House sold for below our offer

Carlowgirl

Hi all
Just wondering if anyone would have heard of this scenario...
looking to buy.. found a really nice house.... put in mortgage application.. were offered 5 grand below asking price.. we offered what we had to estate agent.. they said owners refuse.. bank reviewed application to give extra 5k this was taking a while as they wanted new bank statements or basically made up jump threw hoops..
while this was going on... the estate agent emailed me to ask if we were still interested.. i said yes... but maybe not at the full asking price as we were waiting on the verdict but at the 5k below asking price...
next thing house is sale agreed... i couldn't believe he didn't tell us... the sale went through so fast.. i nearly died when i saw the property price register.. it stated that the house sold for 43k below our offer (without the extra 5 k) so basically 48 k below what we were going to give...
im still really confused over this i rang him to ask he said "oh that s not that house that sale hasn't gone through yet" .. when the new people have actually moved in and its common knowledge... they bought it.. cant believe they refused our offer for 43k extra as they wanted the 48.. extra yet its sold for that... the rumour on the street is that it wouldn't have passed the bank survey.. and it was a cash sale.. but i don know whether to believe this or not? has anyone ever heard of this?

ted1

Cash beats mortgage, the owners probably felt you wouldn't be able to close or the furniture was sold for cash reducing the house price.

Carlowgirl

ted1 wrote: »

Cash beats mortgage, the owners probably felt you wouldn't be able to close or the furniture was sold for cash reducing the house price.

Our mortgage was 50% cash... a drop of 48k is too much ..

Carlowgirl

Carlowgirl wrote: »

Our mortgage was 50% cash... a drop of 48k is too much ..

excuse me i meant to say our offer was 50% cash would you not just take the 43k extra offer.. as opposed to refusing saying you want 48k extra.. it doesn't make sense to sell out so fast for 48k in total below asking price? very strange?

The_Conductor

Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.

Carlowgirl

The_Conductor wrote: »

Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.

what about 50% cash is that any better than 100% morgage

ted1

No because without the mortgage you got nothing. Plenty of sales fall through due to banks not giving mortgages or delaying them

downonthefarm

gazumping

Carlowgirl

Carlowgirl wrote: »

what about 50% cash is that any better than 100% morgage

Sorry just to add to that. we had the 43 k extra there for them... it would probably have taken 6 weeks or more for that to be drawn down .. it was the extra 5k that was stalling things... just all seems a bit strange...... as they say whats meant for you wont pass you by so maybe it wasn't meant to be !

ted1

downonthefarm wrote: »

gazumping

Wrong word, that's when a higher price comes in

falabo

Why are you gutted ? The market is flooded with houses that aren't selling. You'll find your dream home in no time and you'll get a cracking deal.

downonthefarm

ted1 wrote: »

Wrong word, that's when a higher price comes in

oh sorry,just remember that word around at the start of boom
there was alot of that at the time

Carlowgirl

ted1 wrote: »

Wrong word, that's when a higher price comes in

i was thinking that myself.. obviously cash is king.. we were definitely getting the 43 k.. extra... they were humming and hawing about 5 k extra due to loan etc.. we ended up clearing that then...
just cant get my head around it... one rumour was that the house was not structurally sound so the bank would never have allowed the sale.. but as far as i know banks don't carry out detailed surveys just values... it is the buyer that is responsible for the survey ? am i right?

Carlowgirl

falabo wrote: »

Why are you gutted ? The market is flooded with houses that aren't selling. You'll find your dream home in no time and you'll get a cracking deal.

it was a very big nice house for our price range... with land

ted1

AIB don't get structural surveys done. They get you to get valuations carried out by estate agents on their lists. These people just look at the building and put a value on it

Carlowgirl

ted1 wrote: »

AIB don't get structural surveys done. They get you to get valuations carried out by estate agents on their lists. These people just look at the building and put a value on it

i rang the estate agent asked him for an explanation ..... no response

professore

Some sort of under the table deal to avoid stamp duty?

