What to offer post-referendum?

TeaCakes_2

They are under no legal or moral obligation to pay the original asking price. Brexit is a seismic economic even with as yet unknown consequences.

smile88egc

Just had lunch with a friend who works in architecture firm, 3 clients have already cancelled big commercial building jobs citing brexit as the reason.

It's clear that the vote to leave the EU is already putting people off investing in the UK. Surely residential property is sure to follow the downward spiral.

If banks don't tighten up their lending and pull those 5% deposit mortgages, there's going to be a lot of people in negative equity again!

Grenage

Whoever takes charge is going to commit political suicide regardless of whether or not they push the button. I rather wish our referendum was regarded as more of an opinion poll, than a mandate from the people.

Either way, uncertainty! I'd be hesitant to buy a home with a plan of staying there less than 5-8 years+. I'd be tempted to rent for a few years, wait until the market bottoms out, put all of my house deposit in a FTSE tracker, and buy when the market had recovered.

I'm doing neither of these thing, but exchanging this week and completing next month. You're going to have to trust your gut on this one.

kilby_007

ElsieMonkey wrote: »

My point isn't ABSURD (how rude). My point was (looks like I'm going to have to repeat it) I understand, and believe, people are within their rights to question, to be cautious, BUT do it in their own time. Don't leave the vendor hanging, or mess the vendor about by suddenly offering lower than the agreed purchase price (and seriously, how much do people think they're going to knock off, and for what reason? For the reason that something MAY happen?). There is absolutely no reason for a vendor at the moment to accept lower than they did leading up to the referendum. It's all pure speculation, and nothing is certain, just as nothing is EVER certain, pre or post referendum.

I think it's a disgrace the way many people behave during a property sale/purchase. It may be a lot of money and a decision that may impact your life, but there is also someone else in the same position on the receiving end. If people feel they have to change their minds, based on little more than a prediction, do the decent thing and hurry up and do it and just pull out all together and leave the serious buyers to get on with it.

I agree with your point about not delaying, it's not fair to make the vendor put their life on hold, but your comment about "don't mess the vendor about by suddenly offering lower than the agreed purchase price" is nonsense. Markets and sentiment change, and it's perfectly acceptable to reassess right up to the exchange date. It might seem upsetting for the vendor but it's tough luck - it's legal and if market value changes it's the sensible option for a buyer to reduce their offer to suit (depending on their position).

Again, the fact that we have or haven't withdrawn from the EU yet is immaterial. It's all about sentiment and uncertainty at the moment. Like you said - nobody knows what will happen. You can say you think there won't be a crash, others can disagree with you and nobody is wrong or right until the event happens (or doesn't happen). The fact of the matter is there are widespread reports that buyers are withdrawing, so uncertainty IS a big factor whether you think it should be or not. Buyers withdrawing WILL be a contributing factor to what happens with prices. There might well be other factors that swing it back the other way (value of the pound VS foreign investment, reduction or increase in demand/supply, etc).

I don't see your point about withdrawing without reducing your offer. There's no room for being "insulted", you either accept an offer or reject it. If the buyer reduces their offer at a later date, you do the same and you either come to an agreement or you don't... surely it's better that a buyer tries to renegotiate when something happens rather than leaving the vendor on the hunt for a new buyer?

ElsieMonkey

kilby_007 wrote: »

I agree with your point about not delaying, it's not fair to make the vendor put their life on hold, but your comment about "don't mess the vendor about by suddenly offering lower than the agreed purchase price" is nonsense. Markets and sentiment change, and it's perfectly acceptable to reassess right up to the exchange date. It might seem upsetting for the vendor but it's tough luck - it's legal and if market value changes it's the sensible option for a buyer to reduce their offer to suit (depending on their position).

Again, the fact that we have or haven't withdrawn from the EU yet is immaterial. It's all about sentiment and uncertainty at the moment. Like you said - nobody knows what will happen. You can say you think there won't be a crash, others can disagree with you and nobody is wrong or right until the event happens (or doesn't happen). The fact of the matter is there are widespread reports that buyers are withdrawing, so uncertainty IS a big factor whether you think it should be or not. Buyers withdrawing WILL be a contributing factor to what happens with prices. There might well be other factors that swing it back the other way (value of the pound VS foreign investment, reduction or increase in demand/supply, etc).

I don't see your point about withdrawing without reducing your offer. There's no room for being "insulted", you either accept an offer or reject it. If the buyer reduces their offer at a later date, you do the same and you either come to an agreement or you don't... surely it's better that a buyer tries to renegotiate when something happens rather than leaving the vendor on the hunt for a new buyer?

I don't disagree, yes the buyer is within their rights to offer lower if they want to, but equally i don't believe there's any real reason to and any real reason for the vendor to feel they have to accept either. With that in mind, anyone who offers substantially lower for no real reason other than what has or hasn't been predicted will be laughed at, and to offer small reduction of say a few K strikes me as not being worth risking a whole transaction for. There's always what ifs and uncertainties, referendum or not, it just so happens that this what if was more public than most, and because it's so public all of a sudden everyone's an expert and thinks this is the ultimate factor that will change everything and anything, when no one knows.

