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House sold for below our offer

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  • 31-07-2013 7:45pm
    #1
    Carlowgirl
    Registered Users Posts: 296 ✭✭


    Hi all
    Just wondering if anyone would have heard of this scenario...
    looking to buy.. found a really nice house.... put in mortgage application.. were offered 5 grand below asking price.. we offered what we had to estate agent.. they said owners refuse.. bank reviewed application to give extra 5k this was taking a while as they wanted new bank statements or basically made up jump threw hoops..
    while this was going on... the estate agent emailed me to ask if we were still interested.. i said yes... but maybe not at the full asking price as we were waiting on the verdict but at the 5k below asking price...
    next thing house is sale agreed... i couldn't believe he didn't tell us... the sale went through so fast.. i nearly died when i saw the property price register.. it stated that the house sold for 43k below our offer (without the extra 5 k) so basically 48 k below what we were going to give...
    im still really confused over this i rang him to ask he said "oh that s not that house that sale hasn't gone through yet" .. when the new people have actually moved in and its common knowledge... they bought it.. cant believe they refused our offer for 43k extra as they wanted the 48.. extra yet its sold for that... the rumour on the street is that it wouldn't have passed the bank survey.. and it was a cash sale.. but i don know whether to believe this or not? has anyone ever heard of this?


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    #2
    ted1
    Registered Users Posts: 23,524 ✭✭✭✭ted1


    Cash beats mortgage, the owners probably felt you wouldn't be able to close or the furniture was sold for cash reducing the house price.


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    #3
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    ted1 wrote: »
    Cash beats mortgage, the owners probably felt you wouldn't be able to close or the furniture was sold for cash reducing the house price.
    Our mortgage was 50% cash... a drop of 48k is too much ..


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    #4
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    Carlowgirl wrote: »
    Our mortgage was 50% cash... a drop of 48k is too much ..
    excuse me i meant to say our offer was 50% cash would you not just take the 43k extra offer.. as opposed to refusing saying you want 48k extra.. it doesn't make sense to sell out so fast for 48k in total below asking price? very strange?


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    #5
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

    Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.


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    #6
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    The_Conductor wrote: »
    Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

    Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.

    what about 50% cash is that any better than 100% morgage


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    #7
    ted1
    Registered Users Posts: 23,524 ✭✭✭✭ted1


    No because without the mortgage you got nothing. Plenty of sales fall through due to banks not giving mortgages or delaying them


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    #8
    downonthefarm
    Registered Users Posts: 1,308 ✭✭✭downonthefarm


    gazumping


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    #9
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    Carlowgirl wrote: »
    what about 50% cash is that any better than 100% morgage

    Sorry just to add to that. we had the 43 k extra there for them... it would probably have taken 6 weeks or more for that to be drawn down .. it was the extra 5k that was stalling things... just all seems a bit strange...... as they say whats meant for you wont pass you by so maybe it wasn't meant to be !


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    #10
    ted1
    Registered Users Posts: 23,524 ✭✭✭✭ted1


    downonthefarm wrote: »
    gazumping

    Wrong word, that's when a higher price comes in


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    #11
    falabo
    Registered Users Posts: 651 ✭✭✭falabo


    Why are you gutted ? The market is flooded with houses that aren't selling. You'll find your dream home in no time and you'll get a cracking deal.


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    #12
    downonthefarm
    Registered Users Posts: 1,308 ✭✭✭downonthefarm


    ted1 wrote: »
    Wrong word, that's when a higher price comes in

    oh sorry,just remember that word around at the start of boom
    there was alot of that at the time


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    #13
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    ted1 wrote: »
    Wrong word, that's when a higher price comes in
    i was thinking that myself.. obviously cash is king.. we were definitely getting the 43 k.. extra... they were humming and hawing about 5 k extra due to loan etc.. we ended up clearing that then...
    just cant get my head around it... one rumour was that the house was not structurally sound so the bank would never have allowed the sale.. but as far as i know banks don't carry out detailed surveys just values... it is the buyer that is responsible for the survey ? am i right?


