Would you proceed with a view to purchase on this house?...

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Plek Trum

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Hi all,
not looking for advice per say but more peoples opinions.

My partner and I have spotted a old house with potential that recently came on the market at auction. All bids on the day were rejected and the house withdrawn from the market but we have kept in touch with the auctioneer since as we were highest bidder on the day (but no obilgation to buy since it was withdrawn).

In brief, had our solicitor look at the contracts and the following issues were raised:

1)Sale of Contract excludes Condition 36, which pertains to planning / boundry issues etc.
2) There are substantial judgements against the property (various banks owed over 1million euro (!)

We are first time buyers but not totally innocent to the potential legal minefield and hassles we could get into. Solicitor has advised rightly to put an offer on the table at a low low figure and see if they are willing to come down to this. Then, and only then, would we pay an engineer to do a full report and investigate the Cond.36 issues fully to see what we are dealing with.

Also, we are guessing that any offer we do put in would be dependent on the actual banks that have the judgements agreeing to the amount?

Naturally mortgage lender will not loan the amount required unless we have things clarified with the property. One option was to negotiate with the vendor's solicitor to remove the exclusion to Cond.36 but that doesnt solve any issues with the property legally.

Going to have a long think over next day or two and see how to proceed. Its a lovely house, needs work but not huge amount and its a house we could see ourselves grwoing old in.

Sentimentality aside - we don't have a lot of experience in this area.
What would be your thoughts on it? SHould we throw towel in now and walk away or proceed with caution? All hypothetical I know, but what has your experience taught you in situations like these?

Thanks a million, look forward to your replies ...
 
Walk away. There are lots of houses available that do not have all the headaches attached to this one. I has the potential all right, the potential to break your hearts, and possibly tie you up for ages, IMHO. Sorry, I'm guessing that is not what you want to hear.

I'm sure you can make an offer subject to inspections, I'm not sure about setting conditions in the contract though. A qualified or conditional contract is not a contract maybe?
 
No, I totally appreciate honest replies especially those with experience in this area. We're practical about it really and if it's going to be a potential nightmare then we are very happy in our beautiful rented house to sit it out until something possible comes up.

Yes, its a really REALLY good house for us, ticks so many boxes for what we have always dreamed about but romantic dreams are short lived if we would have to spend the foreseeable future dealing with settlements, judgements, solicitors. The gloss will be well gone off it after a year or two (or more *eeek*) of that!

Have to wait and speak with partner tonight after work. I feel it may.. may.. be worth putting in an offer reflecting the problematic issues above but with a condition that the offer is subject to full exploration after an engineers report. Is it likely they would agree to this do you think?
 
The auction is over.

No offer is binding on either side until the contract for sale is signed.

Obviously, you will not buy a house with judgments outstanding on it. Before the contract is signed, you would need to see letters from the banks agreeing to remove those judgments. Your solicitor would advise you on this issue.

Some planning issue has not been complied with. Do you know what it is? Can it be rectified and at what cost?

These problems will reduce the number of people interested in the house and so you can get yourself a bargain.
Solicitor has advised rightly to put an offer on the table at a low low figure
Click to expand...

I presume that the solicitor will be able to tell you what needs to be done to rectify the problems. Take your solicitor's advice. If the house is worth €200k and it costs €50k to rectify the planning issue, then make an offer of €200k. Alternatively, make an offer of €200k to be reduced by the amount which your engineer will tell you it costs to rectify the planning issue.

If it's a boundary dispute with a neighbour, then you probably should walk away. You may be able to legally resolve the dispute, but you may be living with unpleasant neighbours for the rest of your life. Not worth it.
 
Thanks Brendan - I'm of the mindest that its worth holding in there and exploring exactly what the issues are and, as you said, possible getting the house we've always wanted at a price we can afford.