The_Conductor

Carlowgirl wrote: »

what about 50% cash is that any better than 100% morgage

50% cash?
Its irrelevant.
You need a mortgage to make up the other 50%.
Anyone without this requirement- will get first call, irrespective of what they offer.
It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

As you said yourself- cash is king- and in property these days- it certainly is.

As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........

The_Conductor

professore wrote: »

Some sort of under the table deal to avoid stamp duty?

No solicitor will touch shenanigans like that with a barge pole anymore. Several high profile solicitors have been named and shamed over the past few years- and indeed struck off the register- getting involved in transactions under the table is not in their interests.

bigroad

Sounds to me like the estate agent sold the house to his mate.He just tried to fob you off.I would be surprised if the house owner ever heard about your offer.I f you come accross another house ,try to deal direct with the owner.Estate agents are not to be trusted.

Carlowgirl

The_Conductor wrote: »

No solicitor will touch shenanigans like that with a barge pole anymore. Several high profile solicitors have been named and shamed over the past few years- and indeed struck off the register- getting involved in transactions under the table is not in their interests.

would the solicitor have to know.. what if it was transferred between the buyer and seller or through the agent?

Carlowgirl

The_Conductor wrote: »

50% cash?
Its irrelevant.
You need a mortgage to make up the other 50%.
Anyone without this requirement- will get first call, irrespective of what they offer.
It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

As you said yourself- cash is king- and in property these days- it certainly is.

As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........

I thought it would make a difference as it would be paid as a deposit.. or with the deposit.. (mortgage pending)... or would it not? also the buyers would be more optimistic about someone that is only looking for 50% or 47% to be exact... than someone looking for 90-100%

gaius c

Carlowgirl wrote: »

Our mortgage was 50% cash... a drop of 48k is too much ..

Are the buyers relatives of the vendor?
Your bid could have been used to determine market value for the property. Happening quite a bit as an awful lot of property for sale isn't actually really for sale.

Carlowgirl

gaius c wrote: »

Are the buyers relatives of the vendor?
Your bid could have been used to determine market value for the property. Happening quite a bit as an awful lot of property for sale isn't actually really for sale.

No definitely not.... we have gathered some info about both parties... it was definitely for sale..... its a bit baffling to be honest.. unless it was just a genuine quick cash sale.. are the property price registers correct?

djmcr

Its gone, wasn't meant to be, let it go. plenty other houses out there.

StillWaters

I don't think cash would have commanded that much of a discount. More likely is your theory that the survey turned up serious issues and the offer was revised downwards.
You will never know for sure though.

xper

Carlowgirl wrote: »

i was thinking that myself.. obviously cash is king.. we were definitely getting the 43 k.. extra... they were humming and hawing about 5 k extra due to loan etc.. we ended up clearing that then...
just cant get my head around it... one rumour was that the house was not structurally sound so the bank would never have allowed the sale.. but as far as i know banks don't carry out detailed surveys just values... it is the buyer that is responsible for the survey ? am i right?

It sounds from what the way you describe it that the bank hadn't assessed the property yet and you were just getting approval in principle for the loan amount. Even with a substantial cash deposit, that's still a long way from being able to draw down a mortgage. And you were going back looking for 5k more and all the back and forth that entailed. From the seller's point of view, it probably all looked a bit messy. They don't have the inside knowledge/wishful thinking (delete as appropriate) that you had that you would get the money. Any assurances you would have given them would have to be treated with a healthy dose of skepticism. Something you said or did along the way that was totally innocuous to you may have set off alarm bells for them, you just don't know. Maybe the EA saw the cash offer and just wanted to close the sale and get the commission and so bent their ear. Was 43k a large discount percentage wise? Maybe there was some other element of the sale? Maybe family was involved? At the end of the day, the seller can sell to who they want, there is zero obligation to accept the highest offer. It sucks. Move on.

the_syco

StillWaters wrote: »

I don't think cash would have commanded that much of a discount. More likely is your theory that the survey turned up serious issues and the offer was revised downwards.
You will never know for sure though.

