The nervous wait to exchange....

Soldato
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I bet they just wanted to lock in a high chance of getting their fee so told the buyer whatever just to get them so far down the path that it would be major hassle for both sides if the sale didn't go through.
 
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I'm going with thick as **** tbh mate lol

he's een in direct contact with me also and eveything is "need to see what solicitor says"

the last minute survey is clearly due to something someone has said as he showed zero interest in this prio (I suspect his solicitor)

Adding this last minute oh I wan in by SEP was completely unexpected.

I really wanna go back to him and say look you've not stood by anything we've agreed, yer gonna have to rethink yer offer. we declined higher offers on the basis he was ftb and happy to wait for our property and exchange prio to 1 July lol.

missus just wants all the stress over with
 
Soldato
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Negotiating after the fact will always carry some degree of risk. Mortgage valuation will play a part, an in-depth survey could throw up expensive work required as well, I don't think you should never negotiate based on these factors, but if you do I think it's best to be prepared for the eventuality the seller could walk away. Until exchange of contracts nothing is legally binding.

A lot of people can't afford the additional after a down-valuation by a surveyor from the officer price, but I suppose the difference here might be the advertised/expected price and the offer made, for example if I list a house for £300K and EA goes "yep £300K is about right" and then a buyer comes in and offers £330K to secure the deal, then I'd not be too happy about them coming back to me later and asking for £300K instead because their lender values it at that price. I'd be expecting the person offering above list price to realise they'd potentially need to fund that gap.

On the other hand, if someone offers £300K and the valuation came back £270K, then at least they could have not foreseen that as easily, I'd probably be more understanding in that scenario.
The thing is, how can you expect it to be 330k to be sold when banks down-valued it?

Every other buyer will have the exact same issue unless there cash buyers or at a rare chance, are able to make that 30k difference and go into negetive equity.

And why as a seller would you entertain someones offer thats 30k more knowing that they are not cash buyers and that a down valuation could happen?
 
Soldato
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Soo....

We agreed a low ball offer from our buyer with specific conditions.

He move fast (I paid for the searches from the last buyer) - He's been useless
We Exchange prior to the 1 July - This didn't happen
We advised from the outset that if he wanted a survey it was done ASAP, he appears to have contacted the survey company on 29th June
We pushed our reservation the new build as he said he would go with whatever they told him verbally on Monday - He now says he's waiting for the report on Friday.
Agreement that he waits for our new property with w/build window SEP-NOV - He's now said he wants in BY Sep

What an utter ****
Bruh. If your property is in a area i am looking at and meet my budget i would snap it up and try and get the deal done ASAP lol.
 
Soldato
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The thing is, how can you expect it to be 330k to be sold when banks down-valued it?
Like most things, the price is whatever people are willing to pay for it.

Every other buyer will have the exact same issue unless there cash buyers or at a rare chance, are able to make that 30k difference and go into negetive equity.
Eh? How do you know how much equity a buyer will have? Simple maths:

Buyer A offers 300k as they have a 30k 10% deposit and their income enables them to borrow 270k. 10% equity, 90% LTV. Let's say here the bank values it at 300k. If they offered more they'd have to provide cash to do so, not borrow it.

Buyer B offers 330k, they have a 110k deposit and are able to borrow up to 220k also. Obviously they request a mortgage of 220k. House gets valued down at 300k as above. That's fine, they still borrow their 220k but it's at a different LTV.

Expected LTV at 330k: 67%.

Actual LTV after valuation: 73% so they'd probably have a higher interest rate/less options.

No negative equity in sight anywhere :confused: Just that they put 30k of their cash into the house which isn't realised as value yet.

This can happen anywhere e.g. you want a graphics card. RTX 3090, MSRP £1000, no stock available from shops who were selling it at £1100, can get one if you're willing to pay £1500 on eBay. What you have then is a card valued at £1000, that the typical price should be £1100 but due to demand the market price TODAY is £1500. That £400 was your choice to tie up in the card cos you had the cash.
 
Soldato
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Like most things, the price is whatever people are willing to pay for it.


Eh? How do you know how much equity a buyer will have? Simple maths:

Buyer A offers 300k as they have a 30k 10% deposit and their income enables them to borrow 270k. 10% equity, 90% LTV. Let's say here the bank values it at 300k. If they offered more they'd have to provide cash to do so, not borrow it.

Buyer B offers 330k, they have a 110k deposit and are able to borrow up to 220k also. Obviously they request a mortgage of 220k. House gets valued down at 300k as above. That's fine, they still borrow their 220k but it's at a different LTV.

Expected LTV at 330k: 67%.

Actual LTV after valuation: 73% so they'd probably have a higher interest rate/less options.

No negative equity in sight anywhere :confused: Just that they put 30k of their cash into the house which isn't realised as value yet.

This can happen anywhere e.g. you want a graphics card. RTX 3090, MSRP £1000, no stock available from shops who were selling it at £1100, can get one if you're willing to pay £1500 on eBay. What you have then is a card valued at £1000, that the typical price should be £1100 but due to demand the market price TODAY is £1500. That £400 was your choice to tie up in the card cos you had the cash.
EA will know what LTV a buyer has. The EA we have dealt with in this area all ask us what our LTV is and even ask for mortgage in principle. The seller gets feeded some of this information so they can either accept someone making a silly kfderWith only LTV of 90 percent,or go with someone lower that's a cash buyer or better LTV etc

It's common knowledge that if lenders devalue your property and it gets sold for a lot more, that properly is in negetive equity. Not your poroblem the seller but the buyer has purchased a house that's worth say 500 today market but they got it for 550.

