Considering pulling out of a purchase

Cal514

Hi all

I'm a first time buyer and made an offer on a chain-free semi-detached property about a month ago. The house is really beautiful, great neighbourhood , on a cul de sac etc. but pricey. It will pretty much wipe out my savings but I think it is worth it in the long run. Searches have come back, survey done - all good, so could potentially exchange contracts by month end. But...

I don't know what got into me yesterday. I checked Rightmove and found a detached house in the same area but is not on a cul de sac. This house dimensions is similarly sized and ticks all the boxes. It is priced at £50k lower so I couldn't resist from booking a viewing. I'm seeing the house tomorrow and I'm nearly certain I will like it. 

If my offer gets accepted and I withdraw from the first purchase, then I lose a bit of money in solicitor's and surveyor's fees, c. £2k but against a £50k saving it seems to make sense. The survey might come up with some red flags, a risk I'm willing to take. This will also mean the process is reset so will take up more time. The second property has an onward chain so that is a key factor as well.

But I'm really torn between not letting my vendor down and saving a lot of money. I know there is no right answer but welcome comments.     

Thank you.

Crashy_Time

Are you buying cash?

AFF8879

Will the new property actually go for the asking price though? Not sure what area you’re in but it sounds like the type of family home that’s extremely popular right now. Most houses in that bracket round my area routinely go 20-60k above asking. 

It doesn’t hurt to view it though 

Cal514

I've got a mortgage approved. 

AFF - I agree. This is in Kent, so the market is really hot. For the first house, I offered £12k over asking and will do the same for the second, maybe even higher depending on competition.   

Soot2006

"letting your vendor down" is an emotional argument so shouldn't come into a business decision ...

"saving money" to the tune of £50k is not insignificant. My question to you is what is the market like; how do both these houses compare to other houses. Is the cheaper detached likely to sell for the advertised price, or will there be a bidding war sending it way up above the asking price? Is the second house more realistically priced in which case your vendor may (or may not) be open to accepting a lower offer now (only likely if there's no chance in hell of him selling it for the original price; if he can resell it for the current price, then surely the new house which is detached is likely to sell for much higher anyway) ...

gettingtheresometime

It may be 50K cheaper but you have to factor in:

1. the money you've already spent in getting as far as you have
2. the stress of dealing with a chain that may or may not collapse with you having spent additional money
3. You say you're willing to accept some red flags but what happens if there's a real deal breaker - could you accept that you could be in a position where you walk away from the 2nd property, lost the 1st property and have spent 2 lots of costs?
4. What's your current living arrangements? At home with parents or renting?

I would want to know why a house should be more expensive (shouldn't a detached house be more expensive than a semi detached?) is cheaper. Of course there might be a logical explanation but I'd be looking very closely at it.

Bendy_House

Cal, the answer will become clear tomorrow If you like the new house as much as you think you will, and if it doesn't have any obvious issues (clearly you'll need another survey, but you can get a good overall feel for what a place is like by looking at things like the roof, windows and their surroundings, things like that), then I have to say that 'detached' will always be a more attractive proposition than 'semi'. That's a biggie right there.

Yes, cul-de-sac is also a nice thing to have, but that's only a mediumie. (Assuming it isn't on a busy road?)

You need to look out for yourself first, with, of course, one eye on also not messing things up for others. Your offer has 'only' been accepted for one month, and 'exchange' hasn't happened yet. It's not ideal pulling out, but it is a fact of life for many sales, and it can work both ways.

From what you describe, the 'semi' does sound expensive at £50k more - it might be on a cds, but it is a semi.

You might have different priorities, but 'detached' would be as near top of the list for me - especially after reading many of the threads on her :-(

Let us know how the viewing goes. (If you want, take photos of the house showing the frontages and roof if possible, and people on here can advise on its apparent condition.)

ss2020jd

You may find it has been priced lower to encourage a bidding war, or there could be hidden (or known) issues that warrant that price. 

