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

ger1986

We had an offer accepted around 6 weeks ago and were due to settle end of this month. We decided to reduce our offer by 10% which was rejected so we withdrew our offer. We have sold our house and will settle as soon as the lockdown is over and move in with parents until we find a place. There is a neighbouring property for sale exact same as the one we had the offer accepted on and for the same price so no real risk for us to withdraw as they will still be available in a few months (and potentially at a reduced price). 

LoveSauce

All im going to say is: unless the house is something special, unique, and there are no other houses like that around - dont proceed. Seen as you only want to live there for 5 years, im guessing not. So I would pull out. No point putting yourself in a financial hole because you feel bad for the vendors.

MobileSaver

ger1986 said:

move in with parents until we find a place. ... they will still be available in a few months (and potentially at a reduced price). 

Unless you happen to find desperate vendors, you are totally kidding yourself if you think much will change price-wise or otherwise "in a few months."

However as long as you are happy to live with parents for a year or so then you're one of the lucky ones who has less downside to delaying than most people.

Jono987

MobileSaver said:

ger1986 said:

move in with parents until we find a place. ... they will still be available in a few months (and potentially at a reduced price). 

Unless you happen to find desperate vendors, you are totally kidding yourself if you think much will change price-wise or otherwise "in a few months."

However as long as you are happy to live with parents for a year or so then you're one of the lucky ones who has less downside to delaying than most people.

This, you wont see prices much lower in a few months lol, yes they will probably drop but it will take a long time to see it.
I assume you are a young couple? If so enjoy living with your parents for what will probably be way over a year! Personally i would have gone through with the purchase just to not have to do this haha, money isnt everything! 

Richardsondawn

The housing Market will drop, due to the Credit availability and The Economy due to the Covid 19 Virus, you should consider that.. however if you have exchanged its a bit late in the day..and it would be a bit unfair to the seller, considering they have already moved.

Crashy_Time

ems1988 said:

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). 

Exactly, you are not obliged to put yourself in difficulty to bail them out of a very tricky economy for sellers.

Crashy_Time

MobileSaver said:

Chetnick said:

There is a common misconception that house prices are dictated by supply and demand. That is not the case. They are sustained only by the cost and availability of credit

Utter nonsense, the only misconception is in your head. The "demand" part of "supply and demand" already accounts for someone's ability to pay, it always has done and always will do.

You need two things for there to be demand; someone wants something and someone can afford it. I might want a second home on a private island but as I can't ever afford it my want has no impact on the price. Similarly interest rates may be at the lowest they've ever been but if no-one wants to live in certain parts of Liverpool then the council still has to sell off houses there for just £1.

So you see no change if credit suddenly disappears or gets more expensive?

ger1986

MobileSaver said:

ger1986 said:

move in with parents until we find a place. ... they will still be available in a few months (and potentially at a reduced price). 

Unless you happen to find desperate vendors, you are totally kidding yourself if you think much will change price-wise or otherwise "in a few months."

However as long as you are happy to live with parents for a year or so then you're one of the lucky ones who has less downside to delaying than most people.

We will re-evaluate in a few months and decide what to do then when things start to settle down. They may well be more desperate by that point if there aren't many buyers around with unemployment likely to soar and businesses closing left, right and centre, or they might not and we could always make the same offer again. There is no point in us committing now when we can't move until June/July, the house isn't going anywhere in the meantime.

Crashy_Time

ger1986 said:

MobileSaver said:

ger1986 said:

move in with parents until we find a place. ... they will still be available in a few months (and potentially at a reduced price). 

Unless you happen to find desperate vendors, you are totally kidding yourself if you think much will change price-wise or otherwise "in a few months."

However as long as you are happy to live with parents for a year or so then you're one of the lucky ones who has less downside to delaying than most people.

We will re-evaluate in a few months and decide what to do then when things start to settle down. They may well be more desperate by that point if there aren't many buyers around with unemployment likely to soar and businesses closing left, right and centre, or they might not and we could always make the same offer again. There is no point in us committing now when we can't move until June/July, the house isn't going anywhere in the meantime.

No, especially as you were also the only offer on the table. Chances are they will reduce after reality sets in so it is win win for you in the long run I suppose.

societys_child

SouthLondonUser said:

It's a combination, though, isn't it? Even if banks lent at 0.2%, not many people would want to live in Nowheresville-on-sea...

You might find it'd be a dream come true for many. I'd love it!

Sounds so much better than South London