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    #14
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    falabo wrote: »
    Why are you gutted ? The market is flooded with houses that aren't selling. You'll find your dream home in no time and you'll get a cracking deal.
    it was a very big nice house for our price range... with land


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    #15
    ted1
    Registered Users Posts: 23,524 ✭✭✭✭ted1


    AIB don't get structural surveys done. They get you to get valuations carried out by estate agents on their lists. These people just look at the building and put a value on it


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    #16
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    ted1 wrote: »
    AIB don't get structural surveys done. They get you to get valuations carried out by estate agents on their lists. These people just look at the building and put a value on it
    i rang the estate agent asked him for an explanation ..... no response


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    #17
    professore
    Closed Accounts Posts: 5,857 ✭✭✭professore


    Some sort of under the table deal to avoid stamp duty?


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    #18
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Carlowgirl wrote: »
    what about 50% cash is that any better than 100% morgage

    50% cash?
    Its irrelevant.
    You need a mortgage to make up the other 50%.
    Anyone without this requirement- will get first call, irrespective of what they offer.
    It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

    As you said yourself- cash is king- and in property these days- it certainly is.

    As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........


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    #19
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    professore wrote: »
    Some sort of under the table deal to avoid stamp duty?

    No solicitor will touch shenanigans like that with a barge pole anymore. Several high profile solicitors have been named and shamed over the past few years- and indeed struck off the register- getting involved in transactions under the table is not in their interests.


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    #20
    bigroad
    Registered Users Posts: 4,132 ✭✭✭bigroad


    Sounds to me like the estate agent sold the house to his mate.He just tried to fob you off.I would be surprised if the house owner ever heard about your offer.I f you come accross another house ,try to deal direct with the owner.Estate agents are not to be trusted.


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    #21
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    The_Conductor wrote: »
    No solicitor will touch shenanigans like that with a barge pole anymore. Several high profile solicitors have been named and shamed over the past few years- and indeed struck off the register- getting involved in transactions under the table is not in their interests.

    would the solicitor have to know.. what if it was transferred between the buyer and seller or through the agent?


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    #22
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    The_Conductor wrote: »
    50% cash?
    Its irrelevant.
    You need a mortgage to make up the other 50%.
    Anyone without this requirement- will get first call, irrespective of what they offer.
    It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

    As you said yourself- cash is king- and in property these days- it certainly is.

    As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........

    I thought it would make a difference as it would be paid as a deposit.. or with the deposit.. (mortgage pending)... or would it not? also the buyers would be more optimistic about someone that is only looking for 50% or 47% to be exact... than someone looking for 90-100%


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    #23
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Carlowgirl wrote: »
    Our mortgage was 50% cash... a drop of 48k is too much ..

    Are the buyers relatives of the vendor?
    Your bid could have been used to determine market value for the property. Happening quite a bit as an awful lot of property for sale isn't actually really for sale.


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    #24
    Carlowgirl
    Registered Users Posts: 296 ✭✭Carlowgirl


    gaius c wrote: »
    Are the buyers relatives of the vendor?
    Your bid could have been used to determine market value for the property. Happening quite a bit as an awful lot of property for sale isn't actually really for sale.

    No definitely not.... we have gathered some info about both parties... it was definitely for sale..... its a bit baffling to be honest.. unless it was just a genuine quick cash sale.. are the property price registers correct?


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    #25
    djmcr
    Closed Accounts Posts: 237 ✭✭djmcr


    Its gone, wasn't meant to be, let it go. plenty other houses out there.


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    #26
    StillWaters
    Closed Accounts Posts: 1,799 ✭✭✭StillWaters


    I don't think cash would have commanded that much of a discount. More likely is your theory that the survey turned up serious issues and the offer was revised downwards.
    You will never know for sure though.


