Can I drop agreed price before closing?

Brazzer

Hi Guys

Need a bit of input. We have put a booking deposit down on a house and are paying the remainder of the 10% in a few weeks with the view to closing in early January. I have been told by a few people to drop the agreed price now considering houses are supposed to drop by a further 8% next year. A friend of mine had this done to her on the day of signing, her buyer dropped the agreed price by 10k and her solicitor told her to suck it up as going to put the house on the market again she might not achieve the price again. She is one of the people advising me to do it. I broached the subject of doing it with my solicitor and he didn't seem phased at all, I wasn't very outright, just tried to gauge a reaction.

My OH is all for it, he thinks we should 'chance our arm' but it's not something I'd like to happen to me even though I agreed to a 20k drop on our previous property when selling but that wasn't in the final stages the way this new property is now.

Has anyone done this? If so, did you do it directly with the estate agent or get your solicitor to do it on your behalf?

Also, is it an awful thing to do? I know for a fact that the person who owns this house also owns a lot of houses in the area, he's not an investor that bought in the boom times and I would consider him to be well heeled. What I mean is it's not a family I would be considering doing this to. You can probably tell I'm a bit uneasy but we're heavily stretched to buy this house and literally only have what we agreed to pay for it. Not that it makes a difference to the seller but it does to us, the house needs a whole new heating system and this is what's going through my mind, the money I could potentially save could be used to install a new heating system.

Thanks in advance

Bigcheeze

You can do it anytime until the contracts are signed and exchanged.

When I was selling 6 months ago I was half expecting it to happen to me but it didn't so I was lucky to get a straight up buyer.

You do it with the estate agent. It has nothing to do with your solicitor although if you wanted to pay him extra to do it he probably would.

In terms of ethics, I suppose I'm a bit old fashioned and believe that once a deal is agreed it should be honoured but that's just my personal view and there's nothing legally stopping you putting in a lower offer.

Brazzer

Thanks for replying, it's good to hear other peoples opinions and perspectives on this. Much appreciated.

mrmitty

I believe that from a legal standpoint there's nothing stopping you.
Personally, I think that one's word should be their bond.

This practice was dispicipable on the way up and is equally dispicipable on the way down IMO.
The sooner that real estate contract law is rectified in Ireland the better....

Jezzabelle

mrmitty wrote: »

I believe that from a legal standpoint there's nothing stopping you.
Personally, I think that one's word should be their bond.

This practice was dispicipable on the way up and is equally dispicipable on the way down IMO.
The sooner that real estate contract law is rectified in Ireland the better....

How would you like to see contract law rectified in this regard?
A contract is legally binding, until a contract is signed either party are free to change their mind and I see this as fair practice. It may not suit some people's moral standpoint but at the end of the day the op is probably committing to 20 year plus mortgage and wants to be sure they are not paying more for something than it's worth and I can't say I blame them.

odds_on

In Argentina and I think Spain as well, the day you pay a deposit you sign a contract stating the price and the terms and conditions of sale. Such as what happens if either player pulls out of the deal (the buyer usually loses twice the deposit). There is no chance of changing the price to be paid.

However, the price on the deeds is usually a lot lower than the selling price (often 50% or more). This way the buyer pays less municipal taxes and the buyer pays less tax on the sale. Also, the deeds are usually ready within a week to ten days at the most - and can also be as little as 1 or 2 days - with all the legal checks made.

not even wrong

we're heavily stretched to buy this house and literally only have what we agreed to pay for it.

Are you from 2006? Have you been paying any attention at all to what's been going on in the news for the past 5 years?

professore

OP if you can do it then do it. All the other party can do is say no. I don't understand the idea of paying a deposit though.

From this post it seems to be otherwise, but to me a deposit is something you pay to stop the other party selling or changing the price. If you pull out of the deal you should lose the deposit - otherwise what's the point?

ted1

I'm a man of ethics and wouldn't do it.
But seen ad your not. Tell the estate agent the banuk won't give you the full amount so you havwe to lower the price
I'm in the process of buying and have caluculated a price drop of approx 8% a year after I buy it will still keep me up money. As I'm paying approx 15k in rent.
I'm buying in the same estate as I'm renting and rent is currently dearer than aortgage.

rsole1

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Garzorico

Brazzer do what is right and correct for you and yours. Ignore everyone else. If the seller could get an extra 5k or whatever out of you do you not think they would try? Its economics and the market at work. If the seller was offered 10k more than you offered do you think they would say 'no thanks we agreed a price with another buyer already'....would they f*ck. Its not personal, its business. Absolutely chance your arm. Like I said look out for you & yours.

P. Breathnach

ted1 wrote: »

...
But seen ad your not. Tell the estate agent the banuk won't give you the full amount so you havwe to lower the price ...

Why tell lies? If you want to do it, at least have the decency to tell your victim that you are choosing to behave like a shit.

Bigcheeze

Garzorico wrote: »

If the seller could get an extra 5k or whatever out of you do you not think they would try? If the seller was offered 10k more than you offered do you think they would say 'no thanks we agreed a price with another buyer already'....would they f*ck. Like I said look out for you & yours.

The difference is the house has now gone "sale agreed". On the way up, we heard of the phrase Gazumping but it certainly wasn't common and I've never heard of it happening to anyone I know. Reality is that on the way up sellers could have put their house back on the market and got more money in a few days.

