I am getting a bit fed up with how long it is taking to exchange contracts and complete on this deal. Looking back over my records we made an offer on August 22nd and agreed a price on August 27th. That is one month ago today. Great play was made of the fact that the vendor wanted to sell fast and we had our offer accepted on the grounds that we did not need to get a mortgage on the new house. We were told that the vendor had already received the grant of probate so there was no need for any delay. It turns out that this was not the case and an application had not been made. We are told that they subsequently applied but as of yesterday (Friday) it had still not been granted. So why does this delay matter? There are several reasons.
- We have spent money on surveyors fees and legal fees. We would have avoided commissioning any work had we known that the vendor wasn't ready to sell straight away. It only took two days between ordering the survey and receiving the report so it would not have caused any additional delay. Similarly the additional searches and enquires our solicitors have made could have waited.
- House prices have fallen again since the deal was struck. This is not the vendors fault however we should have been well in to the refurbishment project by now.
- After our offer had been accepted the Government made their announcement about increasing the stamp duty threshold to £175,000. This house is slightly over that figure and it sits firmly in the dead spot between £175,000 and £200,000. Again this is not the vendors fault however it seems to me that by increasing the rate, the Government effectively caused all house prices that were just over the threshold to fall to just below it. As a point of principle I did not try and re-negotiate the price after the announcement but I assumed we would be getting on with it.
- We had always hoped to have the refurbishment finished by Christmas with the house re let or put back on the market. Bearing in mind completion is a minimum of two weeks away now it will not be possible to complete the work by Christmas and some of the jobs will take longer during the Winter months.
- As a final (and not really related point) we offered to purchase the house on the basis that it was structurally sound. It is true that we have found more work to do than we were expecting and I was naive about the DPC but the need to re-render and re-point the outside walls is disappointing.
So there you are. I have gone from being very positive to a bit flat over the course of two days. I have approached the agent with my concerns and at the moment I think the chances of this deal happening are only 50/50 from 90/10 in favour a couple of days ago. We shall see what Monday brings.
3 comments:
I note the early morning timing of your latest missive. Did you sit up, bolt upright, in bed with the realisation, “I’ve got thoughts, I must blog” or was it a written conclusion to midnight deliberations, I wonder?
You’re absolutely correct that the housing market continues to be poor and a renegotiation of £10k gives you in effect, £11 175 (plus 1% of the part of the current price that is above £175k) to assist with the extra refurbishment costs. You could offer to pay their agents costs for them.
I’d be disappointed if you decided not to procced as that would suggest an end to this blog. However you’re probably best to disregard this sentiment when analysing. Alternatively, just pretend that you’ve bought it, describe the letting process, the new tenants, etc. etc.
Good luck with the deliberations; have you received any more quotes to allow you to consider further?
I can’t think of a pseudonym, signing off with just my initial seems so pretentious.
The reason for the early morning post was rather less interesting. I couldn't sleep and blogging seemed better than watching poker on Channel 5!
I really do want to proceed but I am determined to treat this as a business and my head must therefore rule my heart.
Interestingly I asked our solicitor about paying their (other sides) fees. His view was that this would be a deliberate ploy to avoid stamp duty and would entail spending some time at Her Majesty's Pleasure.
There have been budget increases following some quotes and I will post them up later on when I have had a chance to update the spreadsheet.
The agent would have to release the sellers from their obligation to pay its fees and you would enter into a new agreement to pay the agent a fee for acquiring the property: the payment of a fee by the buyer being not at all uncommon.
Obviously if a purchaser agreed to pay the agent an enhanced sum of which part would be paid to the Seller, then that would be a fraudulent act of SDLT avoidance and obviously not one to be condoned.
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