Can I drop agreed price before closing?

Brazzer

Hi Guys

Need a bit of input. We have put a booking deposit down on a house and are paying the remainder of the 10% in a few weeks with the view to closing in early January. I have been told by a few people to drop the agreed price now considering houses are supposed to drop by a further 8% next year. A friend of mine had this done to her on the day of signing, her buyer dropped the agreed price by 10k and her solicitor told her to suck it up as going to put the house on the market again she might not achieve the price again. She is one of the people advising me to do it. I broached the subject of doing it with my solicitor and he didn't seem phased at all, I wasn't very outright, just tried to gauge a reaction.

My OH is all for it, he thinks we should 'chance our arm' but it's not something I'd like to happen to me even though I agreed to a 20k drop on our previous property when selling but that wasn't in the final stages the way this new property is now.

Has anyone done this? If so, did you do it directly with the estate agent or get your solicitor to do it on your behalf?

Also, is it an awful thing to do? I know for a fact that the person who owns this house also owns a lot of houses in the area, he's not an investor that bought in the boom times and I would consider him to be well heeled. What I mean is it's not a family I would be considering doing this to. You can probably tell I'm a bit uneasy but we're heavily stretched to buy this house and literally only have what we agreed to pay for it. Not that it makes a difference to the seller but it does to us, the house needs a whole new heating system and this is what's going through my mind, the money I could potentially save could be used to install a new heating system.

Thanks in advance

Bigcheeze

You can do it anytime until the contracts are signed and exchanged.

When I was selling 6 months ago I was half expecting it to happen to me but it didn't so I was lucky to get a straight up buyer.

You do it with the estate agent. It has nothing to do with your solicitor although if you wanted to pay him extra to do it he probably would.

In terms of ethics, I suppose I'm a bit old fashioned and believe that once a deal is agreed it should be honoured but that's just my personal view and there's nothing legally stopping you putting in a lower offer.

Brazzer

Thanks for replying, it's good to hear other peoples opinions and perspectives on this. Much appreciated.

mrmitty

I believe that from a legal standpoint there's nothing stopping you.
Personally, I think that one's word should be their bond.

This practice was dispicipable on the way up and is equally dispicipable on the way down IMO.
The sooner that real estate contract law is rectified in Ireland the better....

Jezzabelle

mrmitty wrote: »

I believe that from a legal standpoint there's nothing stopping you.
Personally, I think that one's word should be their bond.

This practice was dispicipable on the way up and is equally dispicipable on the way down IMO.
The sooner that real estate contract law is rectified in Ireland the better....

How would you like to see contract law rectified in this regard?
A contract is legally binding, until a contract is signed either party are free to change their mind and I see this as fair practice. It may not suit some people's moral standpoint but at the end of the day the op is probably committing to 20 year plus mortgage and wants to be sure they are not paying more for something than it's worth and I can't say I blame them.

odds_on

In Argentina and I think Spain as well, the day you pay a deposit you sign a contract stating the price and the terms and conditions of sale. Such as what happens if either player pulls out of the deal (the buyer usually loses twice the deposit). There is no chance of changing the price to be paid.

However, the price on the deeds is usually a lot lower than the selling price (often 50% or more). This way the buyer pays less municipal taxes and the buyer pays less tax on the sale. Also, the deeds are usually ready within a week to ten days at the most - and can also be as little as 1 or 2 days - with all the legal checks made.

not even wrong

we're heavily stretched to buy this house and literally only have what we agreed to pay for it.

Are you from 2006? Have you been paying any attention at all to what's been going on in the news for the past 5 years?

professore

OP if you can do it then do it. All the other party can do is say no. I don't understand the idea of paying a deposit though.

From this post it seems to be otherwise, but to me a deposit is something you pay to stop the other party selling or changing the price. If you pull out of the deal you should lose the deposit - otherwise what's the point?

ted1

I'm a man of ethics and wouldn't do it.
But seen ad your not. Tell the estate agent the banuk won't give you the full amount so you havwe to lower the price
I'm in the process of buying and have caluculated a price drop of approx 8% a year after I buy it will still keep me up money. As I'm paying approx 15k in rent.
I'm buying in the same estate as I'm renting and rent is currently dearer than aortgage.

rsole1

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Garzorico

Brazzer do what is right and correct for you and yours. Ignore everyone else. If the seller could get an extra 5k or whatever out of you do you not think they would try? Its economics and the market at work. If the seller was offered 10k more than you offered do you think they would say 'no thanks we agreed a price with another buyer already'....would they f*ck. Its not personal, its business. Absolutely chance your arm. Like I said look out for you & yours.

