Should we wait?

greyskymorning

Hello all My partner and I have been looking to buy a flat in Dundee, and have since found one that is absolutely perfect for us. It's on the market at offers over £89k. We need to move in in mid-July because we're both going into education in the fall.

Now, the full story on the flat. It's in an "okay" area. It's nothing special right now. Mostly sites behind it and council housing. The building is a renovated tenement block, and the flat itself is two bedroom. It doesn't need a lot of work done, as it was done up to let out. To the right of the building there are new luxury flats being constructed and across the road and down a bit there's also some more being built: these will sell for between £140k and £180k according to the developers.

We put in an offer last Monday for it subject to survey at £89,777 to test the waters. Giving the current market, and the fear of negative equity, I thought this offer was somewhat cheeky but not a whole lot given that the surveyors I've spoken to said that people are mostly going to fixed price or getting a little over their asking price these days... Anyway, I expected it to be knocked back, and one of the reasons for it was that the vendor was adamant about wanting an entry date for the beginning of June at the latest, but was shocked when my solicitor told me the biggest reason was that the vendor wants... get this... £105k for it!! In this market, he wants 17% more than its worth.

I've since gone back and made a second offer of £92,527 which was also knocked back. The estate agent told my solicitor that the vendor is holding out for the £105k and that he is in "no hurry to sell", and that they have since had two notes of interest! I'm just a little puzzled. One minute he was desperate to sell for the beginning of June and now he says he can hang around? And if he really wants £105k, if there were three people interested then wouldn't he go to closing date? In any case, we need to buy a house relatively soon in order to make sure we're ready come July.

My question is, do you think he's bluffing to try and get the £105k out of me, or being niave as to the state of the market, and do you think I should wait a few weeks and see how this plays out or give up on it? I really love this property, and I have to say it would pain me to walk away, but it's looking like I may not have a choice! Thanks everyone

moneysavinmonkey

are you both going into full time education?
What are the costs of local rentals like - would it be cheaper?
Certainly be less hassle and give you a lot more flexibility + options in the future as sounds like you may have trouble selling the flat in the future if there is going to be a lot of competition form new builds.

greyskymorning

The new builds would be decidedly more expensive than the tenement, being that I think the price increase on that would, in a good market, be capped at around 15%.

As for renting, it costs about the same amount to rent a one bedroom unfurnished flat in Dundee as it would to buy a two bedroom flat and make mortgage payments - the rental market in Dundee is insane because of the amount of students.

We're both here for at least five years because of the length of our courses, in any case, so we don't need a lot of flexibility and we're doing this to set up for the future rather than only because we're going to uni up there. Thanks for your concern, but I've covered all the bases already! Just this pain in the neck of a vendor to boot up the butt now.

moneysavinmonkey

yes. normally i would jump in and say you'd be mad to buy but I know that for some of the uni towns in scotland it can be cheaper...

I would still worry about the competition from the new builds a little though as although the developer is saying £140 .. you can bet there will be some kind of discount or
cash back offer available... also even in a rising market new builds usually devalue at first (like a new car) so when it comes to reselling you might be competing at a similar price point to them... depends on what you manage to buy you flat for so good luck on getting a good price!


I think if this particular vendor is being stubborn you should put a time limit on your offer and keep looking at other places.

greyskymorning

A lot of people have said I was mad to buy until they found out the rental costs in Dundee! Yikes! Thanks for your advice. I don't know a lot about new builds since the flats I've been looking at are mostly older builds (I have a soft spot for sandstone buildings...) so your help is much appreciated.

jimc_2

Hi greyskymorning. Given up on "skarne" builds?

greyskymorning

Things have changed slightly since my last post. My parents have very kindly offered to pay part of my mortgage and all my moving/solicitors fees as a gift so I can now afford a flat up to about £95k. The skarne builds turned out to be in a not-so-nice area in the end anyway.