Doubts before contract exchange - help!

Phil000

Dear all,

I apologise in advance for the long message. I find myself in a really tricky situation, and I would love to hear any advice or opinion on the matter.

I'm a first time buyer, lucky enough to have a considerable deposit coming from a family gift. When last summer (2015) I discussed with my family the opportunity to invest this family money, it seemed like a good idea to invest in property in London, as opposed to Italy (where I'm from and my family is based). So I started my house hunting quest, and after excluding the areas where I live and where I would have loved to buy, because to expensive (anywhere between Hackney and Highbury) I found this property in the outskirts of Walthamstaw. So I place an offer (15k lower than asking price) which was accepted straight away. So all of a sudden I was on. It was November 2015.

A disclaimer: I have absolutely zero experience with house-buying. Also, some rather unfortunate events occurred right after my offer was accepted: I had to look for a new job, and my father got really ill, so I had to start commuting to Italy often. This is to say that my mind was quite clouded, and couldn't give the whole process the right amount of focus.

With this in mind, this is what happened: the flat looked like a good catch (in London terms): period house recently converted, 2 bedrooms, a large living room. Compared to the other flats I saw in Walthamstow it was competitive in terms of price (similar properties in these conditions seem to have reached 400k minimum). So I felt good about this. Found a Mortgage Broker, instructed my solicitors. Here I made my first mistakes: when my lender sent me the mortgage survey evaluation I didn't read it properly (I was in Italy in the hospital every day at the time and was reading those things on my phone in between talking to doctors for my father). In the report they said that they considered the price for the property 20k too high, because there isn't an history of similar sales in that particular area of Walthamstaw. Plus the flat is on a main road, has shops near by and there is a massive building site nearby. That would have been a good moment for me to negotiate on price, but I haven't. I made a second mistake: I didn't instruct a survey. I simply completely missed this step in the process. Not being familiar with the process in the UK, I assumed this wasn't needed and solicitors' searches would have covered all bases.

What happened next is that everything went really quiet. Christmas passed, January and February passed. My solicitors was sending me reports of milestones completed, and I thought we were on track. I didn't realise at the time that it was taking them longer then expected to do their job. So about 3 weeks ago (mid-March) everything exploded. The EA called me saying that it was taking us too long and the vendor wanted to put the property back on the market for a higher price. That was really frustrating and we had a lot of back and forward, until I managed to convince them to sell it to me, as we were so close to exchange.

In the meantime I also read about Building Surveys and convinced myself that I needed one, so I invested even more money on this purchase. The survey didn't highlight anything critical, but a few unaddressed issues were found (they estimated repair cost of 3k).

The last 3 weeks have been the most stressful of my life: I had to keep traveling to Italy, and I had the EA calling me on a daily bases changing their statememts (one day I lost the property, the other it was mine if I could exchange within 24h). My solicitors instead became impossible to contact, they let weeks pass without returning my emails and voice messages.

This week, all of a sudden everything moved. My solicitors sent me their reports and contracts to sign. The EA say vendor is happy to sell to me. But now *I am having second thoughts*. Here is the list of doubts I have:

- Going back to Mortgage Evaluation: I'm afraid that I'm buying at the higher price possible in that area. And reading all this reports around London market slowing its rise, I'm afraid I won't make much money on it, and so 20k will be a big different.

- The EA lied to me in several occasions. For example, they told me that the lease was of 120 years, but from the document my solicitors sent me, it's only 99 years. They told me that the flat downstairs was sold, and it isn't. They told me they would go back on the market for higher price and they haven't, they put it back for exactly the same price. All of this is making me feel uneasy about signing that contract.

- The flat is empty. And I know there was a sale that fell through at the end before mine. The fact that they can't sell an empty flat at what should be a competing price in that area, is making me feel suspicious.

- When I asked to address all the small things found in the Building Survey, they said that that would take weeks, and instead they sell to me only if I exchange now, because what's appealing in me is timeliness, otherwise they'll go back on the market. So they are rushing me into this, playing the ghost gazumping card, which is irritating.

On the other hand, a part of me just wants to get this over with. Going back to square zero would mean, spending other months or even years to go back to this stage, would mean that probably the market would still go up a bit, and would mean spending more money in rent.

