Sale agreed then gazumped

Was highest bidder on house last week in Ballintemple, Cork and EA asked me to go up another 5K to go Sale Agreed. After doing so he then said it was subject to booking deposit being presented. Fair enough.

So I then went to 2nd private viewing Saturday with my cheque, but this was not accepted, saying another couple were viewing and he’d let me know Monday. So today the other couple has bid another 5K.

I can confirm another couple did view, as a friend lives nearby and saw them.

Highly annoying and no way I’m bidding again on the house.

2nd time now a Sale Agreed has fallen through for me in recent months; the other because seller pulled out

Totally legal. Agent acting in best interest of his client.

Legal, yes. Moral, no.

The whole process is crying out for serious regulation.

In brisbane it’s very contractual, you gotta put your offer in writing and this is given to the vendor.
Upon agreement deadlines are placed as to when surveys etc can be done etc. If either party doesn’t meet deadlines there is a $ penalty and the option for the other party to move on.

Sorry to hear it Jackal. Very frustrating.

www.psr.ie

I feel your pain.

I’m due to sign contracts this week. Even then it won’t be a done deal AKAIK - we have to wait for the vendors to sign and return contracts.

The Sales Advice notice was issued in mid-March a week or so after first viewing. So that’s over two months of total uncertainty after we’d agreed a price.

The amount of effort to get us to this stage has been absolutely enormous. Never again.

Family member went sale agreed last June and still not finalised. Firstly the vendor died so probate was needed. This was complicated because her husband’s will hadn’t been probated when he predeceased her.

Then it was discovered that land registry had made mistakes in the original registration of the house when it was built in the 60’s. It seems they are now insisting that probates are repeated because of this. Solicitor says someone at a senior level in land registry could sort it out and has given detailed instructions on how this can be done to vendors solicitor but land registry won’t budge.

There are no other houses in the area for sale so they’re stuck.

Anyone else similar experience or advice?

Commiserations Jackal. During a viewing a few months ago I talked to a couple who had been gazumped after 4 weeks. Had already measured up for curtains and had bought a table. The whole process is a nightmare. Every stage is a stressor. I’m on my 3rd Sale Agreed and after the 2nd fell through, I nearly bought a house of which my first impression was ‘everything about it is horrible’, so desperate was I to get this over with. It’s 2 years since I first bid on a house and I feel 10 years older. You just have to put your head down and keep going. Like Eschatologist I have signed the contract and await the vendor’s countersignature. Nearly there, but still time for something, anything, to go wrong.

The Land Registry will normally accept an opinion from a Senior Counsel that have specialist property skills. This will cover them. Your solicitor should know this and be able to approach a Senior Counsel. It will however cost several thousand. The vendor should pay. I can give you the name of one such Senior Counsel, if you wish.

As strange as it may seem, it is usually the purchaser who pays for the SC opinion to support the title for land registry purposes.

I was in this position for a house I nearly bought. I sourced the opinion but the vendor were going to pay.

If there was another viewing and viewers to come then it wasn’t really sale agreed.

It amazes me that buyers feel they can pull out or push for a price cut due to an issue with a survey (that no one could reasonably know about) But a vendor pulls out or gets better offer and that’s deemed terrible. A vendor is taking a chance going with a higher offer after a genuine sale agreed. Their new buyer can walk away any day up to signing of contract

Nonsense. Houses are advertised–always–as being wonderful with no problems whatsoever. They are made over and problems papered over to fool punters. And potential purchasers make bids based on those assumptions plus whatever a layperson’s visual inspection might turn up. When a survey reveals that all is not as advertised, then that is necessarily going to impact the bid, which was predicated on the house being as advertised. Bidders are not, generally, each going to carry out a survey (at €300 and up) on properties for which they are not sale agreed.

Of course all of this idiocy could be avoided if:

  1. advertising standards applied to houses the way they do to, say, cornflakes: i.e., if you say the place is in “perfect condition” it’d better not be on the verge of collapse;

  2. buyers responsible for providing a survey from a neutral surveyor that they can have no contact with. There would be various ways to enforce the arm’s-length relationship. This survey would then be made available to any prospective buyer, much in the way a BER is now. This takes away both the “I didn’t know the house was collapsing!” excuse and the blind bidding wars among parties who know little about the true state of the house since everyone knows what they are dealing with.

The advertisements are just a string of adjectives some barely literate EA threw together along with some facts (size, location)

A wise vendor who wants to save themselves time and hassle will disclose what their EA tells them might be going to be a roadblock to sale. But there is sometimes no end to how unreasonable a jittery surveyor and conveyancing solicitor on the other side can be about things. Have your EA be nice to underbidders - If a purchaser tries to price chip walk away

Fact 1; The house was not sale agreed.
Fact 2; The property market in Ireland is dysfunctional.
Fact 3; The only perspective I’m interested in is my own.

Only if you think that “go up another 5K to go Sale Agreed” means nothing different than “give me another 5K.” There are jurisdictions in the world where that would be a verbal contract and enforceable. In Ireland, of course, Estate Agents can say absolutely anything they like with impunity.

I guess this is the other side of gazundering where buyers agreed to purchase at X price and then threaten to walk away unless given a reduced price. Think there were a few years of that in the not too dim and distant past.
In fact I would imagine if you search the Pin you would find older threads advising prospective purchasers to do just that…

This is why the Irish Central Bank (a.k.a ECB) is demanding such large deposits on mortgages for Irish houses.

The GFC showed that the gazumping process created an extra “bid” on prices, that in downturns, turned the opposite direction, and thus almost immediately - before the real drops in prices - wiped out any security the bank had in the deposit.

They should have fixed this by a better regulated process but as the Irish government could not get it together to do this (as with everything else), the Irish Central Bank (a.k.a ECB) just increased the deposit amount instead.

I suppose part of what’s anomalous in Ireland is that going Sale Agreed really means nothing. The deposit is refundable and there’s no sanction on the seller for backing out.

A lot of messing around could be dispensed with by a requirement that, when Sale Agreed the booking deposit is handed over and is non-refundable if the purchaser backs out. To keep both sides honest, the vendor could also be legally obliged to pay an amount equal to the booking deposit to the purchaser if they back out.

At present there is no cost to either side to back out and it routinely takes weeks if not months to get from Sale Agreed to exchange of contracts. Even then, nothing is in stone until both sides have signed.