Runner-up at Auction & Feeling Cheated

wicklow_hunter

Hi All,

I found the place of my dreams last year. Fell in love with it de minute i seen it! It was Sale by auction (An Executor sale) came with a 10 acres of land also.

The hammer dropped at 300k on the day of the Auction and i was out bid by a solicitor. I looked up the property price register recently and it was sold for 200k ( registered 6 months after the auction.

I heard later that it was bought by a family member of the deceased (owner)

I was disappointed not getting the property but even more surprised for it to be sold for a fraction of what i was willing to pay.

Does the ppr include everything in the sale?- i was curious to know if the value of the land was subtracted to give an approximate value of the house. (10acres @10k per acre = the 100k difference)



I am still interested in the property and was considering contacting the Auctioneer for an explanation. I spent 1k to do the leg work in prep for the auction / mortgage - survey, valuation etc

The whole thing is very sinister...

my gut feeling is that it was an inside job between the auctioneer and relative of the deceased. (BTW both are related)

Difficult to understand why the price the house was sold for does not = the price registered on the ppr

Has any 1 any suggestions what to do or otherwise?

Does the ppr have any notes suggesting it wasn't the full price?

The new owner might already have owned 1/3 and was bidding through the solicitor for the remaining 2/3?

jon1981

official line from the Property price register guys , basically they only see the transaction amount. They normally put ** beside a transaction if it were deemed to be way below market value. It's possible the buyer was a family member that was left a portion of the house and just bought the remainder... but then why would they have gone to auction?

The Register is compiled from data which is declared, for stamp duty
purposes, to the Revenue Commissioners. The declaration is primarily filed
electronically by persons doing the conveyancing of the property on behalf
of the purchaser.

Until such time as a stamp duty declaration is made to Revenue
Commissioners the details of a transaction will not appear on the Register.
The Register is updated weekly (generally on Wednesday) and would include
all stamp duty declaration up to the previous Friday.

GavMan

Probably doesn't include the 10 acres or something.

Chance your arm with the auctioneer but they may not disclose why

anto9

Glad the relative got it myself .Paying 1k Euro for checking a place ,that you may or may not get before an auction seems a complete waste to me .

Ray Palmer

anto9 wrote: »

Glad the relative got it myself .Paying 1k Euro for checking a place ,that you may or may not get before an auction seems a complete waste to me .

You do get that the original owner may have not wanted the relative to get the property hence not leaving it to them?

Spending money to make sure the property is worth buying makes complete sense and lets you know what your max bid should be.

I would question the auctioneer. Maybe they can explain it because it doesn't make sense to me.

userod

anto9 wrote: »

Paying 1k Euro for checking a place ,that you may or may not get before an auction seems a complete waste to me .

:rolleyes:

anto9

Ray Palmer wrote: »

You do get that the original owner may have not wanted the relative to get the property hence not leaving it to them?

Spending money to make sure the property is worth buying makes complete sense and lets you know what your max bid should be.

I would question the auctioneer. Maybe they can explain it because it doesn't make sense to me.

Have you seen that UK TV series ''Houses under the Hammer'' .Some on that go to the other extreme of not even seeing the property but i still say you can do due dilligence for far less than E1,000 .

Inconspicuous

Not ususally in this forum but happened to be browsing and this caught my eye.

Having watched all of the sh!t that can go on over wills and property in some of my distant family recently, might I suggest a few scenarios that may show this transaction to not be as dubious as you first think.

As suggested, one of the reasons why this property may have sold for less than auction value is that the person who bought it may have already held a 1/3 stake in the property and was buying out the other 2/3. This would then be recorded as a transaction of €200k as that is all the money that changed hands for the transfer of the property.

It was asked, why then go to auction? Families are strange!! Especially when it comes to money. All it could take is for one member to say that they don't want to sell it to the other because they think that they can get more money for it on the open market. In this case the person who ultimately bought it may have agreed to let the house go to auction hoping/knowing that they will be able to outbid any other interested parties. Just a possibility.

The other possibility is that the family member who bought it, didn't have any interest in the property (per the will) and did in fact buy it out right for €300k. As you have said, there are 10 acres of land with the property. It is quite feasible that the new owner asked the seller's solicitor to frame the final sale as 2 seperate properties for sale. Parcel A - House for €200k and Parcel B - 10 Acres land for €100k.

Doing this could have significant advantages. The PPR would only record the sale price for the house as €200k. It would mean that the new owner could use this as a backup for declaring the value of the house for property tax purposes as it would probably be harder for them to show the value of the house is only €200k if they had purchased the house and land in one transaction for €300k than two distinct transactions seperating the two entities.

