Got a conditional offer - what to do?

54and56

Hi all,

I'm the executor of a will and selling residential house in that capacity. In the last few days a number of offers have come in and one has now been made at the asking price (best and final from all potential buyers confirmed) but the buyer won't be in full funds until early April as she is selling her own house and waiting for her buyers to complete.

I am pleased with the value of the offer but not happy about accepting the offer and taking the house off the market on the assumption that there won't be a hiccup or delay in the sale of the buyers own house.

What are my options other than accept the offer, take the house off the market and keep my fingers crossed?

Would it be legitimate to ask for a non refundable deposit from the buyer in order to accept her offer and take the house off the market? If so would 10% be the correct amount to ask for along with a condition of the deposit being that if the buyer is unable to complete the purchase for any reason whatsoever by the end of May then the deposit is forfeited and the house goes back on the market?

I'm new to this so please go easy if I'm being naive about this. I have a duty to the beneficiaries of the will to make good decisions in relation to this and don't want to mess it up. I know I can ask the sole practitioner solicitor handling the will but they are away skiing and not contactable so hoping for a general steer here.

Tiddlypeeps

House sales fall through all the time, the buyers sale could fall through at no fault of their own. I'd keep the house on the market, either it's still on the market in April and you go with the previous buyer or a new buyer comes along and you sell quicker.

I can't see any upside in this scenario for you to pull the property off the market.

Michael D Not Higgins

Deposits are usually refundable all the way until contract signing, a 10% non-refundable deposit wouldn't be entertained.

54and56

Michael D Not Higgins wrote: »

Deposits are usually refundable all the way until contract signing, a 10% non-refundable deposit wouldn't be entertained.

OK, thanks for the input. I'm of the view that unless the buyer has some downside I shouldn't accept their offer and take the house off the market in the hope they get to complete the sale of their own house.

Best thing to do is as Tiddlypeeps suggested. I'll tell them to come back when they are in a position to complete contracts. If the house is still on the market and they still want to buy it we can progress.

Thanks guys.

Atlantic Dawn

I would leave the house on the market and make bidders known that an offer of asking has been received if they wish to better that. Your leaving yourself open to many risks that his deal will fall through, he could lose his job, anything could happen.

mattaiuseire

Definitely keep the house on the market. You never know, maybe tomorrow you could get a buyer with a similar offer who is ready to go. Good luck with the sale.

spaceHopper

What does the EA say, how desirable is their house and will they have trouble selling it. I'd take the offer, with any sale anything can happen and it could fall through for any reason. By April there could be more houses on the market and they might go with another one. Also what do you expect them to do, sell, move out, say with family for the 4 four months it takes to close your sale. If you decline their offer now they aren't likely to come back.

Je_suis_Jean

Je_suis_Jean wrote: »

OK, thanks for the input. I'm of the view that unless the buyer has some downside I shouldn't accept their offer and take the house off the market in the hope they get to complete the sale of their own house.

Best thing to do is as Tiddlypeeps suggested. I'll tell them to come back when they are in a position to complete contracts. If the house is still on the market and they still want to buy it we can progress.

Thanks guys.

Keep in mind the potential issue of them coming back at a lower offer when their house is sold. If your house hasn't sold in all that time, they will surely use that to bargain you down, I'd assume?


(I've no knowledge of property, though!)

P. Breathnach

Take the few days you need until your solicitor is available, but tell your purchaser that is what is happening. When it is practicable, ask your solicitor to get some assurances on how the sale of your buyer's existing property is going (particularly to find out if it is also contingent on uncertain factors). If the report is good, I'd make the deal.

I would not ostensibly take it off the market until the deal is considered reasonably safe. I would give the buyer an assurance that there will be no further showings, and no negotiation with underbidders - in effect, treating it as "sale agreed" but without advertising it as such.

54and56

Deleted User wrote: »

Keep in mind the potential issue of them coming back at a lower offer when their house is sold. If your house hasn't sold in all that time, they will surely use that to bargain you down, I'd assume?


(I've no knowledge of property, though!)

That's not an unreasonable assumption but a number of offers have come in. The highest (at asking price) has this contingency whereas the lowest (€5,000 less) are first time buyers with no contingencies and mortgage approval in principle.

