Buyer Beware! Know what you're bidding on (negative equity house)

lawred2

irlrobins wrote: »

I'd be asking serious questions of my solicitor in this situation. He/she clearly didn't do their due diligence. They shouldn't have even allowed you to sign contracts without establishing the liabilities of the vendor.

Also, from my experience, the solicitor only seeks payment of fees when the sale closes.

I'd also be asking questions of the vendor's solicitor.. A solicitor can not willfully misinform any party in such legal matters.

Why would a solicitor be lieing on behalf on the vendor?

runawaybishop

jjoy80 wrote: »

Really? We got got approved with a few banks and brendan Burgess on askaboutmoney recommends ebs as the no.1 lender to use at the moment. So we went with them.

Cash back on a mortgage is a gimmick and costs you thousands in compound interest over the term of your mortgage. Probably adds years onto your payments

QuiteInterestin

jjoy80 wrote: »

We are going to be hit with a big rent increase in January and now have to sign up to a new lease for 12 months which we didn't want to do, so we think the best decision for the moment might be to leave things be and leave our deposit on it until we find something else. We are going to start looking this week. So disappointing. But have to dust ourselves off, and crack on.

If anyone has other advice I'd be glad to hear it!

I'm not much use regarding advice on the house sale, but depending on how long you've been living in the rental house, you're not under any obligation to sign a new lease. Once you've been renting for six months you become a Part 4 tenant and are under no obligation to sign a new lease and can stay for up to four years. While the landlord can review your rent once every two years, by not signing a lease, you have the option to leave (provided the correct notice period is given) at any time.

lawred2

runawaybishop wrote: »

Cash back on a mortgage is a gimmick and costs you thousands in compound interest over the term of your mortgage. Probably adds years onto your payments

All mortgages cost thousands in compound interest..

We just remortgaged and knocked 1% off our interest rate and reduced the term by 5 years as a result by keeping the repayment around the same level as we've gotten used to. We will also be getting 7.5k back in a few weeks. Sure the loan will still cost us a fortune like all mortgages but it's a much better place now than we were in a month ago.

Call it a gimmick all you like but I'll take what I can get.

runawaybishop

lawred2 wrote: »

All mortgages cost thousands in compound interest..

We just remortgaged and knocked 1% off our interest rate and reduced the term by 5 years as a result by keeping the repayment around the same level as we've gotten used to. We will also be getting 7.5k back in a few weeks. Sure the loan will still cost us a fortune like all mortgages but it's a much better place now than we were in a month ago.

Call it a gimmick all you like but I'll take what I can get.

Take whatever you like. Not taking the additional years to repay your mortgage and getting interest free furniture is still better.

lawred2

runawaybishop wrote: »

Take whatever you like. Not taking the additional years to repay your mortgage and getting interest free furniture is still better.

I've the best interest rate in the market for my LTV currently... And getting cash back. There was no option available to forego cashback in exchange for a lower interest rate so I'm not sure how we could have done any better. Short of not borrowing at all of course.

by the seaside

runawaybishop wrote: »

Take whatever you like. Not taking the additional years to repay your mortgage and getting interest free furniture is still better.

I would rather have a lower interest rate than cash back, but as I do not have that choice I will take the cash and overpay on the mortgage. It is a bit screwy.

L1011

runawaybishop wrote: »

Take whatever you like. Not taking the additional years to repay your mortgage and getting interest free furniture is still better.

Right now, the rates with cashback are close to identical to those without. Due to virtually all banks offering it.

athtrasna

Can we get back on topic please

Fian

Wesser wrote: »

Surely if you signed the contracts it's a done deal..... No?

in this case the vendor didn't sell because his solicitor pointed out to him he couldn't without the consent of the bank. Even if he had signed he cannot sell something he does not legally own, the bank hold the legal title to the mortgaged property. Had he signed though, the vendor would be in more trouble in terms of liability to the OP.

OP you should definitely follow this up with your solicitor, especially as he has allowed you to pay him before the sale closed. Your solicitor is the one you rely upon to advise you in order to avoid problems like this. In this case it seems there were red flags in advance as well, since the vendor's solicitor mentioned a residual balance. I am assuming that you did not receive advice from your solicitor warning you of the pitfalls which you have not mentioned.

SarahMollie

This happened to me twice, back in 2012 and again in 2013. I'm surprised its still happening as I thought with more and more properties coming out of negative equity that its less of an issue.