Agreed. I'd say cash was king, but the figure was revised when the structural damage came to light.

IMO, not getting a house with €43k (or more) of structural damage is a bullet dodged. Although you may have fallen in love with the property, check it out in a years time, and it may look very different.

The_Conductor

Where is all of this about structural damage coming from?
Was there obvious structural damage associated with the property?
If so- how did the OP miss it on their own survey (I'm presuming they did one)?
According to the OP 'the word on the street was it wouldn't pass the bank survey'- what does this mean? No survey was done?
It all sounds like innuendo about structural damage- short of seeing the new owners start major rehabilitation works and talking to them, in due course, no way to prove or disprove this theory.

Also- the 48k reduction in asking price- this could be a massive reduction- or a minor reduction. It could be less than 10% or it could be greater than 25%. We don't know.

Cash- very obviously- is king- and estate agents will happily tell you that they'll get you a further 10-15% discount if you're not in chain, and not subject to mortgage approval. This is standard. There always was a discount offered for this type of purchaser- its just higher now than ever before. A seller isn't going to care whether your offer is 50% cash, 50% mortgage- its cash- or its not cash.

Interesting times.

yankinlk

The_Conductor wrote: »

50% cash?
Its irrelevant.
You need a mortgage to make up the other 50%.
Anyone without this requirement- will get first call, irrespective of what they offer.
It doesn't matter that it only took you 5 or 6 weeks to get the funding together- it could have taken you months of going backwards and forwards to the bank, only for someone to nuke your application without any reason- the seller of the property doesn't know that this isn't going to happen.

As you said yourself- cash is king- and in property these days- it certainly is.

As for the discount offered to the cash buyer- the CSO figures which are showing a small rise in prices nationally- would in fact show a continuing decline in prices- of perhaps between 7 and 10%, were cash sales also included in their calculations. They are looking solely at sales for which mortgages were drawn down- nothing else. You do seriously command discounts like this- by paying in cash...........

+1

How many times was the seller disappointed by buyers that fell thru on mortgage app? Cash has way more power than you may think.

djimi

The_Conductor wrote: »

Any serious seller will give massive discounts to a potential buyer who comes to them with a pure cash offer. Its a simple fact. Banks may be lending again- but the hurdles they're making potential borrowers jump through- and their revised procedures and processes add considerably to the time involved, and quite often for no apparent reason, loans are refused at the very last hurdle.

Sellers who want to sell as quickly as possible, and are serious about selling- will value a pure cash buyer like gold dust. Cash buyers will command discounts like you're suggesting. If you're looking for a mortgage at all- you're up against anyone with cash who is able to get a massive discount- sad, but true.

I dont really understand this logic at all tbh. If it was a small amount that was being talked about then I could understand taking the lower cash bid in an effort to sell more quickly, but in this case its €50k in the difference, so surely nobody in their right mind would accept the lower of two offers, at €50k in the difference, just to sell the house quicker rather than wait for the higher to bid to draw down their mortgage? That makes no sense at all.

dubrov

I have to agree.
People are overrating cash heavily on this thread.

You'd have to be desperate to close a sale quickly to walk away from €50k.
Clearly there was no desperation as the seller initially seemed to be holding out for 5k more.

The only way you'll ever find out the truth is to contact the seller directly.
I wouldn't believe anything the estate agent says at this point.

Why do people go to Estate Agents in the first place ?

I think they had a lot to do with inflated house prices in the boom.

In Germany I don't think they bother with estate agents, certainly my gf's parents sold their house on their own no problem, you advertise the house and if someone wants they will buy it, I don't get giving estate agents money for basically nothing ?

I think things would be a whole lot simpler without estate agents.

Carlowgirl, where was the house for sale ?

pwurple

You never know what's going on behind the scenes. We offered the asking price for a house last october (after several other bids of course) and were the highest bidder. I phoned two days later to see if my bid had been accepted, and was told that another higher bid (5k) had been accepted. Without informing us that there was another bid. Very weird, but I guessed it was a cash buyer where we were part-mortgage.

