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Purchase Property before current one sells?

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  • 01-07-2010 11:48am
    #1
    Mango Joe
    Registered Users Posts: 1,178 ✭✭✭


    We are very interested in a House but cannot secure the deal as our own House is currently on the Market.

    - Generally speaking the Auctioneer/Vendor will only entertain bids from Buyers who can bid while not being subject to the sale of their own House.

    Can anyone out there please offer thoughts, advice or suggestions on how we can raise the money to secure the target Property, the issue here is not one of funding shortfall but is more to do with the fact that though we can afford to buy a House we like it is likely to be sold off before we can release the funds to buy it :(

    Is there a commonly used route that People take in this situation? Would a Credit Union entertain us - Do People ask Close relatives to act as short term Guarantors for a loan?

    Might the Auctioneer be tempted with a large deposit and some legal guarantees of some description attached to this which would act to remove concerns regarding the sale falling through?

    Thanks!

    Joe.


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    #2
    Money Shot
    Closed Accounts Posts: 603 ✭✭✭Money Shot


    I believe the bank will normally, depending on your circumstances, give you a bridging loan at a very caring rate :D

    I've a related question, if you can't sell your house for a while, then buy the other house, live there, and over a year later down the line you secure a sale. Will you have to pay capital gains tax as it is no longer your primary residence, assuming you bought it a while back and it increased in value somewhat ?


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    #3
    mprop
    Closed Accounts Posts: 116 ✭✭mprop


    Mango Joe wrote: »
    We are very interested in a House but cannot secure the deal as our own House is currently on the Market.

    - Generally speaking the Auctioneer/Vendor will only entertain bids from Buyers who can bid while not being subject to the sale of their own House.

    Can anyone out there please offer thoughts, advice or suggestions on how we can raise the money to secure the target Property, the issue here is not one of funding shortfall but is more to do with the fact that though we can afford to buy a House we like it is likely to be sold off before we can release the funds to buy it :(

    Is there a commonly used route that People take in this situation? Would a Credit Union entertain us - Do People ask Close relatives to act as short term Guarantors for a loan?

    Might the Auctioneer be tempted with a large deposit and some legal guarantees of some description attached to this which would act to remove concerns regarding the sale falling through?

    Thanks!

    Joe.

    Speaking as an auctioneer, I would not entertain bids from someone who's house is not sold as there is no security in the deal.

    You run a massive risk of loosing a deposit if you were to somehow sign contracts and any half decent solicitor will tell you to hold off until you have sold your own.

    I'm sure its a killer to miss out on this house but it would be much worse to lose money and have the mental stress and anguish that goes along with it.

    Mike


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    #4
    mprop
    Closed Accounts Posts: 116 ✭✭mprop


    Money Shot wrote: »
    I believe the bank will normally, depending on your circumstances, give you a bridging loan at a very caring rate :D

    This was true in the past but I doubt its very common now... I suppose its all down to personal circumstance.


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    #5
    quozl
    Registered Users Posts: 3,308 ✭✭✭quozl


    Owning two assets in a falling market while having a very large, and punitively rated, bridging loan is a recipe for disaster.

    This could go very seriously wrong, Mango Joe.

    If you truly think now is the time to trade up, then sell your present house, and rent in the interim while looking for a place to trade up to.

    I appreciate that's a lot of hassle if you have a family, but, the alternative would be a very poor idea imo.


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    #6
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    mprop wrote: »
    You run a massive risk of loosing a deposit if you were to somehow sign contracts and any half decent solicitor will tell you to hold off until you have sold your own.

    your an auctioneer and you say this ???

    Lose your deposit are you for real ? you sign the contracts you are committed to buying there is no way out legally.

    I cannot believe you actually said that. Beggars belief :eek::eek:


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    #7
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    mprop wrote: »
    Speaking as an auctioneer, I would not entertain bids from someone who's house is not sold as there is no security in the deal.


    yeah because "sale agreed" is secure. :rolleyes::rolleyes:

    I could go out tonight and make bids on 100 properties and go sale agreed on them all if I wanted string along EA's and vendors and give deposits.

    Then in a week or 2 pull out of them all.

    Just like gazumping there is no such thing as security in a house sale in this country until the contracts are signed. you as an EA should know this. :rolleyes:


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    #8
    Treehouse72
    Registered Users Posts: 1,003 ✭✭✭Treehouse72


    Mango Joe wrote: »
    the issue here is not one of funding shortfall but is more to do with the fact that though we can afford to buy a House we like it is likely to be sold off before we can release the funds to buy it :(


    If the issue isn't funding, then just sell your current house and buy the new one. Why can't you just do that?