P. Breathnach

ted1 wrote: »

...
But seen ad your not. Tell the estate agent the banuk won't give you the full amount so you havwe to lower the price ...

Why tell lies? If you want to do it, at least have the decency to tell your victim that you are choosing to behave like a shit.

Bigcheeze

Garzorico wrote: »

If the seller could get an extra 5k or whatever out of you do you not think they would try? If the seller was offered 10k more than you offered do you think they would say 'no thanks we agreed a price with another buyer already'....would they f*ck. Like I said look out for you & yours.

The difference is the house has now gone "sale agreed". On the way up, we heard of the phrase Gazumping but it certainly wasn't common and I've never heard of it happening to anyone I know. Reality is that on the way up sellers could have put their house back on the market and got more money in a few days.

Garzorico wrote: »

Absolutely chance your arm.

Kind of our national motto isn't it

mikemac1

Gazundering
Go for it OP, often done a few days or even hours before the contract is signed
The money is better off in your pocket. Worst that can happen is they say no

It's not some family emigrating with their life savings here, you say the guy owns multiple properties

There were plenty of gazumping going on not long ago when the sellers could get away with

P. Breathnach

mikemac1 wrote: »

...
It's not some family emigrating with their life savings here, you say the guy owns multiple properties...

It's legal, but I consider it unethical.

I don't think it is right to contrive a justification. If you are going to behave badly, you should at least acknowledge that to yourself.

Brazzer

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Nice ! I'm neither greedy nor deceitful, if I didn't have morals I wouldn't have asked for advice. Your opinion won't be taken on board as you chose to attack me. You don't know me so please keep your disgusting thoughts about me to yourself, they are neither wanted nor welcomed when you choose to blame me for the 'mess we're in'.

Brazzer

To all others who replied, again thank you. It's something I hadn't thought about doing until 3+ people said it to me. I thought it must be common practice as they didn't seem at all miffed offering their advice to do this.

amdublin

It's legal. But I wouldn't do it.
Morally if I agreed a price and gave my word I'd stand over it and honour it.

Howjoe1

flip side...during the boom I was on the wrong end of a builder who hiked the price by 30,000 will I was waiting for the cheque to clear due partially to incompetence of broker.

So maybe its a case of what goes around comes around !

is it a new build?

mrmitty

Jezzabelle wrote: »

How would you like to see contract law rectified in this regard?
A contract is legally binding, until a contract is signed either party are free to change their mind and I see this as fair practice. It may not suit some people's moral standpoint but at the end of the day the op is probably committing to 20 year plus mortgage and wants to be sure they are not paying more for something than it's worth and I can't say I blame them.

Simple.
Submit an offer in writing which will have some contingencies such as
1 inspection period.
2 ability of buyer to obtain a mortgage
3 clear and free title at closing
Both # 1 & 2 above should have specific time limits of approx one week for #1 and 30 days for #2.
At the time of signing an acceptance of offer and upon reciept of earnest money, the document should become an enforceable contract with buyer having rights to sue for specific performance and the seller having same with additional right to confiscate earnest monies.
Once an offer has been accepted (in writing), a contract should be in existence with the above contingencies.

mrmitty

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

The fact that the OP took time to post this thread displays evidence that they do indeed have morals IMO.

Brazzer

Howjoe1 wrote: »

flip side...during the boom I was on the wrong end of a builder who hiked the price by 30,000 will I was waiting for the cheque to clear due partially to incompetence of broker.

So maybe its a case of what goes around comes around !

is it a new build?

No, it's approx 65-70 years old.

Coriolanus

You can and should, otherwise you're paying the owner a premium. If he's willing to take 10k less great, if he's not, pay what the original.

jsd1004

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

Its easy to see you have never been in business and would not survive too long in the business world.

Mr. Presentable

I presume you will lose your deposit if you foul the deal. I believe what goes around comes around. A good tenet is "Don't do to me what you wouldn't want done to yourself"

ted1

P. Breathnach wrote: »

Why tell lies? If you want to do it, at least have the decency to tell your victim that you are choosing to behave like a shit.

easy, it if says "can i pay less". the response will be no. theres adn agrred price.

if he says "I can't pay the agree price as the max th ebank will give me is x". well then the likly hood is that the offer will be accepted.

