My offer was accepted below asking. Thoughts?

Delinja

This is probably going to sound dumb, but as a first time buyer this whole experience is still very surreal to me, I feel like I need to get an outside opinion that I'm not missing some massive red flag here. 

The apartment I'm talking about is a 3 bed 2 bath in London Stratford area. 

The asking price was 650-675, my initial offer of 610 was rejected, due to alleged higher offer. I then made an offer of 625, which was not rejected, but I was asked to make a final offer as part of a sealed bid, where I just stuck to 625, since I was trying to factor in the impending fall in house prices. 

Zoopla (yes I know it's not very accurate) valuation is 667. 

The property is allegedly part of some investment portfolio, which the manager was looking to "rebalance". 

We already rent in the same development so we are familiar with the area, the apartment is only 4 years old and is in good condition, with 999 lease. 

I know that surveyor and solicitor should catch any obvious issues, but is there anything else I should be thinking about? 

Any thoughts are welcome. 

theartfullodger

"Investment portfolio" usually means tenanted.  Until & unless the place is empty, nobody nor their stuff there, I'd not even offer unless I was buying it as a buy2let deal.

Buying with tenants is entirely legal, OK, quite common.  But even if, after purchase, you are outside in the car with 3 screaming kids, incontinent Rottweiler and emotionally collapsing partner plus removals van tenants have every right to remain.

I bought a house with 4 tenants in 2006.  Still tenanted, a good deal, but I knew I was buying aiming to replace tenants every year (student house near a university...)

Have you looked inside??  

Delinja

theartfullodger said:

"Investment portfolio" usually means tenanted.  Until & unless the place is empty, nobody nor their stuff there, I'd not even offer unless I was buying it as a buy2let deal.

Buying with tenants is entirely legal, OK, quite common.  But even if, after purchase, you are outside in the car with 3 screaming kids, incontinent Rottweiler and emotionally collapsing partner plus removals van tenants have every right to remain.

I bought a house with 4 tenants in 2006.  Still tenanted, a good deal, but I knew I was buying aiming to replace tenants every year (student house near a university...)

Have you looked inside??  

Yes, we have seen the place. It is in fact tenanted. Is tenants refusing to vacate a property that big of a problem?! 

FreeBear

Delinja said:

theartfullodger said:

"Investment portfolio" usually means tenanted.  Until & unless the place is empty, nobody nor their stuff there, I'd not even offer unless I was buying it as a buy2let deal.

Buying with tenants is entirely legal, OK, quite common.  But even if, after purchase, you are outside in the car with 3 screaming kids, incontinent Rottweiler and emotionally collapsing partner plus removals van tenants have every right to remain.

I bought a house with 4 tenants in 2006.  Still tenanted, a good deal, but I knew I was buying aiming to replace tenants every year (student house near a university...)

Have you looked inside??  

Yes, we have seen the place. It is in fact tenanted. Is tenants refusing to vacate a property that big of a problem?! 

If you are wanting to live there, it is a huge problem.

You want to buy with vacant possession (i.e. No tenants), so the current owner/landlord is going to have to evict them - That is going to add long delays to the purchase. Most of us would suggest walking (no, running) away before you spend a single penny on solicitors & stuff.

Delinja

Not sure why my last comment is not showing so replying again.

I understand that I should not exchange contracts before the tenants have completely moved out.

Other than that, are potential delays the only risk? I'm fine if it drags on a little bit, earliest I can leave my current property is end of August anyway. 

TheJP

Delinja said:

Not sure why my last comment is not showing so replying again.

I understand that I should not exchange contracts before the tenants have completely moved out.

Other than that, are potential delays the only risk? I'm fine if it drags on a little bit, earliest I can leave my current property is end of August anyway. 

It could take 6-12 months to remove tenants if they decide not to move on, especially of the LL hasn't followed proper procedure. I would find out at what stage the seller is at in making the house vacant.

Delinja

TheJP said:

Delinja said:

Not sure why my last comment is not showing so replying again.

I understand that I should not exchange contracts before the tenants have completely moved out.

Other than that, are potential delays the only risk? I'm fine if it drags on a little bit, earliest I can leave my current property is end of August anyway. 

It could take 6-12 months to remove tenants if they decide not to move on, especially of the LL hasn't followed proper procedure. I would find out at what stage the seller is at in making the house vacant.

Yes, will definitely do that first thing tomorrow. 

Appreciate everyone's responses so far! 

MultiFuelBurner

I am sure the apartment is lovely but wouldn't your budget but a house in that area.

It really does depend what your future plans and needs are but always worth exploring all options and if you can cut a future move out do it.

Delinja

MultiFuelBurner said:

I am sure the apartment is lovely but wouldn't your budget but a house in that area.

It really does depend what your future plans and needs are but always worth exploring all options and if you can cut a future move out do it.

Unfortunately, in that area, the only houses available for a similar price range are usually similar size, and need a complete renovation. It's not something we are looking to take up at the moment. 

We were actually initially looking for 2 beds, but to your point of trying cut out a future move, we felt the 3 bed is a good compromise, and it's only a little over what we wanted to pay for a 2 bed in the same area. 

ThisIsWeird

Just because it is tenanted doesn't mean that there's going to be delays beyond the usual to serve notice. Most tenants aren't going to cause problems, as this will likely count against them when seeking a new place to rent - they'll hardly come with glowing references, will they? - and, in any event, most folk are just decent.

But, yes, the standard 'vacant possession', and a physical check of the flat immediately before completion. 

gwynlas

As you are living in the development already are you aware of the tenants circumstances ie when they moved in and when their current tenancy ends? Yes do not exchange without vacant possession but I let a couple of flats in London for a number of years and never had any problems with overstayers. Your offer was only £25k below asking and you were probably very aware of what similar properties had sold for so whilst you achieved a reduction I would not worry that there was anything ominous in this. Enjoy owning your own property rather than paying out rent but you will now need to start paying your own service charges.