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This is where it gets really tricky. Old houses need work. There's always something to fix. It's not totally unreasonable for her to think 'that shit was priced in'.
Or maybe it is. This stuff is hard.
As above, that she's dropped the price at all is a good start. Make the EA earn his fee and negotiate further. And get on Rightmove and start looking for other houses as you might need to find another one!
Howard-
Yeah it's difficult. I don't want to come out the dickhead in this. We'll negotiate up a bit, maybe even more than a bit, but the fact remains there's close to £40k of work required that we weren't really expecting, just to get it back to where we sort of thought it already was, and the house isn't and may never be worth £295k (Northern Ireland prices, yo)...
t4ny4
The annoying thing is that she seemed very reasonable when we made the offer, in that it was specifically stated that she didn't want a bidding war as she'd got over asking price and was happy just to have the best-fit people get it.
The level of self-sabotaging i-don't-know-what head in sand bullshit and dickheadedness going on now makes me want to tell her to go fuck herself.
But I want the house.