8 months later, we have bought and moved into a different house, and that house sale still hasn't gone through. There were engineer report issues, title issues, delays etc etc. A friend knows the sellers, and asked what the selling price is now, and they have gone to 20K below what we last offered, 25K below the original agreed price.

If I had not known what was going on, I'd be very suspicious when I looked on the property price register.

pwurple

Deleted User wrote: »

Why do people go to Estate Agents in the first place ?

I think they had a lot to do with inflated house prices in the boom.

In Germany I don't think they bother with estate agents, certainly my gf's parents sold their house on their own no problem, you advertise the house and if someone wants they will buy it, I don't get giving estate agents money for basically nothing ?

I think things would be a whole lot simpler without estate agents.

We originally tried to sell our house without an estate agent and people were quite wary and unsure that things above board. I assured them that we wouldn't be taking any deposit, it would all be going through solicitors.

It just isn't the done thing I suppose.

pippip

OP, on the price register, by any chance is there a cross or asterix beside the price? if there is that indicates there was more to the deal on top of the money shown.

Sounds odd to me, people may want a quick sale but to turn away from a potential €48k is almost inhuman to me. If they were in financial trouble and needed a quick sale they definitely wouldn't have walked away from your deal.

AlanG

If you think you were screwed over you should report it to the Revenue Commissioners – they sold the house for below the market value (close to your offer) so unless they paid stamp duty on the market value they have broken the law.

More than likely they either:
Put it on the market to gauge the market value before selling it to a relative or,
The Estate Agent sold it to a mate and didn’t pass on your offer – most likely.

pwurple

pwurple wrote: »

We originally tried to sell our house without an estate agent and people were quite wary and unsure that things above board. I assured them that we wouldn't be taking any deposit, it would all be going through solicitors.

It just isn't the done thing I suppose.

If I was selling there is no way in hell I'd deal with estate agents, I'd have nothing to do with them.

I don't get why people would be wary, if you want to sell a house and you both have solicitors I don't see the problem.

Estate agents overvalued property like mad in this country. SO I would love to see the lot of them out of business I wouldn't trust any of them as far as I could throw them.

How do you know they are working in your interests ? or even telling the potential buyer all the facts, what you will or won't take etc ?

No 3rd party involved is always too much hassle.

Ray Palmer

Register an official complaint /query.

The benefit of cash is being overrated here from what I can see but as we don't know the percentage of the property price this discount applies to maybe it isn't that much.

youwhoglue

OP, you should be delighted, if your offer was taken you were overpaying hugely!

ted1 wrote: »

Wrong word, that's when a higher price comes in

This is called gazundering.

mickdw

There is certainly more to this than just the buyer having all cash.

Id say there was a 25k under the table deal done and a 20k saving for the buyer due to the benefits of 25k unrecorded cash in hand to the seller.
Alternatively, as said already, OPs offer might never have gone to seller and house was sold to mate of agent.

Uriel.

Lol. Gotta love the conspiracy theorists. Something is odd about the whole affair but structural damage, under the table cash deals, undervalue declarations to revenue...

Op all you can do is forget it at this stage. You didn't get the house, obviously it's a disappointment but I'm sure you'll find another

yankinlk

Uriel. wrote: »

Lol. Gotta love the conspiracy theorists.

Exactly. The truth is most likely pretty simple.

When people say its a buyers market - they actually mean a CASH buyers market. I been selling my moms house for 3 years. Every Season we hear offers, crazy ones, but still offers... they have YET to result in a mortgage app being approved. and yes many of the offers are 50k less than the asking - and yes i would snap the hand off them.

in my scenario if i was about to sell to a 50k less cash buyer, and A. Nother contacted with asking (but was in a chain) i would not wait for the chain. As it is - this season is closing and im gonna rent it out again.

tatli_lokma

Could it be that the seller *had* to sell, possibly under instruction from their own mortgage lender? A friend of the family recently was forced to sell their home after several restructures. They were offered €20k below asking price. They didn't want to sell at that price as they would still owe that €20k to the bank. The house was only on the market for a few weeks at this stage and had had a lot of interest. They were confident, as was the estate agent, that they could get at least another €10k if not the full asking price. But the bank insisted that they had to take the serious offer that was on the table. Possibly the sellers in this case might be dealing with a similar situation?