In both cases it took months for the banks to say they wouldnt agree - I cannot fathom how this at least cannot be made quicker. The banks should need no more than a few weeks to decide if they're going to come to an arrangement with their borrower or not, but it seems they like to drag their heals in this area and theres nothing you can do.

I did end up wasting money on a survey and a valuation on the 1st property (on the 2nd one I obviously left it to the last minute so it ultimately never happened). My solicitor was a very decent man who only charged me a few hundred € for his time, on the understanding that I'd come back to him the next time (finally succeeded on my 4th attempt - the 3rd one was a whole other story!)

Its very annoying and its good of you to share your tale OP as I'd say a lot of people could sleepwalk into the same situation. I cannot understand how your solicitor let you sign contracts - you should look further into this.

Buyer beware.

Claw Hammer

Paulw wrote: »

Sounds like your solicitor didn't do a good job of due diligence to make sure all was in order for the sale to go through. You should have a word with your solicitor or even consult the Law Council about this.

But, as said already, you should be able to get your full deposit back at least.

What should the solicitor have done? What is the Law Council?

TheAnalyst_

Sue the owners if you think they have any assets.

Lumen

I hope your solicitor put in a clause for terminating the sale if it doesn't close by a specific date, or else you will not be able to pull out.

paul71

Claw Hammer wrote: »

What should the solicitor have done? What is the Law Council?

Request documented consent to sale from any lender of vendors solicitor. I spotted the "Law council" too, Law society I believe is the intended name.

sadie1502

This is definitely negligence on your solicitors behalf.

Ray Palmer

People really seem to have this messed up in their views. Firstly the OP probably didn't sign the contract for the sale and an agreement for the solicitor to act on their behalf instead. Usually the buyer signs last and then is handed the keys.

The buyer's solicitor cannot control or be privy to the seller's dealings with the bank. They could not have known what the bank would do so not at fault. The seller also doesn't know what the bank will do until they actually say what they will do. It takes the bank along time to do this

When buying a house all costs are really on the buyer's side. If it falls through you just have to suck up the costs.

Not nice but there isn't actually anybody at fault. The bank made a decision and may have indicated all along they were in agreement and then a more senior staff member can say no or it could be simply a new policy. Raising house prices is a valid reason for the not to take a loss from the seller. Why should they when they could get all the mortgage back if they wait?

Never spend money on a house you don't own but I would ask for the boiler service money back.

Claw Hammer

paul71 wrote: »

Request documented consent to sale from any lender of vendors solicitor. I spotted the "Law council" too, Law society I believe is the intended name.

The Law Society do not deal with complaints of negligence. It is standard, and I presume it was done, to ask if the property is mortgaged and to ask for an undertaking to clear the mortgage. It seem to me that the selling agent told lies to the o/p.

Casa2

I am dealing with the estate agency at the moment as I know that the solicitor can do nothing anymore.
EA is telling us that they really didn't know about the multiple property that the seller is trying to negotiate with his bank before signing the contract. In fact I think the owner is messing everyone EA, my solicitor and myself so now I will call him every other day including Xmas and New year until he gets annoyed and next month he will get a 28 days notification of completion that all I can do I guess if I am stressed he will be as well. I will make sure that he will never forgets my voice and I am very good on that.

Before the solicitor allowed you to sign contracts he should have requested a copy of the title deeds and consent of sale. Since the deeds are in the posession of the bank, these could not have been produced. Last time I bought it was frustrating waiting for this, but there was no question of going further without them.
It does seem like your solicitor slipped up here and is the person to chase. The EA is not the person who takes responsibility for the conveyancing.

johnnyskeleton

irlrobins wrote: »

I'd be asking serious questions of my solicitor in this situation. He/she clearly didn't do their due diligence. They shouldn't have even allowed you to sign contracts without establishing the liabilities of the vendor.

How is it the solicitors fault? Their job is to arrange the conveyance, not to advise the client on whether the other person can pay their debts. And in the course of the conveyance the solicitor found out that there was no consent to the sale so it couldnt go through. How else should the solicitor have acted?

Also, from my experience, the solicitor only seeks payment of fees when the sale closes.

Are you suggesting not paying the solicitor because the sale didnt go through, for reasons that had nothing to do with the solicitor?

jjoy80

Lumen wrote: »

I hope your solicitor put in a clause for terminating the sale if it doesn't close by a specific date, or else you will not be able to pull out.