TOMP

Beware the seller might respond and put the price up 10%

Supercell

Who was it that said you should always leave the other guy something?

My dad was telling me the other day about when they bought their first house. They bargained hard (but didn't gazunder the seller) and when they got the keys to the house they went down to check it out as you do. The seller was stripping the place!! Curtains, copper wiring, even the front door was off his hinges!! He couldn't believe it, he reckons if he'd not gone down the gaff would have been a shell a few days later!!
I would thread carefully about gazundering any seller, bad blood never leads to good things.

Posy

Brazzer wrote: »

the house needs a whole new heating system and this is what's going through my mind, the money I could potentially save could be used to install a new heating system.

You should have really considered this when making your final offer, but I'm sure you know that already!
Perhaps tell the estate agent that you were going to be getting a loan to repair the heating system, but now the bank won't give you the extra, so you'll have to reduce your offer by 5k, unless you get a credit union loan but it's not too likely.. that way you can get a 'feel' for how a reduced offer would go down before being too 'official'. I don't agree with lying, but it sounds better than 'I'm chancing my arm, sure you can only say no!'
If you don't ask, you don't get- in this climate you have to be tough!
It's not ideal, but it's not ideal leaving yourself so financially stretched either, especially in a buyer's market.

The_Conductor

rsole1 wrote: »

Brazzer - how disgusting a person you are. Driven by greed and deceit is what got us in the mess we're in. Get some morals.

5 day ban for personal abuse.

Guys- how many times do I have to spell it out for folk, if you disagree with what someone posts- refute the post, without attacking the poster.

Regards,

SMcCarrick

Posy

Supercell wrote: »

I would thread carefully about gazundering any seller, bad blood never leads to good things.

That's why I would tread carefully OP.. but if you're prepared for the answer being 'No', you might as well ask, while voicing your financial concerns over the overhaul of the heating system.
Good luck with the house, either way!

Victor

Know what you want. Explain that you are under pressure / need money for the plumbing / are conscious of the price drops. and that you need a reduction. Gauge their reaction. If you can, get them to offer first, but if not ask for a reduction somewhat greater than what you are looking for (allow them space to haggle back some distance), but don't ask for so much that they walk away.

Perhaps give them 24 horus to think it over.

3DataModem

This happened a bit during the boom. I bought my first flat through Gunne's EA. After price was agreed a builder selling a bunch of new build flats gave all the deposits back and jacked up prices by 30%. Gunne's figured that a bunch of these buyers would be interested in the place I was buying. So they put the place back on the market. Scummy behaviour, but that's the way the market is structured. Deposit / Contract / Close in that order, and nothing final till contract step completed.

Ray Palmer

Garzorico wrote: »

Brazzer do what is right and correct for you and yours..

You can do it but don't call it right. It is an ethical issue and doing it for your "family " doesn't make it right. You are doing it to another family it isn't a grey area.

Legally you can do it

cursai

I don't see any issue with this. I was in the same boat at the end of last year. Got into the process of buying a h iused for 220000. Before I signed or paid the deposit. I asked for the price to be dropped to 210000.
They refused. I taught it was too risky seeing as the prices kept dropping nationwide and the interest rates had risen that week so I pulled out.

The same house is now on the market for 185000......

n900guy

Contracts are oral as well as written. If you agreed at price (by saying you did) and paid a deposit on that price - well, that's indication enough that you agreed a contract and the deposit is proof.

You can try for a lower price - therefore looking for a new agreement. If they don't want the new lower price, you have broken your oral agreement and lose the deposit.

It's like getting a plumber out for €100 and when he at the door, you say, actually I want the service done for €80.

IANAL!

zac8

n900guy wrote: »

Contracts are oral as well as written. If you agreed at price (by saying you did) and paid a deposit on that price - well, that's indication enough that you agreed a contract and the deposit is proof.

You can try for a lower price - therefore looking for a new agreement. If they don't want the new lower price, you have broken your oral agreement and lose the deposit.

It's like getting a plumber out for €100 and when he at the door, you say, actually I want the service done for €80.

IANAL!

You've never bought a house, have you?

zac8

This happened to me in 2008. I managed to negotiate with the buyer to meet half way on the drop he was looking for.

It's legal to do this and also I think it is fine to do it if the surveyors report identifies any issues, as you obviously agree the price before getting the report.

