PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

Making an offer conditional on exchange/completion dates - Can I do it? Does it work?

Hi, I wonder if anyone can advise me, please...?

I made an offer on a house of £125k - approx. 5% below asking price - which was refused. At first the vendor said she insisted on the asking price. After a few days, she dropped £2K. I haven't (yet?) raised my offer because (a) probably the house is worth what I offered, (b) the stamp duty threshold is a bit of a psychological barrier for me, and (c) she has been on holiday, so I could take my time... However, she's back on Monday so it's decision time, but I'm still not sure what to do.

I like the house, and prefer it to everything else I have looked at (100+ online and about 10 visited). I am probably prepared to offer a bit more if I can complete reasonably quickly and be in by early summer. I reckon it's probably worth an extra couple of grand to avoid the stress and uncertainty.

Other maybe-relevant details... I'm an 'attractive' buyer with nothing to sell and mortgage offers in place; but on the other hand the vendor hasn't found anywhere she want to buy and is in no hurry. She said she would be prepared to move out into rented accommodation if I made the 'right' offer.

So - can I make an offer conditional on completion dates? Could I say something like "OK, I'll offer £127.5k if we complete by 28th May?" What sort of time-scale is reasonable? What sort of price do you reckon (and yes, I know it's all speculation) would make it worthwhile for the vendor?

If I can in principle, do these sorts of offers work in practice? What are the risks?

I realise there are a lot of unknowns, but someone might enjoy speculating! :)

Thanks in advance!
«13

Comments

  • Better_Days
    Better_Days Posts: 2,742 Forumite
    I've been Money Tipped!
    1) Is the property really worth the extra plus the SDLT?
    2) Personally I think it is unrealistic to make an offer conditional on an exchange/completion date. You just never know what the searches, survey etc will throw up. Plus if there is a chain there are so many variables.
    3) What would the consequence be if the vendor failed to meet the date?
    4) What is the value to you in exchanging/completing by the set date?
    5) People say they will move into rented but don't always do it - they do their sums, realise they will likely have to rent for a minimum of 6 months and it is not worth the extra that they get for their property

    Just a few thoughts
    It is a good idea to be alone in a garden at dawn or dark so that all its shy presences may haunt you and possess you in a reverie of suspended thought.
    James Douglas
  • florence4
    florence4 Posts: 129 Forumite
    Thank you for your reply Better Days. To answer your questions...
    1) Is the property really worth the extra plus the SDLT? >> It's hard to say. Probably not in 'market' terms, but I haven't seen anything else that meets my needs, so perhaps it is to me.
    2) Personally I think it is unrealistic to make an offer conditional on an exchange/completion date. You just never know what the searches, survey etc will throw up. Plus if there is a chain there are so many variables. >> No chain either end. But I hadn't thought about what the searches/survey might throw up... Which might mean I wanted to delay to sort things out... Thanks for that thought :)
    3) What would the consequence be if the vendor failed to meet the date? >> Only inconvenience. I'd like to move during a school holiday, so would prefer May half term... Then it feels a long time 'til July! I'd like to be in at the start of summer, but that's preference not necessity.
    4) What is the value to you in exchanging/completing by the set date? >> See above.
    5) People say they will move into rented but don't always do it - they do their sums, realise they will likely have to rent for a minimum of 6 months and it is not worth the extra that they get for their property >> Yes, I reckon you're right about that. Unfortunately.

    Just a few thoughts
  • Yorkie1
    Yorkie1 Posts: 11,909 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 6 April 2013 at 5:37PM
    I agree with Better Days' comments.

    I think you are setting yourself for a great deal of aggro by making a conditional offer.

    Neither you nor the sellers have that amount of control over a completion date at this point in the process. It's only after the searches have been done, and your seller has found somewhere to move to and done all the necessary paperwork there, that you can have any idea of when completion might be likely. That's not to say you can't have a target date in mind but you never make plans dependent on it.

    When people ask on here about likely timescales from offer to completion, the answer is 'how long is a piece of string'. Some people have done it in just a few weeks, many people do it in about 12 weeks, some people report even longer.

    If you have offered about 95% of asking price, then I imagine it is on the market at about £132K. As soon as you go over the £125K then you pay stamp duty at 1%, as you've mentioned. A seller who has declined a £125K offer in the hope of you paying more, plus stamp duty, is a bit unreasonable in my view.

    I would stick to my guns and not increase. If you raise your offer by £2.5K, you are also going to be paying out £1275 - over half the additional money being offered.

    Edit: Just seen your additional post. You say that the property probably isn't worth the extra plus stamp duty. If it's valued lower than your offer, you will have problems with the amount your lender will lend you if you are near a LTV band, so you would need to find extra cash to make up that difference.
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    So what will you do when your conditional Exchange date comes... and goes?

    *withdraw? And lose the survey/legal etc costs you've incurred?
    * what if Exchange looks to be a week late? You still withdraw? Or demand a lower price? And get told to take a hike?
    * what if it is you who delays? eg your solicitor finds something that needs investigating?

