About to exchange - should I lower my offer?

lookstraightahead

housebuyer143 said:

It's hardly the sellers fault you didn't give some thought to the future and think that rates could go up and house prices down.  The writing has been on the wall since march so there is no excuse for waiting this long to offer less. 

You can do it, but it's disgusting behaviour and your reasoning isn't based on anything real, just all assumptions of the next 6 years. 

I think the writing has been on the wall since vendors were plucking valuations out of thin air, and positively encouraging bidding wars. Doesn't really sound as if that was the case here, but it's been a bit of a fantasy for a couple of years at least. 

housebuyer143

htcclub said:

london21 said:

What interest rate did you secure?

If you lose his property, will they allow you to use for another property?

Is the property affordable?

What is the offer price compared to the sold price in the area?

3.6% for 2 years. So when I come out I will have to go onto SVR or fix for 6+% at that point.
Having negative equity on top of this seems crazy and somewhat irresponsible
I want this house badly, but I am playing devils advocate.
Now that I check, my mortgage would go from 1300 to 2000 if rates reach 7.5%, which is affordable with cut backs.

I am really going to have to crunch the numbers, is having a house worth it at that price vsr renting, maybe - having a house will give sanity

Rachelredwood16 said:

Did you offer over asking? How long is your fixed rate for? If 5 years, you plan to stay for 6 years and it could be less bleak by then or we at least know more about the situation then you may be fine. Is there a possibility of a pay rise at any point during the fixed rate? Are you buying alone? You may have a partner to contribute at a later date if you are.

How would you feel if your buyer did the same at the 11th hour? (This applies whether you're selling something now or hypothetically). I know I wouldn't be happy. You put in an offer of what you're willing to purchase the house at the time and whether you see yourself living there which you do. 

Really think about whether you're willing to lose the house over this. You can suggest they lower their offer but their vendor may not accept. Remember, not everyone who was selling at this time was doing it because they had to, some may have been downsizing whilst prices were high. Some may have just been fully taking advantage of the high prices do won't be as disappointed if the sale fell through.

Yes it was 1% over asking. mortgage 3.6% for 2 years. On the money side, a 9% interest rate would be affordable. But it makes me think at that point, why not just rent?



I see what everyone is saying, but if someone did this to me I would understand that this is a market like any other and prices and credit availability change. I understand that house buying is emotional, but really in my view, it should be less so. Especially because making a mistake can be life changing. I don't want to buy then in 2 years lose the house and deposit due to negative equity. I think I would be fine getting a lodger if rates did reach 2000, I am just playing devils advocate at this point. But thanks for your views I am considering the viewpoint, maybe I will just proceed as is.

I might have been a bit harsh in my earlier reply but some people are just trying to get money off for money sake and using the recently hyped media to do it. 
If you are really worried you won't be able to afford the payments in two years and your choice is to drop out or get it cheaper, then I think you should at least ask. 

If you are going to buy it regardless and hope to maybe just get a few grand off it, then I don't think it's worth the risk as the seller could very well put it back on the market and you get nothing. 

htcclub

lookstraightahead said:

When anyone ever buys a property they should expect value and interest rates to go up and down. It's no different now to whet your could experience a few years down the line.

Personally if you did this to me I would remarket. 

I find it similar to vendors who want a bidding war. Did you pay over asking? Are you making up the difference between valuation and what you're paying?

payed 1% over asking, valuation was spot on. Ok that's a fair point about how things will go up and down. I suppose I am trying to rationalise why I should own a house with an 8% interest rates, when I can rent instead, I suppose I may have to suck up this isn't a short term investment?

housebuyer143 said:

It's hardly the sellers fault you didn't give some thought to the future and think that rates could go up and house prices down.  The writing has been on the wall since march so there is no excuse for waiting this long to offer less. 

You can do it, but it's disgusting behaviour and your reasoning isn't based on anything real, just all assumptions of the next 6 years. 

Sorry, but this is mostly untrue. The tax cuts from the government last week meant markets have priced in worse prospects for the economy, and swap/mortgage rates have gone up in the last few days. So it is a very recent thing, things are even more bleak.

Well I would argue that assumptions and forecasting are the basis for pricing in most markets.

Having said this, its definitely a lesson learned that I should have fixed at 5 years and not 2

Flugelhorn

the bidding wars have been ghastly and I refused to be involved in any. I have bought at the top of the market a couple of times in the past and the prices then dropped (no neg equity though - just my own money disappearing) but they eventually bounced back up even if it was rather slowly after the 2008/9 crash 

SuseOrm

@htcclub in answer to your why not just rent question- they are no rentals right now.  And the ones left are awful and likely to rise in cost. 

chanz4

I think offer over game has damaged a lot of this market, and a lot are due to get hit thats for sure with neg

MobileSaver

htcclub said:

But it makes me think at that point, why not just rent?

Why not just keep renting now rather than buying? There must be some reasons you are planning to buy now rather than rent, have all those reasons changed?

If in two years YOUR mortgage goes up from 1300 to 2000, then landlord's mortgages may too so what makes you think that rents won't go up by a similar percentage?

BikingBud

htcclub said:

With the base rate priced in to get to 5-6% in the next 2 years. I see this to mean that when you add bank margins, we could see mortgage rates of 8+% in a year or two.
This will exacerbate the likelihood of a price crash.
Should I gazunder now? is this a valid reason?
I think I found a home I could be in for 6+ years, so the price could cure by that time if it did fall. But the prospect of 10-20% down seems so scary.
I wonder if I should even ask my vendors to accept a lower offer and try to get their purchase lowered also?

Why not?

Gazunder appears to attract lots of negative responses whereas bidding wars are encouraged

It has to  be something you are content with and can afford, now and subject to changes in the wider economy. Only you know what your exposure is.

As many say on here it is just a business transaction. This is a  money saving site why would we encourage anybody to pay more than they have to?

RM_2013

Personally I wouldn’t do this.  We in theory could Gazunder because I hold my hands up to being sucked into a bidding war and we’ve offered over asking price on the house.
however, we offered over with eyes wide open because it was a house we wanted that ticked all the boxes, I hadn’t seen anything else close to the price we have offered that gives us what we need.  We made the decision based on prices go down as well as up, we are putting a large deposit in, have a 5 year fixed deal and we intend to make this a family home and done see it as a business transaction.

i would be really upset if my buyers did this to me and I wouldn’t do this to my vendor and risk losing the sale

that said it does happen I just don’t personally agree with it.  I’d only reduce my offer of something came up in survey etc to warrant a lower offer.

good luck whatever you decide to do

donutandbeer

How much do you want to lower your offer?

We are close to exchange and I have been wondering how much we “overpay” if the offer is made now instead of a few months ago. Certainly I think our position (cash buyer) will be especially strong right now. But I suspect our vendor will probably remarket the house, he doesn’t seem to be in a rush (retiring and moving back abroad). It’s the cheapest freehold house one can find in the area, so there were lots of offers from people in similar position. At the end of the day it’s not like we will be unable to afford the house. I also don’t know how much of a discount I want - I suppose any would be good but I don’t really have a number!