buyers trying to knock down price

soolin

I haven't bought a house for many years so I don't know if this is now common or not.

Short story is I am selling a house which is in a very poor state of repair. As soon as my relative was moved out we had people knocking on the door asking if we were selling as it is in an area of London that still has good prices and a huge rental market. We had it valued both by Estate agents and a private surveyor and accepted an offer from the neighbour without putting house on the market. The sale is being dragged out by both solicitors and I had a phone call today from mine to say that buyers solicitors have said that their valuation received last year was less than the price they offered, my solicitor believes they will be asking for a £10000 reduction in due course as we are probably just a couple of weeks short of exchange.He asked how much I was prepared to drop to guarantee the sale.

I was a bit taken aback, the price was fair and I know they are desperate for the house for personal reasons and I think (hope) they are just trying it on thinking I am as desperate to sell as they are too buy.

I have therefore told my solicitor to return the letter with a neutral statement saying that their vaulation doe snot therefore tally with mine, and leave it at that. I also said that I am prepared to pull out and remarket the property if they do push for a reduction.

Is this usual, do people normally negotiate a cheaper price this close to contracts or am I being taken for a ride? They did not have a full valuation or survey on the house either, they just sent a mortgage chap in who spent approx 12 minutes in the proeprty most of that chatting to me about how nice the area used to be.

Although this is not my property, due to ill health of the owner I remain legally and entirely responsible for its sale.

jonewer

If your buyers mortgage provider have valued the home at less than the agreed price then they wont get the mortgage they are asking for so wont be able to proceed.

Given the state of the housing market (worst sentiment since the early 90s) you might do well to stick with your current buyers at a slightly reduced price rather than chasing the market down.

merlinthehappypig

It's not common, but not that unusual either, especially at a time like this when it's becoming a buyer's market.

I try as hard as I can when buying to get a decent price, but I don't think I could go to this extreme.

From what you say it is less likely to be due to the valuation and more likely to be tactical. They are probably assuming that at this stage you will take the drop rather than go through the hassle of selling again. It might also simply be because they can't borrow as much as they had hoped or they have got scared after all the negative reports in the press about house prices.

Whatever the reason, under our poor house buying and selling laws, what they are doing is perfectly legal. They don't have to go ahead with the purchase at this stage any more than you have to go through with the sale.

Whilst I can understand that your knee-jerk reaction to this might be to withdraw from the sale and re-market the property, I'd probably feel the same, you do need to look carefully at your options.

You don't say when the sale was first agreed, but the market has changed quite a bit on the last few months. You don't say how much the house is selling for, but if the £10000 is only a small percentage of the sale price you might find that you have to reduce your price by that, or more, to get it sold again.

If prices drop as much as predicted you might look back and consider a £10000 drop at this stage to be a lucky escape.

soolin

Thank you for the quick responses.

I supposed I was just surprised that the solicitor just assumed I would drop the price and that he actually only phoned to see how much by.

The sale was agreed last September/October and I had a slightly higher offer a few weeks after sale which I turned down as I was happy with the buyer as they wanted a fast sale as I did.

I will have to have a think and see what to do when the solicitor gets back to me.

lynzpower

Where abouts is it Soolin.

Many areas of london dont have the gorwth yuou might think, but some are going very strong.

hagve you had a look on nethouseprices to see if theres been much else selling on the road, it can give you a guide as to what your relatives place is worth.

You can always call thier bluff and say you will pull out if you dont want to reduce at all. I think the market in london is tipping, but people are still buying but maybe not at the over inflated rates they were before....

pamaris

merlinthehappypig wrote: »

It's not common, but not that unusual either, especially at a time like this when it's becoming a buyer's market.

I try as hard as I can when buying to get a decent price, but I don't think I could go to this extreme.

From what you say it is less likely to be due to the valuation and more likely to be tactical. They are probably assuming that at this stage you will take the drop rather than go through the hassle of selling again. It might also simply be because they can't borrow as much as they had hoped or they have got scared after all the negative reports in the press about house prices.

Whatever the reason, under our poor house buying and selling laws, what they are doing is perfectly legal. They don't have to go ahead with the purchase at this stage any more than you have to go through with the sale.

Whilst I can understand that your knee-jerk reaction to this might be to withdraw from the sale and re-market the property, I'd probably feel the same, you do need to look carefully at your options.

You don't say when the sale was first agreed, but the market has changed quite a bit on the last few months. You don't say how much the house is selling for, but if the £10000 is only a small percentage of the sale price you might find that you have to reduce your price by that, or more, to get it sold again.

If prices drop as much as predicted you might look back and consider a £10000 drop at this stage to be a lucky escape.

What he said. Especially the last part. Selling in a buyer's market is no cakewalk. Selling in a falling market... well I think the rule is price competitively (undercut the last guy) and complete as quickly as possible.

boinging_2

Also don't forget your solicitor will probably want paying for the work done thus far on the sale, plus if you readvertise you'd have to pay estate agency fees (1.5% ish - though I can't make out from your OP if you had an EA in the first place?)...

Personally, it's not a great position but given that the market is dropping like a stone I'd negotiate on the drop and take the sale.

dolce_vita

I take it you have inherited this house?

Or at least it is not "your" house?

Running_Horse

Work out what it would cost if the sale fell through and you had to accept less via an agent on commission. Then compare this with what you can get now. It should be a simple sum. Whatever you do, don't get emotional and rule it out in principle. A bird in the hand...etc.

dubsey

As I have said on another thread. We had a valuation come back that had a deficit of £12k, but we went to see the vendor ourselves to show them the report (full survey). They asked to think about it and the next day their EA called to say they wouldn't drop. We offered to go halves because our mortgage company wouldn't give us the mortgage we required based upon their valuation and even £6k was pushing what we could go to. They rejected this and we had no choice but to pull out.

We found another house and on the day we were moving in (28 days later) I had a call from the EA on my mobile to say they were now willing to go halves. Funny thing was it was through the same EA we'd just picked up keys for the new house from!

Don't do anything too hasty. As others have said the market isn't fantastic at the moment. Have a look at some of the threads on here where owners have regretted turning down offers months before. Maybe ask to see a copy of the report and maybe even offer to pay half if the buyer does.

Trollfever

Short story is I am selling a house which is in a very poor state of repair. As soon as my relative was moved out we had people knocking on the door asking if we were selling as it is in an area of London that still has good prices and a huge rental market.

If it was mine I would be considering putting it up for auction.