Reducing Offer Price Due To COVID-19 Financial Uncertainty

Dunbar82

Hello all, 
I am a first time buyer, due to exchange and complete simultaneously within a months time. The offer was accepted back in November, but it has taken this long for all the ducks to line up. The seller is due to move into a newbuild, so a very short chain. 
I am considering reducing my offer. This is due to the financial uncertainty about what effects could happen with coronavirus and the measures that have been put in place, plus some potential for a lower future income. 
I do not wish to upset the seller, and they will be looking forward to moving soon. I do not wish it to come across as me taking advantage of the situation, but I can carry on with my current living situation just fine, I am in no rush to move and so waiting until all the financial effects are known would now be my preference (if I wasn't already fairly committed to purchasing). 
The purchase was to be in the 180,000 mark, so I am considering lowering it by about 5%. 
What are your thoughts on the matter? Would I be a massive !!!!!! for attempting such a thing? 

RelievedSheff

You can ask for nothing but you have to be prepared that they say no or even walk away from the deal.

Are you prepared to lose the house and the sale over such a small amount of money?

Dunbar82

That's what I'm not sure of. I think I would be prepared to lose it if the upshot was for around £9000 yes. 

Thrugelmir

If you are getting jittery back out. At least then the vendors can remarket the property. 

RelievedSheff

£9k over the period of the mortgage is nothing and don't forget you also have the costs involved with solicitors, estate agents, mortgage brokers, surveys, etc. to take into account so you won't be £9k up on the deal at all.

You need to make your vendor aware sooner rather then later that you are looking to back out of this deal. The longer you drag this on the longer you are leading them up the garden path.

Personally I would tell you where to stick your money. You have obviously been happy with the price you have agreed on the property since November and are now looking to reduce the offer less than a month before completion.

jimbog

Dunbar82 said:

I do not wish to upset the seller

You will.
But if you are uncertain about the future (and you're not the only one) then it is understandable you want a bit of a buffer . But if this is your dream 'forever' house be prepared to lose it. 

[Deleted User]

Realisitically to compensate for the financial uncertainty and potential for reduced income you would need a massive discount to ease those concerns. If I was the seller and you came to me asking to pay 9000 less I would think you were taking adavantage of the situation. How much cheaper would your mortgage be if you paid 9000 less. About £40? If things are so tight that this would be the difference between affording the mortgage and not then you shouldnt be buying.

Dunbar82

@RelievedSheff - Current costs for myself will be around £1000, so not too much of a loss if it does fall through. I am not currently looking to back out, just don't want to end up in negative equity the very day I move in. 
I was indeed happy with the price before, but am not now due to current events. I basically don't want to be a mug and purchase somewhere when we are potentially on the cusp of a price crash without a buffer. 

@jimbog - Yeah, and I feel bad about even thinking it! Not forever house, first rung house. Hence why I am jittery. I don't know if it would make sense to potentially lose it and maybe pick up somewhere if / when prices do come down. 

numbercruncher8

Without further details I don't think anyone is going to give you a right answer.
Obviously the seller will be annoyed. But does it make you a bad person? I'd say it depends. 
What has the surrounding market done since November? What sort of properties are available in the vicinity? What sort of property would you go for if your offer was rejected and the owner refused to deal with you? How is the current pricing comparing to that? If you are already getting a good deal, the chances of reduction is remote, if you have offered 100% of a 'kite-flying' price, the chances are better. Nobody really can tell what ballpark you are in, unless you are prepared to post the link of the property.
If you're prepared to lose it over £9k I'd reckon you don't have a large attachment to it or are ambivalent.... what I would say is that anecdotally 'forever home' is a bit of a misnomer. Plenty of people I have known have missed out on one and it seems terrible at the time, but invariably another one comes up at another time.

Personally I think the surrounding area property comparables (current and sold) would be a much better guide than asking on here, next would be your own attitude towards the property and opinion on where the market is going in future relative to the time you might live in it.

jonnygee2

What are your thoughts on the matter? Would I be a massive !!!!!! for attempting such a thing? 

Personally I see it as a business transaction and as such you are entitled to do whatever you want to or need to to get the best deal for yourself. Clearly they aren't going to be happy, but that's business. 

Changing your offer at the last moment can obviously have an impact on the relationship between you and the seller - sometimes a positive relationship is worth more than the reduction. They could also pull out altogether, it's unlikely but its a risk.

I think you just need to weigh up the objective pros and cons and not worry about subjective moral judgements.

Ftb2019_3

RelievedSheff said:

£9k over the period of the mortgage is nothing and don't forget you also have the costs involved with solicitors, estate agents, mortgage brokers, surveys, etc. to take into account so you won't be £9k up on the deal at all.

You need to make your vendor aware sooner rather then later that you are looking to back out of this deal. The longer you drag this on the longer you are leading them up the garden path.

Personally I would tell you where to stick your money. You have obviously been happy with the price you have agreed on the property since November and are now looking to reduce the offer less than a month before completion.

Things change though, same as vendors would change buyer if theyd been offered an extra 10k.