Pulling out after revised offer rejected

Spiderroo

We had an offer accepted on a house in April and have been going through the slow process to buy ever since. It was marketed as in need of a cosmetic update but our RCIS level 3 survey has uncovered a lot of other issues. My brother's a builder so he reviewed the report and helped us sift through what needs doing vs what we can do gradually. 

The main work required immediately is a new roof, full rewire and new heating pipes. We've had quotes back and it's well over £20k of work which is money we just don't have. The property was also undervalued after a mortgage desktop valuation and even further undervalued by the surveyor who actually saw the property. We've offered £18k less than our original offer, which will fund a good chunk of the work (the rest will come out of our cosmetic work budget) and is in line with the surveyor's valuation. 

Our seller told us verbally multiple times he would negotiate if major work was needed as they need the purchase to go through but the EA has come back to say they won't negotiate at all, on the steer of their family. We've countered by saying we're going to pull out because we can't afford the work and have pointed to the valuation, the surveyor's report and the wider price of houses in the area as our reasoning. 

I guess I'm looking for some reassurance we're doing the right thing? Does everyone else just suck up these huge costs and go without doing internal work (kitchen is falling apart so needs replacing, every room needs redecorating, etc) for years? It's our first house (always flats before) and we absolutely love it but we don't have a spare £20k lying around. We're also very nervous about paying well over the property's value and then pouring money in on top, given the general economic instability at the moment. 

nicknameless

If you can't afford it, you can't afford it?

tightauldgit

It's really up to you whether you feel a) you can afford it and b) it's worth it given the new information that you have. 

If the seller won't negotiate then there's their choice, and your choice is either to complete or walk away from the deal now. 

A house is worth what someone is willing to pay for it, is there a better option available for the same or less money? If not then it would suggest to me that the seller is probably confident that they can sell at their asking price. 

On the other hand if you are really having serious doubts about whether it's the right move and whether it's affordable it may be wise to at least have a long hard think about it. 

hazyjo

Tbh it sounds like a project and I'd have thought most of the works needed would have been expected (or obvious).

Really do think this property is for a more experienced buyer and even 18k or 20k off might not make it affordable. That may not touch the surface if everything needs doing and you have no skills to do the work nor people you can call on.

hannahcolobus

Surveys often come back saying you need a new roof, sometimes you do, sometimes you don’t. You could find you offer on another property and get a report that says the same. Is it currently leaking or in a very visibly poor state? What have they said is wrong with the pipework? 

Echo what others have said above, the seller is presumably confident they’ll get the amount from another buyer so isn’t willing to reduce. I guess it all comes down to if you’re willing to lose the house or not. 

user1977

hazyjo said:

Tbh it sounds like a project and I'd have thought most of the works needed would have been expected (or obvious).

Yes, if something obviously needs "cosmetic updating", you'd expect things like the electrics to be even older than what's visible.

And I'd generally query whether the "work required immediately" is really "a new roof, full rewire and new heating pipes", because that suggests to me the roof is currently leaking like a sieve, the electrics are a deathtrap (or simply not working), and the heating doesn't work. Or is it not really quite all that bad?

Spiderroo

We can buy a similar sized house that requires less structural work (and possibly less cosmetic work if we sacrifice a bit of garden space) in that area for around the budget we have. We viewed and offered on heaps of houses in the area before we got this one so we know the market pretty well. We offered just under £290k and we could go over £300k if we went for somewhere that required slightly less cosmetic work (e.g. had a kitchen we could paint and use or a bathroom from this side of the century).

We have been saving and we have a decent pot so, if we can negotiate on price, I'm confident we could afford this house. We've got some tradespeople in our family who could help here and there (not based near us in the country so can't pop round) and we've budgeted for surprises. Unfortunately, without a reduction most of those savings will be wiped out leaving us with no cosmetic works money after we've built in a buffer for the unexpected! We're not looking to do the house up like a show home but it needs a new kitchen, bathroom and every room needs painting and flooring of some description. I'm pretty thrifty so we've budgeted carefully for those things but I can't make 0 stretch to all of that and we wouldn't want to spend the buffer. 

Spiderroo

user1977 said:

hazyjo said:

Tbh it sounds like a project and I'd have thought most of the works needed would have been expected (or obvious).

Yes, if something obviously needs "cosmetic updating", you'd expect things like the electrics to be even older than what's visible.

And I'd generally query whether the "work required immediately" is really "a new roof, full rewire and new heating pipes", because that suggests to me the roof is currently leaking like a sieve, the electrics are a deathtrap (or simply not working), and the heating doesn't work. Or is it not really quite all that bad?

