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Switching home queries

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  • 07-06-2020 11:36am
    #1
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭


    Hi

    I've decided to sell my current home and purchase somewhere else, this will be my first time switching home so just have a few queries and hoping to get other people's experiences of the process.

    My situation:
    Although I have decent savings and already have a new mortgage approval from the bank, I'll have to sell first in order to have the full amount to buy a property in my target price range. I want to get out of my place soon but haven't bid on any new properties yet.


    1. How do estate agents and prospective sellers view it when people like myself put in bids on the basis that they have to sell their own property first?
    Obviously cash is king and I'll be at a disadvantage against cash buyers until I get rid of my current place first, but is there much point in me bidding on properties now or should I wait until I at least have sale agreed on my current home?

    2. I'd be interested in hearing how other people dealt with that transition phase between switching homes? As above, did you try secure a deal on your new property first and then sell? Or did you sell first and possibly rent short-term somewhere before you got your new place?
    It just seems like it would be very difficult to try juggle the two perfectly whereby you sell and can move into your new home the next day.

    3. Finally, the apartment complex I'm currently in has recently found out that we need to conduct fire safety repairs. This seems to an emerging problem with a lot of complexes built in the last 20 years and the management company have told us to keep it quiet for now. How should I deal with this in terms of selling my place, do I need to inform the estate agent and any prospective buyer? I presume a buyer would find out anyway through their solicitor when doing the prep work for the sale?

    The complex is in a nice area, good reputation and under normal conditions I think I'd be able to sell it easy enough. But not sure how this fire safety situation and the current market will affect my ability to sell?

    Thanks


Comments

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    #2
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    I would say first have a chat with your solicitor before you list the house so they can talk you through the likelihood of balancing the sale and purchase. It can be a very stressful process as you are in a chain. Unless you have somewhere else to go in the meantime, you would generally try find a property you want to buy first and they line up the sale of your current property.

    The issue with the management company will be a problem. Your solicitor will have to get Pre contract queries from the management company which has to disclosed the accounts and things like that. It could be a red flag to a purchaser who could be landed with that bill down the line. I say chat to your solicitor now about it.

    Most sellers would prefer cash buyers and FTB to someone who has to sell a house to buy - as they are stuck in a chain. The best thing is if you find a house you want to purchase and that auctioneer seems good, use them to sell your house. They will know the timelines of the sale and purchase and should keep everyone on the same page (after all they have the incentive of two fees of it).

    If the timing goes right and auctioneer can keep everyone on board, you could sell your apartment and then buy the new place within a short period of time to minimise having to rent. It will depend on the circumstances of your purchasers and sellers


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    #3
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭Lieutenant Maximus Killjoy


    Dolbhad wrote: »
    I would say first have a chat with your solicitor before you list the house so they can talk you through the likelihood of balancing the sale and purchase. It can be a very stressful process as you are in a chain. Unless you have somewhere else to go in the meantime, you would generally try find a property you want to buy first and they line up the sale of your current property.

    The issue with the management company will be a problem. Your solicitor will have to get Pre contract queries from the management company which has to disclosed the accounts and things like that. It could be a red flag to a purchaser who could be landed with that bill down the line. I say chat to your solicitor now about it.

    Most sellers would prefer cash buyers and FTB to someone who has to sell a house to buy - as they are stuck in a chain. The best thing is if you find a house you want to purchase and that auctioneer seems good, use them to sell your house. They will know the timelines of the sale and purchase and should keep everyone on the same page (after all they have the incentive of two fees of it).

    If the timing goes right and auctioneer can keep everyone on board, you could sell your apartment and then buy the new place within a short period of time to minimise having to rent. It will depend on the circumstances of your purchasers and sellers

    Thanks for the reply Dolbhad, I hadn't really thought about using the same auctioneer for the sale/purchase so it's definitely something to consider. Although I do want to kick off the sale of the apartment asap and haven't yet spotted a new property that has really caught my eye.

