Reducing offer price on a house....
06 October 2008, 08:24 AM
#126
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Better change the local newspaper story.......
"Mystery Fire at Empty Property"
Firemen were perplexed as they were called out to a fire at an empty property late last night. The property, which had been empty for a while, was owned by local business man Fred Greed who was understood to be in financial difficulties. Mr Greed was not available for comment but police were examining clothes found at the water's edge on the beach.
06 October 2008, 09:56 AM
#127
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When Mrs C and I were looking to buy our first house, we'd saved up a deposit, had our offer accepted, and then had to get the survey and valuation done in order to get a mortgage.
The bank's surveyor came back with a value that was £10k less than the price we'd agreed.
We had a 10% deposit, but the bank would only lend us 90% of their valuation, not the price we'd agreed. In other words, we found ourselves nearly £10k short. At that point we had no choice but to reduce our offer in the light of the bank's valuation - not through any act of greed, but simply because the bank disagreed about the value of the property.
IIRC we ended up meeting halfway, which still meant that all the money we'd set aside for furniture and other expenses had to go straight on the house instead. We couldn't possibly have paid a penny more - we'd have had to pull out entirely.
So, under the circumstances, was it 'morally reprehensible' to reduce our offer?
Does it make any difference that we were buying brand new from the builder rather than a private individual?
The bank's surveyor came back with a value that was £10k less than the price we'd agreed.
We had a 10% deposit, but the bank would only lend us 90% of their valuation, not the price we'd agreed. In other words, we found ourselves nearly £10k short. At that point we had no choice but to reduce our offer in the light of the bank's valuation - not through any act of greed, but simply because the bank disagreed about the value of the property.
IIRC we ended up meeting halfway, which still meant that all the money we'd set aside for furniture and other expenses had to go straight on the house instead. We couldn't possibly have paid a penny more - we'd have had to pull out entirely.
So, under the circumstances, was it 'morally reprehensible' to reduce our offer?
Does it make any difference that we were buying brand new from the builder rather than a private individual?
It is the issue with the Scottish systems, the valuation could be much less than you offered but that's your problem and bad advice fromt he legal team.
However, it does in theory stop you getting gazumped which is good. Someone tried to play my mate off for £600 more having accepted his offer on a place near London. Called back saying they'd had an offer of £500 more. He told them where to go if they were that desperate.
The house we just bought was fixed price (the other possibility for a regular sale in Scotland) and these are usually set at the high end of the estate agents forcast. We offered less than the askign price and as i say we were right o do so, the valuation was 5k less than what was being asked so if we'd just paid up we'd have been in the same situation as Andy.
5t.
06 October 2008, 11:11 AM
#128
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Kieran and Rev have it spot on for me 
You make an offer at the time based on all the circumstances and then stick to it. It works both ways when prices are falling and rising knowing in 3 months time when you move house the market value may have changed.
Anyone did that to me i'd also be telling them where to go stick their stupid offer.
You make an offer at the time based on all the circumstances and then stick to it. It works both ways when prices are falling and rising knowing in 3 months time when you move house the market value may have changed.
Anyone did that to me i'd also be telling them where to go stick their stupid offer.
06 October 2008, 11:39 AM
#129
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Thanks. I took a chance and it was the right choice. It could have gone the other way and i'd be looking silly now and wouldn't have been able to have the time of my life for a year, give up work etc.
Life is all about taking chances, people don't seem to take enough though...
Life is all about taking chances, people don't seem to take enough though...
For those of us that live in the real world, life isn't that simple!
06 October 2008, 02:48 PM
#131
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can see both sides to this, I personally dont think there is anything wrong in offering less.
The OP knows the property, knows the location, knows the condition, and knows the market is falling.
If the offer has been accepted for a while and things are moving slowly then the market value will have dropped. Why should the op put himself at risk of being into neg equity just so the current owner can have exactly what they want (which in all likelyhood will be a massive profit from what they bought it for in the first place). I believe if you dont ask, you dont get, maybe I wouldnt pull out of the deal if they wouldnt accept a further reduced offer as I know how hard it is to find a house you like and there is nothing worse than looking again and all the viewings paperwork etc etc.
On the other hand, how would the op feel is somebody else a few days/hours before due completion the seller said they had accepted a better offer and were therefore pulling out.
In all honesty I think only the op can answer his own question, things like how close to the edge will he be financially with a mortgage at the current accepted offer, what kind of difference would it be if the mortgage was 10k less etc
The OP knows the property, knows the location, knows the condition, and knows the market is falling.
If the offer has been accepted for a while and things are moving slowly then the market value will have dropped. Why should the op put himself at risk of being into neg equity just so the current owner can have exactly what they want (which in all likelyhood will be a massive profit from what they bought it for in the first place). I believe if you dont ask, you dont get, maybe I wouldnt pull out of the deal if they wouldnt accept a further reduced offer as I know how hard it is to find a house you like and there is nothing worse than looking again and all the viewings paperwork etc etc.
On the other hand, how would the op feel is somebody else a few days/hours before due completion the seller said they had accepted a better offer and were therefore pulling out.
In all honesty I think only the op can answer his own question, things like how close to the edge will he be financially with a mortgage at the current accepted offer, what kind of difference would it be if the mortgage was 10k less etc
06 October 2008, 03:18 PM
#132
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to be fair the house isn't close to being unaffordable as it is, I have been told I can borrow up to £300k 
The house is £175, so maybe it was just a bit of greed kicking in, but affordable or not £10k is £10k.
After mulling it over I think I will just keep things as they are, as I would quite like this property and the whole viewing thing does my head in.
The house is £175, so maybe it was just a bit of greed kicking in, but affordable or not £10k is £10k. After mulling it over I think I will just keep things as they are, as I would quite like this property and the whole viewing thing does my head in.
06 October 2008, 05:09 PM
#134
Umm, this is what you should be focusing on, not that the bank will lend you 300k 
I don't agree with gazumping at the last minute, but surely there's nothing wrong with adjusting your offer if the market is tanking, just give them good notice?
In my experience, at the end of the day, you have to look after number one first. It's nice to be nice to people, but if it puts you in a much worse position, then it's wrong.
Gazumping is morally wrong, IMO, because that's pressurising the seller unduly on the day of exchange (or very close to), but adjusting your offer and giving ample notice is completely different.
Remember that 10k is still a lot of money, it's probably more than 5 months after tax work for most people.
I don't agree with gazumping at the last minute, but surely there's nothing wrong with adjusting your offer if the market is tanking, just give them good notice?
In my experience, at the end of the day, you have to look after number one first. It's nice to be nice to people, but if it puts you in a much worse position, then it's wrong.
Gazumping is morally wrong, IMO, because that's pressurising the seller unduly on the day of exchange (or very close to), but adjusting your offer and giving ample notice is completely different.
Remember that 10k is still a lot of money, it's probably more than 5 months after tax work for most people.
06 October 2008, 05:14 PM
#135
Cookie, if you are in a position to walk away without causing you any hardship then, by all means ask for a reduced price. It is only a business transaction at the end of the day.
If you really want this house, then I think you are skating on thin ice asking for a substantial reduction!
If you really want this house, then I think you are skating on thin ice asking for a substantial reduction!
06 October 2008, 05:28 PM
#136
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Unfortunately the world seems real enough to me and i doubt i'll be around in it that much longer (comparatively) so the only way for me to do things is both feet first, seat of my pants not looking back....
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