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    #27
    xper
    Registered Users Posts: 1,068 ✭✭✭xper


    Carlowgirl wrote: »
    i was thinking that myself.. obviously cash is king.. we were definitely getting the 43 k.. extra... they were humming and hawing about 5 k extra due to loan etc.. we ended up clearing that then...
    just cant get my head around it... one rumour was that the house was not structurally sound so the bank would never have allowed the sale.. but as far as i know banks don't carry out detailed surveys just values... it is the buyer that is responsible for the survey ? am i right?
    It sounds from what the way you describe it that the bank hadn't assessed the property yet and you were just getting approval in principle for the loan amount. Even with a substantial cash deposit, that's still a long way from being able to draw down a mortgage. And you were going back looking for 5k more and all the back and forth that entailed. From the seller's point of view, it probably all looked a bit messy. They don't have the inside knowledge/wishful thinking (delete as appropriate) that you had that you would get the money. Any assurances you would have given them would have to be treated with a healthy dose of skepticism. Something you said or did along the way that was totally innocuous to you may have set off alarm bells for them, you just don't know. Maybe the EA saw the cash offer and just wanted to close the sale and get the commission and so bent their ear. Was 43k a large discount percentage wise? Maybe there was some other element of the sale? Maybe family was involved? At the end of the day, the seller can sell to who they want, there is zero obligation to accept the highest offer. It sucks. Move on.


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    #28
    the_syco
    Registered Users Posts: 37,301 ✭✭✭✭the_syco


    StillWaters wrote: »
    I don't think cash would have commanded that much of a discount. More likely is your theory that the survey turned up serious issues and the offer was revised downwards.
    You will never know for sure though.
    Agreed. I'd say cash was king, but the figure was revised when the structural damage came to light.

    IMO, not getting a house with €43k (or more) of structural damage is a bullet dodged. Although you may have fallen in love with the property, check it out in a years time, and it may look very different.


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    #29
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Where is all of this about structural damage coming from?
    Was there obvious structural damage associated with the property?
    If so- how did the OP miss it on their own survey (I'm presuming they did one)?
    According to the OP 'the word on the street was it wouldn't pass the bank survey'- what does this mean? No survey was done?
    It all sounds like innuendo about structural damage- short of seeing the new owners start major rehabilitation works and talking to them, in due course, no way to prove or disprove this theory.

    Also- the 48k reduction in asking price- this could be a massive reduction- or a minor reduction. It could be less than 10% or it could be greater than 25%. We don't know.

    Cash- very obviously- is king- and estate agents will happily tell you that they'll get you a further 10-15% discount if you're not in chain, and not subject to mortgage approval. This is standard. There always was a discount offered for this type of purchaser- its just higher now than ever before. A seller isn't going to care whether your offer is 50% cash, 50% mortgage- its cash- or its not cash.

    Interesting times.


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    #30
    yankinlk
    Registered Users Posts: 2,740 ✭✭✭yankinlk


    The_Conductor wrote: »
    50% cash?
    Its irrelevant.
    You need a mortgage to make up the other 50%.
    Anyone without this requirement- will get first call, irrespective of what they offer.
    It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

    As you said yourself- cash is king- and in property these days- it certainly is.

    As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........

    +1

    How many times was the seller disappointed by buyers that fell thru on mortgage app? Cash has way more power than you may think.


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    #31
    djimi
    Registered Users Posts: 13,237 ✭✭✭✭djimi


    The_Conductor wrote: »
    Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

    Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.

    I dont really understand this logic at all tbh. If it was a small amount that was being talked about then I could understand taking the lower cash bid in an effort to sell more quickly, but in this case its €50k in the difference, so surely nobody in their right mind would accept the lower of two offers, at €50k in the difference, just to sell the house quicker rather than wait for the higher to bid to draw down their mortgage? That makes no sense at all.


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