Carlowgirl

Deleted User wrote: »

Why do people go to Estate Agents in the first place ?

I think they had a lot to do with inflated house prices in the boom.

In Germany I don't think they bother with estate agents, certainly my gf's parents sold their house on their own no problem, you advertise the house and if someone wants they will buy it, I don't get giving estate agents money for basically nothing ?

I think things would be a whole lot simpler without estate agents.

Carlowgirl, where was the house for sale ?

Rural area.. over half hour from city... 6 miles from nearest town... house prices are expensive in the area in comparison with other areas.... it was a good bargain with the extra 50k... offer

Carlowgirl

tatli_lokma wrote: »

Could it be that the seller *had* to sell, possibly under instruction from their own mortgage lender? A friend of the family recently was forced to sell their home after several restructures. They were offered €20k below asking price. They didn't want to sell at that price as they would still owe that €20k to the bank. The house was only on the market for a few weeks at this stage and had had a lot of interest. They were confident, as was the estate agent, that they could get at least another €10k if not the full asking price. But the bank insisted that they had to take the serious offer that was on the table. Possibly the sellers in this case might be dealing with a similar situation?

No they were not in trouble with the bank both the previous owners are in good jobs .... if they were in trouble I think they would of accepted our initial offer....

Carlowgirl

Thanks for the all the replies.. I suppose its possible that the rumour was true.. the house had issues.. or structural problems. it is ten years old .. many houses thrown up in the boom... are only showing their cracks now it seems...

Carlowgirl

Carlowgirl wrote: »

Thanks for the all the replies.. I suppose its possible that the rumour was true.. the house had issues.. or structural problems. it is ten years old .. many houses thrown up in the boom... are only showing their cracks now it seems...

This gets me to thinking... how much below asking price do you offer for a cash sale?

The_Conductor

Carlowgirl wrote: »

No they were not in trouble with the bank both the previous owners are in good jobs .... if they were in trouble I think they would of accepted our initial offer....

I know plenty of families with both parents working who are in trouble with their mortgages. Just because they both have good jobs, doesn't mean squat.

tatli_lokma

The_Conductor wrote: »

I know plenty of families with both parents working who are in trouble with their mortgages. Just because they both have good jobs, doesn't mean squat.

Exactly what I was thinking! Plenty of people out there with 'good' jobs by other peoples standards, but with a shed load of financial commitments and finance agreements they can't meet.

Carlowgirl

The_Conductor wrote: »

Where is all of this about structural damage coming from?
Was there obvious structural damage associated with the property?
If so- how did the OP miss it on their own survey (I'm presuming they did one)?
According to the OP 'the word on the street was it wouldn't pass the bank survey'- what does this mean? No survey was done?
It all sounds like innuendo about structural damage- short of seeing the new owners start major rehabilitation works and talking to them, in due course, no way to prove or disprove this theory.

Also- the 48k reduction in asking price- this could be a massive reduction- or a minor reduction. It could be less than 10% or it could be greater than 25%. We don't know.

Cash- very obviously- is king- and estate agents will happily tell you that they'll get you a further 10-15% discount if you're not in chain, and not subject to mortgage approval. This is standard. There always was a discount offered for this type of purchaser- its just higher now than ever before. A seller isn't going to care whether your offer is 50% cash, 50% mortgage- its cash- or its not cash.

Interesting times.

it was between just less than 25 % drop... (will have to calculate again)
We didn't have a survey carried out.. we were applying again for the extra amount... when they refused first offer... the rumour was from the neighbours.. regarding structural damage.. it didn't appear to have any from viewings or from looking at the house from the outside..