Sale Agreed - Buyers Right

Gundam

Hi All,

I wonder if you can help to understand this.
I went sale agreed on a property over a month ago. The property valuer from the bank and the engineer already went to look at the property and we already paid them as well as the solicitor had already to do some of his papers. Yesterday the Estate Agent told me that the owner won't sell the house any more. Can we ask the Agent/owner to refund the cost that we had already paid? Do we have any right as we were sale agreed?

Thanks for your help

Bigcheeze

Unfortunately not. It's the risk you take.

drunkmonkey

The solicitor should have nailed the contact down at sale agreed so they couldn't just back out. The solicitor shouldn't have even got paid yet surprised they even looked for money at such an early stage, I wouldn't use them again.

P. Breathnach

drunkmonkey wrote: »

The solicitor should have nailed the contact down at sale agreed so they couldn't just back out....

It doesn't work like that. I think it should, but it doesn't.

Gundam

Thanks for the advice, it's annoying as well that it seems the owners had already pulled out from the sale of this house before, so I am not the first one to lose money with them

The_Conductor

Unfortunately its a game many 'sellers' are playing with their mortgage lenders. The lenders have engaged with them- as in many cases they may be in negative equity, or in some cases where they aren't- they may simply not be paying the mortgage- and part of the process is they have agreed to sell the property (that is- they have agreed to their lender to sell the property). They have to be seen to be actively trying to sell the property- to keep the lender off their back- but behind the scenes- they have no intention whatsoever of selling.

Lenders need to get on top of this- because it seems to be endemic at the moment- I'd guess conservatively that over half the property for sale on the Dublin market- is only 'for sale' for aesthetic purposes- the sellers have little if any intention of completing the transaction.

Lenders need to grasp this one by the horns- because they certainly haven't grasped just how they are being conned.........

davo10

OP it works both ways, if you changed your mind you could walk away as well leaving the owner high and dry.

mathepac

It is unfortunate the some buyers still think "sale agreed" bestows some legal entitlements on them. The term "sale agreed" has no legal status as nothing is agreed until the contracts are signed. Up to the signing of contracts either party can walk away from the deal.

The terms "Under Offer" and "Sale Agreed" are estate agents inventions to put on "For Sale" signs outside houses to prove to the world what wonderful EAs are handling the sale.

on_my_oe

If contracts are signed and the vendor backs out, are the purchasers still left out of pocket for the costs incurred or can they claim costs from the vendors?

The_Conductor

In the UK- a property seller is expected to get a surveyor and a valuer from an approved panel to do surveys on a property. These are then supplied to prospective purchasers- saving the prospective purchasers from doing their own surveys. If there are 6-7 interested parties- you have one good survey which everyone gets- whereas in Ireland- you have 7 different surveys.

Its a great situation for surveyors- not for potential purchasers........

The_Conductor

mathepac wrote: »

It is unfortunate the some buyers still think "sale agreed" bestows some legal entitlements on them. The term "sale agreed" has no legal status as nothing is agreed until the contracts are signed. Up to the signing of contracts either party can walk away from the deal.

The terms "Under Offer" and "Sale Agreed" are estate agents inventions to put on "For Sale" signs outside houses to prove to the world what wonderful EAs are handling the sale.

Until a contract is signed by both parties- there is no legal agreement to do anything (irrespective of the fact that a deposit may have been paid).

The_Conductor

on_my_oe wrote: »

If contracts are signed and the vendor backs out, are the purchasers still left out of pocket for the costs incurred or can they claim costs from the vendors?

Yes- they're out of pocket.
It makes sense to talk to the seller- to get a feeling as to whether they're genuine or not- before you waste time and money.

P. Breathnach

mathepac wrote: »

... The term "sale agreed" has no legal status as nothing is agreed until the contracts are signed. Up to the signing of contracts either party can walk away from the deal....

The only thing to stop a seller pulling out is a sense of honour, and it is a sad fact that many people cease to be honourable if there is a prospect of getting an extra few thousand for a property.

I sold two properties in the not-too-distant past, using different EAs. In each case, when we went sale agreed the EA made it clear that all sales effort ceased at that point. I think that even if I had wished them to remain open to taking higher bids, they would have refused (I didn't test them on that point). I imagine that there are EAs who would be more "flexible" than the ones I employed.

It's not always EAs who are behind dishonourable practices. It's often the vendor.

Marcusm

drunkmonkey wrote: »

The solicitor should have nailed the contact down at sale agreed so they couldn't just back out. The solicitor shouldn't have even got paid yet surprised they even looked for money at such an early stage, I wouldn't use them again.

That would have resulted in a great position for the buyer if the engineer had shown up with a problem or the mortgage was withdrawn post valuation!

Marcusm

The_Conductor wrote: »

In the UK- a property seller is expected to get a surveyor and a valuer from an approved panel to do surveys on a property. These are then supplied to prospective purchasers- saving the prospective purchasers from doing their own surveys. If there are 6-7 interested parties- you have one good survey which everyone gets- whereas in Ireland- you have 7 different surveys.

Its a great situation for surveyors- not for potential purchasers........

Unfortunately this is not true. A full survey plus title searches etc was supposed to be included in the HIP (home information pack) but it was watered down pre implementation and now it's only the BER/EPC which is included. As a result, the England & Wales system is almost identical to Ireland. Scotland is different to both.

mathepac

mathepac wrote: »

.... The term "sale agreed" has no legal status as nothing is agreed until the contracts are signed. ....

