Offer - Dangerous Game?

Really like a house, so put it an offer a few days ago as wanted to get involved in the bidding process as I think the EA was adding a few k to the ‘latest offer’ (pinch of salt) every time we went back to see the house. I thought this would help stop that and also it’s an offer i’m happy to make (i.e price i’m prepared to buy at).

The issue is i’m still waiting on mortgage approval - letter of offer. Obviously told the EA this was in place.

I understand this isn’t exactly 100% honest but i’d be hopeful either AIB or BOI might be back in a week or so. How likely is it the EA will ask to see the letter of offer if my offer is accepted?

Any chance of getting the booking deposit down and stall a week re getting a valuer to buy the time for the loan offer to come through?

In the current market an EA increasing the lastest offer prices every time you visit suggests there area a few interested parties.

the EA shouldn’t / won’t ask for a offer letter … they don’t give a monkeys, your offer isn’t accepted until you pay the booking deposit.

I don’t mind that, and there may be a counter offer in the mean time.

I just don’t want to get ‘caught out’ being asked to produce a letter of offer till I get one.

I wanted to get involved in the bidding process rather than looking in from the outside for another 10 days wondering how it’s going and if the house will go sale agreed in the meantime.

Should be no issue with being “caught out”. Keep yourself in the game if you want this place.

The only thing I’d say is don’t bid unless you’re confident of approval, as otherwise you’re messing around a lot of people.

I recently bought a house where by the EA said on initial enquiry that they were only entertaining ‘cash buyers’ … i wasn’t a cash buyer, but as far as I was concerned money is money regardless of who is writing the cheque.

When I sold last year I had 2 bidders. I was not really concerned over who was the highest (within reason) but who could close without too many issues. I had previously lost a sale after being told that the buyer was a cash buyer and so I took his offer. It turned out he was lying and was waiting for a mortgage so I would disagree with you that ‘cash is cash’. Cash buyers have no mortgage and no chain of sale. Mortgages can have issues where the banks can suddenly request more information about helath insurance and you could be 6-8 weeks delayed. This has happened to a friend of mine (but he still got the house as there were no other bidders - back in 2011).
So, yes, it’s a dangerous game, as if your offer is accepted what are you going to do then? The EA will want a contract signed but you’ll be nowhere. The bank could easily come back with more questions. I know when I bought a house a few years ago (that i’ve sold now) I was fully approved and all ready to go and waiting for the letter and then I got a note saying that my bank statements needed a further 6 months of information. It took approx 10 days to get this and get the bank to send the letter.

So, contrary to what everyone else is saying, I think you’re bidding with absolutely nothing to back it up. You’re “hoping” the bank will come back in a week or so? You’ll need to have all that in place if the buyers accept your offer. I assume you’re putting the pressure on the bank to get that detail to you by a certain date.

Any offer/deposit should be subject to mortgage approval,contracts and acceptable completion of survey, otherwise you may have issues !

When you say it like that do you mean the op could potentially lose their booking deposit if they pay it over and have told the EA they have approval but don’t in fact?

I have advocated on here before putting any offer on a house in writing, summarising the benefits of your buying position and your timescale, stating the price offered, justifing the price offered, and listing any other conditions. This helps to ensure that your offer is communicated accurately and will help to avoid future misunderstandings or disputes about who said what. There was a letter someone on here posted up that was a good example. But even if you leave out any and all of the above information, just leaving your offer, the letter would always be headed ‘Subject to Contract/Contract denied’. Surely that would cover your ass?

EDIT - Yes, also, maybe mention ‘subject to survey’. Personally, when I took this approach myself, I also said subject to the property being taken off the market immediately.

A little known fact is that all property offer/acceptances need to be in writing before they can be considered a valid contract.

A bidder is only ever going to get a “Sanction in Principle” or whatever to buy. Once you are sale agreed with a potential mortgagee everybody knows you are at the whim of the banks who will want to investigate the property before actually writing a cheque. Therefore there’s always going to be a period of time before contract will be even close to signing.

If the OP is only a week away from approval, then this is only another week on top of the time the bank will already require to part with the money.

Deposits are meaningless. Any party can back out at any time, for any reason, until the contracts have been signed and exchanged.

Seems to be a few Lot of misconceptions on this thread.

First, you don’t have to show the EA your mortgage offer letter. In fact, you should never tell the EA how much you are mortgage approved for (for obvious reasons).

Second, you need to pay the booking deposit in order to go sale agreed (i.e. take the property off the market and enter into exclusive negotiations). The booking deposit is fully refundable until signing of formal contracts.

Third, when you sign a formal sale contract, you need to pay 10% deposit (including the booking deposit). Do not sign a formal contract until you are absolutely sure you can get a mortgage - otherwise you will lose that 10% if you are unable to close the deal because you can’t get funding.

It’s not long ago since this couple got a newspaper article and the sympathy of the nation by not worrying about mortgage approval until after they had paid their deposit … 95978.html

I was just trying to point out on behalf of the offeror that it needs to be caveated correctly, so that everyone knows exactly what is being offered and under what conditions. You might think its implicit to Mortgage approval but others may not. Best to be clear. Better in the long run.

That ideal letter - I remember that - a long long time ago in pin years

Hard to know from the article whether these guys were reckless or misunderstood the process. One of the benefits of using a mortgage broker is that they will explain how all the pieces fit together. Anyway, their solicitor really should have raised the mortgage approval issue with them (or explained the consequences of not getting it) before they signed the contract.

Really? Can you back this up in legislation?
I don’t believe that this is true, at least it wasn’t true in the past in terms of auctions.
If you made a verbal offer at an auction then appropriately witnessed that would be enough.

I know folks who have wriggled their way out of this but I also know folks who got stuck with stuff.

So it is.

Statute of Frauds (Ireland) 1695 requires that all contracts for the transfer of an interest or estate in land be in writing. Auctions are a different matter but even with an auction, a contract will have been prepared in advance and he highest bidder will be required to sign the contract on the day of the auction.