Keep in mind that you run the risk of seeing the whole deal collapsing as some buyers take this personally and you will still need to pay your solicitor. Most likely outcome is that he will try to meet you half way.

wetdufflecoats

Interesting thread...i've just agreed after 6 weeks an offer of 110k on a house on the outskirts of Galway. Took forever for the EA to get word from the seller as he had been in trouble with the banks and NAMA had control over his finances according to the EA. I'm now a little worried considering the budget and the doubts over the euro....and am considering not going ahead with it until January/February. I wonder where do I stand legally?I havent signed any contracts but have given an offer.

domcq

I'm in a similar process. Sale agreed but there's an issue with planning on an extension that I'm not happy with. I've been advised that until I sign the contract my booking deposit is fully refundable - I think this is the case in most instances.

ravendude

domcq wrote: »

I'm in a similar process. Sale agreed but there's an issue with planning on an extension that I'm not happy with. I've been advised that until I sign the contract my booking deposit is fully refundable - I think this is the case in most instances.

Booking deposit is fully refundable. Its merely a signal that you are serious about proceeding.

jmayo

Brazzer wrote: »

Hi Guys
You can probably tell I'm a bit uneasy but we're heavily stretched to buy this house and literally only have what we agreed to pay for it. Not that it makes a difference to the seller but it does to us, the house needs a whole new heating system and this is what's going through my mind, the money I could potentially save could be used to install a new heating system.
...

The worrying thing in this post is what I have highlighted.
Also it is noticable how only one other poster on here has commented on it.

You need to save every penny you can.
If it makes you feel better continue looking at it in terms of the loss of the money would be felt a lot more by you than the seller.

It may be buying a home, but it is also a business transaction and those that do well in business are the ones that strike the best deal.

BTW when did you discover you needed new heating system ?
Was it after you had the survey done ?

odds_on wrote: »

In Argentina and I think Spain as well, the day you pay a deposit you sign a contract stating the price and the terms and conditions of sale. Such as what happens if either player pulls out of the deal (the buyer usually loses twice the deposit). There is no chance of changing the price to be paid.

However, the price on the deeds is usually a lot lower than the selling price (often 50% or more). This way the buyer pays less municipal taxes and the buyer pays less tax on the sale. ...

Oh FFS.
You do know what happened in Spain and will likely happen in Bulgaria where this sh**e was happening a lot with the deed price being way lower than the actual prices paid ?
The tax officals start checking up and eventually find out the sale prices were much higher that offically stated and they go looking for the unpaid taxes.
Guest who the only ones they can find are ?
Yep, the Paddy with the keys.
Also if you had resold during the boom for much higher value than on deeds then you were liable for more tax.
Your only saving grace now is that if you sell you won't be making any money, even above deed value, to have to pay taxes on.

TOMP wrote: »

Beware the seller might respond and put the price up 10%

Yeah it is a sellers market out there afterall. :rolleyes:

Brazzer

Only noticed the heating after the surveyors report. Also showed up that the back boiler needed to be replaced so would mean a full new heating system. Have asked around and been told that it will cost approx 8k to do this as part of the heating system has been bricked up behind the kitchen units. Odd layout to begin with but it's an older house. OH wasn't too impressed with the surveyors report and the solicitor actually commented on it too and suggested I go with another one he uses as he felt that the attic and other areas of the house weren't checked out thoroughly enough, he felt it was just given a once over and needed closer inspection. The surveyor I used was actually recommended by the estate agent and is a family member of his.

TwoShedsJackson

Brazzer wrote: »

The surveyor I used was actually recommended by the estate agent and is a family member of his.

It should be obvious to you now what a truly terrible idea this is...

ravendude

Brazzer wrote: »

Only noticed the heating after the surveyors report. Also showed up that the back boiler needed to be replaced so would mean a full new heating system. Have asked around and been told that it will cost approx 8k to do this as part of the heating system has been bricked up behind the kitchen units. Odd layout to begin with but it's an older house. OH wasn't too impressed with the surveyors report and the solicitor actually commented on it too and suggested I go with another one he uses as he felt that the attic and other areas of the house weren't checked out thoroughly enough, he felt it was just given a once over and needed closer inspection. The surveyor I used was actually recommended by the estate agent and is a family member of his.

Whoa, - definite no no! Get your own independent surveyor.

There is absolutley nothing even arguably unethical about going back for reductions due to issues in surveys. Thats what they're for to a large extent.
I think even previous posters who were up in arms previously would have no problem with this.

