Buying a Repossessed House - want to lower offer price after it was accepted after the survey

Cat85MSE

I’m a first time buyer and currently in the process of purchasing my first property, a repossession.

I’ve had a survey done, but as the electrics, gas and water are off to the property these couldn’t be tested, the property is dated and I knew I would have to update these anyway. However in my haste at wanting this property, I offered the full asking price, it is discounted anyway due to needing modernisation but as the market is slowing slightly and I’m a cash buyer, I think I’m in a strong position. Repo company are pushing for exchange in 14 days and I’m happy to do this but as long as all the searches are back in time. Solicitor and EA are happy that the company will go with this, so that’s not an issue.

I’d like to lower my offer buy £10k but thinking this will be rejected in the offer of reducing it by £5K instead, I was told at the time by the estate agent there would be ‘wiggle room’ but I didn’t do it as there were other interested parties at the time and I liked the place.

Survey hasn’t highlighted anything that wasn’t too much of a surprise, dated and in need of modernisation etc, however they did note that some drains were blocked and would need these seeing too. There is asbestos in the outside pipes as well so will need to be replaced. – built early 70’s.

When I look to renegotiate the offer, do I ask the solicitor to do this or do I tell the estate agent? I’m thinking if I use the estate agent, then I won’t need to pay for the solicitors fees?

What tactics would other forumites use to renegotiate the selling price? Do I need to share the survey with the repossession company at all if I were to mention the pipes and drains or will they just take our word for it so to speak? Either way, I don’t want to have to have an additional cost of having the pipes cleared before I move in.

Any  advice on how to go ahead would be most welcomed, as I’m buying it myself and have no one around that I could get sound advice off!

GDB2222

There's no point asking about £5k or £10k without saying how much you have offered in total. £5k off £1m is way different from £5k off £70k.

However, as far as managing the reduced offer is concerned, I would just tell the agent. By email, most likely. Give a couple of reasons off the survey report to justify it, but don't go mad.

You can only do this once, so ask for the full £10k off. They can always haggle. 

The sellers will then check your new offer against their own surveyor's valculation. If it's within the range he gave, they'll most likely say okay. 

Are you quite sure £10k is enough, btw?

Cat85MSE

GDB2222 said:

There's no point asking about £5k or £10k without saying how much you have offered in total. £5k off £1m is way different from £5k off £70k.

However, as far as managing the reduced offer is concerned, I would just tell the agent. By email, most likely. Give a couple of reasons off the survey report to justify it, but don't go mad.

You can only do this once, so ask for the full £10k off. They can always haggle. 

The sellers will then check your new offer against their own surveyor's valculation. If it's within the range he gave, they'll most likely say okay. 

Are you quite sure £10k is enough, btw?

Thanks, I think £10K off is enough as the house is 'only' £280K on the market currently. Houses that are up together and in a nice condition currently are on the market for £325K, not selling though, but I would have thought even with a bit off they would go for £310K perhaps, they were definately selling for £325K in summer before mortgage rates went up etc.

GDB2222

You can always call the agent up and start off by saying you've had a shocking survey report and need to reduce your offer, whilst being cagey about just how much. They may give you an indication of what they think the sellers will accept. That could be more than a £10k reduction. 

The seller's surveyor will have looked at comparable houses and allowed for the full cost of renovation by a professional builder. Many FTBs (and I remember doing this) grossly underestimate the cost of refurbishment, so the surveyor may have valued it way below your reduced offer.

Section62

Cat85MSE said:

GDB2222 said:

There's no point asking about £5k or £10k without saying how much you have offered in total. £5k off £1m is way different from £5k off £70k.

However, as far as managing the reduced offer is concerned, I would just tell the agent. By email, most likely. Give a couple of reasons off the survey report to justify it, but don't go mad.

You can only do this once, so ask for the full £10k off. They can always haggle. 

The sellers will then check your new offer against their own surveyor's valculation. If it's within the range he gave, they'll most likely say okay. 

Are you quite sure £10k is enough, btw?

Thanks, I think £10K off is enough as the house is 'only' £280K on the market currently. Houses that are up together and in a nice condition currently are on the market for £325K, not selling though, but I would have thought even with a bit off they would go for £310K perhaps, they were definately selling for £325K in summer before mortgage rates went up etc.

When you buy a reposession there is an element of sold-as-seen about it.  A commercial vendor wants to sell with the minimum of hassle, and doesn't have the same considerations to take into account (e.g. needing to keep a chain intact).

You can always ask to reopen the negotiation, but bear in mind this might cause the vendor to pull out and sell to someone else instead.

Equally, the vendor has a responsibility to ensure the property is sold at a fair (for the original owner) price, and would need to be able to justify reducing the price once agreed.

