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To Gazunder Or Not To Gazunder?

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Some advice from the regular at HPC would be nice....

I am going through the process of buying a 1 bed flat in Enfield. The area is pretty good - heading towards the Cheshunt side of Enfield rather than the Edmonton side. It has a reasonable amount of space with a 30 ft garden - which is one of the reasons I was keen on this in the first place. There is an old lady who lives upstairs, which the owner says he hardly ever sees. Was priced at £155k and an offer was accepted at £150k. The guy seems very keen to sell (not surprised with recent event) and he tried to make the selling process a little smoother by throwing in the cooker and fridge (ha!). The lease has 75 years remaining.

What concerns me on this flat is the lease. Through my own rough calculations, I think it would cost me approx £4k to £6k to renew the lease back up to 99 years. This cost is something I should have factored into the original offer when it was made - however, I made this offer in the Summer of 2007 (peak of gazumping mania) so I was fearing making any lower offer would be refused outright.

So thus what I am thinking of doing is something ‘unethical’ - which is gazundering the offer at the last minute. Say, 24 hours before exchange of contracts, putting in an offer of £145k (to cover the lease renewal costs). Am I wrong to do this? Or should I be ethical and just take the hit and renew the lease under my own costs?

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Some advice from the regular at HPC would be nice....

I am going through the process of buying a 1 bed flat in Enfield. The area is pretty good - heading towards the Cheshunt side of Enfield rather than the Edmonton side. It has a reasonable amount of space with a 30 ft garden - which is one of the reasons I was keen on this in the first place. There is an old lady who lives upstairs, which the owner says he hardly ever sees. Was priced at £155k and an offer was accepted at £150k. The guy seems very keen to sell (not surprised with recent event) and he tried to make the selling process a little smoother by throwing in the cooker and fridge (ha!). The lease has 75 years remaining.

What concerns me on this flat is the lease. Through my own rough calculations, I think it would cost me approx £4k to £6k to renew the lease back up to 99 years. This cost is something I should have factored into the original offer when it was made - however, I made this offer in the Summer of 2007 (peak of gazumping mania) so I was fearing making any lower offer would be refused outright.

So thus what I am thinking of doing is something ‘unethical’ - which is gazundering the offer at the last minute. Say, 24 hours before exchange of contracts, putting in an offer of £145k (to cover the lease renewal costs). Am I wrong to do this? Or should I be ethical and just take the hit and renew the lease under my own costs?

Why not gazumping happened all the time on the way up.

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Some advice from the regular at HPC would be nice....

I am going through the process of buying a 1 bed flat in Enfield. The area is pretty good - heading towards the Cheshunt side of Enfield rather than the Edmonton side. It has a reasonable amount of space with a 30 ft garden - which is one of the reasons I was keen on this in the first place. There is an old lady who lives upstairs, which the owner says he hardly ever sees. Was priced at £155k and an offer was accepted at £150k. The guy seems very keen to sell (not surprised with recent event) and he tried to make the selling process a little smoother by throwing in the cooker and fridge (ha!). The lease has 75 years remaining.

What concerns me on this flat is the lease. Through my own rough calculations, I think it would cost me approx £4k to £6k to renew the lease back up to 99 years. This cost is something I should have factored into the original offer when it was made - however, I made this offer in the Summer of 2007 (peak of gazumping mania) so I was fearing making any lower offer would be refused outright.

So thus what I am thinking of doing is something ‘unethical’ - which is gazundering the offer at the last minute. Say, 24 hours before exchange of contracts, putting in an offer of £145k (to cover the lease renewal costs). Am I wrong to do this? Or should I be ethical and just take the hit and renew the lease under my own costs?

Business is war, of course you're not wrong to do it if you think you can make it happen, ethics doesn't come into it.

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You have a verbal contract with the guy. Although non-binding, if breaking such a contract does not fit with your personal ethics, then don't do it.

