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Buyer may reduce offer, payment instead?
SallyDucati
Posts: 573 Forumite
I’m currently selling my flat and buying a house. At the moment there is a hold up with the house due to the 1O year warranty (new build).
The buyer of my flat is a cash buyer, so delays are costing him in rent.
I spoke to my estate agent on Saturday, and my buyer is willing to wait, but is saying if it takes much longer he may reduce offer to compensate for additional rent. This is something I may be willing to negotiate, but would want to do it as a separate payment to buyer as my mortgage is at 59.75 LTV and pushing that higher will change the mortgage rate and possibly initiate another mortgage approval
Is a separate payment suggestion reasonable? I wouldn’t pay the full amount and may see if my vendors would also reduce/ pay some, but I REALLY don’t want to increase the LTV.
The buyer of my flat is a cash buyer, so delays are costing him in rent.
I spoke to my estate agent on Saturday, and my buyer is willing to wait, but is saying if it takes much longer he may reduce offer to compensate for additional rent. This is something I may be willing to negotiate, but would want to do it as a separate payment to buyer as my mortgage is at 59.75 LTV and pushing that higher will change the mortgage rate and possibly initiate another mortgage approval
Is a separate payment suggestion reasonable? I wouldn’t pay the full amount and may see if my vendors would also reduce/ pay some, but I REALLY don’t want to increase the LTV.
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Comments
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No idea why you are even entertaining it to be honest.
Transactions take time, he will have spent money on legals, maybe even a valuation and so on. If he pulls out, he will incur those costs on a new purchase.
If dates were so important, he should have put a long stop date on there or brought it up at the outset.
But if you have shown your cards to the agent, you might find his poker face is better than yours.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
No it's not reasonable for two reasons.
The money the buyer is losing is just the difference between rent and interest component on a mortage.
It's not the whole Mortgage.
Second point, if he pulls out the delays in finding a new place will be much longer than sticking with you assuming it's only a month or two. Plus a whole lot of repeated expenses such as legal, searches etc.0 -
No idea why you are even entertaining it to be honest.
Transactions take time, he will have spent money on legals, maybe even a valuation and so on. If he pulls out, he will incur those costs on a new purchase.
If dates were so important, he should have put a long stop date on there or brought it up at the outset.
But if you have shown your cards to the agent, you might find his poker face is better than yours.
You’re right of course, and that’s partly what I’m thinking but I’m scared of losing him as a buyer!
The estate agent is mine so I’m hoping there on my side as I’m the one paying them.
I’m probably just panicking, I really want this house and was (naively) hoping it would go smoothly. It’s 18 years since I bought this flat and forgotten what its like!0 -
AnotherJoe wrote: »No it's not reasonable for two reasons.
The money the buyer is losing is just the difference between rent and interest component on a mortage.
It's not the whole Mortgage.
Second point, if he pulls out the delays in finding a new place will be much longer than sticking with you assuming it's only a month or two. Plus a whole lot of repeated expenses such as legal, searches etc.
He is a cash buyer so won’t have a mortgage, so the longer he is paying rent the more it is costing him.
I’m am panicking a bit and possibly over reacting!0 -
No idea why the selling price to your buyer has any effect on your mortgage LTV for the purchase.
So what is the holdup with the warranty? You make it sound like you have no choice but it is your purchase, do you really want to wait for a 10 year warranty that is probably caveated to oblivion? Why not just instruct your Solicitor proceed and accept the risk? We don't know the details, but you have those options.0 -
No idea why the selling price to your buyer has any effect on your mortgage LTV for the purchase.
So what is the holdup with the warranty? You make it sound like you have no choice but it is your purchase, do you really want to wait for a 10 year warranty that is probably caveated to oblivion? Why not just instruct your Solicitor proceed and accept the risk? We don't know the details, but you have those options.
It reduces the LTV as the mortgage will stay the same but the price paid so the ‘value’ will reduce.
The warranty is a condition of the mortgage, will be with all lenders.0 -
SallyDucati wrote: »It reduces the LTV as the mortgage will stay the same but the price paid so the ‘value’ will reduce.
Not sure what you mean by this. If the buyer pays less it does not affect your loan to value. It may affect how much money you have to pay the new house.
If it were me, I would not pay him a penny. House sales take time. If he is a cash buyer, well that indicates to me that he has the money to pay the rent and he is trying it on.
Don't do it!0 -
????SallyDucati wrote: »It reduces the LTV as the mortgage will stay the same but the price paid so the ‘value’ will reduce.
The warranty is a condition of the mortgage, will be with all lenders.
It is (as I understand it) the price you sell your current property that is potentially going to be reduced. What has that got to do with the LTV on the property you purchase?
well if he was not a cash buyer, and did have a mortgage then his mortgage would be costing him.He is a cash buyer so won’t have a mortgage, so the longer he is paying rent the more it is costing him.
This whole thread is pointless. Sort out your purchase and forget your buyer, He'll still be there in another month.......0 -
????
It is (as I understand it) the price you sell your current property that is potentially going to be reduced. What has that got to do with the LTV on the property you purchase?
well if he was not a cash buyer, and did have a mortgage then his mortgage would be costing him.
This whole thread is pointless. Sort out your purchase and forget your buyer, He'll still be there in another month.......
The amount of equity released from the sale will reduce. Now that I have stopped panicking I can see that if He did reduce his offer I could put put more cash into the purchase (rather than give directly to buyer). Unlikely (again now that I have stopped panicking) that I will accept that.
As for saying the thread is pointless, it isn’t for me because helpful people have helped me stop panicking. I am completely alone in doing this, no partner or parents to discuss things with. I do think you saying it is pointless is verging on rude.0 -
SallyDucati wrote: »He is a cash buyer so won!!!8217;t have a mortgage, so the longer he is paying rent the more it is costing him.
I!!!8217;m am panicking a bit and possibly over reacting!
Ok so it is costing him then, but it will still cost him more to back out because he'll have to pay all the fees he's paid so far, again, and then presumably his rent for longer since another purchase will take longer (and it might even fall through, 1/3 do) so he'll have to start again twice.
The one unknown is what this guarantee problem is with your place and how long it's going to take to fix it. I don't think you've given any details. If, for sake of argument it's going to take a year to fix I can see his point..if ut will be fixed ina few weeks, he's either trying it on or hasn't thought through the consequences of starting again. .0
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