Given the level of interest I'm not too worried that I won't get another offer in or around asking price during the period I'd be waiting for the top bidder to get in position to close a sale.

Appreciate all the input guys.

I think I'll let things sit for a little while to see if any of the better offers (in terms of ability to complete) are prepared to offer close to the asking price. I'd be prepared to take a slightly lower price with a higher degree of certainty than vice versa.

P. Breathnach

Je_suis_Jean wrote: »

...
I think I'll let things sit for a little while to see if any of the better offers (in terms of ability to complete) are prepared to offer close to the asking price....

If you have already gone through "best and final offer" then it is unethical to re-open the bidding.

54and56

P. Breathnach wrote: »

If you have already gone through "best and final offer" then it is unethical to re-open the bidding.

If it was a closed bidding process where the seller was obliged to accept the best and final from some short listed bidders I'd agree with you but it's not. It's an open sale by private treaty. At the moment I have best and final offers from three potential buyers and my intention is to revert to all three declining their offers for clearly stated reasons, the two below asking price offers will be told their offers are below what I will accept whereas the asking price buyer wil be told that their offer is not acceptable due to the contingency they have attached to it.

I will not go back and instruct the EA to do a 2nd round of best and final offers (kind of defeats the purpose of doing the first round!!) but if one of the three voluntarily changes their offer to make it acceptable I will then consider that revised offer on it's merit. If none of the three come back with updated offers I will wait for new offers to come from future viewings.

Hope that explains the way I will be treating the potential buyers to your satisfaction

Arbiter of Good Taste

Je_suis_Jean wrote: »

That's not an unreasonable assumption but a number of offers have come in. The highest (at asking price) has this contingency whereas the lowest (€5,000 less) are first time buyers with no contingencies and mortgage approval in principle.

Given the level of interest I'm not too worried that I won't get another offer in or around asking price during the period I'd be waiting for the top bidder to get in position to close a sale.

Appreciate all the input guys.

I think I'll let things sit for a little while to see if any of the better offers (in terms of ability to complete) are prepared to offer close to the asking price. I'd be prepared to take a slightly lower price with a higher degree of certainty than vice versa.

But if the next best offer is only a couple of €k, would you not just accept that if it is guaranteed to close quickly?

Steve

Don't take the house off the market unless you have signed contracts.

Once signed, the deposit is non refundable and the contract is binding - i.e. if they fail to complete, you can sue them for the balance (or, as is more normal, negotiate release terms).

54and56

Arbiter of Good Taste wrote: »

But if the next best offer is only a couple of €k, would you not just accept that if it is guaranteed to close quickly?

I may well do that Arbiter. I've asked for more info on their ability to complete and will take it from there.

54and56

Steve wrote: »

Don't take the house off the market unless you have signed contracts.

Once signed, the deposit is non refundable and the contract is binding - i.e. if they fail to complete, you can sue them for the balance (or, as is more normal, negotiate release terms).

Good advice, thank you.

The Mulk

Steve wrote: »

Don't take the house off the market unless you have signed contracts.

Once signed, the deposit is non refundable and the contract is binding - i.e. if they fail to complete, you can sue them for the balance (or, as is more normal, negotiate release terms).

This isn't necessarily true, one condition solicitors seem to like is "Contract is non-binding until bank releases cheque", meaning if you accept this clause the buyer can pull out at any stage. We couldn't sign the contracts as our bank wanted a non-conditional contract, so there was plenty of to and fro with the solicitors.

Je_suis_Jean

Je_suis_Jean wrote: »

the buyer won't be in full funds until early April as she is selling her own house and waiting for her buyers to complete.

Is it just me or isn't 8 weeks to complete a sale fairly reasonable?

Je_suis_Jean wrote: »

I am pleased with the value of the offer but not happy about accepting the offer and taking the house off the market on the assumption that there won't be a hiccup or delay in the sale of the buyers own house.

The house is on the market until contracts are signed AND exchanged. You can accept this offer, agree to go Sale Agreed and the house will still be "on the market" but you are beginning the process of completing a sale.

