US based vendors want an additional £10k owing to Brexit!

[FrankAbagnale]

Ean218 said:

I would have a word with the Estate Agent. They will have seen a marked reduction in activity since the vote and may even have had a deal or two unravel already.

They will therefore be more on your side than usual and if you indicate that you were actually thinking about lowering your offer or walk away then the agent will do everything in his power to sort the vendor out.

Across our offices (home counties) we have not seen any real effect on interest, prices or agreed sales due to the brexit vote. I expected to see a fall in enquiries, applicant registrations, offers and also people withdrawing from agreed sales however none of that has happened. My local Knight Frank office hasn't had a sale fall through although Savills had two, one of which was related to brexit as the chap worked in commercial property in Europe.

I see comment across the board that due to brexit house prices are certain to fall and that may be the case, but I see it as far from a certainty. I'd expect growth to slow in most areas/price brackets but I don't think prices are going to regress.

• Above £2m prices were softening long before brexit.

[walm]

Foxtons issued a massive profit warning two days ago.
Point to that and drop your offer by £10k.

The vendors are utter morons.

[AyBee]

Can I have £10k please?

They've basically just asked you for money because of their personal situation - the fact that they are converting £ to $ is of no relation to the house sale. I'd tell them to FO and I suspect they'll back down.

[DonkeyApple]

walm said:

Foxtons issued a massive profit warning two days ago.
Point to that and drop your offer by £10k.

The vendors are utter morons.

Absolutely. You have the actual advantage. They are overseas and selling into what is now an uncertain market. They were too dumb to hedge their fx risk, that's their fault and they will pay for it. And if you fancy a punt you can also make them pay an additional idiot tax for trying it on. I'd knock your offer down and sweat them out a little bit.

[Cudd Wudd]

I agree with all of the above.

I'd also be emphasising the roof point picked up on the survey as further evidence as to why any price change should be in your favour.

Best of luck.

[g3org3y]

Thank you all for taking the time to reply, your opinions are appreciated.

Cudd Wudd said:

I agree with all of the above.

I'd also be emphasising the roof point picked up on the survey as further evidence as to why any price change should be in your favour.

Absolutely. I'm glad I did the full survey in the end, gives me some ammo.

It will be interesting to see how they react to this as 10k will probably need to be spent to reslate the roof in the next couple of years. In view of this (and the current housing uncertainties) they should be desperate to sell.

Ean218 said:

I would have a word with the Estate Agent. They will have seen a marked reduction in activity since the vote and may even have had a deal or two unravel already.

They will therefore be more on your side than usual and if you indicate that you were actually thinking about lowering your offer or walk away then the agent will do everything in his power to sort the vendor out.

I spoke to them on Monday when they informed me of the developments. I could hear the frustration in the estate agent's voice.

The vendor has been a bit bothersome during the entire situation tbh. As mentioned they currently rent the house out and kept pushing to get the mortgage/survey done asap as they had a pencilled in completion date of end of July (presumably when the tenancy ends). Their fall back position has always been 'we'll just continue to rent it out instead'.

FrankAbagnale said:

Above £2m prices were softening long before brexit.

Perhaps I need to increase my budget and try and pick up a bargain!

AyBee said:

Can I have £10k please?

They've basically just asked you for money because of their personal situation - the fact that they are converting £ to $ is of no relation to the house sale. I'd tell them to FO and I suspect they'll back down.

Indeed. I've read the emails from the vendor to the estate agent (they forwarded them to me) and the content is much about not foreseeing the leave vote (and the effect on the £), potential conversion to dollars, US tax obligations and them mitigating their position. They seem aware that we may very well pull out.

DonkeyApple said:

walm said:

Foxtons issued a massive profit warning two days ago.
Point to that and drop your offer by £10k.

The vendors are utter morons.

Absolutely. You have the actual advantage. They are overseas and selling into what is now an uncertain market. They were too dumb to hedge their fx risk, that's their fault and they will pay for it. And if you fancy a punt you can also make them pay an additional idiot tax for trying it on. I'd knock your offer down and sweat them out a little bit.

Indeed, though it seems to me they would rather sit on it as a rental than sell at this price and that's their fall back/default position.

If that's the case, so be it. We'll simply continue to rent and take our time to look for another house. By that point perhaps prices will drop a touch, we'll have more saved up for a deposit and perhaps buy something bigger/better.


