# Bidding - should we believe estate agent?



## Voda (23 Oct 2006)

I got a friend to ring an estate agent this morning to ask about a house I am interested in - she was told there were no bids in. An hour later, I rang to make a bid and low and behold, I was told someone had bidded the asking price. 
Apart from the fact that it seems a bit of a coincidence, given the current climate when most houses are having to drop prices a little, why would someone who is the first bidder not offer a little less? It has made me suspicious and a friend of mine who works in this area said it sounds like they are 'trying to hold the asking price' and that there is probably no other bidder.
What do others think??


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## Howitzer (23 Oct 2006)

Of course there's no other bidder. It's simply their job to get the best price.


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## extopia (23 Oct 2006)

Get your friend to ring back. Or if you believe there is no other bidder, bid what you feel like bidding anyway.


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## sheena1 (23 Oct 2006)

I would ring back and put in the offer you were going to make and insist that the auctioneer tells the seller of your offer. I doubt if there was an offer for the full asking price within that hour. I might even hint that I would contact the seller directly and see what the reaction is. Tell the auctioneer if you have mortgage approval/are not in a chain/ are first time buyer etc. Anything that would give you an advantage...


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## extopia (23 Oct 2006)

And remember the market is starting to turn in the buyer's favour so don't go overboard with your offer!


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## Mag2006 (23 Oct 2006)

Similar to this my friend just made an offer on a property in Navan on Friday, amv €310k,she was told there was already an offer of €317,500 on the house BUT the bidders had a house to sell. So, she bid €317.5k as a FTB with full mortgage approval ready to go and they came back a while ago with €320k, she can't afford to go that high. So they will go to the vendor again with her original offer coz she is not in a chain and they asked her is she willing to maybe up it to €320-322k with cash, but contracts will reflet €317.5k. Do you think she should walk away or accept it if they say yes. Thing is she loves that house, it's lovely, other ones she looked at at the same price range are not as nice.


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## coinfused (23 Oct 2006)

What they are suggesting is illegal- avoiding stamp duty. In the present market which is strong for buyers I would run a mile before doing business with anybody suggesting a scam like this. Why should she risk prosecution for tax avoidance when in 6 -12 months time she will more than likely buy the same house for less than 300k.


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## Mag2006 (23 Oct 2006)

Are the vendors not open to tax avoidance risk too though by suggesting this as well as estate agent. From what my friend told me it seemed to be a done thing there as she was told they way they do it etc, so it's probably been done before. My hubbie reckons that €317.5k is too much for Navan anyway esp for a 3 bed semi eventhough it's in fab condition and totally walk in, all she needs is beds and a sofa and the usual compliances to move in. Someone else we know up there told us that with the new motorway coming on stream in the next year or so the houses will rocket up there so she is worried about waiting around and ending up in Cavan in a years time.


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## nelly (23 Oct 2006)

it may be illegal I would do it in order to get the house she wants. If she should agree then dont be sucked into going too much over the 317k  as there is a change in the market in her favour. I would offer 320 for a week and then take off the table. Keep looking in the meantime


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## extopia (23 Oct 2006)

If your friend has no house to sell she should stick with her original offer. She's a better prospect than the other bidder so all things being equal she should get the house unless someone else comes in.


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## Mag2006 (23 Oct 2006)

I kind of agree Nelly, if she can get it for the €317.5 and avoid the excessive stamp duty and give some cash  over sure it's better for her. She cannot offer €320k, stamp duty too much for her and she's right. What if they did agree to €320k and they accepted she 'd be up the creek then trying to find €10k or so. Oh I dunno, it's a pity they came back with the €317.5k, they knew they are FTB's so I'd say they made the offer up coz she told them she likes the house. It's tough out there!


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## Frank Zappa (23 Oct 2006)

Ok lets get this one straight.

When making a bid enquire to see the BID BOOK.

Most people dont know about BID BOOKS, but under the IAVI rules all IAVI auctioneers are required to WRITE ALL BIDS DOWN.

