Buyer reduced bid by 9% before exchange

youth_leader

At least you know he is a developer with the intention of getting it as cheap as he can, whether you allow that depends on your individual circumstances, and whether the freedom from the worry is worth it. 

My developer buyer didn't let on and portrayed himself as 'such a nice young man', my EA must have said 'poor XXX has spent so much money on the survey already' ten times during the last conversations I had before I withdrew from the sale.

lookstraightahead

[Deleted User] said:

pollyp123 said:

anselld said:

All those reasons are probably true to some extent but they don't even need a reason.  Your choices are obviously to accept, reject or try to negotiate a middle ground.

Don't read too much into your EA comments, they are primarily interested in getting their commission.  Arguably if it is a property suitable for HMO conversion the current turmoil has minimal effect on developers and if one was interested there will be others.  Article 4 must be backed with specific planning criteria on what will be accepted so minimal risk if the developer does their homework.

Personally, I would reject and remarket on principle.  The current buyer still has the option to proceed at the agreed price unless someone else comes along first.

Rejected on principle is an emotional reaction and is the wrong thing to do. If you don't think you'll get the same price then just accept it.

To be fair he also outlined a number of reasoned points why it may not be justified to reduce a price, so you cannot reduce his contribution to one turn of phrase.

Also, I do not take issue with the idea of being principled. Generally speaking, holding people to their offers is laudable and a strong negotiating tactic.

Of course - in some cases a small reduction for good reason could be considered.

And, whilst the market may plummet this time, advice to accept low ball offers was commonplace on here at the start of the pandemic, the crystal balls were faulty then! 

To accept 9% less is to buy into fear rather than facts.

I just think the game has changed. Vendors had a great hand, and now buyers have a great hand  (or at least better than the hand they've had recently). 

I would accept. If they then come back with a lower price, I'd throw my hand in and walk away. Wouldn't want to play with them no more. 

[Deleted User]

It sounds like the developer is chancing his arm and I'm sorry to read you are going through this at such a late stage and with your mother's property @"[Deleted User]". I guess where you go from here depends on how willing you are to take a risk and potentially have them walk away. You could decline or re-negotiate, both of which hold a risk that the deal will be off and you may have to go through the process again, or you could agree to their terms in the interest of an easy life, but for less money. You probably have an idea of what you'd rather do. 

pollyp123

[Deleted User] said:

pollyp123 said:

anselld said:

All those reasons are probably true to some extent but they don't even need a reason.  Your choices are obviously to accept, reject or try to negotiate a middle ground.

Don't read too much into your EA comments, they are primarily interested in getting their commission.  Arguably if it is a property suitable for HMO conversion the current turmoil has minimal effect on developers and if one was interested there will be others.  Article 4 must be backed with specific planning criteria on what will be accepted so minimal risk if the developer does their homework.

Personally, I would reject and remarket on principle.  The current buyer still has the option to proceed at the agreed price unless someone else comes along first.

Rejected on principle is an emotional reaction and is the wrong thing to do. If you don't think you'll get the same price then just accept it.

To be fair he also outlined a number of reasoned points why it may not be justified to reduce a price, so you cannot reduce his contribution to one turn of phrase.

Also, I do not take issue with the idea of being principled. Generally speaking, holding people to their offers is laudable and a strong negotiating tactic.

Of course - in some cases a small reduction for good reason could be considered.

And, whilst the market may plummet this time, advice to accept low ball offers was commonplace on here at the start of the pandemic, the crystal balls were faulty then! 

To accept 9% less is to buy into fear rather than facts.

There is a difference between using a negotiating tactic and acting out of principle.
Acting out of principle is emotional.
Also your assumption that the offer is lowball goes against the OP's description of it.

loubel

The reality is that if the numbers no longer add up for the developer then they won't buy and you'll have to re-market and start again. In the current climate you need to consider whether you are likely to get another offer above your original asking price. What does your estate agent say?

lisyloo

[Deleted User] said:

RM_2013 said:

I tend to agree that I would take the offer but request an early exchange/completion.
No harm in trying to negotiate and see if they would offer at least original asking price? 

How does an early exchange/completion differ to what would normally happen? There is no chain on either side.

I had some friends get a very good deal from a developer but they had to pull out all the stops to exchange and complete on the same day (that didn’t happen much pre covid).

i don’t know whether they paid extra to jump queues, got indemnity policies to overcome issues or whether they just pushed really hard, but they did achieve it.

Shelldean

Offer to meet them halfway? 4.5% reduction.
With the fall back of asking for asking price? So a 7% reduction in their offer.

After all asking price is what you originally hoped to achieve!

sidneyvic

I've never seen-so many prices reduced as I have seen this week and it is going to get worse. Everything is getting more expensive and interest rates are only going one way. We are going to start seeing people coming tonthe emd of their fixed rates and not being able to afford the new rate and panic selling or even worse repo'd.... 

housebuyer143

sidneyvic said:

I've never seen-so many prices reduced as I have seen this week and it is going to get worse. Everything is getting more expensive and interest rates are only going one way. We are going to start seeing people coming tonthe emd of their fixed rates and not being able to afford the new rate and panic selling or even worse repo'd.... 

Yes they are going up, but so is inflation so house prices should rise with that at a minimum.

This week is a blip caused by speculators trying to bet against the market. The pound is already coming back to the level it was a week ago and predictions are looking to be back at what they were.

Give in a week and most the fixed rates will be back again also.

anselld

pollyp123 said:

anselld said:

All those reasons are probably true to some extent but they don't even need a reason.  Your choices are obviously to accept, reject or try to negotiate a middle ground.

Don't read too much into your EA comments, they are primarily interested in getting their commission.  Arguably if it is a property suitable for HMO conversion the current turmoil has minimal effect on developers and if one was interested there will be others.  Article 4 must be backed with specific planning criteria on what will be accepted so minimal risk if the developer does their homework.

Personally, I would reject and remarket on principle.  The current buyer still has the option to proceed at the agreed price unless someone else comes along first.

Rejected on principle is an emotional reaction and is the wrong thing to do. If you don't think you'll get the same price then just accept it.

Call in emotional if you like, not sure if I agree, but that doesn't automatically make it wrong.  We can't go through life making entirely unemotional decisions.