I'm really not sure what to do, the stress level is through the roof. I should be happy to exchange, instead I'm feeling really nervous and paranoid.

Any opinion or help is much appreciated!
Phil

lewishardwick

If I were on your shoes, I'd pull out. There are plenty more properties out there.

Focus on your family and don't allow some EA whose chasing commission to cloud your mind.

The housing market isn't going anywhere soon.

joeistheone

Firstly, sounds like a horrible situation you have had to go through. Buying a property is stressful at the best of times.


In terms of being worried about paying too much, just have a look on Rightmove or Zoopla what similar properties are on sale for. If you offered £15k below asking price, then that's already a good thing. Mortgage valuations can be a tricky thing when no suitable comparables.


You should review all the documentation you have received from your solicitors with a clear head to check that you are happy with all the legalities covered e.g. the lease, service charge and ground rent. EAs are typically clueless, so any information they provide to you in the process before making an offer should be taken with a pinch of salt anyway.


I think that part of London may be subject to regeneration like most others so the value should hold and will probably rise - especially if it's currently below £400,000. Being on/near the Victoria line is always a good thing as the area should be popular with commuters. If you're happy with the location, flat etc then those may be encouraging reasons to go ahead with the purchase.

marksoton

Walk away.

And when you find another place get a better solicitor.

ThePants999

You use the word "invest". Are you buying this to live in, or to let and then sell?

If this really is an investment, i.e. your primary goal is to make money over a period of a few years, overpaying could be a huge deal, and I'd recommend you pull out so you have the time and space to make a properly considered decision.

If it's somewhere you're going to live for years, I'd get on and exchange. It's a property you're happy with, at a price you can afford. That's all that matters. Don't fret massively about whether you're slightly overpaying for it. And you should address the items found in the survey yourself, after you've bought it. Getting the vendor to address those issues themselves will result in shoddy rush jobs being done, at best.

Grenage

Go with your gut; you clearly don't need any more stress on your plate. Revisit the situation when life has settled.

tidds

Agree with many others. If you're feeling worried and nervous then pull out, you have a lot of life stresses going on and it's not worth adding this to the list.

If you don't NEED this as a place to live, pull out, start again with a much better solicitor (mine responds within a few hours generally, more than a day or two is entirely unacceptable).

sleepymans

The obvious answer would be to pull out......however don't cut your nose off to spite your face.....why not reduce your offer by something like £3k to £10k. This could reduce any concern that you are paying too much and as there are some issues as highlighted by the survey you paid for, seems fair game to me.

As you are buying in London I think you'd probably be hard pressed to actually lose money if you do decide to move in a year or two should your circumstances change.

Phil000

@joeistheone - Many thanks for your reply!

I tried to check Zoopla and Rightmove, and again if I extend my search Walthamstaw as a whole, then the price seems competitive, or at least within the trend. But if I search specifically in the area directly surrounding the flat, there isn't any visible history of purchases in the last year so, so it's really difficult to make comparisons.

You're right when you say that the property is close to Victoria line and there are regeneration plans, those were a big influencing factors in my original choice. Many thanks again!

Phil000

@ThePants999 - thanks!

I'm not buying on a buy-to-let basis, the plan is to move in the flat, as one of the objectives is to stop paying really high rents. The flat though also have a second bed room which I'm planning to rent out.

But of course there is the hope that in a few years time, I'd be able to sell the place for higher price, which is why I use the word 'invest'. Consider also I'm a foreigner, and might want to back to my country in a few years time. So I guess I'm after a compromise between finding a nice to place to live for the short-medium term, and to have some sort of margin when I sell back.

Hoploz

Check whether the lease has the complete 99 years on it, or whether it was originally 99 and has reduced lower now.

Other than that, I'd say go ahead. It's a popular area, and with regeneration is bound to increase. Frankly it's so long ago you agreed the sale price, chances are it would already have increased. I'd put money on you not being out of pocket on this.

But clearly you have had a lot on your plate and still do.

If you want to buy in London, you may as well do it now as you are so far down the line. But if you don't want to then now is your exit chance.

EA lying is no reason to go one way or another, it's a standard hazard.