another property? At this rate it could be months more before you can move in!