The_Conductor wrote: »

Until a contract is signed by both parties- there is no legal agreement to do anything (irrespective of the fact that a deposit may have been paid).

I'm glad we agree

grumpydwarf

Marcusm wrote: »

That would have resulted in a great position for the buyer if the engineer had shown up with a problem or the mortgage was withdrawn post valuation!

In Australia and NZ, the Sale and Purchase Agreement is drawn up by the estate agent and signed by both parties when the bid is accepted by the vendors. You add the conditions in before both parties sign it e.g. 'subject to satisfactory survey, mortgage finance, and LIM report'. This stops vendors from 'testing the water' and gazumping and means that if there is anything wrong with the house, the purchasers can escape... The protection for the vendors is that if the survey etc is good but the purchasers pull out, they lose their deposit.

moxin

davo10 wrote: »

OP it works both ways, if you changed your mind you could walk away as well leaving the owner high and dry.

How financially? A sellers costs only occur once as they own the house.

A purchaser's costs can happen many times. For example they incur a surveyor's costs on the first house which the sale falls through and also on the 2nd choice house and if that falls through, the purchaser can incur costs on the 3rd house. Assuming the 3rd house is finally bought legally, the purchaser has incurred 3x times the cost for a surveyor alone.

bovril

moxin wrote: »

How financially? A sellers costs only occur once as they own the house.

A purchaser's costs can happen many times. For example they incur a surveyor's costs on the first house which the sale falls through and also on the 2nd choice house and if that falls through, the purchaser can incur costs on the 3rd house. Assuming the 3rd house is finally bought legally, the purchaser has incurred 3x times the cost for a surveyor alone.

As a buyer you don't have to get the surveyor in until just before signing the contract. Our solicitor recommended us to get the survey done about a week before signing the contract. There is a slight risk that the sale could fall through but at least it's smaller than if you get the surveyor in quickly.

moxin

bovril wrote: »

As a buyer you don't have to get the surveyor in until just before signing the contract. Our solicitor recommended us to get the survey done about a week before signing the contract. There is a slight risk that the sale could fall through but at least it's smaller than if you get the surveyor in quickly.

The surveyor(and banks valuation fee) will always be a cost for the buyer before a contract is signed. Of course one could bother with no surveyor and take the sellers word on the state of the building, as if

bovril

moxin wrote: »

The surveyor(and banks valuation fee) will always be a cost for the buyer before a contract is signed. Of course one could bother with no surveyor and take the sellers word on the state of the building, as if

I don't think you read my post correctly. I never said to hold off on getting a surveyor in. I said to not get one done until nearer contract signing time. By not getting the survey done until close to signing you run a smaller risk of the losing the survey cost if sale falls through. In my opinion I would consider a survey 100% necessary and money well spent. I was just pointing a way lowering the risk of being stung for the surveyor costs if the vendor pulls out of the process.

amber2

Quick question can a vendor let a sale of a property go as far as sale agreed, accept a security deposit, then accept a % deposit. In turn all the purchaser has all surveys done, which took all of a few days. once completed the vendor then refuses to sign the contracts and demands more money for his property saying property prices are on the increase. Is there any come back for the purchaser?

The_Conductor

Until the contract is signed- the vendor can withdraw from the sale, change the conditions of the sale, the price etc etc etc.
If you disagree- you either negotiate- or you ask for your money back.
Until the contract is signed- you have no legal standing.

amber2

The_Conductor wrote: »

Until the contract is signed- the vendor can withdraw from the sale, change the conditions of the sale, the price etc etc etc.
If you disagree- you either negotiate- or you ask for your money back.
Until the contract is signed- you have no legal standing.

Ahh, thank you for the quick reply.

TheDriver

You can also tell them where to go or drop your offer a few thousands, works both ends.....

The_Conductor

TheDriver wrote: »

You can also tell them where to go or drop your offer a few thousands, works both ends.....

It really depends on where the property is, and whether the seller is under pressure to sell. If its anywhere in the Dublin region- you'll be sorely punished if you try this- its not a buyers market. Move towards the midlands and further from the East- and the market is poles apart.

ezra_pound

bovril wrote: »

As a buyer you don't have to get the surveyor in until just before signing the contract. Our solicitor recommended us to get the survey done about a week before signing the contract. There is a slight risk that the sale could fall through but at least it's smaller than if you get the surveyor in quickly.

Yes but you're a cash buyer, right?

bovril

ezra_pound wrote: »

Yes but you're a cash buyer, right?

No. I wish I was! Whether you're a cash buyer or not you still have to get the survey done before signing the contract so technically the deal can be pulled in either situation after the buyer has paid for the survey.

jmayo

The_Conductor wrote: »

Unfortunately its a game many 'sellers' are playing with their mortgage lenders. The lenders have engaged with them- as in many cases they may be in negative equity, or in some cases where they aren't- they may simply not be paying the mortgage- and part of the process is they have agreed to sell the property (that is- they have agreed to their lender to sell the property). They have to be seen to be actively trying to sell the property- to keep the lender off their back- but behind the scenes- they have no intention whatsoever of selling.

Lenders need to get on top of this- because it seems to be endemic at the moment- I'd guess conservatively that over half the property for sale on the Dublin market- is only 'for sale' for aesthetic purposes- the sellers have little if any intention of completing the transaction.

Lenders need to grasp this one by the horns- because they certainly haven't grasped just how they are being conned.........

It's not just Dublin.
If have been keeping an eye on an area you will find properties that have been on the market at this stage for a number of years and the prices haven't altered one bit.
Now either someone is thinking that we are going back to 2006 or they have no intention of really selling.