If you are not dealing with an IAVI then simply run for your life as they really dont know their stuff and will end up costing you time money and heartache because of their inexperience.


Another hot tip is.....

After going "SALE AGREED" you dont have to sign the contracts for around 9 months. Yes thats right,according to IRISH LAW your solicitor can hold on to those contracts while you sit there on the fence requesting more and more "surveys" or water tests ( while you fritter away the months and the vendors are getting desperate because of that crippling bridging loan they took out ). The Auctioneers and the Vendors are powerless once you have the contracts. In a downward market this can pay BIG DIVIDENDS as the auctioneers cannot sell to anyone else while you have the contracts. if they do you can pursue them legally........

You're welcome


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## exile (24 Oct 2006)

Frank Zappa said:


> After going "SALE AGREED" you dont have to sign the contracts for around 9 months. Yes thats right,according to IRISH LAW your solicitor can hold on to those contracts while you sit there on the fence requesting more and more "surveys" or water tests ( while you fritter away the months and the vendors are getting desperate because of that crippling bridging loan they took out ).



That's interesting - is there a specific limit after which the buyer is deemed to have decided not to buy and must return the contracts?  My buyers certainly took their sweet time; I picked up the phone one day and told my solicitor to withdraw from the sale - all hell broke loose then.


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## extopia (24 Oct 2006)

I believe this question was addressed in the post above - i.e. 9 months.


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## liteweight (24 Oct 2006)

Surely your solicitor should ask for a date by which time contracts are returned or else the deal is off? This is what we do any time we're selling. Any links showing this 'Irish Law'?


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## Brendan Burgess (24 Oct 2006)

Frank Zappa

I take it that you are not a solicitor or estate agent? 

No contract exists until the contract is signed by both parties. I have never heard of a vendor selling signed contracts to a buyer. They send blank contracts and the buyer signs first. At that stage, the vendor has the buyer over a barrell.  I have often heard of long delays in the vendor returning signed contracts and I have heard of occasions where the vendor did not go ahead with the deal after the buyer had signed the contracts.

I have not heard of anyone seeing the bid book before. It's an interesting idea. Have you inspected it in practice? Have you ever made a complaint to the IAVI before about auctioneers breaking the rules on guide prices? I suspect that this rule is not observed much either.

Brendan


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## Mag2006 (24 Oct 2006)

I'm gobsmacked at this information this morning!!. Anyway, advised my friend to get back to estate agent, offer amv again and walk away if she says no, tell estate agent to ring her when it falls thru coz buyer cannot sell their house. She is being messed around with as I think for a second time buyer to bid €317.5k is a bit suspect. We all know the housing market is changing so how can a house is Navan jump €7.5k in 3 days??. I also said to her is she had to sell in 6 months time she wouldn't get €317.5k for it, probably less, god only knows!!
She is going to see 2 more houses today so hopefully no more muppet estate agents mess her around.


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## Longfordian (25 Oct 2006)

The idea that you can agree to a sale and not close for 9 months is crazy. We give deadlines all the time to buyers. One developer we sell for gives you 21 days to sign contracts after you pay your deposit or your house is back on market. Lots of EA's have bid books and are happy to show them to you. It is a foolish auctioneer who makes up bids and risks losing a buyer. Just because you are not the highest bidder doesn't mean you won't get the house. Vendors often choose an underbidder if they are a more qualified buyer. I did this myself last week for a vendor. The high bidder was in a long chain of sales and was unable to convince us of his ability to close. We went with the underbidder for E5,000 less as she had cash and went straight to contract. 

Brendan


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## Brendan Burgess (25 Oct 2006)

SPC100


> One of my local estate agents, documents all bids and will show them to someone who wants to bid on the property.



That is excellent. Would you mind naming and praising the estate agent? 