You may not save as much as you think if the other house requires work that will incur more costs, not to mention the fact that you are so close on a purchase that sounds like it doesn’t have any issues identified. 

Do not underestimate the added value of a chain-free purchase, or the potential complications and delays of a property in a chain, sometimes reflected in the price. 

Your original vendors may find that they could actually get more than your offer since prices are still rising, if reports are to be believed. 

It’s not something I would do, or risk doing, but ultimately it’s a risk that you need to weigh up very carefully. 

Cal514

Soot2006 said:

"letting your vendor down" is an emotional argument so shouldn't come into a business decision ...

"saving money" to the tune of £50k is not insignificant. My question to you is what is the market like; how do both these houses compare to other houses. Is the cheaper detached likely to sell for the advertised price, or will there be a bidding war sending it way up above the asking price? Is the second house more realistically priced in which case your vendor may (or may not) be open to accepting a lower offer now (only likely if there's no chance in hell of him selling it for the original price; if he can resell it for the current price, then surely the new house which is detached is likely to sell for much higher anyway) ...

I'm quite certain there will be a bidding war as the location is really good (albeit not a cul de sac). The £50k savings estimate is assuming I will offer £12k over listing price. If the competition gets tough and I up it even further (say £8k), then obviously the saving is lower but still substantial.

I do believe the first house is priced right because a neighbouring house (identical layout) was sold 3 years ago at £20k less than current asking price and the next door house (attached to this) was also sold at the same price as mine. And in any case I wouldn't ever negotiate on the agreed price unless the survey reported any defects (which isn't the case).

I think the reason the semi is more expensive is that it is close (0.2 mi) to an outstanding primary school which is probably among the top 10% in England (backed by Locrating report) with a high percentage of its students progressing to reputed grammar schools. This is a consideration for me too though I'm not sure my child will get an in-year admission (waiting list at the moment is no. 1). The detached house is 0.5 mi from the school, which is enough to be out of this school's catchment. However, there is another good-rated school with a larger catchment area, so I'm happy with that.

So I'm pretty sure that the semi will sell quickly once it's back on the market. Of course it would have cost the vendor a month unfortunately.          

Titus_Wadd

Once you've had the viewing you'll be able to compare and contrast.  It may sound a bit woolly but you'll get a feel for each house because there will be factors which maybe don't have a ££ value but can you see yourself living there for a couple of years.  Ease of access to places you will use: so if a dog-owner not having to drive elsewhere to walk a dog might be important; a cat owner wants to be away from main roads.  Don't pay for being close to trains to London if you never commute there.  Ease of parking is useful whether you have a car or not.  You can consider resale potential, but if you can't picture yourself living there for a couple of years I wouldn't short-list a house.

You are doing the right thing viewing and you'll know which house would suit you the best. Let us know how it works out.

Cal514

gettingtheresometime said:

It may be 50K cheaper but you have to factor in:

1. the money you've already spent in getting as far as you have
2. the stress of dealing with a chain that may or may not collapse with you having spent additional money
3. You say you're willing to accept some red flags but what happens if there's a real deal breaker - could you accept that you could be in a position where you walk away from the 2nd property, lost the 1st property and have spent 2 lots of costs?
4. What's your current living arrangements? At home with parents or renting?

I would want to know why a house should be more expensive (shouldn't a detached house be more expensive than a semi detached?) is cheaper. Of course there might be a logical explanation but I'd be looking very closely at it.

Thanks, helpful points.

1. True, I've spent about £2k which is now a sunk cost. 
2. Absolutely. I think this is the biggest risk. I just got to know that the vendors are an elderly couple who will start looking for properties only after accepting an offer. 
3. Again, a valid point. I don't have an answer to that except that I hope it doesn't turn out that way. 
4. I'm renting and my tenancy comes to an end next month. I've told my letting agent that I'm in the process of buying, so they've suggest moving to a rolling contract. 

Semi vs detached - should be a no brainer but I think the presence of a really outstanding school greatly skews the picture. An identical detached property down the road was sold at the exact same price, so I think it's fairly priced.