Reduce offer or hold our nerve?

mj2014

If anyone can stand another question about what to do now that we’re in a pandemic, I’d like some opinions.
Partner and I are FTBs, been looking for a house for 18 months, had one purchase fall through after waiting a year. Found a 2 year old property we really liked and wanted to get the house so went in with an offer £5k under asking which was accepted after it being on the market only a week. They had another offer but EA said it was much less than ours. The agreed purchase price is £40k more than it sold for 2 years ago (no new work done), but our valuation came back at the purchase price and we plan to stay put for at least 4-5 years, potentially longer, so I wasn’t that bothered as it meant we were getting a house we liked. I think even without a pandemic we would be waiting a long time to find something we liked as much in the area for our budget.

Now with all that is happening I’m apprehensive we are overpaying way too much. We both have jobs I expect will be secure, and we’ve got a 22% deposit in cash, mortgage offer in place...but we don’t need to move and actually pay really cheap rent. We really like the house, but if you didn’t need to move in our situation, would you? I don’t want to put the seller off, but I would feel better if we were at least paying say £10k less, which might offset some losses if we sold in say 4-5 years and things hadn’t completely recovered. I felt the house was worth a bit less than we were paying, but wasn’t bothered paying more in order to get the house and get things moving. Now I’m not so sure...(for ref the purchase price is £330k).

graphs

I'm in the same position as you. Looking to buy but, paying incredibly cheap rent and dont need to move.

Lower your offer by 20 to 30k. Because within 6 months that is what the property will be worth. Maybe less

Bossypants

^ Or there might simply be nothing on the market in 6 months. With the government pledging to protect mortgage holders and prevent renters from being evicted, you might find that the net result is less a dip in prices and more the whole property market grinding to a standstill as people batten down the hatches. That could keep the prices of what little does come on (probate properties for example) steady. What happens in the long run is unknown, but I think people who pull out now should expect to stay where they are for at least another year.

onetimeatponycamp

I'm in a similar position. Offer accepted on a HTB property at about £5k under asking (they'd already reduced by £15k from their list price). On the one hand I'm twitchy because it's HTB so slightly inflated anyway, on the other it's a lovely conversion and great transport links/commutability to London. It's really difficult to know what to do!

JessJ23425

I don't understand this?
Surely if you're buying a property to stay in it for years to come this fairly short term situation will be long over, they're saying 12 months to a vaccine. Why do you think you deserve 10, 20, or 30k off it's current value for that?

Thrugelmir

Your mistake was to go in £5k under asking. Though I guess you didn't want to lose this one. If you let this property go how long before you find another?  

GoingOn30

I think many sellers will be open to a reduction in offer in the current climate. Its not as if you are going to have to compete with loads of other buyers falling over themselves to put other offers in right now, everyone is spooked by this. 
Have your sellers found somewhere to move to yet? If so and they are keen to get things proceeding then they might be more willing to consider a reduced offer. 

jimbog

mj2014 said:

Found a 2 year old property we really liked 
 our valuation came back at the purchase price 
 we would be waiting a long time to find something we liked as much

If you lost this house (that you really like) a similar house might not come onto the market after this pandemic finishes. If it did, you'll be in competition with all those others who were also sitting back and waiting too

mj2014

Reading other similar threads on here there are many different opinions, just reaffirms the ‘no one knows’ element! I am kind of leaning toward just proceeding at the current price...I kind of think the market may either stagnate with prices staying flat for a while because of the low interest rates. Plus the town we’re buying in is pretty small and it took a long time for something that suited us to come up for sale. If we pull out we’d have to be prepared to wait probably a year for something we wanted. My partner thinks we should just go ahead too. We are going to see about getting a better mortgage offer now though!

alex_163163

Also remember that your sellers are probably buying somewhere too, and will need a certain price for theirs to complete their onward transaction.
if you now reduce your offer by £x amount, it might mean that they simply cannot sell to you and be able to move to their new house. 

jimmyjammy001

No chance I would be buying in the current economic climate, experts saying we're in a recession allready, possibly a depression on the horizon, there will be loads of unemployment over next few months, interest rates are at zero, pumping hundreds of billions into the market, nothing is working, there is only one way for the housing market to go and that is down big time.