What to do next - call agents bluff?

purplegirl*13

Hi all,

To give you a bit of background, I am a FTB in London and have been looking since March.

A new property came on the market last Thursday, viewing arranged for Friday. 2 bed flat for £250k (more expensive than flats normally go for, but orginal features and very, very close to the tube). Also first flat to come on in 4 months.

Lease at 75 years but advised that the seller has made contact with freeholders to extend, and if they were to get close to the asking price they would cover the costs. Went for second viewing and put in an offer for asking price (conditional on lease being extended) as location to tube was a big plus for me.

Agent called this morning to say that seller was chasing freeholder to confirm cost of extension as that may affect price they would accept.

Later called to say that another offer has been made for full asking price but not conditional on lease being extended. This offer has not been accepted as they have come back to see if i want to match it. If I match it, then my offer will not automatically be accepted but the vendor will look compare finances of both buyers.

I don't understand why they didn't accept the other offer? I have previously been advised that mortgage lenders are funny about leases under 80yrs so depending on her circumstance, the other buyer may have probs (not sure she's aware that 75yrs is low). And if she's in a good financial position, they'll choose her over me anyway.

I genuinely can't afford anymore and also think I might be being played by the agent. Is there even another buyer??

Because I can't go pay the asking price and afford to extend the lease, I will have to let this one go. I think I'm going to respond saying my original offer still stands (conditional on offer being extended) or I'm happy to negotiate price and extend lease myself. Any thoughts on this?

I'm reluctant to pay the full asking price and have to pay to extend the lease at a later date (don't want to risk that this may not be extended or how much this may cost later) and I cant afford to extend lease now.

Do you think I'm doing the right thing?

Do you think there's another buyer?

Thanks for reading. Any thoughts would be much appreciated x

Fire_Fox

Made contact with the freeholder or has formally agreed a price? Not the same thing AT ALL, this could drag on for months if they have not jumped through the necessary hoops. It's normal for buyers to pay the price as if the lease had been extended and the seller to pay for the extension, anything else most lenders will not touch. Remember that a new leaseholder doesn't have the right to extend the lease for two years.

Is the other buyer in the same proceedable position as you? Since you have been looking a long time you will know the value from sold prices, is it more than the asking price? IMO let this one stew you may well find the other sale (if it exists) falls through. http://www.lease-advice.org/publications/
http://www.lease-advice.org/ (scroll down for extension calculator, it's eye watering)

anselld

Tell the agent you are not interested in a bidding war and your offer is withdrawn. If they come crawling back you have the advantage. If they don't then you were going to lose anyway.

MrsCrafty

Stay well away. I am an ex agent and this stinks of desperation.

Kynthia

There probably is another buyer but whether there is or isn't is not important. You only offer what you are willing to pay and what you are capable of paying whether or not there are other offers. You really don't want a flat with a 75 year lease. This forum is littered with posts from people who bought flats with leases under 85 years and did not realise the implications at the time. They now can't afford the extortionate cost to extend but they can't sell if they don't.

purplegirl*13

Fire_Fox wrote: »

Made contact with the freeholder or has formally agreed a price? Not the same thing AT ALL, this could drag on for months if they have not jumped through the necessary hoops.

Is the other buyer in the same proceedable position as you? Since you have been looking a long time you will know the value from sold prices, is it more than the asking price? IMO let this one stew you may well find the other sale (if it exists) falls through. http://www.lease-advice.org/publications/
http://www.lease-advice.org/ (scroll down for extension calculator, it's eye watering)

No price agreed.

Other buyer is meant to be a FTB

Value of flat is not worth more than asking price, asking price is top end and unheard of for 2 bed flat around here. I was wiling to pay for location and the fact that lease was being extended. Definitely not worth asking price without the extension, which i suppose gives me my answer.

purplegirl*13

Kynthia wrote: »

There probably is another buyer but whether there is or isn't is not important. You only offer what you are willing to pay and what you are capable of paying whether or not there are other offers. You really don't want a flat with a 75 year lease. This forum is littered with posts from people who bought flats with leases under 85 years and did not realise the implications at the time. They now can't afford the extortionate cost to extend but they can't sell if they don't.

Thanks. Has just taken a bit of thinking to realise I can only pay/offer what I can afford and £250k was top of my budget. It's hard to not get caught up in the idea of buying especially as it's taken 4 months for this flat to come on the market.

I just seem to be very unluckly. Offered asking price for another flat in April and went to other prospective buyer because the sellers knew the buyers landlord! You'd think offering asking price would make things easier...

Fire_Fox

purplegirl*13 wrote: »

No price agreed.

Other buyer is meant to be a FTB

Value of flat is not worth more than asking price, asking price is top end and unheard of for 2 bed flat around here. I was wiling to pay for location and the fact that lease was being extended. Definitely not worth asking price without the extension, which i suppose gives me my answer.

FTB? Great! :beer: They likely won't have a clue about how much lease extension costs, how long it takes and possibly even be aware it needs doing to get a mortgage. Every chance this will fall though, how many FTBs have a spare £10K to £15K?

IMO write a letter specifying your strong position, reiterating your offer of asking price with the lease extended, say that your offer remains on the table for the forseeable future, to contact you if the vendor's circumstances change. Maybe enclose your MIP.

purplegirl*13

Fire_Fox wrote: »

FTB? Great! :beer: They likely won't have a clue about how much lease extension costs, how long it takes and possibly even be aware it needs doing to get a mortgage. Every chance this will fall though, how many FTBs have a spare £10K to £15K?

IMO write a letter specifying your strong position, reiterating your offer of asking price with the lease extended, say that your offer remains on the table for the forseeable future, to contact you if the vendor's circumstances change. Maybe enclose your MIP.

Yes, they definitely don't have a clue. EA mentioned that the other FTB was willing to offer asking price now without lease extension as 'she was going to deal with it later, once she moved in'.

EA also commented he was surprised when I was was talking about notice to extend etc..

I think the vendors will struggle with most prospective buyers unless they extend lease or reduce price to take into account lease extension.

The_Real_Mrs_Smith

Definetly put in writing your position and ask that the agents pass a copy onto the vendor. It is likely that the other offer will fall through and it may take many months to get the lease extended so you should continue your search in the mean time, and dont be disheartened you will find the right place, Good Luck!

Leew1231

250k isn't a great price either, is that the stamp duty threshold still? That means it would automatically add 2.5% or whatever it is.