2 days away from exchage

Zammo

And I'm seriously considering pulling out. The house was on for 160k in August. Put in an offfer for 154k, which was accepted. After the survey revealed a few issues I was able to knock them down to 147k. By then it was October and the credit crunch was in full swing.

I was due to exchange last week, but after reading all the negative press with mortgage approvals down 30% and the 0.6% drops shown by the nationwide report I called the estate agent and told him I was going to pull out unless the seller dropped their price by a further 5k. To my surprise he got back to me within 30 minutes to say they had agreed as long as we exchanged this Friday.

Initially I was quite pleased as 142k is a good price compared to the 160k these houses were commanding before August. However after reading another deluge of gloomy articles this evening, particularly one in the times announcing a possible 30 billion funding shortfall next year for mortgage lenders, I am on the verge of calling it a day, pulling out and seeing how this all pans out next year. The down side to this is that I will be out of pocket to the tune of 2.5k already spent on conveyancing etc.

What would you fellow MSEers do in my situation, bearing in mind I have no dependants and can quite happily rent for another few years?

cheekeemonkey

It's a tough call.

If you pull out you lose £2.5k and with no certainty that the housing market will drop rather than stagnate but with a clear head and back into rental again.

If you go ahead you might end up with a house in negative equity but, assuming you've done your sums you will have a house that you can afford and you can sit tight knowing that you are comfortable with the cost.

The value of the house might not grow at the rate we've seen over the last few years and might even be worth less than what you pay for it - but this is, IMHO, a short term view and you should look at buying with a minimum of 5 years view unless it is purely an investment property.


Bottom line is that only you can decide if you want the house 'badly enough' and is it worth £142k to you?


Good Luck
CM

Zammo

I hopefully won't end up in negative equity as I've put 50k down and I can comfortably afford the mortgage repayments, however I am a little concerned that I may lose a big chunk of my deposit and lose out on a bigger, better place this time next year for less money if I sit tight and wait this out.

I wish I had a crystal ball!

david29dpo

Are you after a home or an investment? Its seems you cant have both these days.

Zammo

Somewhere to live.

mr218

dont buy it. if you dont buy now, you might still be able to buy a house at a similar price in a years time. if you do buy, you might sit through the next couple of years wondering what if you had waited and how many better houses you have missed out on due to your haste

why not try and visualise that you have exchanged and taken the key. does that make you feel relieved or worried. visualise the other scenario where you have not exchanged. how does that make you feel.

i know you are toying with the vendor, but why not say to the EA that you have got the jitters and can they give you one more week to decide either way. that way you buy some time and do more thinking.

good luck.

remember if you dont buy now, it will not be a catastrophic decision. but if you do, it might not really work out well in the short term

david29dpo

Zammo wrote: »

Somewhere to live.

Then buy it. Dont worry about the "investment" part of things. If you after a cash cow, buy shares, gold, diamonds etc but not a house at the moment.

cherry_blossom_6

Well I rented for 3 and a half years to try to save a deposit to try to buy a house. In that time the house prices in my area rocketed and I was forced to relocate to afford a house.
Personally I would buy it. In a years time if the market has slowed or gone down slightly there may not be the choice of houses available as people won't want to sell at less than they think it is worth.

Canucklehead

Zammo wrote: »

And I'm seriously considering pulling out. The house was on for 160k in August. Put in an offfer for 154k, which was accepted. After the survey revealed a few issues I was able to knock them down to 147k. By then it was October and the credit crunch was in full swing.

I was due to exchange last week, but after reading all the negative press with mortgage approvals down 30% and the 0.6% drops shown by the nationwide report I called the estate agent and told him I was going to pull out unless the seller dropped their price by a further 5k. To my surprise he got back to me within 30 minutes to say they had agreed as long as we exchanged this Friday.

Initially I was quite pleased as 142k is a good price compared to the 160k these houses were commanding before August. However after reading another deluge of gloomy articles this evening, particularly one in the times announcing a possible 30 billion funding shortfall next year for mortgage lenders, I am on the verge of calling it a day, pulling out and seeing how this all pans out next year. The down side to this is that I will be out of pocket to the tune of 2.5k already spent on conveyancing etc.

What would you fellow MSEers do in my situation, bearing in mind I have no dependants and can quite happily rent for another few years?

Good morning: Yet another glowing example of the cesspool that is buying/selling property in this country.

Canucklehead

General_Mayhem

It seems you have negotiated well: 8% below asking price is a good position to be in (although you don't state how much you are intending to spend to rectify the issues highlighted in the survey)

If you can afford the mortgage payments (not interest only), are buying a house to live in, and like what you are getting, then I would say carry on.

If you are having doubts about any of the above, then walk away.

BrandNewDay

Are you thinking of selling and moving up in a year? That's what it sounds like you said.

If you want this place because you want to live in it for a while, it sounds like you don't have much to lose. Your equity would be more than 1/3, which is pretty good. If the mortgage isn't interest-only, you should be in pretty good shape no matter what happens to the market.