If you do gazzunder, be prepared for your relationship with him to go to crap and for him to let the place go to ruin in the period between exchange and completion, hide prawns under the floorboards etc etc.

Edited by aussieboy

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Guest The_Oldie
So thus what I am thinking of doing is something ‘unethical’ - which is gazundering the offer at the last minute. Say, 24 hours before exchange of contracts, putting in an offer of £145k (to cover the lease renewal costs). Am I wrong to do this? Or should I be ethical and just take the hit and renew the lease under my own costs?

If someone did that to me, I'd reject it and pull out of the sale on principle (in fact, one did and I did). Why not discuss it with the vendor now?

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a friend of mine has had something similar happen

the person offering on their house sunddenly asked for 5k from each person in the chain to do a repair on their own building,

needless to say my friend said on yer bike. & re- listed the house, sold again next day!

are you willing to risk on losing the house you want if the vendor says no & pulls out from you!! just something to think about.

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Thanks all for the replies.

I like to think of myself as a decent person, so if I was to do this it would not be a decision taken lightly. However, as you can appreciate, I don't want to be in a position where I have a flat which is both deprecating in value and harder to sell in a housing market downturn. That is my double-wammy fear.

Say, I wanted to *discuss* this with the seller, what would be the best way to approach him? Ask kindly might result in a better response than blackmailling him? Any suggestions?

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Guest The_Oldie
Thanks all for the replies.

I like to think of myself as a decent person, so if I was to do this it would not be a decision taken lightly. However, as you can appreciate, I don't want to be in a position where I have a flat which is both deprecating in value and harder to sell in a housing market downturn. That is my double-wammy fear.

Say, I wanted to *discuss* this with the seller, what would be the best way to approach him? Ask kindly might result in a better response than blackmailling him? Any suggestions?

Just say you're having second thoughts and explain your problem.

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It seems like you understand it fully already .To gazunder feels "unethical" so its a question for your own conscience. If you do decide to do it you won't be striking a blow to HPI but dishonouring your own verbal contract.

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Why not tell him you have re-calculated your costs and are unable to proceed at the current price agreed? Thats what I would do & if he walks, there will always be another one & the latter will almost certainly be cheaper anyway :lol:

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If somebody did that to me I'd tell them that they had 24 hours to pay the price agreed otherwise it was going to cost them an extra £5k, and it was back on the market with immediate effect.

The fact you didn't do your sums correctly up front is your problem not the vendors. I'm all for offering way bellow asking price and playing hard ball, but once that offer has gone in the thats the end of it unless something comes up on a survey.

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Business is war, of course you're not wrong to do it if you think you can make it happen, ethics doesn't come into it.

I don't know what business you are in but you wouldn't last too long employing those sorts of tactics in mainstream business - your reputation would precede you. There is a big difference between driving a hard bargain in the first place and welching on a deal at the last moment just because you think you can get away with it.

what goes around come around - not that I believe that unfortunately.

same goes for people who accept a gazumper too imo.

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Here's an update:

Just found out that the front area of the flat, which we were 'assured' (well that's what the missus told me!) was part of the ground floor flat, is actually commonhold - it belongs to both the upstairs and the downstairs flat. Now considering the circumstances, and of course the timing of this all, we are actually starting to get cold feet. So the plan appears to be to offer a lower price (with the front area in mind). Taking into consideration what's going on at the moment, if the seller pulls out then its fine by us - we can get value-for-money next year. So now the balls will be in his court - I will wish him good luck trying to find another buyer now ;)

When the deed is done, I will keep you all posted. P.S. to that poster who says that the seller could be a psychopath - don't worry, I can look after myself. People cross the street when they see me, not the other way round. :ph34r:

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Here's an update:

Just found out that the front area of the flat, which we were 'assured' (well that's what the missus told me!) was part of the ground floor flat, is actually commonhold - it belongs to both the upstairs and the downstairs flat. Now considering the circumstances, and of course the timing of this all, we are actually starting to get cold feet. So the plan appears to be to offer a lower price (with the front area in mind). Taking into consideration what's going on at the moment, if the seller pulls out then its fine by us - we can get value-for-money next year. So now the balls will be in his court - I will wish him good luck trying to find another buyer now ;)

So, translating, you found something you thought you could use as justification for cutting the price - or do you really think that the commonhold affects the value (by the amount you want to cut the price by ?). Really ? How did you do that valuation then ?

