Ready to exchange on house purchase - should we reduce our offer due to COVID-19?

ems1988

We have been in the process of buying a house for over 5 months now and we were finally at the point of exchange when the coronavirus pandemic really kicked in over here in the UK. Everything was placed on hold - however the sellers have now found a removal company willing to take their stuff, meaning they can leave the house vacant and we can complete whilst keeping in line with restrictions.
However, this delay has given my husband and me time to think (worry!) We are wondering with all the uncertainty in the market whether we should try at this stage to negotiate on price?
Some things to factor in:

• The agreed price was around 8% under the asking price, however the house had been on the market for 9 months and we were the only people to offer, so all things considered we think this was a fair price and not a particularly great bargain. Sellers were resistant to negotiation during the initial offer process and it took us waiting 6 months and going back with a slightly higher offer to get to our agreed price
  
• We tried to negotiate after receiving the survey and were told the buyers 'are not interested in selling unless it's at the agreed price' - though this was well before Covid crisis
• We will probably be living in this house for the medium-term - around 5-7 years

Would appreciate some guidance. We are stuck between just wanting to get the purchase through and feeling as though we'd be foolish to proceed at the agreed price with all the financial turmoil ahead.
Thanks in advance!

Thrugelmir

If your overiding concern is financial. The property obviously holds no great appeal as a home. Then back out as soon as possible. Your vendors and others involved in the chain need to be made aware. 

graphs

I would definitely renegotiate. At least another 10% if you really want to go ahead now.

Linton

Either drop out completely or keep to your agreement. Dont mess about with house buying, it's stressful enough anyway without an unreliable buyer. If you renege on your agreement and ask for a lower price what do you do if the vendor says "no"? I would have thought it unlikely you could get a sufficient discount to actually cover any genuine fears.  Something like an extra 2% off would be irrelevent in the context of a major long term fall in house prices.

[Deleted User]

If you renegotiate you will have to update the mortgage company.  The mortgage company will underwrite the case again as its a material change.  Are you 100% confident they wont decide to pull the whole deal? 

Ive just had this with someone trying to reneg.  Told them that they can do it all they want but the lender we are with is no longer lending at the level we are at so if they change the ltv then the lender wont be able to offer a new mortgage.   They decided that 5+ years of property price movement will probably even itself out and getting a few grand off the purchase price is small compared to losing the property if they cant get a new mortgage for the reduced price

steampowered

The government has issued advice saying to delay moving house until the crisis is over.  Personally I'd follow that advice.

The Law Society has issued guidance to conveyancing solicitors saying that they should discourage their clients from exchanging until the situation is more settled, so you may have problems with solicitors.

Personally I would just wait. There are lots of problems involved with moving house and lots of things that can go wrong - e.g. getting funds from the lender in time, having solicitors able to exchange, getting contracts signed and witnessed etc.

You might also have practical problems when you move. For example you won't be able to get an engineer out to set-up broadband. Imagine lockdown without internet !

numbercruncher8

Sounds like either the sellers are not that flexible, or maybe they need a specified amount of money to move so a renegotiation potentially isn't easy. If there was something in the survey that could have been a basis for negotiation but you refused to be firm about it and let it slide, why should the sellers believe an attempt this time around?
Without more detail it is hard to be definite..... being on the market for so long and being the only offer kind of implies it was overpriced anyway, so it could be the case knocking 8% off means its still overpriced.
Need to ask yourself, what would be the costs of the deal falling through (ie total money committed so far, housing arrangements while looking again), and also, what are comparable properties listed and selling for? That would probably give you a better ballpark to the value.

Tea_Pea_Dee

graphs said:

I would definitely renegotiate. At least another 10% if you really want to go ahead now.

Dear Mr Graphs,

Do your bit for the community in this time of crisis (not house price crisis, you understand, a life and death crisis) and PM the op to get the vendor's contact details.  Start off with 20% then begrudgingly accepting 10%, whilst exclaiming that Crashy is a good friend of yours, and await the two word response.  Same two word response that I would so dearly love to say to you, but I quite like posting in here, from time to time.

Good luck and do let me know how you get on.

Yours sincerely.

TPD 

cc  The Loony Bin

Loanranger21

I don't think my conscience would allow me to let someone down like you are proposing to do. But, if you have so little in the way of moral compass go ahead. I don't believe in karma but you may do. 

ems1988

Loanranger21 said:

I don't think my conscience would allow me to let someone down like you are proposing to do. But, if you have so little in the way of moral compass go ahead. I don't believe in karma but you may do. 

I don't think this is a question of morals. We are - as everyone keeps saying - in unprecedented times and we are about to make a big financial commitment to a 35 year mortgage, as well as all of our savings. We can't go through with something simply because we don't want to upset the sellers. They also don't need to sell to move - they have already moved into a property in London (house is in Derbyshire). 

numbercruncher8

Hardly anything moral is it, there are many threads asking the same thing. 
The virus has been a bit of a black swan has and will affect many things, perhaps fundamentally for some people.
Had there been some kind of freak event where houses jumped in price by 20% overnight, there would be plenty of sellers who hadn't exchanged suddenly demanding more cash or re-starting the process again.

Frankly, if you are spending almost all your money into a 35 year mortgage the question of negative equity may be pretty relevant even over 5 years (much of the payments at the start of the mortgage do not touch the capital, and reduce only the interest), so even more incentive not to overpay.

Research the market, look at what has sold recently on the Land Registry, assess value that way. Or post a link to a similar house at a similar price and people will give better opinions.