Ways around Gazumping?

bla.bla.b

Looking for advice.

Since the turn of the year my wife and I have been looking for a doer upper. We have happend to stumble upon what we considered a Gem of a place - it's the first place we have both said "I want to live there". One problem- it's sale agreed. We rang EA and left our details in case it falls through but dont expect it to as it's a low price and financing should be straight forward. The EA did let us know how much it went - barring any major structural issues we would be prepared to pay circa 20% higher than the current sale price in order to get it (it sold for less than 200k).

We dont want to Gazump the current buyers. Has anyone experience of a situation where you make a bid to the new owners when the current sale goes through? ie. The new owners will make a profit without ever living there.
How would you go about doing this?

Cian59

It really depends on what 20% is in Euros? 20% of 100k or what are we talking about.

Let alone the hassle of finding a new place to buy and move into, there is also other costs that need to be recovered (solicitor fees, insurance, surveyor etc.). There's also not a lot of supply of property out there so there is likely to be a delay in closing a new place and a significant opportunity cost.

If I was the new owner, I'd want to see very significant profit after costs to justify considering it.

daheff

You also have to take into account that the new buyer may value it much more than the price you put on it....so even what you feel is a good price may not be enough -no price might be!

Dolbhad

bla.bla.b wrote: »

Looking for advice.

Since the turn of the year my wife and I have been looking for a doer upper. We have happend to stumble upon what we considered a Gem of a place - it's the first place we have both said "I want to live there". One problem- it's sale agreed. We rang EA and left our details in case it falls through but dont expect it to as it's a low price and financing should be straight forward. The EA did let us know how much it went - barring any major structural issues we would be prepared to pay circa 20% higher than the current sale price in order to get it (it sold for less than 200k).

We dont want to Gazump the current buyers. Has anyone experience of a situation where you make a bid to the new owners when the current sale goes through? ie. The new owners will make a profit without ever living there.
How would you go about doing this?

Also if the owners were FTB, bought the house and sold it, the would need a bigger deposit next time round so would need more money to cover that and the costs of stamp duty, solicitor fees etc. Not to mention if they had a fix rate mortgage it could be a high breakage fee. They also think it’s a gem and not sell it.

I think you either Gazump or let it go.

iColdFusion

Agree with what everyone else is saying but still worth a shot of making the offer, as its a fixer upper might have been bought by someone who planned to sell it on anyway.
Id stick a brief letter with your details and interest in the property in the letterbox and then keep an eye on landdirect.ie, once the sale is gone through you can request the folio for €5 to get their name and address which can be useful if option A gives you nothing.

bla.bla.b

Thanks all for the input.

Gazumping is just a non-runner for us. Whatever about ethics and morals we'd also fear we might run into someone that didnt take too kind to it and we then became a target in some shape or form.The letter in the door to the new owner is probably the option we are leaning towards at the minute. Sale Agreed is between 180-190k (EA was vague). We're prepared to offer upto 230k for it.

The thought of Stamp Duty and Solictor Fees being paid on the double is the biggest bug bear I would have. I know I would not be physically paying them but inadvertently feel I will be if to go this route.

3DataModem

There used to be a way to flip a house post-contracts and pre-closing that avoided the double stamp-duty. It happened occasionally for new houses when buyer A purchased off plans and then sold to buyer B (effectively "assigned the contract").

Del2005

Wouldn't the sellers have a CGT liability if they flip it after buying?

3DataModem

Del2005 wrote: »

Wouldn't the sellers have a CGT liability if they flip it after buying?

Yep. But only on the profit.

StupidLikeAFox

bla.bla.b wrote: »

Thanks all for the input.

Gazumping is just a non-runner for us. Whatever about ethics and morals we'd also fear we might run into someone that didnt take too kind to it and we then became a target in some shape or form.The letter in the door to the new owner is probably the option we are leaning towards at the minute. Sale Agreed is between 180-190k (EA was vague). We're prepared to offer upto 230k for it.

The thought of Stamp Duty and Solictor Fees being paid on the double is the biggest bug bear I would have. I know I would not be physically paying them but inadvertently feel I will be if to go this route.

You are overthinking this i think. Make the offer and you will get the house you and your wife want, for a price you are willing to pay. It will be disappointing for the other crowd, but you are currently letting them get a house at below market rate at your expense. Why would you settle for a less desirable place for the benefit of strangers?

As regards becoming a target for someone, its likely they will be disappointed but unlikely they will go looking for revenge, doesn't really make sense unless they were complete psychos. Chances are they will say **** it, and just continue with their search.

Its commendable that you are thinking about them but you don't owe them anything either. Not nice to be gazumped but if I was in your position I'd be thinking of my own housing needs and wants. Anything else is likely to get messy

listermint

Do you have the money ready to go.

If not I think you should forget about it.

If it's sale agreed then all you can do is leave your details with the estate agent and tell them you'll match the price should it fall through..

You're no more or less deserving of the house than the other couple, but they got there first, end of story..

offering another sum is Gazumping and it's scummy, end of story.
Also, you may well end up meeting the other couple for the worst, if they take it badly so Gazump at your peril! if you do it, any bad luck is yours deservedly in my book.

Claw Hammer

You shouldn't wait until; the sale is closed. The current buyers might be prepared to sell you their interest in the contract. This will save stamp duty.

CollyFlower

I don't think Sale Agreed means anything, it will be still open to offers, it's when Sold it's off the market.

DM1983

I see nothing wrong with gazumping. Sale agreed is pretty meaningless. Either party can pull out for any reason.