Also bear in mind that the property and agreed price may have to be advertised in a local paper - in which case the vendor won't want to entertain price reductions once the advert has been placed, and other potential buyers will know what a bargain you are snapping up and could gazump you. Paying a little more than rock bottom is one way of making sure you get the property.

mi-key

You need to weigh up if saving £5k is worth losing the house for if they decide to sell to someone else, Considering it is less than 2% of the purchase price. You would also lose the money you have already spent on fees and surveys etc...

Of course they may accept it, but it is a risk. Personally if I had got this far in the process and already made an offer I could afford then I would just get on with buying it and not mess around

mi-key

p.s. I would also say there isn't really anything in the survey that is unexpected or would justify a reduction in price, so basically you just want to pay less for the house for no real reason? 

diystarter7

Hi OP
Offer what you like, be it 10k below price or 40k, your choice

What helps is the position you are in and if you are eager to complete A-Sap.

If you offered 10k less, what is the worst outcome - yes, simple answer they say no or counter it

However, keep eye on the ball as you may get someone else interested

Repo's - EA are given min price they have a min price se. Therefore do go for 10k less or even a bit more - tell them many unkonws, market, housing in turmoil, cost of living, uncertainty, etc etc and the rest of it and go for it.

See what they say tak it from there - its a buyers market - your choice your money

Good luck

Section62

diystarter7 said:

If you offered 10k less, what is the worst outcome - yes, simple answer they say no or counter it

The worst outcome is the vendor pulls out leaving the OP to cover all their own costs to date, with no house to show for it.

The answer "No, (we aren't prepared to negotiate)" would be towards the more positive end of the scale of outcomes.

For the reasons already given in the thread, trying to reopen the negotiation with a corporate vendor disposing of a property (within specific legal constraints) is a risky gamble. Their position and strategy is likely to be very different to a person who has a chain to juggle with.

propertyrental

So far as the survey is concerned there's nothing there really to justify a price reduction, any renegotiation is basically gazundering.

...... as the electrics, gas and water are off to the property these couldn’t be tested, the property is dated and I knew I would have to update these anyway. 
as exprcted for a repo and known about when you viewed and offered
... I offered the full asking price, it is discounted anyway due to needing modernisation 
Fair enough. Still needs modernising
but as the market is slowing slightly and I’m a cash buyer, I think I’m in a strong position.
To gazunder? Maybe.
...
I’d like to lower my offer buy £10k  Why not 15? or 20?
but thinking this will be rejected in the offer of reducing it by £5K instead,
No one knows.
 I was told at the time by the estate agent there would be ‘wiggle room’ but I didn’t do it as there were other interested parties at the time and I liked the place. 
If that's the case, those other 'interested parties' might still be circling like sharks waiting to pounce.....
Survey hasn’t highlighted anything that wasn’t too much of a surprise, dated and in need of modernisation etc, 
As I said....
however they did note that some drains were blocked and would need these seeing too.
That's a joke, yes? Blocked drains is just normal annual maintenance. 10 minutes up a ladder (or if the drains are underground, with a drain snake or drain rods).
 There is asbestos in the outside pipes as well so will need to be replaced. – built early 70’s. 
'need to be replaced' why? So long as they work/don't leak, leave them be.
When I look to renegotiate the offer, do I ask the solicitor to do this No   or do I tell the estate agent? Yes I’m thinking if I use the estate agent, then I won’t need to pay for the solicitors fees? Solicitors don't negotiate price - just instruct your solicitor once a new price is agreed.
What tactics would other forumites use to renegotiate the selling price? Do I need to share the survey with the repossession company at all if I were to mention the pipes and drains or will they just take our word for it so to speak? 
If you want to use the drains and pipes as a reason, then yes, you'll need to provide evidence eg the survey or relevant section. But I'd expect any seller, whether a repo or not, to first laugh and then refuse!
If you want to reduce the price, just reduce the price. It's called 'gazundering'. 
Either way, I don’t want to have to have an additional cost of having the pipes cleared before I move in.
You're buying a house that you 'have to update'  and you're worried about clearing blocked pipes? Are you sure you know what you're doing? Maybe a modernised house would suit you better.

My advice? Pay what you agreed and modernise the house. The pipes will be the least of your worries!

Even if they agree to a price change, they may have to (re) advertise the new agreed price and invite other offers, in order to prove to the repossessed owner that they did everything reasonably possible to get the best price.

mi-key

@propertyrental I agree. The danger is there may be someone who would pay full asking, or even over if they really want the house and missed out on it. 

It seems like the OP just wants to gazunder for the sake of it thinking they have the seller over a barrel somehow