This has scared the life out of me because I do not know. Is this true? Can they trap us like this? Surely if they can't close we can walk away. They sent contracts out to our solicitor and sale was to close this week. My solicitor has now written back and told them they have til mid January to sort it out. EA won't return calls. We don't know what's going on.

A friend of ours knows the vendor and says they are loaded. (Hearsay, i know) but we have now seen the vendors recently built palatial home in the country with relatively new and expensive car. So assume they are wealthy and now we really don't know what the hell is going on, only that we are being taken for a ride.

In the meantime I am a timely viewing other properties.

Marcusm

jjoy80 wrote: »

This has scared the life out of me because I do not know. Is this true? Can they trap us like this? Surely if they can't close we can walk away. They sent contracts out to our solicitor and sale was to close this week. My solicitor has now written back and told them they have til mid January to sort it out. EA won't return calls. We don't know what's going on.

A friend of ours knows the vendor and says they are loaded. (Hearsay, i know) but we have now seen the vendors recently built palatial home in the country with relatively new and expensive car. So assume they are wealthy and now we really don't know what the hell is going on, only that we are being taken for a ride.

In the meantime I am a timely viewing other properties.

If you have yet to sign or return the contracts then you are not bound in any way. Usually when contracts are signed an estimated completion date is set. If it is met, I believe there is a time period (4 or 6 weeks) which must elapse before you can demand completion. If the vendors fail to complete in such circumstances you might have a claim for compensation for breach of contract. This is all the stuff you should be discussing with your solicitor.

The most important issue in any Irish sale today is verifying at an early stage whether the vendor is free to sell the property or what sort of consent is necessary.

Casa2

If you signed the contract but has not been signed by seller you can get your full deposit back. That is where we are at the moment but instead of asking for refund I will send the 28 days notice of completion and meanwhile visit another properties. If not complete in 28 days I will get my money back and start all over again. That is life what can we do. I was really careful but they still fool me.

pwurple

Not the first time I've heard this story with neg equity and lenders /vendors dragging feet. For the most part, it has resolved with time though. Check your options with solicitor, and accept that you've missed the christmas deadline you've gven yourself. It's 9 working days to christmas, banks are in year end processing mode, they won't budge on this one before january.

Try to enjoy your Christmas all together where you are now, and aim for an easter or summer move instead. No consolation I'm sure, but It's way easier in summer too, with longer daylight hours.

On losing engineer and valuation fees, i'd consider you to be reasonably lucky on that front if this is the only time you've been in this situation. I have had engineers in who told me in no uncertain terms.. do not buy this house. Or solicitors uncover a very short leasehold, or subsidence and uninsurable property. I think I've had five sales fall through with expenses like that in my life so far. It's a real suckfest, especially when you have a family and there are so many other things you can do with it. But it happens often, and for loads of reasons.

formernyer

jjoy80 wrote: »

We are going to be hit with a big rent increase in January and now have to sign up to a new lease for 12 months which we didn't want to do, so we think the best decision for the moment might be to leave things be and leave our deposit on it until we find something else.

You probably don't have to sign a new lease. Look up Part 4 tenancies. You can stay on and give notice, when ready to move - the length depends on how long you've been renting the place. More flexible.

jjoy80

formernyer wrote: »

You probably don't have to sign a new lease. Look up Part 4 tenancies. You can stay on and give notice, when ready to move - the length depends on how long you've been renting the place. More flexible.

In the house almost 2 years. They made us a sign a years lease when our first year ran out. Does this mean we are not in a part 4? So maybe this time it would be more beneficial to me if I declined to sign a new year and opted for part 4, then I could leave with notice and not be committed to a full year. I wonder will they consider allowing us to do this. I'll have to check it out

runawaybishop

jjoy80 wrote: »

In the house almost 2 years. They made us a sign a years lease when our first year ran out. Does this mean we are not in a part 4? So maybe this time it would be more beneficial to me if I declined to sign a new year and opted for part 4, then I could leave with notice and not be committed to a full year. I wonder will they consider allowing us to do this. I'll have to check it out

You are gain part 4 rights after 6 months. There is no considering for them, this is a right you have.

Casa2

After suggestion we decided to view another property today and off course after noticing that it was empty and toilet with some rust I had to ask to the EA if it was a bank sales and the answer was yes. According to him most of the empty houses in Dublin are in the bank hands.
At least the EA was honest this time.

December2012

That depends on where you're looking and what your budget is.

Also a bank selling as mortgagee in possession is different than an owner selling subject to the consent of the bank