    Yeah the fire safety remediation work is what I'm worried about and is kind of prompting me sell sooner rather than later. Its going to be a substantial charge and as you said it will be a red flag to any potential purchaser. I'll talk to my solicitor and see what he says, the residents here are stuck with the bill as the developer's company went bust.

    Should I mention the fire safety issue to the estate agent upfront when I'm selling? It will obviously affect their judgement in terms of what price to look for ..or just wait until a potential buyer brings it up further down the line?


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    #4
    Dolbhad
    Registered Users Posts: 782 ✭✭✭Dolbhad


    Lieutenant Maximus Killjoy wrote: »
    Thanks for the reply Dolbhad, I hadn't really thought about using the same auctioneer for the sale/purchase so it's definitely something to consider. Although I do want to kick off the sale of the apartment asap and haven't yet spotted a new property that has really caught my eye.

    Yeah the fire safety remediation work is what I'm worried about and is kind of prompting me sell sooner rather than later. Its going to be a substantial charge and as you said it will be a red flag to any potential purchaser. I'll talk to my solicitor and see what he says, the residents here are stuck with the bill as the developer's company went bust.

    Should I mention the fire safety issue to the estate agent upfront when I'm selling? It will obviously affect their judgement in terms of what price to look for ..or just wait until a potential buyer brings it up further down the line?

    I’d be inclined to probably say something to the auctioneer but more so to advise that you prefer a cash buyer as may be issues with management company and leave it at that.

    If you get to sale agreed stage then your solicitor will be upfront and disclose it straight away to the purchasers solicitor and let the purchaser take advice from their solicitor of the risks. Only because a purchaser would have questions and I’m not sure would auctioneer be the best to advise on it.

    I think main thing for a purchaser would be the potential cost and effect on the management fee going forward. Even if you get a purchaser okay with it, if they require a mortgage to buy the property, it would need to be disclosed to that bank for their approval. Whereas a cash buy can make their own decisions.

    I would say it’s best to move with the apartment as could take time for sale to complete.


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    #5
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    As I understand it, most agents/vendors won't consider a bid from you until your own property is sale agreed.


  • Options
    #6
    ELM327
    Registered Users Posts: 21,367 ✭✭✭✭ELM327


    Yes that's generally the way.


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    #7
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭Lieutenant Maximus Killjoy


    SozBbz wrote: »
    As I understand it, most agents/vendors won't consider a bid from you until your own property is sale agreed.

    Yeah that's understandable, but would that still be the case if you appointed them agent for the sale of your own property?

    Would they be more inclined to accept a bid that way as they could control both sides of the deal (even though you aren't sale agreed for your own place yet)?


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    #8
    ELM327
    Registered Users Posts: 21,367 ✭✭✭✭ELM327


    Lieutenant Maximus Killjoy wrote: »
    Yeah that's understandable, but would that still be the case if you appointed them agent for the sale of your own property?

    Would they be more inclined to accept a bid that way as they could control both sides of the deal (even though you aren't sale agreed for your own place yet)?
    I've considered doing this.
    We're in the same journey, house listed, found new house, not sale agreed on current place.


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    #9
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭Lieutenant Maximus Killjoy


    ELM327 wrote: »
    I've considered doing this.
    We're in the same journey, house listed, found new house, not sale agreed on current place.

    Did you mention it to the estate agent of the new house yet ELM327?

    Would be interesting to see what they say, although for yourself you mention that your current place is listed already so would you end up paying for 2 estate agents on your home? Or can you drop the current agent without paying a termination fee or something similar?


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    #10
    ELM327
    Registered Users Posts: 21,367 ✭✭✭✭ELM327


    Yes I mentioned it, am looking to do a deal where we list and complete with the same agent.


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    #11
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭Lieutenant Maximus Killjoy


    ELM327 wrote: »
    Yes I mentioned it, am looking to do a deal where we list and complete with the same agent.

