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House purchase contract

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  • 27-10-2012 2:43pm
    #1
    dudmis
    Registered Users Posts: 191 ✭✭


    We are in the process of buying a house and we will be signing the contracts early next week. The contracts are with my solicitor at the mo.

    I know that we will lose the 10pc deposit if we pull out once these contracts are signed (we dont want to btw).

    What I want to know is at what stage can the vendor not pull out? Once we sign, are they also contractually obliged to go through with the sale?

    (I suppose I'm just nervous that something is going to go wrong!)


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    #2
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    It's a fairly equal deal: both parties are fully bound once the contracts are signed.


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    #3
    the_syco
    Registered Users Posts: 37,300 ✭✭✭✭the_syco


    dudmis wrote: »
    Once we sign, are they also contractually obliged to go through with the sale?
    From reading about sales here, it's not the if, but the when; some sellers may take a while finishing the sale, due to a number of reasons such as they may be moving into another house with the sale of the current house, there could be various other complications, etc. Talk to your solicitor if you should have time penalties if the sale takes more than 5 months to complete, etc. Okay, maybe not 5 months, but nothing too short, nor too long.


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    #4
    dudmis
    Registered Users Posts: 191 ✭✭dudmis


    thanks.

    the contracts are with our solicitors - are the vendors deemed to have signed at this stage (as it is there sol that drew up the contract) or do they sign after us?

    (i know i should have gotten all this info from the sol but these questions are only coming to me now - at the w/end.:o)


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    #5
    the_syco
    Registered Users Posts: 37,300 ✭✭✭✭the_syco


    dudmis wrote: »
    the contracts are with our solicitors - are the vendors deemed to have signed at this stage (as it is there sol that drew up the contract) or do they sign after us?
    Oh. Me thinks they can sign whenever they feel like it. I'm taking that price has been agreed, and that you've already gotten someone (whose professional job it is) to survey the property to ensure that it's okay to live in and doesn't have any architectural f**k-ups that would cost you lots of money to fix (eg; stupid cracks in wall, or something?) that you have bargained a lower price with...

    Or have you gotten any surveyor to look at the property at all? before agreeing on price?


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    #6
    dudmis
    Registered Users Posts: 191 ✭✭dudmis


    surveyor has been and is happy with the house - so that side of things should be ok.

    its more that i just want to get to the stage where i know no-one can pull out!


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    #7
    Milk & Honey
    Banned (with Prison Access) Posts: 1,950 ✭✭✭Milk & Honey


    You sign first, then the vendors. They can pull out any time before they sign. It is not unknown for vendors to get your signed contract and then sit around doing nothing about signing themselves. You can pull out before they sign.


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    #8
    dudmis
    Registered Users Posts: 191 ✭✭dudmis


    thats what i thought - oh, well we have to hang in there a bit longer...


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    #9
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    Contracts become binding once signed & exchanged. The purchaser signs the contracts first and they are then returned to the vendor to sign. As mentioned above the vendor dictates the timeframe and it's very difficult to put pressure on the vendors to return signed contracts as they tend to work to whatever schedule suits their moving plans. If the purchaser has signed contracts and looks to withdraw from the deal they will lose their contract deposit if the vendor signs the contracts and they are exchanged. The vendor can withdraw from the sale without loss anytime up until they have signed the contracts and returned them to the purchasers solicitor.


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    #10
    dudmis
    Registered Users Posts: 191 ✭✭dudmis


    killers1 wrote: »
    The vendor can withdraw from the sale without loss anytime up until they have signed the contracts and returned them to the purchasers solicitor.

    thanks!

    Just out of interest what are the penalties to the vendor if the vendor withdraws after they too have signed the contract?


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    #11
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    dudmis wrote: »

    thanks!

    Just out of interest what are the penalties to the vendor if the vendor withdraws after they too have signed the contract?

    The only penalties to the Vendor after they sign & exchange the contracts is that they have to move out and the house is yours! Lol!


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    #12
    Milk & Honey
    Banned (with Prison Access) Posts: 1,950 ✭✭✭Milk & Honey


    killers1 wrote: »
    The only penalties to the Vendor after they sign & exchange the contracts is that they have to move out and the house is yours! Lol!

    They may also have to pay damages!