They need that property to go up by 50k in value to break even. And who knows if that will go up during what everyone is saying about a possible market crash /recession.

Yes normal times your property will go up by 50k in london in less than 2 years
 
Soldato
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Yeah I think OP is possibly conflating negative equity with negative/poor investment return.
Sorry yes. But if you bought a place that's 50k above market rate in a fixed 2 year deal and if **** really hits the fan, you are most likely not going to remortgage in a positive equity if that makes sense?

So you could be in negetive equity at the time you are ready to remortgage
 
Soldato
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Sorry yes. But if you bought a place that's 50k above market rate in a fixed 2 year deal and if **** really hits the fan, you are most likely not going to remortgage in a positive equity if that makes sense?

So you could be in negetive equity at the time you are ready to remortgage
Yeah you are FUBAR. This is how repossessions happen, as your LTV will be higher than what the market is willing to offer. You either pay "another deposit" on the place you live to get back to the minimum 95/90% LTV, or foreclose.
 
Caporegime
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That's the issue and why when I bought this house I was really concerned with offering over.
I was worried with the high LTV and covid that values would fall. And come remortgage be stuffed.
Got lucky and property boomed.

But if you're buying now over value and have high (90-95pc) values only need to fall 10 percent for you to be needing a 100 percent mortgage. Which isn't a thing. So you end up on SVR.
My house was downvalued by 10 percent from zoopla estimates by lender. And I bet could get the zoopla estimate!

In a few months time SVR could easily be 6 or 7 percent.

Bang. You're a FTB. You've gone from a 2pc deal to 6-7pc on what is probably a high cost/earnings mortgage.
 
Soldato
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But all the above hits a lot harder if you ARE borrowing a large amount and running a 90/95% LTV. We bought at 61% LTV because we had big deposits and very low borrowing power (only one of us earning) so there's a pretty big margin before we're in the ****. So it depends on your circumstances. While I think deposits (in conjunction with high rent/living costs) are the thing that blocks reasonable earners from getting on the ladder, only owning 5% of your house in a wildly variable market seems risky.

I think our house would need to devalue 86k before we'd be at 5% equity. And it's not a very valuable house (for the south).
 
Soldato
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But all the above hits a lot harder if you ARE borrowing a large amount and running a 90/95% LTV. We bought at 61% LTV because we had big deposits and very low borrowing power (only one of us earning) so there's a pretty big margin before we're in the ****. So it depends on your circumstances. While I think deposits (in conjunction with high rent/living costs) are the thing that blocks reasonable earners from getting on the ladder, only owning 5% of your house in a wildly variable market seems risky.

I think our house would need to devalue 86k before we'd be at 5% equity. And it's not a very valuable house (for the south).
But as I said. You as a buyer would know that someone offering on your property what LTV they have and what silly money they offered.

With that in mind, you should expect a down valuation and the possibility of that buyer pulling out as a result or dare I say it, try and negotiate with you.

You are always going to have the exact same problem for any buyer who has a high LTV..

Would you accept a offer on someone that offered 50k more but has a LTV of 90 or someone that offers you 20k more but has a LTV of 70.

You can't just look at the offer amount. Surely as a seller you look at the buyers LTV, if there FTB or not, etc
 
Soldato
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Money received by solicitor. Building insurance purchased and confirmation of exchange completed!

Completion is on schedule for next week. Fingers crossed.
Completed as scheduled on Thursday, received the keys and moved a few bits. Friday, Saturday, Sunday and all day today have been moving days!

Finally got there and now the fun begins to decorate and spend even more money!

Huge relief to have finally done it, we started looking in January 2020 when we left our rental. After several lock downs, a couple job changes and two houses falling through we are finally here and I dont think I will ever leave again, the stress is too much hah
 
Soldato
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Completed as scheduled on Thursday, received the keys and moved a few bits. Friday, Saturday, Sunday and all day today have been moving days!

Finally got there and now the fun begins to decorate and spend even more money!

Huge relief to have finally done it, we started looking in January 2020 when we left our rental. After several lock downs, a couple job changes and two houses falling through we are finally here and I dont think I will ever leave again, the stress is too much hah

Grats! and yep moving is a total nightmare, I'm not even entertaining the thought of doing it again anytime soon!
 
Soldato
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Funny story on ours... had a young lad come and survey for the buyer. The house was built in 1880 - mid-terrace. He scared the life out of her by mentioning rising damp and issues with the chimney being damp.

The lass got a local bloke who is renowned for owning the church contracts - very inexpensive, kind, socialist type. He just came and basically said - I don't really care what the survey says, I'm not checking the party walls as it is a mid-terrace - and I'm not going in the loft, the chimney will be fine --- but I will check the front/rear walls and recommend injection damp proofing.

Not sure how she will feel getting a quote for a job on a wall that wasn't even flagged :cry:
 
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