Bank won't consent to sale of property at agreed price

crazy cat lady

We went sale agreed on a property 6 months ago. Price was agreed with the vendor, mortgage in place and booking deposit paid. The valuation and building assessment was done with no issues.

We knew it would take a few months to close as there were some planning conditions to be met.

The property was sitting empty so we decided to rent it off of the vendor while everything was sorted. Not ideal but it suited our circumstances.

Our solicitor refused the first contract based on the planning conditions not being met, and also as the vendors bank had not yet released the consent for sale.

The vendor came around yesterday with a letter from his bank informing that they cannot consent to the sale of the property at the agreed price as it is significantly below market comparibles and told us that we need to find another €15k.

So my queries are:

How do you decide what a comparible is? We've been watching the local area for over a year and in our opinion there hasn't been anything like this sold for the price the property has now been valued at.

We know that house prices are going up, but this is an increase of over 10% of the agreed price. Is it worth trying to contest this? And if so how do we start???

eyescreamcone

You have nothing legal to contest this with.

Of course haggle, but at the end of the day your choice is accept the sellers terms or walk away

dubrov

Was the property open to public bidding and were there other bidders?
If so the price you agreed is the fair market price.

I'd be careful as the vendor might be watching rising prices and trying to squeeze an extra €15k out of you.

crazy cat lady

To be honest, I think this is beyond the vendors control. It is his bank refusing to release the consent to sale. We have a copy of the letter he received.

I'm just curious to know how the bank has valued the property at more than 10% of what it was valued at a year ago.

dubrov

They probably just looked at the property price register to see the final sale prices of similar houses in the area
https://www.propertypriceregister.ie/website/npsra/pprweb.nsf/PPR?OpenForm

Victor

Play hardball. Tell the vendor to sell other assets or dig into their savings to make up the difference. That said, they might not have any.

HouseHunter13

the vendor in negative equity?

If so 15k is pocket change to the bank so I'd be surprised at that.

do you know which bank?

crazy cat lady

The vendor owns all of the houses in our development and is apparently being forced to sell 2 of them due to his arrears.

The bank is kbc

Eldarion

Very strange altogether. I wonder when the banks started putting checks like this back in place.

Like has been said before, you can't contest in a legal sense. I don't even think the vendor is in the wrong at all here, maybe he should have warned you that the sale agreed figure would be subject to the bank's consent but how was he to know they'd block the sale over 15k in fairness?

Your choices are up your offer or walk away I fear. All indicators are showing an up-swinging market, I'm sure they'll get that 15k included price from someone else before too long. Sorry to perpetrate the fear that's infecting our property market but those are the facts.

Tails142

You should walk in principle.

Eldarion

Tails142 wrote: »

You should walk in principle.

On principle is great too. Unfortunately, in a sellers' market the walking buyer gets his principle, the next buyer gets the house and the seller is happy either way.

223vmax

crazy cat lady wrote: »

The vendor owns all of the houses in our development and is apparently being forced to sell 2 of them due to his arrears.

Is this not strange? How can the bank force him to sell? Even if he is in negative equity with arrears on the development, does the owner not have a choice in how he might meet these arrears? I think he's trying to squeeze you for a few extra grand.Plus, you're renting it from him so is he not thinking that you'll pay a few grand extra, rather than throwing in the towel and moving out all together? I'd tell him to feck off and he's got a month to decide.

pc7

Can you see a comparable house for sale in the area you like at the price you are paying, if you can go for that (you have mortgage approval). If there is ask your solicitor to do up a letter saying you won't go 15k higher and give a months notice

crazy cat lady

There is nothing even close to this house in this area at this price.

I have a copy of the letter from the vendors bank which states that the agreed price is below market value so I really can't see that it is the vendor acting the maggot. He is selling the second house to someone in his family so I can't imagine that he would be trying to screw them over either.

Our broker has advised us to get a copy of the valuation report and take it from there.

Mrs OBumble

Eldarion wrote: »

Very strange altogether. I wonder when the banks started putting checks like this back in place.

Did they ever stop?

If the OP has not already walked away, this is sending a clear message that they think the property might be worth more than the agreed price. (Remember, value is simply what someone is willing to pay).

gaius c

crazy cat lady wrote: »

The vendor owns all of the houses in our development and is apparently being forced to sell 2 of them due to his arrears.

The bank is kbc

Foreclosure stuffing as market manipulation tool.

Basically they want you to pay his arrears and are attempting to stiff-arm you into doing so, rather than get to work on the vendor. I'd walk because you don't have any legal recourse here and the threat of walking is the only tool you have left. Be prepared to follow through on your threat.

The other way you can look at it is that they are trying to get you to bid against yourself.