No one has thought about interest rates rising. There's talk of that too, likewise there's talks of interests rates dropping. If rates rise a mortgage will become less affordable. Buy a house now with low interest rates (this is a fact), or hold out for a slightly cheaper house in 2 years time (this is a prediction) but risk more expensive mortgage (again another prediction). Now if mortgage rates fall, more people will then want to rush to buy, and property prices will RISE...

There is no real answer, which is why buyers should do the decent thing, stick to the deal that was made, or just admit they are not ready to buy asap and pull out (and resign themselves to sitting it out for 2+ years to see what ACTUALLY happens).

ElsieMonkey

I'm currently buying a property. It hasn't once crossed my mind to offer a reduced price, no matter what my crystal ball says might or might not happen. I'm not buying a short term investment, I'm buying a long term home. Most long term home owners will see drops and rises in the value of their home during the duration of their ownership, this is normal and expected. Therefore the price I was prepared to pay pre-referendum is the same today.

The only exception I would say are those buying for short term investment (buying property to do up and sell on in a matter of months) or those buying with 95% mortgages for example - I can understand these people being slightly more cautious than before.

stueyhants

It's a business transaction buying a house. If you can get it 10k cheaper then why wouldn't you want that. For some people who live in area with low supply the risk probably isn't worth it but for a standard house in a standard area the risk/reward is there to reduce offers......just think how much work you do to earn say 10k net of tax .....it's money I'd like in the bank account

kilby_007

ElsieMonkey wrote: »

I don't disagree, yes the buyer is within their rights to offer lower if they want to, but equally i don't believe there's any real reason to

Thousands of buyers up and down the country disagree with you. Are they all "wrong" for lowering their offer? As you hear a lot of people saying on here, a house is only worth what you're willing to pay for it, so who are you to say they're wrong for wanting to pay less?

ElsieMonkey wrote: »

and any real reason for the vendor to feel they have to accept either.

Why would they? Nobody is forcing the seller's hand! If sellers are accepting less, then doesn't that just reinforce that market sentiment is low? I'm seeing more reductions in my area so doesn't that also say something about seller sentiment? Bare in mind it's all anecdotal at the moment until ONS data is released but in my search area I've seen 12 houses that had gone SSTC come back to the market in the last 3 days. 7 have been reduced, and there are only a fraction of the usual number of new properties for sale.

ElsieMonkey wrote: »

With that in mind, anyone who offers substantially lower for no real reason other than what has or hasn't been predicted will be laughed at

I dont think it's a laughing matter if a buyer thinks your house has gone down in value. Especially when they walk away and you don't get another buyer!

ElsieMonkey wrote: »

and to offer small reduction of say a few K strikes me as not being worth risking a whole transaction for.

Why are you assuming it's only a few thousand? 10% below asking (which is considered a fair starting offer in some areas), on a 200K house is 180K. Some buyers are talking of offering 10% less than their accepted offer, so you could be talking another £18K on top of that...

ElsieMonkey wrote: »

There's always what ifs and uncertainties, referendum or not, it just so happens that this what if was more public than most, and because it's so public all of a sudden everyone's an expert and thinks this is the ultimate factor that will change everything and anything, when no one knows.

Understandably, people get very paranoid about the biggest purchase they will make in their lives, but this isn't paranoia this is reality. We're at the height of a booming market, people have been maxing themselves out on cheap credit to buy, and any interest rate increases will cause chaos, defaults and reposessions. Economists and financial experts are saying that we're at the very height of the market, and it's a simple fact that after a boom comes a crash. People are right to back off or reassess during these uncertain times.

hanb

kilby_007 wrote: »

'm seeing more reductions in my area so doesn't that also say something about seller sentiment? Bare in mind it's all anecdotal at the moment until ONS data is released but in my search area I've seen 12 houses that had gone SSTC come back to the market in the last 3 days. 7 have been reduced, and there are only a fraction of the usual number of new properties for sale.

On the other hand, where I'm looking 76 houses within my criteria have come up in the last 24 hours which is normal compared to the last 6 months or so. They are all coming on for the price you'd have expected a month ago too and there's only been 1 relishing! I think it's varying a lot in different areas. Brexit doesn't change the fact that here(!) there's more people looking to buy than he mess for sale!

kilby_007

hanb wrote: »

On the other hand, where I'm looking 76 houses within my criteria have come up in the last 24 hours which is normal compared to the last 6 months or so. They are all coming on for the price you'd have expected a month ago too and there's only been 1 relishing! I think it's varying a lot in different areas. Brexit doesn't change the fact that here(!) there's more people looking to buy than he mess for sale!

That's true. EAs are reporting a big North/South divide, with some areas in the south seeing more foreign investment than usual due to the low value of the pound against the dollar, whilst areas further North demand is low and chains are falling through.