Again, thanks for your opinions chaps, I'll be speaking to the estate agent tomorrow.

[DonkeyApple]

g3org3y said:

Indeed, though it seems to me they would rather sit on it as a rental than sell at this price and that's their fall back/default position.

If that's the case, so be it. We'll simply continue to rent and take our time to look for another house. By that point perhaps prices will drop a touch, we'll have more saved up for a deposit and perhaps buy something bigger/better.


Again, thanks for your opinions chaps, I'll be speaking to the estate agent tomorrow.

If they are based in the US you can only begin to imagine the terrifying end of the world news about the UK they will have been digesting all week. They will be soiling themselves and ripe for a bit of knocking. . The trouble is that it's impossible to have those balls to do so if it's a personal purchase not an investment.

[walm]

Despite the bounce, if the economy does further tank and we even hear hints of a further interest rate drop, the GBP will fall considerably further.
Making the rent they will receive in GBP worth even fewer USDs.
Furthermore if they have US taxes to pay then that's going to be a lump sum/one-off and you don't get payment plans from the IRS - i.e. they can't pay their taxes from the rental income.

If however, they mean that selling the house will crystalise some capital gain that they will have to pay tax on then they (as you would expect) would be paying a % of the gain, which DOESN'T CHANGE WITH FX.

i.e. If they made a £500k gain which had a 40% CGT charge then they owe £200k in the equivalent USD value AT THE RATE ON THE DAY OF THE GAIN.

So I strongly suspect that the whole "we owe tax" is BS.

[Fastpedeller]

See if you can be the new rental tenant..... Then you will be able to see all the faults with the property and offer accordingly

[g3org3y]

Thanks for the insight Walm, very interesting.

Fastpedeller said:

See if you can be the new rental tenant..... Then you will be able to see all the faults with the property and offer accordingly

That sounds like a plan!

[ColinM50]

So if the deal doesn't go ahead and they're happy to carry on renting the house out, will they expect the tenants to pick up their f/x "losses"? I think not. As others have said, call their bluff and say no. But it's easy for us to say, we haven't got your wife bleating and moaning at you every day

[Ozzie Osmond]

It's a negotiation. The other side have pointed out quite reasonably that the background to the transaction has changed and they want to renegotiate. Whether or not OP agrees he needs to deal with the situation. At the end of the day these late stage rengotiations are far from uncommon and it's just a matter of working through it.

Realistically OP has three options, because just saying "no" is a high risk strategy,
a) Find a strong counter-argument to support the original deal, put that argument to the other side and see if the deal can stick, or
b) Show understanding and agree to meet them half way, or
c) Just suck it up - if the pain of having to start again would be too great.

[walm]

Ozzie Osmond said:

It's a negotiation. The other side have pointed out quite reasonably that the background to the transaction has changed and they want to renegotiate. Whether or not OP agrees he needs to deal with the situation. At the end of the day these late stage rengotiations are far from uncommon and it's just a matter of working through it.

Realistically OP has three options, because just saying "no" is a high risk strategy,
a) Find a strong counter-argument to support the original deal, put that argument to the other side and see if the deal can stick, or
b) Show understanding and agree to meet them half way, or
c) Just suck it up - if the pain of having to start again would be too great.

Disagree.
The vendors need to make a strong argument to raise the price. They are the ones putting the whole chain at risk, not the OP.
FX moves is NOT any sort of argument at all.

And you missed:
d) Lower your offer because consumer confidence is shot, jobs are more at risk and housing transactions will dry up.

[Ozzie Osmond]

Well, we'll see what happens! Hopefully OP will keep us informed.

Talk is easy - delivery can be more tricky.

[Davel]

A house is worth whatever someone will pay for it.

It doesn't matter where the owners live as that has no impact on the market value where the house it.

They are messing you about and surely their agents will have told them that it's a ludicrous idea.

[XMT]

walm said:

Ozzie Osmond said:

It's a negotiation. The other side have pointed out quite reasonably that the background to the transaction has changed and they want to renegotiate. Whether or not OP agrees he needs to deal with the situation. At the end of the day these late stage rengotiations are far from uncommon and it's just a matter of working through it.

Realistically OP has three options, because just saying "no" is a high risk strategy,
a) Find a strong counter-argument to support the original deal, put that argument to the other side and see if the deal can stick, or
b) Show understanding and agree to meet them half way, or
c) Just suck it up - if the pain of having to start again would be too great.

