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Options to buy

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  • 04-02-2018 11:46pm
    #1
    quinne22
    Registered Users Posts: 46 ✭


    Hi my wife's grandfather has a second house that he is interested in selling.

    We currently have a small deposit but we were wondering would it be another option to say go to a solicitor and do up a legally binding agreement that we pay x amount a month for x amount of months/years till the deed then automatically signs over to us??

    Is this a viable option or would we be better off saving for another year and hopefully get a mortgage for the property?

    Thanks in advance for any information.

    Mods feel free to move if in wrong sub.


Comments

  • Options
    #2
    Heres Johnny
    Closed Accounts Posts: 2,738 ✭✭✭Heres Johnny


    quinne22 wrote: »
    Hi my wife's grandfather has a second house that he is interested in selling.

    We currently have a small deposit but we were wondering would it be another option to say go to a solicitor and do up a legally binding agreement that we pay x amount a month for x amount of months/years till the deed then automatically signs over to us??

    Is this a viable option or would we be better off saving for another year and hopefully get a mortgage for the property?

    Thanks in advance for any information.

    Mods feel free to move if in wrong sub.

    I assume your wife's grandfather is an old man. How much could you realistically pay him before he dies in relation to market value? Not much I'd imagine.
    Sounds like a good deal for you and a bad deal for him.

    If he doesn't need the money and wants to help you out then fine but if he wants market value or close to it I cannot see this working at all.

    I don't know where the grandfather's own children come into this either, your wife's parents, aunts, uncles and cousins might have an issue with this arrangement also.


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    #3
    quinne22
    Registered Users Posts: 46 ✭quinne22


    Heres Johnny wrote: »
    I assume your wife's grandfather is an old man. How much could you realistically pay him before he dies in relation to market value? Not much I'd imagine.
    Sounds like a good deal for you and a bad deal for him.

    If he doesn't need the money and wants to help you out then fine but if he wants market value or close to it I cannot see this working at all.

    I don't know where the grandfather's own children come into this either, your wife's parents, aunts, uncles and cousins might have an issue with this arrangement also.

    He would be mid 60s his wife a bit younger. If he lived till 80 we could realistically pay full market value to him or his wife before they passed on.

    He's never been the type to worry about his decisions about the second property in relation to his own family as his own family home is in a nice area and worth a good amount in itself.


  • Options
    #4
    Heres Johnny
    Closed Accounts Posts: 2,738 ✭✭✭Heres Johnny


    quinne22 wrote: »
    He would be mid 60s his wife a bit younger. If he lived till 80 we could realistically pay full market value to him or his wife before they passed on.

    He's never been the type to worry about his decisions about the second property in relation to his own family as his own family home is in a nice area and worth a good amount in itself.

    All you can do is raise it with him and see what he says. I don't know of how enforceable a binding agreement to pay monthly would be. Interesting idea though in a close knit family I'm sure some would agree.
    One thing I would suggest to you though is getting a good insurance policy for life and illness on yourself and your wife so if you get sick and out of work and can't pay or one of you died the man could still be paid.
    That's if this can even go ahead at all. Consult a solicitor I suppose is all anyone can say here.


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    #5
    quinne22
    Registered Users Posts: 46 ✭quinne22


    Heres Johnny wrote: »
    All you can do is raise it with him and see what he says. I don't know of how enforceable a binding agreement to pay monthly would be. Interesting idea though in a close knit family I'm sure some would agree.
    One thing I would suggest to you though is getting a good insurance policy for life and illness on yourself and your wife so if you get sick and out of work and can't pay or one of you died the man could still be paid.
    That's if this can even go ahead at all. Consult a solicitor I suppose is all anyone can say here.

    Yeah I'm not sure if it is even doable that's why i was looking for advice here.



    If the agreement was doable we would get good policies for life and illness.

    It would also save us a lot of money in interest compared to if we went down the normal route of a bank etc and would also give the grandfather more or less a guaranteed extra chunk of income a month for years.


  • Options
    #6
    spaceHopper
    Registered Users Posts: 3,991 ✭✭✭spaceHopper


    There could be others in the family who feel you are getting special treatment or they are hard done by or that you are exploiting an old man. I'd save hard and buy


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    #7
    quinne22
    Registered Users Posts: 46 ✭quinne22


    spaceHopper wrote: »
    There could be others in the family who feel you are getting special treatment or they are hard done by or that you are exploiting an old man. I'd save hard and buy

    He has all his faculties knows exactly what he's doing etc

    l dont think his kids would have any problem with it they are all very fond of my wife and all his kids own more than one property with one of the children getting a big deposit off his grandmother for one of his properties.


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    #8
    GingerLily
    Registered Users Posts: 4,767 ✭✭✭GingerLily


    I wouldn't underestimate how nasty family situations can get when inheritance comes into the equation.

    The most wealthy tends to more the most trouble too.....


  • Options
    #9
    antoinolachtnai
    Registered Users Posts: 9,792 ✭✭✭antoinolachtnai


    In the US it is done a lot. It is ‘vendor financing’. Basically the seller gives you a loan to buy the property.

    The important thing about this is that there has to be something in this for both parties, ie he gets a return that is greater than he would have gotten otherwise and you get a house you couldn’t have afforded otherwise.

    Another possibility might be to borrow some of the money from the bank and some from the seller. The bank’s loan would take priority however. This might leave the seller in a weak position if anything went wrong.

    The seller needs sound independent legal and tax advice for this.


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    #10
    Morte
    Registered Users Posts: 181 ✭✭Morte


    quinne22 wrote: »
    If he lived till 80 we could realistically pay full market value to him or his wife before they passed on.
    quinne22 wrote: »

    It would also save us a lot of money in interest compared to if we went down the normal route of a bank etc and would also give the grandfather more or less a guaranteed extra chunk of income a month for years.
    These two things don't go together. If you're paying market value then it should be more expensive than a mortgage. He's effectively giving you a mortgage but with much more risk attached and will still have to pay for costs like insurance. If your intention is to pay for a €200k house by paying €10k a year for 20 years you're only paying about half the cost in Net Present Value terms (half being completely made up but you get the idea).

    I wouldn't try raising this as an option at all. Even if you did put in a genuine effort to work out a fair value for the property it's so hard to calculate either he himself or another family member is bound to be suspicious of it. Taking out a regular mortgage would be much easier for all concerned.

    If he suggests it then of course that's different. You would need to spend quite a bit on professional fees to get it done properly though. It would surely be a lot less hassle for him to just gift you the deposit.


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