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For mortgage should you ask for more than asking price

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  • 09-08-2013 4:07pm
    #1
    jojo_12
    Registered Users Posts: 10 ✭


    We are looking to get a mortgage at the moment. Property will cost €65,000. My question is, should we ask for more than asking price of house (to pay for solicitor, etc.) or should we just get the €65,000 from bank? We have about €10,000 saved so far. Any advice greatly appreciated!!
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    #2
    Anyone
    Registered Users Posts: 3,376 ✭✭✭Anyone


    jojo_12 wrote: »
    We are looking to get a mortgage at the moment. Property will cost €65,000. My question is, should we ask for more than asking price of house (to pay for solicitor, etc.) or should we just get the €65,000 from bank? We have about €10,000 saved so far. Any advice greatly appreciated!!

    The max you can get is a 92% mortgage. And even those might be tricky to get.


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    #3
    jojo_12
    Registered Users Posts: 10 ✭jojo_12


    Do you think we should ask for €70,000 though or stick to €65,000?


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    #4
    average_runner
    Registered Users Posts: 12,851 ✭✭✭✭average_runner


    jojo_12 wrote: »
    Do you think we should ask for €70,000 though or stick to €65,000?


    They will only give you to the value of the house. So if its 65,000, they will give u 92% of it


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    #5
    jojo_12
    Registered Users Posts: 10 ✭jojo_12


    Oh sorry ok, I get what you mean. First time buyer and new to all of this! It's actually valued at much more but its a private sale and we agreed with the owner on €65k, but I'm sure bank will want proof of how much we agreed anyways. I appreciate your help! Many thanks!


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    #6
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    jojo_12 wrote: »
    Oh sorry ok, I get what you mean. First time buyer and new to all of this! It's actually valued at much more but its a private sale and we agreed with the owner on €65k, but I'm sure bank will want proof of how much we agreed anyways. I appreciate your help! Many thanks!
    You're not doing a side deal for cash on the balance are you?


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    #7
    jojo_12
    Registered Users Posts: 10 ✭jojo_12


    murphaph wrote: »
    You're not doing a side deal for cash on the balance are you?

    Eh sorry but have no idea what that means!!! I'm a novice when it comes to this! :/


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    #8
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    jojo_12 wrote: »
    Eh sorry but have no idea what that means!!! I'm a novice when it comes to this! :/
    The property is (according you you) worth a lot more than you're paying for it. If you are genuinely paying (say) half the market value then you're receiving a gift of the other half and this will need to be included on your tax return (there's no such thing as a free lunch as they say) and depending on the relation of the seller to you, there could be significant CAT (gift tax) to pay.

    Can you say what the real value of the property is and why (gift?) the seller is selling it for well under that value? (If you don't want to it's fine, it's your own business, but be careful you don't fall foul of Revenue in this)


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    #9
    jojo_12
    Registered Users Posts: 10 ✭jojo_12


    Oh right I see what you're saying. Well it was valued at between €80,000 - €90,000. It's not really the actual house that costs this much, its because its a small house in the countryside and you could get planning on it easily enough to extend, so if it went on the market it would fetch that much. The person selling is a neighbour and its not far from where I live. Also the other neighbours would prefer me to have it as they know me and my family, so they don't want to put it on the market and could end up with God knows who living next door. Do I really have to put this down on tax return?


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    #10
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    jojo_12 wrote: »
    Oh right I see what you're saying. Well it was valued at between €80,000 - €90,000. It's not really the actual house that costs this much, its because its a small house in the countryside and you could get planning on it easily enough to extend, so if it went on the market it would fetch that much. The person selling is a neighbour and its not far from where I live. Also the other neighbours would prefer me to have it as they know me and my family, so they don't want to put it on the market and could end up with God knows who living next door. Do I really have to put this down on tax return?
    Well, the neighbour is gifting you €15k -€25k by your own estimate (however a different auctioneer might value it closer to your selling price ;) ). Perhaps you should seek some proper legal advice (you'll need to get a solicitor anyway for the conveyancing so you should speak to him or her about this and make sure they're aware of it) on this so you don't leave yourself open to a nice fine from Revenue.


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    #11
    username123
    Closed Accounts Posts: 7,484 ✭✭✭username123


    jojo_12 wrote: »
    Oh right I see what you're saying. Well it was valued at between €80,000 - €90,000. It's not really the actual house that costs this much, its because its a small house in the countryside and you could get planning on it easily enough to extend, so if it went on the market it would fetch that much. The person selling is a neighbour and its not far from where I live. Also the other neighbours would prefer me to have it as they know me and my family, so they don't want to put it on the market and could end up with God knows who living next door. Do I really have to put this down on tax return?

    Get an independent valuation done. Its highly unlikely a neighbour is gifting you 15-25k. Chances are the property is worth much closer to 65k than you are being led to believe.


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    #12
    marco_polo
    Moderators, Science, Health & Environment Moderators Posts: 10,079 Mod ✭✭✭✭marco_polo


    Have a read of this op

    http://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html


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    #13
    rainbowtrout
    Registered Users Posts: 15,382 ✭✭✭✭rainbowtrout


    jojo_12 wrote: »
    We are looking to get a mortgage at the moment. Property will cost €65,000. My question is, should we ask for more than asking price of house (to pay for solicitor, etc.) or should we just get the €65,000 from bank? We have about €10,000 saved so far. Any advice greatly appreciated!!

    The question should be, if you can't afford to pay your solicitor's bill should you be getting a mortgage?

    Banks give out mortgages to cover the cost of the house, not to cover the extra bills which come with it. That's what got so many people into the mess they're in now, lumping in other bills into their mortgages.


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    #14
    fiestaman
    Registered Users Posts: 1,146 ✭✭✭fiestaman


    rainbowtrout wrote: »
    The question should be, if you can't afford to pay your solicitor's bill should you be getting a mortgage?

    Banks give out mortgages to cover the cost of the house, not to cover the extra bills which come with it. That's what got so many people into the mess they're in now, lumping in other bills into their mortgages.

    Totally agree. On the gift thing, if theres a price set at 65 then valuation is noting to do with it. Seller wants 65 you pay 65. Value on something is the price somone will pay on the day, not some random number some tool picks from his a**s thats called an autioneer. Thats why the property market is in pieces.


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    #15
    Gone Anon
    Banned (with Prison Access) Posts: 14 ✭Gone Anon


    murphaph wrote: »
    Well, the neighbour is gifting you €15k -€25k by your own estimate (however a different auctioneer might value it closer to your selling price ;) ). Perhaps you should seek some proper legal advice (you'll need to get a solicitor anyway for the conveyancing so you should speak to him or her about this and make sure they're aware of it) on this so you don't leave yourself open to a nice fine from Revenue.

    You will need to pay tax on this gift otherwise you are breaking the law any may be jailed


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    #16
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    Gone Anon wrote: »
    You will need to pay tax on this gift otherwise you are breaking the law any may be jailed
    As already mentioned the true value of the site should be established. Perhaps the gift isn't that large or even a gift at all.


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    #17
    murphaph
    Registered Users Posts: 19,018 ✭✭✭✭murphaph


    fiestaman wrote: »
    On the gift thing, if theres a price set at 65 then valuation is noting to do with it. Seller wants 65
    Seller only wants 65 from the op, not from anyone. Using your logic folk could avoid CAT left right and centre. A parent could "sell" their property to a would be heir for €1 instead of letting the property go through probate and be subject to tax. A gift is most certainly made if property is sold for under market value.


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