We put an offer on a property back in June 2019. No deposit was taken off us as we were later to find out that there was bank interest with the property. But the vendor accepted our offer, and the house was taken down off the website for sale.
To date we still have still not proceeded any further. We offered €300,000 as there is a lot of work to be done on the house. I suppose we just want to know where we stand, also given that the property is now vacant almost 12 months with no heating/electricity/water running.
Would we be in a position to now go back with a lesser offer as I am sure the heating system would more than likely need some work now if not replaced.
Ms Ms J.F., email
Property purchase is one of the most stressful times for people and with good reason. There are so many steps to the process, and it involves a lot of people – estate agents, solicitors, mortgage lenders and surveyors – all of whom can at times sound as if they speak a different language.
For you at this point the key question seems to be very simple: just how committed are you? You’ve found the property and made an offer, that offer has been accepted. So what now?
So what, indeed.
It is standard practice for people to put down a small deposit when they have had an offer accepted. As the Competition and Consumer Protection Commission notes, this can be either a set sum – say €5,000 – or a small percentage – under 5 per cent – of the purchase price, and it is normally lodged with the vendor's estate agent.
It is an indication of commitment: the wannabe purchaser is declaring the interest with solid cash; the seller responds by taking the property off the market to allow time for the deal to be done.
It is very odd that no such deposit was sought or paid in this case.
Since then, you say, some bank interest or lien over the property has been found. That might explain why things have not progressed. Your solicitor would want to ensure “clean title” – i.e. assurance that if you bought the property you would own it without the risk of a bank or anyone else coming in and claiming a share.
This is the conveyancing part of the process, and until it is done no solicitor would agree to a contract being signed by a client.
There is nothing financially or legally to stop you going back with a lower offer. Indeed, you would be advised to do so if you want to pursue this property at all
Critically, from your point of view, until you sign a formal purchase contract there is nothing more than an informal agreement or understanding between you that you will buy the property. And even if you had paid a booking deposit, it would be refundable in full until contracts are signed.
You never got this far, so you have in law zero commitment to the property or the agreed price.
Things have undoubtedly changed in the interim. As you say, the house has been vacant, and the cost of making it habitable is likely to rise with each passing season.
The market has also hanged. Covid-19, among other things, has had a chilling impact on prices which were already cooling even before the current crisis.
If you were buying a newly-built home from a developer they would be looking for contracts to be exchanged quickly before prices dip and you seek to renegotiate. The same applies here. Circumstances have changed, and your perception of the value of the property is lower than the price you offered almost a year ago.
There is nothing financially or legally to stop you going back with a lower offer. Indeed, you would be advised to do so if you want to pursue this property at all.
The vendor is not forced to accept, but failure to do so would bring them back to square one in what is a vastly more difficult market.
You have a strong hand here. Play it, but be prepared to walk away if it does not work out. It is currently a buyer’s market – especially for those not in a chain – i.e. waiting until their own current property is sold.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email firstname.lastname@example.org. This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into.