The roof has visible sections of tiles missing which we couldn't see from the bottom but you can see in the aerial photos, there's no leaks coming through but a large amount of the tiles either have bits missing or aren't there. The roofers that have quoted and the surveyor both said the roof is currently relying on the layer underneath to prevent water ingress which isn't great news. 

The electrics haven't been replaced for 50+ years and so the fuse box doesn't have something required to cut out if there's a surge (I can't remember what it's called) and the coatings on the wires aren't complete anymore. Apparently some stuff trips the fuse too which is a bit worrying as the person living there is significantly older than us so they don't have most of the electricals of a modern household. The heating does work though so maybe that's one we could put off! They said the pipes are old and can't manage the pressure of the boiler and there is lead piping for the gas which both need to be replaced.

I don't think the refusal to negotiate is based on a belief they will definitely get more and can hold out for it. Our seller is desperate to move into accommodation more suitable to his needs and, like I said, told us he'd be happy to negotiate. We saw him a few weeks ago and he said the most important thing is the sale goes ahead. He's elderly and until now we've always dealt directly with him. The EA said today's u-turn on negotiating has come from his family. He's told us he's expecting to give them the surplus after he's downsized so that may be influencing the situation. 

If it sold for the offer we originally made it would be the most expensive house to sell on the street (last one went for £282k in late 2021) which we thought tracked given it only needed cosmetic work and prices are rising. With the bigger problems and the significant undervaluation, not so much. 

hpsauce86

We were in a similar position last year. The house was about the same amount. We didn’t get it in the end (it went to a developer I think), but we have been thanking our lucky stars since. The cost of building materials at the moment, as well as the time delays, we would have been paying mortgage and rent on both while we did it up, I am so glad we didn’t have the offer accepted now. (And we found something that’s beautiful and for the same amount of money, that I know was meant for us!) 

Personally I would back out. 

TheJP

Spiderroo said:

user1977 said:

hazyjo said:

Tbh it sounds like a project and I'd have thought most of the works needed would have been expected (or obvious).

Yes, if something obviously needs "cosmetic updating", you'd expect things like the electrics to be even older than what's visible.

And I'd generally query whether the "work required immediately" is really "a new roof, full rewire and new heating pipes", because that suggests to me the roof is currently leaking like a sieve, the electrics are a deathtrap (or simply not working), and the heating doesn't work. Or is it not really quite all that bad?

The roof has visible sections of tiles missing which we couldn't see from the bottom but you can see in the aerial photos, there's no leaks coming through but a large amount of the tiles either have bits missing or aren't there. The roofers that have quoted and the surveyor both said the roof is currently relying on the layer underneath to prevent water ingress which isn't great news. 

The electrics haven't been replaced for 50+ years and so the fuse box doesn't have something required to cut out if there's a surge (I can't remember what it's called) and the coatings on the wires aren't complete anymore. Apparently some stuff trips the fuse too which is a bit worrying as the person living there is significantly older than us so they don't have most of the electricals of a modern household. The heating does work though so maybe that's one we could put off! They said the pipes are old and can't manage the pressure of the boiler and there is lead piping for the gas which both need to be replaced.

I don't think the refusal to negotiate is based on a belief they will definitely get more and can hold out for it. Our seller is desperate to move into accommodation more suitable to his needs and, like I said, told us he'd be happy to negotiate. We saw him a few weeks ago and he said the most important thing is the sale goes ahead. He's elderly and until now we've always dealt directly with him. The EA said today's u-turn on negotiating has come from his family. He's told us he's expecting to give them the surplus after he's downsized so that may be influencing the situation. 

If it sold for the offer we originally made it would be the most expensive house to sell on the street (last one went for £282k in late 2021) which we thought tracked given it only needed cosmetic work and prices are rising. With the bigger problems and the significant undervaluation, not so much. 

From what you say it doesn't sound like it 'needs' a new roof other than some new tiles fitted. What did the survey say about the roof structure that's the important bit. You would have noticed the electrics are old from your viewing but i appreciate the safety concern. I think £18k reduction was a bit optimistic from everything you described.

hazyjo

You've asked for reassurance you're doing the right thing by pulling out, but still seem to be justifying buying it, so it sounds to me like you still want it?

I'd not want to pay over valuation. You've asked for a reduction, and they've refused. So that only leaves no further reduction. Are you happy paying over valuation? Can you afford to? Nobody here can tell you if that's the right thing to do...