Disagree.
The vendors need to make a strong argument to raise the price. They are the ones putting the whole chain at risk, not the OP.
FX moves is NOT any sort of argument at all.

And you missed:
d) Lower your offer because consumer confidence is shot, jobs are more at risk and housing transactions will dry up.

Totally agree with Walm it is not reasonable at all!
I have mentioned this on another post as well but if the pound got stronger would it be reasonable for the OP to restart discussions on price and wanting to pay less. The seller would tell him to do one and rightly so.

[g3org3y]

ColinM50 said:

So if the deal doesn't go ahead and they're happy to carry on renting the house out, will they expect the tenants to pick up their f/x "losses"? I think not. As others have said, call their bluff and say no. But it's easy for us to say, we haven't got your wife bleating and moaning at you every day

She's been cool and quite adamant that we shouldn't pay more to be fair. We both like the house however if it doesn't happen it doesn't happen. We're both quite realistic.

walm said:

Ozzie Osmond said:

It's a negotiation. The other side have pointed out quite reasonably that the background to the transaction has changed and they want to renegotiate. Whether or not OP agrees he needs to deal with the situation. At the end of the day these late stage rengotiations are far from uncommon and it's just a matter of working through it.

Realistically OP has three options, because just saying "no" is a high risk strategy,
a) Find a strong counter-argument to support the original deal, put that argument to the other side and see if the deal can stick, or
b) Show understanding and agree to meet them half way, or
c) Just suck it up - if the pain of having to start again would be too great.

Disagree.
The vendors need to make a strong argument to raise the price. They are the ones putting the whole chain at risk, not the OP.
FX moves is NOT any sort of argument at all.

And you missed:
d) Lower your offer because consumer confidence is shot, jobs are more at risk and housing transactions will dry up.

Thanks for providing an alternative viewpoint Ozzie.

There's no major chain. We currently rent and are looking to buy. As mentioned previously, if the sale falls through we'll continue to rent and take our time in finding another house.

I'll be speaking to the estate agent tomorrow. Will keep you guys updated.

[Ozzie Osmond]

XMT said:

Totally agree with Walm it is not reasonable at all!

My own experience of buying and selling is that if external circumstances change, which they have, it is not at all unusual for one party to try to renegotiate. To that extent I consider it reasonable.

Compare and contrast the Brexit negotiations. UK turns up and says, "We'd like to keep all of the benefits while walking away from the stuff we don't like". Is that reasonable? There are probably other threads on that one!

[Tallow]

Here's my point of view from the other side of a similar fence:

I've just accepted an offer in the past week on my house from a buyer. When the house completes, I'll be immediately transferring the funds to USD as I am expatriating.

To say I am unhappy about the exchange rate situation because of Brexit would be an understatement. However, I recognise that this is my problem as the vendor, not the problem of the buyer. I haven't made any changes or demands, nor would I consider it reasonable to do so. The flip side of the coin, though, is that if they try and do any post survey haggling (which I really hope they won't), I will be much less amenable to discussing it.

The exchange rate will likely recover somewhat (although not completely) before completion. If they haven't understood that is the case, it might be worth mentioning it. For them to ask more money is unreasonable and speculative in my opinion.

[Lucas Ayde]

Tallow said:

Here's my point of view from the other side of a similar fence:

I've just accepted an offer in the past week on my house from a buyer. When the house completes, I'll be immediately transferring the funds to USD as I am expatriating.

To say I am unhappy about the exchange rate situation because of Brexit would be an understatement. However, I recognise that this is my problem as the vendor, not the problem of the buyer. I haven't made any changes or demands, nor would I consider it reasonable to do so. The flip side of the coin, though, is that if they try and do any post survey haggling (which I really hope they won't), I will be much less amenable to discussing it.

The exchange rate will likely recover somewhat (although not completely) before completion. If they haven't understood that is the case, it might be worth mentioning it. For them to ask more money is unreasonable and speculative in my opinion.

Why do you need to immediately transfer all your funds to USD? Just transfer what you need to cover immediate expenses and hold the rest in a sterling bank account until such time as you feel is right to change them. You can set up a non-resident sterling account if you are going to be resident somewhere else (the US) - just find a suitable international bank, HSBC are pretty good for this sort of thing.