    As said above. there are jusyt too many variables. Most people want to Exchange asap. All you can do is work in good faith on that basis.
  • phoebe1989seb
    phoebe1989seb Posts: 4,452 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    I agree with what Yorkie says in that you can have a *target* or ideal date in mind from the outset, but as other posters have said there are too many variables that will determine the eventual outcome.

    Last time we moved (2011) our buyers explained from the time of making their offer that someone further down the chain was putting pressure on them to complete by a certain date as they had holidays booked. Our buyers told us they really wanted to accommodate this if possible and we agreed to do our best, but as it was only about 8 weeks away and we were looking to move to a completely different part of the country, plus we had an uber-specific criteria list, we thought it highly unlikely.

    In the end we were surprised to actually achieve the desired week originally suggested for completion, so it can work out - but I'd say we were one of the lucky ones as often these things take far longer than expected ;)
    Mortgage-free for fourteen years!

    Over £40,000 mis-sold PPI reclaimed
  • moneyistooshorttomention
    moneyistooshorttomention Posts: 17,940 Forumite
    edited 6 April 2013 at 6:23PM
    I would have thought you could only specify a completion date IF she really is going into rented accommodation.

    If she intends to move straight on to her next home (as do most of us) then it will probably not be possible for her to agree to this even if she herself wants to. Reasons being:

    - no control over how fast (or slow) her or your solicitor will get to exchange of contracts time and if its your solicitor being slow then she will come straight back at you and (perfectly correctly) tell you its your fault that that date cant be met and therefore you will still pay her the agreed price for her house.

    - unable to book her chosen removal firm until she has safely got to "exchange of contracts" time (because of the tendency of this date to shift on and on in some transactions) and her firm may be fully booked at the time she wants to use them and she has to wait for them to have an available slot for her

    - her own vendor may not agree to her buyers (ie your) suggested completion date (and may even be "getting the wink" from her that she herself isn't bothered about the date you want and is more concerned with keeping her own vendors happy).
  • moneyistooshorttomention
    moneyistooshorttomention Posts: 17,940 Forumite
    edited 6 April 2013 at 6:11PM
    1) Is the property really worth the extra plus the SDLT?
    2) Personally I think it is unrealistic to make an offer conditional on an exchange/completion date. You just never know what the searches, survey etc will throw up. Plus if there is a chain there are so many variables.
    3) What would the consequence be if the vendor failed to meet the date?
    4) What is the value to you in exchanging/completing by the set date?
    5) People say they will move into rented but don't always do it - they do their sums, realise they will likely have to rent for a minimum of 6 months and it is not worth the extra that they get for their property

    Just a few thoughts

    Agreed.:T

    Also - its been many years since I lived in rented accommodation, but one of the (many) reasons why I would never do so myself is that I understand that landlords these days expect to do credit checks (at the tenants expense) on them before they will agree to rent the place to them. Isnt there also a letting agency fee to find as well these days?

    I would just have the feeling I would definitely land up with 6 months rent thrown down the drain if I were to do this (cheapest rented 1 bed flat in my locality = £3,300 for 6 months) and wouldn't mind betting I'd land up with hundreds of £s more vanished on top of the rent. My - very rough indeed- guesstimate would be £4,000 of MY money down the drain to suit someone else's wish for me get out of my home at a time that suited them.:(

    Mustn't forget two lots of removal fees (well taking all my stuff with me to the rented place would mean I needed to rent a 3 bedroom house instead of a flat then....) or paying fees to store my possessions during the rental period.

    All round - I'd be surprised if I ended up with much change from £6,000 to suit someone elses wishes....so I can well understand why I've read frequent accounts of vendors deciding they won't be renting somewhere temporarily after all.
  • florence4
    florence4 Posts: 129 Forumite
    Thanks all. I can see all your points. It's just so frustrating I can't make things happen fast! :D

    I suppose because the vendor hasn't found anywhere to buy yet, I'm afraid of raising my offer, then still finding that she drags her feet... :(
  • florence4
    florence4 Posts: 129 Forumite
    G_M wrote: »
    Most people want to Exchange asap. All you can do is work in good faith on that basis.

    That's useful to remember. I think I'm anxious that this vendor might not. But perhaps that's unfair.
  • florence4 wrote: »
    Thanks all. I can see all your points. It's just so frustrating I can't make things happen fast! :D

    . :(

    Join the clan:( - and if you find a way to "make things happen fast" I'd pay good money for it personally....:rotfl:

    I've already offered my EA a bribe (jokingly) if they can find a way to make someone hand in a suitable offer on my place fast and they burst out laughing...

    But..sometimes we are on the receiving end of external factors outside our control. Darn it! In my case, as a vendor of a house for sale, I think the main external factor right now is an underpriced house gone up for sale right near mine (they deliberately underpriced by £10,000 because they had already found the one they want) and the buyers are fighting it out to try and get that one. It will be off the market very soon now sold (I have my ways of finding out these things...:rotfl:) and then there will be just two of us in very close vicinity waiting for our buyer and the other house is an overpriced one.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 349.8K Banking & Borrowing
  • 252.6K Reduce Debt & Boost Income
  • 453K Spending & Discounts
  • 242.7K Work, Benefits & Business
  • 619.5K Mortgages, Homes & Bills
  • 176.4K Life & Family
  • 255.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.