    Ok thanks, good to know, so looks like some of them anyway are open to that type of deal.

    That may mean that I can start bidding on places I like now rather than have to wait until I'm sale agreed (which could take a while). But obviously I'll be in weaker position than cash buyers. At least its an option anyway.


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  • Options
    #12
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Lieutenant Maximus Killjoy wrote: »
    Yeah that's understandable, but would that still be the case if you appointed them agent for the sale of your own property?

    Would they be more inclined to accept a bid that way as they could control both sides of the deal (even though you aren't sale agreed for your own place yet)?

    Personally, I doubt it.

    One in the hand is worth two in the bush and all that.

    Maybe in a normal functional market, it might make sense, but with covid 19 etc theres no telling how long it might take them to find a buyer for your apartment. This is further hugely complicated by your firestopping issue. If their current client has other offers, they'd be actively doing them a disservice if they advised them to hang on and wait for you.

    I've been through firestopping on a previous property. Long story short, we got off lightly but it probably took a good year to resolve and anyone who looked to buy during that time would have been informed. We were also told to keep quiet and as far as I know no one actually tried to sell during that time, but I remember speaking to our Management Agent about it and she said we'd be legally obliged to turn over that information to any perspective buyer. You really need to get to the bottom of this before you do anything else. IMO this has the potential to be a showstopper.


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    #13
    Lieutenant Maximus Killjoy
    Closed Accounts Posts: 6 ✭Lieutenant Maximus Killjoy


    SozBbz wrote: »
    I've been through firestopping on a previous property. Long story short, we got off lightly but it probably took a good year to resolve and anyone who looked to buy during that time would have been informed. We were also told to keep quiet and as far as I know no one actually tried to sell during that time, but I remember speaking to our Management Agent about it and she said we'd be legally obliged to turn over that information to any perspective buyer. You really need to get to the bottom of this before you do anything else. IMO this has the potential to be a showstopper.

    That's what I'm afraid SozBbz, I'll talk with a solicitor but it could take ages before any remediation work is finished and costs are paid so could be stuck here until then.
    Just a random question on the fire safety issue, were you allowed to claim tax back on that type of work that was done on your previous property? I've tried to google it but can't find anything definitive if its eligible, suppose I'll just have to ring revenue when the time comes for payment to find out.


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    #14
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Lieutenant Maximus Killjoy wrote: »
    That's what I'm afraid SozBbz, I'll talk with a solicitor but it could take ages before any remediation work is finished and costs are paid so could be stuck here until then.
    Just a random question on the fire safety issue, were you allowed to claim tax back on that type of work that was done on your previous property? I've tried to google it but can't find anything definitive if its eligible, suppose I'll just have to ring revenue when the time comes for payment to find out.

    No, not that I'm aware of anyway and I'm pretty sure that I'd have heard about it if that were an option. Maybe those whose properties were rented were able to write some of it off against tax, but it was my home at the time.

    We got off lightly as I said (less than €1k per unit) so I think most people were just happy to pay so we could all put it behind us.

    As far as I know, the only legal obligation is for the Management Company to tell the potential buyers solicitor which will only happen midway through the process. But in my view its almost inevitable that this will be a problem, so I'd be upfront with people from the get go. No one is going to say "yeah grand" when handed that information - they'll either walk away or ask for a huge price cut to cover the risk. They're going to be pissed that you knew from the outset, let them spend money on legal costs and surveys etc. And the EA will be pissed when the sale falls through.


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    #15
    Housebuying
    Registered Users Posts: 54 ✭✭Housebuying


    SozBbz wrote: »
    As I understand it, most agents/vendors won't consider a bid from you until your own property is sale agreed.

    You can certainly bid but I don't think they will go sale agreed without you providing proof of funds.

    I recently tried to VIEW a house where the EA asked for my mortgage loan approval letter.


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