    (^^ Full disclosure....this is a mischievous rhetorical question designed to make you see a fundamental error in your thinking).


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    #9
    facksake
    Closed Accounts Posts: 35 ✭facksake


    From my experience auctioneers will accept bids subject to the sale of their own. Contracts just won't be signed until the buyer has sold his own.

    A property can go sale agreed which is when you give your deposit, but if you can't sell your own or they decide to sell to someone else the deposit is refundable. So I would say put a bid on the property, sale agree it, but by no means sign a contract until you've sold your own.

    I also think you should listen to quozl's advice above


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    #10
    Jo King
    Banned (with Prison Access) Posts: 2,139 ✭✭✭Jo King


    D3PO wrote: »
    yeah because "sale agreed" is secure. :rolleyes::rolleyes:

    I could go out tonight and make bids on 100 properties and go sale agreed on them all if I wanted string along EA's and vendors and give deposits.

    Then in a week or 2 pull out of them all.

    Just like gazumping there is no such thing as security in a house sale in this country until the contracts are signed. you as an EA should know this. :rolleyes:

    Because "SALE AGREED" is NOT secure!

    You could only go sale agreed if vendors and auctioneers are prepared to accept your bid in the first place. The deposits you are referring to are booking deposits which are refundable. The contract deposit paid at signing can be forfeit if the purchaser does not complete the sale. It is the contract deposit which mrprop is referring to.
    Mrprop is saying that he is not prepared to get involved in taking deposits subject to the sale of another property. The property is sale agreed for months and then the whole thing unravels. Far better to take bids from people who are in a position to proceed straight away.
    The sensible thing to do in a falling market is to sell the first house, put the money in the bank, then buy another house.


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    #11
    mprop
    Closed Accounts Posts: 116 ✭✭mprop


    Jo King wrote: »
    Because "SALE AGREED" is NOT secure!

    You could only go sale agreed if vendors and auctioneers are prepared to accept your bid in the first place. The deposits you are referring to are booking deposits which are refundable. The contract deposit paid at signing can be forfeit if the purchaser does not complete the sale. It is the contract deposit which mrprop is referring to.
    Mrprop is saying that he is not prepared to get involved in taking deposits subject to the sale of another property. The property is sale agreed for months and then the whole thing unravels. Far better to take bids from people who are in a position to proceed straight away.
    The sensible thing to do in a falling market is to sell the first house, put the money in the bank, then buy another house.


    Thanks. .

    I was about to get into an explanation!
    mprop wrote: »
    You run a massive risk of loosing a deposit if you were to somehow sign contracts and any half decent solicitor will tell you to hold off until you have sold your own.

    I have seen this happen. Your 10% can be taken if lets say your finance is pulled at the last minute or the funds you were gaurenteed get "lost"


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    #12
    Mango Joe
    Registered Users Posts: 1,178 ✭✭✭Mango Joe


    Sincere thanks to you all - It'll just be the disappointment and sense of missed opportunity but perhaps the next one.....

    Appreciate your comments, advice and opinions :)


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    #13
    okedoke
    Registered Users Posts: 924 ✭✭✭okedoke


    mprop wrote: »
    Thanks. .

    I was about to get into an explanation!



    I have seen this happen. Your 10% can be taken if lets say your finance is pulled at the last minute or the funds you were gaurenteed get "lost"



    I think D3PO meant that when you sign a contract you are legally obliged to buy the property, not just forfeit your deposit. See for example

    http://www.herald.ie/national-news/courts/father-and-son-sued-for-836472m--in-flats-deal-1684137.html

    It is surprising that an auctioneer wouldn't know this.


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    #14
    Jo King
    Banned (with Prison Access) Posts: 2,139 ✭✭✭Jo King


    okedoke wrote: »
    I think D3PO meant that when you sign a contract you are legally obliged to buy the property, not just forfeit your deposit. See for example

    http://www.herald.ie/national-news/courts/father-and-son-sued-for-836472m--in-flats-deal-1684137.html

    It is surprising that an auctioneer wouldn't know this.

    One of the things that happen, is that if you do not complete after signing, the deposit can be forfeit. The vendor can sue for specific performance and or damages. The most usual thing is that the deposit is forfeit and the house is sold to someone else. If the price on the second sale is lower than on the first sale the purchaser can be sued for the difference.
    I am perfectly sure that auctioneers know the effects of signing a binding contract.
    You are legally obliged to complete, but if you cannot, damages may be awarded against you in lieu of specific performance. That is the most likely scenario. Most vendors, unless they are builders, will not bother with a court case. The house cannot be sold to anyone else while the case is going on, which may take years, and there is always the risk of something going wrong with the case.


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