Garzorico wrote: »

Absolutely chance your arm.

Kind of our national motto isn't it

mikemac1

Gazundering
Go for it OP, often done a few days or even hours before the contract is signed
The money is better off in your pocket. Worst that can happen is they say no

It's not some family emigrating with their life savings here, you say the guy owns multiple properties

There were plenty of gazumping going on not long ago when the sellers could get away with

P. Breathnach

mikemac1 wrote: »

...
It's not some family emigrating with their life savings here, you say the guy owns multiple properties...

It's legal, but I consider it unethical.

I don't think it is right to contrive a justification. If you are going to behave badly, you should at least acknowledge that to yourself.

Brazzer

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Nice ! I'm neither greedy nor deceitful, if I didn't have morals I wouldn't have asked for advice. Your opinion won't be taken on board as you chose to attack me. You don't know me so please keep your disgusting thoughts about me to yourself, they are neither wanted nor welcomed when you choose to blame me for the 'mess we're in'.

Brazzer

To all others who replied, again thank you. It's something I hadn't thought about doing until 3+ people said it to me. I thought it must be common practice as they didn't seem at all miffed offering their advice to do this.

amdublin

It's legal. But I wouldn't do it.
Morally if I agreed a price and gave my word I'd stand over it and honour it.

Howjoe1

flip side...during the boom I was on the wrong end of a builder who hiked the price by 30,000 will I was waiting for the cheque to clear due partially to incompetence of broker.

So maybe its a case of what goes around comes around !

is it a new build?

mrmitty

Jezzabelle wrote: »

How would you like to see contract law rectified in this regard?
A contract is legally binding, until a contract is signed either party are free to change their mind and I see this as fair practice. It may not suit some people's moral standpoint but at the end of the day the op is probably committing to 20 year plus mortgage and wants to be sure they are not paying more for something than it's worth and I can't say I blame them.

Simple.
Submit an offer in writing which will have some contingencies such as
1 inspection period.
2 ability of buyer to obtain a mortgage
3 clear and free title at closing
Both # 1 & 2 above should have specific time limits of approx one week for #1 and 30 days for #2.
At the time of signing an acceptance of offer and upon reciept of earnest money, the document should become an enforceable contract with buyer having rights to sue for specific performance and the seller having same with additional right to confiscate earnest monies.
Once an offer has been accepted (in writing), a contract should be in existence with the above contingencies.

mrmitty

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

The fact that the OP took time to post this thread displays evidence that they do indeed have morals IMO.

Brazzer

Howjoe1 wrote: »

flip side...during the boom I was on the wrong end of a builder who hiked the price by 30,000 will I was waiting for the cheque to clear due partially to incompetence of broker.

So maybe its a case of what goes around comes around !

is it a new build?

No, it's approx 65-70 years old.

Coriolanus

You can and should, otherwise you're paying the owner a premium. If he's willing to take 10k less great, if he's not, pay what the original.

jsd1004

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Its easy to see you have never been in business and would not survive too long in the business world.

Mr. Presentable

I presume you will lose your deposit if you foul the deal. I believe what goes around comes around. A good tenet is "Don't do to me what you wouldn't want done to yourself"

ted1

P. Breathnach wrote: »

Why tell lies? If you want to do it, at least have the decency to tell your victim that you are choosing to behave like a shit.

easy, it if says "can i pay less". the response will be no. theres adn agrred price.

if he says "I can't pay the agree price as the max th ebank will give me is x". well then the likly hood is that the offer will be accepted.

TOMP

Beware the seller might respond and put the price up 10%

Supercell

Who was it that said you should always leave the other guy something?

My dad was telling me the other day about when they bought their first house. They bargained hard (but didn't gazunder the seller) and when they got the keys to the house they went down to check it out as you do. The seller was stripping the place!! Curtains, copper wiring, even the front door was off his hinges!! He couldn't believe it, he reckons if he'd not gone down the gaff would have been a shell a few days later!!
I would thread carefully about gazundering any seller, bad blood never leads to good things.

Posy

Brazzer wrote: »

the house needs a whole new heating system and this is what's going through my mind, the money I could potentially save could be used to install a new heating system.

You should have really considered this when making your final offer, but I'm sure you know that already!
Perhaps tell the estate agent that you were going to be getting a loan to repair the heating system, but now the bank won't give you the extra, so you'll have to reduce your offer by 5k, unless you get a credit union loan but it's not too likely.. that way you can get a 'feel' for how a reduced offer would go down before being too 'official'. I don't agree with lying, but it sounds better than 'I'm chancing my arm, sure you can only say no!'
If you don't ask, you don't get- in this climate you have to be tough!
It's not ideal, but it's not ideal leaving yourself so financially stretched either, especially in a buyer's market.

The_Conductor

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

5 day ban for personal abuse.

Guys- how many times do I have to spell it out for folk, if you disagree with what someone posts- refute the post, without attacking the poster.

Regards,

SMcCarrick

Posy

Supercell wrote: »

I would thread carefully about gazundering any seller, bad blood never leads to good things.

That's why I would tread carefully OP.. but if you're prepared for the answer being 'No', you might as well ask, while voicing your financial concerns over the overhaul of the heating system.
Good luck with the house, either way!