Solicitor doesnt know exactly what the issues are to be rectified hence the need for a full engineers report to check EVERYTHING out with a finetooth comb and assess costs to rectify same. I feel its worth going as far as this, even if we walk away after, it will be money well spent either way and at least we will know what we were /are dealing with.

I don't think it's a boundary dispute- we live locally and know all neighbours and no-one has mentioned that but possibly planning and sceptic tank issues are the rumour (owner is from another country, doesnt live there fulltime).

Plenty to think about - but something tells me it could be rectifiable too, it may be worth hanging in there and spending money to see... Any opinions?
 
Are there opinions on compliance available for the property?? sellers solicitor would have to have these and a land registry map in order to be able to sell....

if there is a planning issue is it not up to the seller to resolve this??

is it an engineer or architect you require??
is it an old house? is there someone currently living in the house?? would you need to have a damp / dry rot report done (just being practical - i have seen people get caught for many 000's as this was not checked),
 
Will the mortgage lender require clear Certificate of Title with no qualifications before releasing loan cheque. If so what are the financial implications for you in order to have this possible.
 
dewdrop said:
Will the mortgage lender require clear Certificate of Title with no qualifications before releasing loan cheque. If so what are the financial implications for you in order to have this possible.
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I've heard of a number of cases where the loan cheque is issued before this is achieved. Usually the solicitor details what the issues are and when they are being rectified and the banks can be ok with it. Each circumstance is different however.
 
aoc said:
Are there opinions on compliance available for the property?? sellers solicitor would have to have these and a land registry map in order to be able to sell....

if there is a planning issue is it not up to the seller to resolve this??

is it an engineer or architect you require??
is it an old house? is there someone currently living in the house?? would you need to have a damp / dry rot report done (just being practical - i have seen people get caught for many 000's as this was not checked),
Click to expand...

Land registry map and deeds of house are all clear.
Planning issues are exempt in current Contract of Sale as per post above (Cond.36)
We would require an Engineer and not architect (his report would cover damp/dry rot issues)
 
dewdrop said:
Will the mortgage lender require clear Certificate of Title with no qualifications before releasing loan cheque. If so what are the financial implications for you in order to have this possible.
Click to expand...

Not as far yet as set requirements with mortgage lender, we are only at early stages of negotiations (if that). Financial implications will be hopefully identifed and evaluated via Engineer's report (if / when we proceed to that stage) and we won't place an offer until we have this clarified..
 
Hypothtical question you may be able to help with:

Say the market value of house is currently 280k
We offer 200k as remedial works and legal costs will add up to 50k
Will mortgage company loan 250k for our mortgage to cover the work needed?

Vague and green horned I know - feedback apreciated!

UPDATE: Did some research and think I have answered my own qstn - what we would be looking at would be an appraisal based loan to value mortgage that would give us enough money to rectify the possible problems (?)

How would this work in terms of actual payments though - do we pay the vendor the selling price and keep the 'balance' for remedial works in an account and pay from that as needed?

All new...but learning...
 
If the works you propose doing are likely to increase the value of the house from €200,000 up to, €250,000 then you may get a lender to support it. The lender will never advance more than 90% (or whatever their own limit is) of the value of the property or the amount spent at any given time.

So you'd get approved for €225,000 at the start. They'd advance you €180,000 to complete the purchase and you'd put in €20,000 plus Stamp Duty out of your own funds. Then as remedial works progressed, they'd advance more money in stage payments. If the remedial works are going to cost €50,000 the lender would put up €45,000 and you'd put up the other €5,000. The valuation would need to be at least €250,000 after the works have been done.
 
Thanks for that LDFerguson - we weren't aware that the money to be used for remedial works would also be subject to the 92% / 8% ratio also. Great to know this before we would commit to the work needed and then wonder why we are only being forwarded 92% of costs.

I'm forever recommending this website to family and friends and its really been a valuable source of opinion and information - thanks SO much for all your replies.

If you have any other thoughts, keep them coming... ;)
 
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