Stay Calm! Shock as buyer makes massive price reduction...
We are about to exchange contracts and my buyers have dropped their offer by £30,000. What should I do?
Firstly, don’t panic. Take a few deep breaths then…
Step 1. Talk to your agent.
Find out all the nuts and bolts of the revised offer. Unfortunately it's a classic property investor/speculator move as these people are clearly in the market to make money, not to move home. If they can save £5,000 - £20,000 or more, they can add that to their bottom line. So, is your buyer a private individual, buying to move in, or a property speculator, buying to rent out, or redevelop and sell?
With the former, it is easier to discuss, find middle ground if possible, or just say ‘no’. Quite often, private individuals have been put up to it by ‘friends’ (using that term advisedly as they may cause them to lose the property they want!). Once your buyers have had a serious conversation with the agent who should be doing everything to keep the deal on board at the original agreed price, they may well relent and just go ahead.
With property people, they will have been looking carefully at the market and calculating their risk against return. Unfortunately, it’s a tried and tested manoeuvre to get a seller to the brink of exchange, then move the goalposts by revising the offer. Don’t fall for it if you don’t have to.
Unfortunately, they have not made an offer on your property out of 'love'; they've seen a return on investment.
What can your agent find out? This will help you make the right decision but you also need to urgently talk to your solicitor.
Step 2. Call your solicitor. Find out what they have heard from the buyer's side. Sometimes, they will be in the dark as the buyer will perhaps have gone straight to the agent with the revised offer. But any extra information helps.
Step 3. Do you have a trusted knowledgable advisor who knows the local market? It may be another estate agent or a surveyor who could advise on value and what to do. The issue here is 'trust'. An agent who is not employed by you already may advise you to drop your current sale and start again with them to realise the price you have. But, will they? You could, for definite peace of mind, pay an independent valuer (non-estate agent) to come and look, research the market and advise you. It will cost you £300-500 (plus VAT) but could save you many £1000s in lost sale price. It’s your call.
You can of course do your own research. Land registry figures for ‘sold property’ in your street or within ¼ mile within a 6 month to year period, will help you find out what other people have sold for. If you are objective about your property, you may be able to discover easily whether you are doing fine if you reduce, or if you should ‘stick’. Rightmove have this facility: http://bit.ly/RightMoveSold
Step 4. After consulting, go back to your agent with your best counter-offer. If you feel the sale price is right, just say ‘no’ to the revised offer. If you can afford to make a slight reduction and still carry on with your plans, say so. If you had always felt you had achieved a massive 'over value' sale and can take the reduction or something near, do it. The main thing is to be calm; don’t be pressured and try not to be too emotional about it.
You need to ensure your agent acts in YOUR best interests; not for the buyer, nor for them getting their commission now rather than re-marketing and waiting another 12-16 weeks for the sale to complete. Find out your agent’s motives and make sure you trust them.
Taking it as read that you want to sell the property; be dispassionate and make the best decision for you and yours. The questions that should be at the front of your mind throughout this period are:
If I pull out of this sale, am I going to be here or in a worse position in 3-6 months’ time?
Can I afford the time?
Can I afford the financial ‘loss’ if I go ahead now?
Whatever your decision, be decisive and stick to your guns! Don’t be bullied into making a decision you then regret.
Paul Bonett F.N.A.E.A. M.A.R.L.A. 01273 677365 firstname.lastname@example.org