If something wasn't obvious at the time of putting in the offer, I wouldn't think twice about going back for money off. Ideally, you would send them a written quote as to the cost.

pavb2

Victor wrote: »

Know what you want. Explain that you are under pressure / need money for the plumbing / are conscious of the price drops. and that you need a reduction. Gauge their reaction. If you can, get them to offer first, but if not ask for a reduction somewhat greater than what you are looking for (allow them space to haggle back some distance), but don't ask for so much that they walk away.

Perhaps give them 24 horus to think it over.

I agree with most of this but again if more things are showing up on the survey it's more cost to you and legitimate & ethical to ask for a reduction. I'd say that house prices are expected to drop 8% ask him to meet you halfway at 4% if he says yes you've got a reduction and kept your 'integrity', he still gets the sale. If he says no at least you've given him the opportunity seal the deal.

I probably give him longer than 24 hours ultimatum depends on your urgency.

Not an attack on people here but I don't subscribe to the view that you can separate business, shaft someone and say 'it was a business deal but on a personal level I'm a really nice guy and have high morals & ethics'.

I don't think the 2 are mutually exclusive also I tend to believe in Karma

Good luck whatever you decide

bath handle

n900guy wrote: »

Contracts are oral as well as written. If you agreed at price (by saying you did) and paid a deposit on that price - well, that's indication enough that you agreed a contract and the deposit is proof.

You can try for a lower price - therefore looking for a new agreement. If they don't want the new lower price, you have broken your oral agreement and lose the deposit.

It's like getting a plumber out for €100 and when he at the door, you say, actually I want the service done for €80.

IANAL!

Deposits are paid subject to contract. Until the contract is signed by both parties there is no binding contract. Under the Statute of Frauds a contract for the sale of land must be evidenced in writing and signed by the party to be charged.

Victor

n900guy wrote: »

You can try for a lower price - therefore looking for a new agreement. If they don't want the new lower price, you have broken your oral agreement and lose the deposit.

The way around this would be to say "Would you accept X?", which is an enquiry, not a counter-offer.

jmayo

Brazzer wrote: »

Only noticed the heating after the surveyors report. Also showed up that the back boiler needed to be replaced so would mean a full new heating system.

Ok that is very important.
Never mind the fact that market has dropped and your agreed (not contracted mind) price is already probably more than current market value, the survey has highlighted mahor issues that will cost a lot to remedy.

Brazzer wrote: »

Have asked around and been told that it will cost approx 8k to do this as part of the heating system has been bricked up behind the kitchen units. Odd layout to begin with but it's an older house.

If someone quoted you 8k I would add another few grand on for unforseen circumstances and the hassel of doing it.
Thus I would demand drop of 12k.

Brazzer wrote: »

OH wasn't too impressed with the surveyors report and the solicitor actually commented on it too and suggested I go with another one he uses as he felt that the attic and other areas of the house weren't checked out thoroughly enough, he felt it was just given a once over and needed closer inspection. The surveyor I used was actually recommended by the estate agent and is a family member of his.

Ok this sheds a whole new light on it.
FFS what possessed you to use a surveyor that is connected in any way with the seller or the selling agent ? :eek:

You need another survey done before you sign anything.
The surveyor needs to be independent and even if it costs a good few quid it could save you many more thousands down the road.

As it is looking at the information you have provided here I would be backing out of deal.
You are buying old house with very dodgy heating which is going to cost to set straight.
It looks like you are going to have to tear the kitchen apart.
That is not just plumbing, but from the sounds of it you will end up needing a plasterer or the likes to tidy up the mess.
If heating is in rag order then what about the wiring ?

Unless you have made the fatal flaw of following in love with the house I would recommend walking away.
If you have fallen in love with it and really want it you should be looking for drastic reduction, how much depends on new surveyors report and what it turns up.

ArraMusha

wetdufflecoats wrote: »

Interesting thread...i've just agreed after 6 weeks an offer of 110k on a house on the outskirts of Galway. Took forever for the EA to get word from the seller as he had been in trouble with the banks and NAMA had control over his finances according to the EA. I'm now a little worried considering the budget and the doubts over the euro....and am considering not going ahead with it until January/February. I wonder where do I stand legally?I havent signed any contracts but have given an offer.

what are you worried about ? Until the contracts are signed you can tell the seller you have changed your mind 40 times...

I'd be in no hurry to buy now even if its a bargain.

marienbad

What if the seller says no and keeps your deposit as you have broken the agreement ?