Reducing offer on house late into purchase due to stamp duty tax

marlot

If I were the seller I'd tell you to go away.

user1977

anselld said:

How is it possible this late on in the process to realise that you own a second property?
Also, most solicitors give a breakdown of the full purchase cost estimate up-front.  Did this not show the expected SDLT at that stage?

Those are usually based on vanilla assumptions, before the solicitors knows much about the property or the client beyond the price and what sort of tenure the property is. I wouldn't expect any SDLT complications to be looked into until a fairly late stage, it's up to the client to have figured out their budget.

In the OP's case, their SDLT bill isn't really any sort of argument for chipping away at the price. The vendor can sell to somebody who hasn't been as naive about their costs.

MeteredOut

Only you can decide, but there's a lot of anecdotal commentary about people reducing their offers late in the day due to the market outlook deteriorating between offer and closing (known as gazundering).

As others have said, unless the vendor needs the money soon-ish in order to get their own new property, and they can afford the reduction, they're likely to tell you where to go.

But, if you truly now can't afford to pay the price you offered, then its probably a choice of reducing your offer or walking away. I'd not recommend getting out a loan you can't afford.

Could you sell/remortgage the second property which is causing the additional SDLT?

jimbog

ForestOfSouls said:

For context, the vendor had the property valued at £380.000 but put the property on the market for £370.000 as they didn't feel comfortable asking the valuers price. I met them personally when viewing. It's a competitive market here (there's often bidding wars on good properties), but I believe the seller to be of kind nature who's main motivation was to find a serious buyer who was right for the house and not to squeeze as much money as they could from the market. They seemed quite disillusioned with the property market here (flaky buyers) you will be placed into that category now, not just by the vendor but by the estate agent 

Unfortunately I have found out from my solicitor from her report that I am going to need to pay the higher stamp duty tax rate when I believed I would pay the lower residential rate. This is going to cost an £12.000 or so I don't have.

I am afraid of losing the property, but one suggestion made to me has been to revise my offer for the house based on this  


I really don't want to antagonise the seller, but I could for instance explain my situation and firmly offer £8000 less (I could just about stretch to this), apologising for this late development and inconvenience but reiterating my strong financial and motivated position financially you're not in a strong financial position if you have had to go back to ask for a discount. I'm just concerned they may think I'm pulling a fast one and tell me to get lost. Good chance they will as they seemed to be very principled 

My brother thinks I should just be extremely firm about what I can now offer at this stage knowing I hold many of the aces. You have less power than you think. This is the house you've been looking for (and went over asking to get it) and there are more buyers willing to step in to take it away from you 

My intuition is the seller would be a bit peeved your instincts are right

My comments in bold. It's a risk and I think you'll lose

MultiFuelBurner

Seems like a well written chatbot/MSE posed dilemma to then post on twitter.

Flugelhorn

MultiFuelBurner said:

Seems like a well written chatbot/MSE posed dilemma to then post on twitter.

I suspect that is exactly what it is. 

Exodi

As others have said, words could not describe how angry I'd be if this was pulled on me at this late stage, the reasoning just makes it worse. I don't usually operate like this, but in these circumstances purely out of spite, I'd probably refuse to deal with you if you gave the reason you've given here.

ForestOfSouls said:

My brother thinks I should just be extremely firm about what I can now offer at this stage knowing I hold many of the aces.

Either your brother is just telling you what you want to hear, or he lives on another planet. You have invested money into surveys, searches and conveyancing, of which none would be reimbursed. You also state this is your 'dream house'. While granted, you have wasted a lot of the sellers time, they will only pay the EA for a completed transaction.

Reading between the lines, it sounds as if you own a second property and hadn't mentioned this till the eleventh hour to your conveyancer, nor done any research whatsoever on possible stamp duty payable. This is not the sellers problem.

ForestOfSouls said:

I believe the seller to be of kind nature who's main motivation was to find a serious buyer who was right for the house and not to squeeze as much money as they could from the market. They seemed quite disillusioned with the property market here (flaky buyers) and very motivated to sell as they have found a property to buy that's not in a chain.

Now imagine the rude awakening that these 'kind natured' sellers are in for, that despite trying their best to find non-flaky buyers instead of maximizing the sales price, they still end up getting stitched up at the last possible moment. It's no suprise they have become disillusioned with the property market, you sound like exactly the type of buyer they had tried to avoid.

ForestOfSouls said:

I really don't want to antagonise the seller, but I could for instance explain my situation and firmly offer £8000 less (I could just about stretch to this), apologising for this late development and inconvenience but reiterating my strong financial and motivated position. I'm just concerned they may think I'm pulling a fast one and tell me to get lost.

I really don't know how you could say this with a straight face. The audacity to 'reiterate your strong financial position' in the same conversation as informing them that they need to take a ~£8k haircut...

ForestOfSouls said:

My intuition is the seller would be a bit peeved as I already know they didn't want anything minor deducted from the survey but still accept as it would still be an offer 6% over the asking price.

I mean 'a bit peeved' is putting it lightly, I'd suggest the seller would more likely be 'absolutely seething' but this is exactly what I mean. They were already wary of flaky buyers so much so that they accepted a cash buyer, and possibly (as you implied earlier) accepted a lower price to do so.

They've explicitly mentioned that they don't want to mess about with any chipping away at the price and now you're planning to wade in with "just learned about something called 'stamp duty'... decided you're gonna have to pay it for me thanks. Please remember I am in a strong financial position and hold many of the aces."

ForestOfSouls said:

The only other solution is to borrow, and I really don't want to plunge myself into more debt as times are tough with cost of living but I guess that would be one way to secure the purchase.

Either you can afford the house or you can't. I personally would not even entertain the idea of making the seller pay my stamp duty bill, so I would word the above quote "The only other solution...". I appreciate you "don't want to plunge myself into more debt as times are tough with cost of living" (and would probably prefer the seller to plunge themselves into debt instead) but I expect they may find it hard to sympathise with a potential buyer who seemingly has £400k laying about in cash (as you said you offered 8% over asking) on top of other properties they occasionally forget about.

Good luck whatever you do.

Herzlos

I wouldn't sell to you if you proposed that, it just sounds like it'd be a hassle going forward.

What else would you forget about and ask the seller to sort later?

theartfullodger

If i was vendor and you attempted this I'd respond by stating i didn't realise the price hadn't been agreed, was now flexible, and I was putting price UP.  Cheek!

YoungBlueEyes

Absolutely agree with Exodi above. Edit : and artful.  

A few years ago we were selling a big old Edwardian terrace. We accepted an offer from (a man who turned out to be) a developer. Have gone through nearly all the motions he decided to reduce his offer - he’d worked out what it would cost to turn it into 2 flats, rounded it up a bit, and reduced his offer by that much. On the morning of exchange. 

I can’t tell you how angry I was. I told the EA - I don’t care if that man walks into your office with big suitcases full of cash, promising never to ask another question and will proceed right this very instant. In fact I don’t even want to know if he calls again. 

If you’re going to reduce your offer, be aware that it could illicit a reaction you will not like.