By seperating out the land they would also have had the option to purchase the land using a company or some other entitiy and record it as an asset of the company and possibly use it then for business purposes.

The truth is that nobody but the solicitor and purchaser knows exactly what went on, but there are some legitimate reasons as to why the PPR shows a lower price than the final sales price at auction.

It's a tough pill to swallow though, especially when you've your heart set on a place. Happened to myself. Placed an offer on a lovely house that met all of our needs and we really loved. The offer was fair for what we felt was the condition of the place and what needed to be done to it. It was however 60K under the asking (4 years ago) and was laughed at by the estate agent. I told him you'll be lucky to get more and turns out that 6 months after our offer the place was sold for €15k under what we offered. Sickening, but in the end we found a much nicer place that we are much happier in! Hope you do too!

Plek Trum

Is it possible they paid some money 'under the counter' to account for the difference. I know this happens to keep some of the sale price off the books and lower the taxes due for both parties. Possibility?

Inconspicuous

wicklow_hunter wrote: »

Has any 1 any suggestions what to do or otherwise?

Sorry.....missed this bit!

Honestly, put it out of your mind and walk away! There really isn't much you can do. Even if you do hear that there were wrongdoings it will be very hard to prove and will ultimately take years to trundle on through investigations and court proceedings. At the end of the day, while €1000 is a lot of money, it would pale in comparison to what you would need to expend in time and money to try and recover it.

It's a very bitter pill to swallow, but you really would be better off forgetting about it and focussing your efforts and finding a new property that fits your bill

Dr Turk Turkelton

It's obviously the price of the land.
The reason for this would be because of the property tax-why pay tax on house @300k when the value of the house on its own is 200k.
Done the same last year buying contents with house so got them appraised seperately.

Cuddlesworth

Plek Trum wrote: »

Is it possible they paid some money 'under the counter' to account for the difference. I know this happens to keep some of the sale price off the books and lower the taxes due for both parties. Possibility?

Not with 100k.

toughapple

Dr Turk Turkelton wrote: »

It's obviously the price of the land.
The reason for this would be because of the property tax-why pay tax on house @300k when the value of the house on its own is 200k.
Done the same last year buying contents with house so got them appraised seperately.

Stamp Duty has to be paid on the total. Property tax has no relevance for contents. A person can have a house worth 100k and contents of 200k but they only pay property tax on 100k. If they sold the lot together stamp duty would be charged on 300k.

ted1

The auction was probably to get the true market price so that it may be sold to a part owner.

By having an auction draws a line in the sand and gives them the knowledge that on x day they'll have a fair value

Dr Turk Turkelton

toughapple wrote: »

Stamp Duty has to be paid on the total. Property tax has no relevance for contents. A person can have a house worth 100k and contents of 200k but they only pay property tax on 100k. If they sold the lot together stamp duty would be charged on 300k.

I never mentioned stamp duty which is only 1%.
It basically looks like you agree with me so.

ted1

toughapple wrote: »

Stamp Duty has to be paid on the total. Property tax has no relevance for contents. A person can have a house worth 100k and contents of 200k but they only pay property tax on 100k. If they sold the lot together stamp duty would be charged on 300k.

Fraud is seriously frowned upon and that carry on is no longer carried on...
No solicitor would get involved in that

Dr Turk Turkelton

ted1 wrote: »

Fraud is seriously frowned upon and that carry on is no longer carried on...
No solicitor would get involved in that

Where is the fraud?

ted1

Dr Turk Turkelton wrote: »

Where is the fraud?

Over valuing furniture to reduce the selling price is fraud.

Dr Turk Turkelton

Who said it was overvalued?
It was done by an auctioneer so I doubt they are going to make themselves liable by overvaluing contents.
Even if they did I can't see where fraud would come into it on the purchasers behalf as they would have to take the prices at face value. That's why a professional was engaged.

ted1

Dr Turk Turkelton wrote: »

Who said it was overvalued?
It was done by an auctioneer so I doubt they are going to make themselves liable by overvaluing contents.
Even if they did I can't see where fraud would come into it on the purchasers behalf as they would have to take the prices at face value. That's why a professional was engaged.

I'm referring to a post which you may have missed

Plek Trum wrote: »

Is it possible they paid some money 'under the counter' to account for the difference. I know this happens to keep some of the sale price off the books and lower the taxes due for both parties. Possibility?

toughapple wrote: »

Stamp Duty has to be paid on the total. Property tax has no relevance for contents. A person can have a house worth 100k and contents of 200k but they only pay property tax on 100k. If they sold the lot together stamp duty would be charged on 300k.

in the past furniture was over valued to reduce stamp duty.