Je_suis_Jean wrote: »

Would it be legitimate to ask for a non refundable deposit from the buyer in order to accept her offer and take the house off the market? If so would 10% be the correct amount to ask for along with a condition of the deposit being that if the buyer is unable to complete the purchase for any reason whatsoever by the end of May then the deposit is forfeited and the house goes back on the market?

You can ask for whatever you want in the contract but the buyer would be mad to agree to this. However, I don't understand why, if the buyer will be "in funds" in early April, you'd be aiming for a closing date in May? In a chain, timing is an issue and the buyer will be looking to close their sale and their purchase within a tight timeframe so they can leave their current house with somewhere to go to!

Je_suis_Jean wrote: »

I'm new to this so please go easy if I'm being naive about this. I have a duty to the beneficiaries of the will to make good decisions in relation to this and don't want to mess it up.

Whether you go Sale Agreed with this asking price offer or take a lower offer which appears it will complete more quickly, there is always a risk (right up until contracts are signed and exchanged) that the sale will fall through, that's just the way it is.

Have a read of this:

http://www.buyingahouse.ie/faq-bs.html

There's a lot to do, particularly in an executor sale. If the offer is solid and they're willing to pay a booking deposit (which is refundable) I don't see why you wouldn't accept the offer and hope for the best as you would under any circumstances.

ted1

P. Breathnach wrote: »

If you have already gone through "best and final offer" then it is unethical to re-open the bidding.

Not if it transpires the buyer doesn't have the money.

Butters1979

Steve wrote: »

Don't take the house off the market unless you have signed contracts.

Once signed, the deposit is non refundable and the contract is binding - i.e. if they fail to complete, you can sue them for the balance (or, as is more normal, negotiate release terms).

Just to clarify here. As far as I know even if the buyer signs the contract it is not binding until the vendor sings and returns the contracts.

But also many cases, and I'd be extremely surprised if not also in this case, the buyer will have a clause in the contract that depends on them selling their house. This is normal.

D_D

Butters1979 wrote: »

Just to clarify here. As far as I know even if the buyer signs the contract it is not binding until the vendor sings and returns the contracts.

It would want to be a good offer for the item in bold to happen :pac:

Butters1979

D_D wrote: »

It would want to be a good offer for the item in bold to happen :pac:

Ha. Something like this always happens when I try to be clever.
Although at times I felt like I was singing for my mortgage.

gaius c

What's the next best offer down (%)? Do you have any offers from folk not in a chain? Or even better, cash buyers?

54and56

gaius c wrote: »

What's the next best offer down (%)? Do you have any offers from folk not in a chain? Or even better, cash buyers?

No, no cash offers. If only!! EA is sussing out the under bidders who are first time buyers to see if they are in fact approved for a mortgage and are ready to rock.

gaius c

Are they a long way short of the high bid?
You could possibly try to get the agent to cajole a less conditional buyer up a bit. Risk losing them too but that's the game you play.

54and56

gaius c wrote: »

Are they a long way short of the high bid?
You could possibly try to get the agent to cajole a less conditional buyer up a bit. Risk losing them too but that's the game you play.

Kind of. The EA will let the under bidder know they haven't been successful but that an offer which was €5,000 more than theirs was acceptable financially but isn't progressing because the bidder isn't in a position to close.

Is the under bidder is any good at reading between the lines they should work out that by offering another €5,000 or close to €5,000 with the ability to close out in a reasonable time frame without the complication of a chain will get them the house. The question is whether they have the ability to pay more than they've offered and whether they think the house is worth it.

Time will tell.

Steve

Butters1979 wrote: »

Just to clarify here. As far as I know even if the buyer signs the contract it is not binding until the vendor sings and returns the contracts.

But also many cases, and I'd be extremely surprised if not also in this case, the buyer will have a clause in the contract that depends on them selling their house. This is normal.

By 'signed' I meant signed by both parties.

As the seller - you do not have to accept a get out clause, this is where a good solicitor who knows conveyancing inside out will be invaluable.

If you have a queue of buyers you can dictate terms, if you haven't then you need to be a shrewd negotiator.

SeanSouth

Even as a newbie, I think id have to agree with almost everything you say.
Your logic is sound. Well done.

54and56

SeanSouth wrote: »

Even as a newbie, I think id have to agree with almost everything you say.
Your logic is sound. Well done.

Who are you agreeing with??