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Here's an update:

Just found out that the front area of the flat, which we were 'assured' (well that's what the missus told me!) was part of the ground floor flat, is actually commonhold - it belongs to both the upstairs and the downstairs flat. Now considering the circumstances, and of course the timing of this all, we are actually starting to get cold feet. So the plan appears to be to offer a lower price (with the front area in mind). Taking into consideration what's going on at the moment, if the seller pulls out then its fine by us - we can get value-for-money next year. So now the balls will be in his court - I will wish him good luck trying to find another buyer now ;)

When the deed is done, I will keep you all posted. P.S. to that poster who says that the seller could be a psychopath - don't worry, I can look after myself. People cross the street when they see me, not the other way round. :ph34r:

If you're having this many doubts, why not just pull out. It's coming across (to me at least) that you want to do this anyway but don't want to be the ones to make the final decision. You could tell the buyer that in light of recent events you're withdrawing from the housing market for now. It'll generate far less ill-feeling than messing about asking for reductions and will give the vendor the opportunity to find a more serious buyer. That isn't meant as a criticism by the way, it just seems like common sense to me.

Edit: Fixed use of 'buyer' in place of 'vendor'

Edited by narrowescape

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Final Update:

Well, I've officially pulled out of it. Told my solicitors today. Although I do kinda sorry for the seller though - not sure how is going to flog that flat off with a sizeable discount (say, 20k off?). Just recently put my nice and healthy deposit in NSandI and Icesave. Will now rent for the next year or so.

Now I can sit on the sidelines and laugh at all those people in the approaching doom of negative equity. Phew....I feel I lot better already. :) Happy days. :P

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I'm glad you have made a decision you are happy with.

After selling the flat I had owned for nearly 10 years, I came very close to buying about a year ago, and dropped 15K from the agreed price of 390K after a dodgy survey. If I am completely honest, I had doubts from the start which only intensified as time progressed (I didn't know about this site then btw, just had a gut feeling). Therefore pulling out wasn't a problem for me, but it was for my other half who was absolutely set on redeveloping it (it needed quite a lot of work and was a "great opportunity"). I wasn't so keen with regard to the amount of work and also the cost. I eventually managed to convince the o.h. that we had to drop the offer because the survey identified extra work that we hadn't planned on. The revised offer was rejected so the o.h. gave up at that point and that was that, or so I thought. The following day, the vendor decided that they wanted to accept the offer after all, but to my immense relief the o.h decided enough was enough and we called it a day.

The vendor eventually sold the place for 385K so it turned out OK for both parties in the end.

My money is now in NS&I and shiny gold sovereigns.

Edit: Got one of the prices wrong.

Edited by narrowescape

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I don't know what business you are in but you wouldn't last too long employing those sorts of tactics in mainstream business - your reputation would precede you. There is a big difference between driving a hard bargain in the first place and welching on a deal at the last moment just because you think you can get away with it.

100% agreed. Just because the world's full of corrupt, unethical businesses doesn't mean it's something to aspire to. And Mattyboy, maybe karma will kick in for certain big businesses (banking, oil, for example) now with everything that's coming out in the wash - you have to hope.

I see the situation came to an end anyway - but I had to laugh at 'I consider myself a decent person' in the same post as pondering 'blackmail' (and with the later 'laughing at people in approaching doom' statement).

Either you believe gazundering is wrong and don't do it, or you believe it's fair and have no qualms doing it. Asking for others' opinions would suggest the former belief with a desire to be excused.

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