Change of requirements after sale agreed

pafro

Hi,

My wife and I have been bidding on a house that we inted to buy.
After the auctioneer has told us we were the highest bidder and the sale was agreed beginning of this week we started the final paper work with our finacial advisor and the bank.

The auctioneer has called us today and asked to meet us in regards to some "change" the seller is requesting.
It turns out that the bank forced the current owner to sell the house as he could pay the mortgage. But I guess thats not our problem...

Anyway, we met the auctioneer this afternoon and he came up with the following proposal:

Our bid was 265k EUR
Now the seller wants to agree the sale on 250k. (contract would state 250k)
BUT...
He wants to have 13k in cash and would give us 2k "discount".
The auctioneer also advised us not to mention any of this "13k cash" to the solicitor or anyone else...

We said we need to think about this.

My question now; is this legal??? Is this common and what if the bank finds out after a couple of year?

Any advise what to do?

We really love the house and want to take it, but dont really understand the risk behind this.

L1011

Sounds extremely like fraud to me.

deelite

Hate to ask but did the seller really ask for the cash- I remember a few years back that house prices were allegedly agreed at a higher figure than the seller actually got as I said allegedly. Speak to your solicitor.

3DataModem

The ball is in your court. You will be signing a contract at 250. You will be closing for 250. They will expect you to pay cash after closing... but they have no comeback if you don't, as there'll be nothing in writing.

They are defrauding their bank, I would have a conversation with your brief to ensure you are not doing anything illegal. If I was in this spot I'd make sure I paid stamp duty on the full whack.

foxinsox

pafro wrote: »

Hi,
The auctioneer also advised us not to mention any of this "13k cash" to the solicitor or anyone else...

</p>
There must be some cost to you, I'm not sure what though?The value of your house would be one? Maybe? 250k is not 265kMight be tax implications?Someone more experienced on here might be able to tell you.In my mind it sounds dodgy as feck...I would talk to your solicitor..Good luck :-)

Victor

It's fraud and it's a big enough fraud with very little benefit for you.

Of course, if the rules on capital gains tax are changed for principal private residences, you will pay tax on the €13,000.

Of course, if they screw over the bank, they are the types that would also screw over you.

StillWaters

3DataModem wrote: »

They are defrauding their bank, I would have a conversation with your brief to ensure you are not doing anything illegal.

And they are defrauding revenue (stamp duty), as will you be. This was common enough back in high stamp duty days, but solicitors were always involved.

No way would I progress without talking to my solicitor.

djmcr

Be very wary, what if he demands the 13k in cash before signing and then does not go ahead with the deal and you are left with nothing as he aint going to give you a receipt. All gain for the vendor and little for you. No doubt auctioneer is getting his cut too

ABajaninCork

OP. This sounds too dodgy for words. Why is the seller/EA asking for cash? And what proof would you have the amount's been paid?

I would be on to my brief tout suite. After hearing what he has to say, I'd run (not walk) away from the deal. No house is so nice that you run the risk of getting into trouble with the tax man.

im invisible

Say yeah, but offer 8k cash

P. Breathnach

I note also that the auctioneer seems to be colluding with the vendor in an apparent effort to defraud the bank. They are trying to involve you in a dishonest move. Should the bank find out, they might be able to come after all of you.

Tell your solicitor that you have agreed to purchase at €265K, and instruct him/her to advance the business on that basis.

ted1

After deposit, stamp duty, repair and renovation fund, have you 13k in cash. The bank won't give it to you

Condatis

There is a perfectly legal way to deal with this situation.

You contract to buy the house for 250k and agree a separate contract to buy furniture and fittings for 13k.

The vendors bank does not need to know of the second contract. The two deals should be completed at the same time. Get a receipt for the 13k specifying that it is for furniture, fittings, carpets or whatever.

mark renton

Condatis wrote: »

There is a perfectly legal way to deal with this situation.