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    #13
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    killers1 wrote: »
    Contracts become binding once signed & exchanged. The purchaser signs the contracts first and they are then returned to the vendor to sign. As mentioned above the vendor dictates the timeframe and it's very difficult to put pressure on the vendors to return signed contracts as they tend to work to whatever schedule suits their moving plans. If the purchaser has signed contracts and looks to withdraw from the deal they will lose their contract deposit if the vendor signs the contracts and they are exchanged. The vendor can withdraw from the sale without loss anytime up until they have signed the contracts and returned them to the purchasers solicitor.
    Milk & Honey wrote: »
    You sign first, then the vendors. They can pull out any time before they sign. It is not unknown for vendors to get your signed contract and then sit around doing nothing about signing themselves. You can pull out before they sign.

    There is a difference between these two answers that is worth exploring. If the intending purchaser signs the contract and returns it to the vendor who then sits on it, there is no contract. In that circumstance, neither party is bound. If the purchaser pulls out before the vendor signs and returns the contract, it is likely that the deposit is not forfeit.

    The courts would be unlikely to countenance a setup where the purchaser is bound and the vendor is not, especially if the inequality arises because of the vendor's behaviour.


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    #14
    Victor
    Registered Users Posts: 78,404 ✭✭✭✭Victor


    If you are concerned about your tax relief at source, you need to explain this to your solicitor.

    If you expect to move at a particular date, you also need to mention this - to make 'time is of the essence'.
    P. Breathnach wrote: »
    There is a difference between these two answers that is worth exploring. If the intending purchaser signs the contract and returns it to the vendor who then sits on it, there is no contract.
    Not quite. The vendor can enforce it any time they want.
    In that circumstance, neither party is bound. If the purchaser pulls out before the vendor signs and returns the contract, it is likely that the deposit is not forfeit.
    The purchaser can't really pull out after they have signed (without losing the deposit) as the vendor has a contract that they can enforce.
    The courts would be unlikely to countenance a setup where the purchaser is bound and the vendor is not, especially if the inequality arises because of the vendor's behaviour.
    It could be more complicated than you think as the Statute of Frauds only insists that the plaintiff has a memo with the plot, parties and price signed by the other party. I'm not sure what wordings, if any, are used in contracts to avoid such abuse.


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    #15
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    Victor wrote: »
    ... Not quite. The vendor can enforce it any time they want....
    This revolves around the question of when the contract comes into existence. Property conveyancing is largely part of common law, but the picture is that the contract exists only from the time contracts are exchanged - that is, signed by each party and passed over to the other. See
    http://www.balbriggansolicitor.ie/homebuyingterms.html
    http://www.propertywords.com.au/Exchange_of_Contracts.html
    http://books.google.ie/books?id=va6-NDmT6PEC&pg=PA646&lpg=PA646&dq=%22real+property%22+%22exchange+of+contracts%22&source=bl&ots=sma6LrfT45&sig=tFoy4P4vtF-0yOezwuk3mds15OA&hl=en&sa=X&ei=4i6NUPv8PIXAhAf2uIGYAQ&ved=0CCQQ6AEwAjgK#v=onepage&q=%22real%20property%22%20%22exchange%20of%20contracts%22&f=false


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    #16
    Milk & Honey
    Banned (with Prison Access) Posts: 1,950 ✭✭✭Milk & Honey


    P. Breathnach wrote: »
    There is a difference between these two answers that is worth exploring. If the intending purchaser signs the contract and returns it to the vendor who then sits on it, there is no contract. In that circumstance, neither party is bound. If the purchaser pulls out before the vendor signs and returns the contract, it is likely that the deposit is not forfeit.

    The courts would be unlikely to countenance a setup where the purchaser is bound and the vendor is not, especially if the inequality arises because of the vendor's behaviour.

    There is no difference between the two answers. The difficulty from a purchasers point of view is that he won't know if the vendor has signed. If he announces he is pulling out the vendor can produce the signed contract and demand completion.
    The purchaser has to threaten the vendor that un;less a signed contract is returned within a particular time frame, the purchaser will withdraw.


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    #17
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    Milk & Honey wrote: »
    There is no difference between the two answers. The difficulty from a purchasers point of view is that he won't know if the vendor has signed. If he announces he is pulling out the vendor can produce the signed contract and demand completion.
    The purchaser has to threaten the vendor that un;less a signed contract is returned within a particular time frame, the purchaser will withdraw.
    It's not sufficient that the vendor has signed the contract document: for the contract to come into existence, the signed document must be given to the purchaser. Unless and until that happens, the purchaser may rescind. In property transactions, "exchange of contracts" has a literal meaning.

    I think it likely that the court would take a poor view of a purchaser rescinding capriciously. I think it a near-certainty that the court would take a strong line against a vendor who produced a signed contract only after the purchaser has given notice of rescinding.


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