Purchase about to fall through due to misrepresentation

Albermarle

Assuming this 'bedroom' is in the loft/second floor ( I do not think this has been explicitly stated in the thread so far). Then if it has not got building control sign off, then it should not be described as a bedroom in the EA description.

AJM1984

Albermarle said:

Assuming this 'bedroom' is in the loft/second floor ( I do not think this has been explicitly stated in the thread so far). Then if it has not got building control sign off, then it should not be described as a bedroom in the EA description.

Thank you! Sorry, it is a loft. I didn't know that was relevant, so I genuinely appreciate you explaining the distinction.

RHemmings

AJM1984 said:

RHemmings said:

AJM1984 said:

We can't magic up 5k quickly without some considerable risk and, really, we don't want to. We were at 95% LTV, so no wiggle room. We also need to retain some funds for the necessary repairs. Seller won't reduce by 5k because she was two weeks away from exchanging on her dream house which the EA claims she would lose overnight if the chain broke and it was relisted. EA seems to be dealing with both other purchases/sales within the chain.

Why would the offer being reduced by £5k prevent the seller getting her dream home, but you walking away wouldn't? 

To me that paragraph makes me think that it's you that's in the stronger position. And, if they marketed the property as having one more bedroom than it legally is allowed to be described as, then morally I think you are entirely justified in reducing your offer. In fact, I would think that reducing by only £5k would be generous in these circumstances. 

I don't know about that tbh. The EA says other lenders and solicitors would happily class it as three bedroom despite no regs. Maybe she thinks the top of the chain can push back exchange giving my seller more time to market her house again for the same price we agreed? The EA seems to give out the general vibe that we're the idiots about to miss out. Hence me needing some impartial feedback.

I would definitely check this thoroughly. Easy to say that, particularly if it was verbal. The firm evidence that you have is that it isn't. 

AJM1984 said:

The seller insists that she can't lose 5k on our transaction because she'll then be short 5k for the seller above her. If we drop out it's messy for her and the chain above. Apparently she was crying and screaming on the phone to the EA. Makes me feel awful! We really do like the house but not sure we want an extra 5k commitment on top of repairs. I'm browsing other houses in case. Yes, we would very much have liked to settle in that house but we're very used to just accepting that things fail and we have to move on. We just didn't want that to be the case in this instance.

Please don't feel guilty about this. It isn't your fault. And, you shouldn't have to compromise based on someone else's error. 

Doozergirl

Albermarle said:

Assuming this 'bedroom' is in the loft/second floor ( I do not think this has been explicitly stated in the thread so far). Then if it has not got building control sign off, then it should not be described as a bedroom in the EA description.

And if the house itself doesn't have building control sign off because it pre-dates the regs - is it no longer a house?   We know it's a grey area; the surveyors opinion is their opinion and it won't be changed though.  

OP, try and see if the whole chain can absorb some of the cost for an immediate exchange.  £1666 each isn't a lot.  

£5k actually isn't much in the grand scheme, you'll lose money on all the fees to date if you pull out. 

lincroft1710

If you cannot raise the £5K needed for the mortgage shortfall, or if the vendor will not agree to a £5K price reduction, or you cannot persuade your lender to increase their offer by £5K (or by an amount to which you could afford to make up the shortfall), or you cannot persuade the vendor to reduce the price to an amount to which you could afford to make up the shortfall, then quite simply you will not be purchasing this property

lisyloo

 "Apparently she was crying and screaming on the phone to the EA."

This may or may not be true.
It shouldn't affect your judgement on whether you should pay this.

Momanns

1. Don't believe everything the EA says. Having gone through a very stressful sale & purchase, I wouldn't be inclined to believe much they say especially as they will be trying anything to keep the chain in tact.
2. As people have listed, sounds like your only option here is to offer £5k less. The vendor can either accept or decline. If they want their dream house, they should be working with you as much as possible. Having to relist will likely put their purchase in jeopardy.
3. This is a fairly common occurrence, the vendor & EA should be working with their sellers to renegotiate. This happened on our chain, an offer was reduced but it was agreed along the chain that everyone would accept the same reduction so it didn't harm us although it is reliant on the end of the chain being willing to accept.

AJM1984

RHemmings said:

AJM1984 said:

I don't know about that tbh. The EA says other lenders and solicitors would happily class it as three bedroom despite no regs. Maybe she thinks the top of the chain can push back exchange giving my seller more time to market her house again for the same price we agreed? The EA seems to give out the general vibe that we're the idiots about to miss out. Hence me needing some impartial feedback.

I would definitely check this thoroughly. Easy to say that, particularly if it was verbal. The firm evidence that you have is that it isn't. 

Agreed. Our MA used to be a regional manager for a huge EA chain and he implied that under no circumstances can it be marketed as three bedroom, especially now everyone is aware of the lack of regs. He's been mediating with the EA on our behalf. He's very experienced and very reassuring. We trust his judgement. He says if we pull out they'll need to remarket as two bed. Unless the current owner gets a certificate; which we'd happily wait for and accept. The EA also wants to confirm with our solicitor that they haven't uncovered any regs. It's frustrating because there are regs and certificates for everything else except one replacement window. (Which indemnity was agreed.)

Doozergirl 

OP, try and see if the whole chain can absorb some of the cost for an immediate exchange.  £1666 each isn't a lot.  

£5k actually isn't much in the grand scheme, you'll lose money on all the fees to date if you pull out. 

We believe the EA to be negotiating with the chain above. We'd happily absorb 1.5k. Our deposit was just over 5% as MSE suggested that would increase acceptance. So our official mortgage offer is 123,500k of the 135k needed. (7k deposit to be added.) 
At present we'd lose about 2k and then have to start the process on another house but if they want that extra 5k it would eat in to the repair funding which we'd already told them we'd accept. Such a pickle! 

AJM1984

lisyloo said:

 "Apparently she was crying and screaming on the phone to the EA."

This may or may not be true.
It shouldn't affect your judgement on whether you should pay this.

I'm being naive again, aren't I? 

The seller is also an older lady who has struggled to find the perfect house over the last few months. I do sympathise but our MA did also say something like "Yes, the EA would say that. The seller is their client and they want this deal for them."

AJM1984

Momanns said:

1. Don't believe everything the EA says. Having gone through a very stressful sale & purchase, I wouldn't be inclined to believe much they say especially as they will be trying anything to keep the chain in tact.
2. As people have listed, sounds like your only option here is to offer £5k less. The vendor can either accept or decline. If they want their dream house, they should be working with you as much as possible. Having to relist will likely put their purchase in jeopardy.
3. This is a fairly common occurrence, the vendor & EA should be working with their sellers to renegotiate. This happened on our chain, an offer was reduced but it was agreed along the chain that everyone would accept the same reduction so it didn't harm us although it is reliant on the end of the chain being willing to accept.

Thank you so much for your input! I'm sorry you've been in a similar stressful situation. 
The EA did imply that they are handling the chain for quite a few links, as it were, as all the sales are through them. I'm keen to see if the seller is willing to lose out over 5k. If we're willing to lose out over 5k. Or, by some miracle, at least three parties are willing to split the cost.