You contract to buy the house for 250k and agree a separate contract to buy furniture and fittings for 13k.

The vendors bank does not need to know of the second contract. The two deals should be completed at the same time. Get a receipt for the 13k specifying that it is for furniture, fittings, carpets or whatever.

And you have an excellent bargaining position, 8k was mentioned earlier and I would look in around this

Marcusm

pafro wrote: »

Hi,

My wife and I have been bidding on a house that we inted to buy.
After the auctioneer has told us we were the highest bidder and the sale was agreed beginning of this week we started the final paper work with our finacial advisor and the bank.

The auctioneer has called us today and asked to meet us in regards to some "change" the seller is requesting.
It turns out that the bank forced the current owner to sell the house as he could pay the mortgage. But I guess thats not our problem...

Anyway, we met the auctioneer this afternoon and he came up with the following proposal:

Our bid was 265k EUR
Now the seller wants to agree the sale on 250k. (contract would state 250k)
BUT...
He wants to have 13k in cash and would give us 2k "discount".
The auctioneer also advised us not to mention any of this "13k cash" to the solicitor or anyone else...

We said we need to think about this.

My question now; is this legal??? Is this common and what if the bank finds out after a couple of year?

Any advise what to do?

We really love the house and want to take it, but dont really understand the risk behind this.

Up to 5 years in Mountjoy for you, the estate agent and the vendor; not a great idea.



Making gain or causing loss by deception.

6.—(1) A person who dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another, by any deception induces another to do or refrain from doing an act is guilty of an offence.

(2) A person guilty of an offence under this section is liable on conviction on indictment to a fine or imprisonment for a term not exceeding 5 years or both.

L1011

Condatis wrote: »

There is a perfectly legal way to deal with this situation.

You contract to buy the house for 250k and agree a separate contract to buy furniture and fittings for 13k.

You will have to provide proof of the fixtures and fittings being reasonably worth 13k if Revenue raise a query. Not that they're likely to care since its nowhere bloody close to the stamp duty limit (1M).

Your mortgage will also be based on the 250k contract value meaning that unless you have the 13k in savings, you're going to have trouble.

This is all ignoring the massive elephant in the room of the obvious attempt to defraud the bank by the vendor.

the_syco

Victor wrote: »

Of course, if they screw over the bank, they are the types that would also screw over you.

This.

Also, I'd wonder what the seller will remove from the house?

pafro

Thanks all for replying.
We will make him an offer but not near the 13k.

If he doesnt take it, we will look further..

Thanks again for all the answers

ABajaninCork

Speak to your solicitor first though!

pafro

Sure, called them up and will meet her this afternoon

johnam

pafro wrote: »

Hi,

My wife and I have been bidding on a house that we inted to buy.
After the auctioneer has told us we were the highest bidder and the sale was agreed beginning of this week we started the final paper work with our finacial advisor and the bank.

The auctioneer has called us today and asked to meet us in regards to some "change" the seller is requesting.
It turns out that the bank forced the current owner to sell the house as he could pay the mortgage. But I guess thats not our problem...

Anyway, we met the auctioneer this afternoon and he came up with the following proposal:

Our bid was 265k EUR
Now the seller wants to agree the sale on 250k. (contract would state 250k)
BUT...
He wants to have 13k in cash and would give us 2k "discount".
The auctioneer also advised us not to mention any of this "13k cash" to the solicitor or anyone else...

We said we need to think about this.

My question now; is this legal??? Is this common and what if the bank finds out after a couple of year?

Any advise what to do?

We really love the house and want to take it, but dont really understand the risk behind this.

You met the auctioneer who said the seller wants you to agree to pay less...was the seller there during this conversation? If he wasn't, are you sure he is aware of the deal? Auctioneer could just be topping up his fee. Either way, sounds dodgy as hell, steer clear I reckon.

Sleepy

Or contact the seller's bank with this information and an offer of 255k for the house they own?

The vendor is trying to screw us all, why let them?