Brendan


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## Ballyman (25 Oct 2006)

coinfused said:


> What they are suggesting is illegal- avoiding stamp duty. In the present market which is strong for buyers I would run a mile before doing business with anybody suggesting a scam like this. Why should she risk prosecution for tax avoidance when in 6 -12 months time she will more than likely buy the same house for less than 300k.


 
What planet are you living on?? Come January 1st the housing market will explode into life once more, same as it has every year after the budget. Less than E300  lol.

My advice would be, if you want the house, then tell your morals to take a hike and pay the E317,500 and 2.5K in cash. If you don't want it then go away and wait for the next one, which incidentely will be *MORE *than E317,500. This is not rocket science.


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## bacchus (25 Oct 2006)

Ballyman said:


> . If you don't want it then go away and wait for the next one, which incidentely will be *MORE *than E317,500. This is not rocket science.


 
What makes you so sure that it will be more than €317.5k rather than less?

Considering the behavior of the market since April '06, the odds are that it will be less ...not a guarantee though, just my opinion.


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## Mag2006 (25 Oct 2006)

They rang her back this morning saying the vendor is willing to do a deal at 317.5k + 2.5kcash as the other bidder cannot guarentee when they can close as they have a house to sell. I think she is going to go with it anyway and I am very happy for her, it's a lovely house just hope to god the market doesn't kick her in the behind and the house ends up being worth €300k, thing is it's a home they are buying for their family so it's not like they will want to move in the next 5 years anyway.


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## howstrange (25 Oct 2006)

Ballyman said:


> What planet are you living on?? Come January 1st the housing market will explode into life once more, same as it has every year after the budget. Less than E300  lol.
> 
> My advice would be, if you want the house, then tell your morals to take a hike and pay the E317,500 and 2.5K in cash. If you don't want it then go away and wait for the next one, which incidentely will be *MORE *than E317,500. This is not rocket science.



Explode into life like this Autumns selling season. NOT!!. You seem to have the gift of predicting the future.


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## conor_mc (25 Oct 2006)

Ballyman said:


> What planet are you living on?? Come January 1st the housing market will explode into life once more, same as it has every year after the budget. Less than E300  lol.
> 
> My advice would be, if you want the house, then tell your morals to take a hike and pay the E317,500 and 2.5K in cash. If you don't want it then go away and wait for the next one, which incidentely will be *MORE *than E317,500. This is not rocket science.


 
We must have only ever had 11 budgets in this country so, because I sure as hell don't remember sky-rocketing house prices every January in the 80's and early 90's!

It seems that free market fundamentals are lost on you. House prices _can_ actually fall sometimes.

By the way, it's all well and good for the vendor and their estate agent to suggest tax avoidance. But it'll be the buyer and their solicitor who'll end up in court over it.

My advice would be to restate the 317.5k offer and leave it on the table. They're chancing their arm on the 2.5k cash, which will mean nothing if they get stuck with bridging finance.


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## extopia (25 Oct 2006)

Absolutely agree with the above. I'd even go so far as saying "I've considered the situation some more and have revised my offer to €310k"


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## conor_mc (25 Oct 2006)

Economics 101.

Rising supply = falling prices.

http://irish-property-bubble.blogspot.com/ .... is that a trend I see?

Offer 317k max. I would even contemplate extopia's suggestion of playing hardball.


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## coinfused (25 Oct 2006)

Ballyman said:


> Come January 1st the housing market will explode into life once more, same as it has every year after the budget.
> 
> If you don't want it then go away and wait for the next one, which incidentely will be *MORE *than E317,500. This is not rocket science.


 
 lol- sure, property only ever goes up in value.

Mag2006 I wish your friend all the best in her new home but she really should have held out for a better deal and definitely not paid that 2500 cash imo.


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## Dowee (25 Oct 2006)

conor_mc said:


> By the way, it's all well and good for the vendor and their estate agent to suggest tax avoidance. But it'll be the buyer and their solicitor who'll end up in court over it.



AFAIK its tax evasion, not avoidance. Avoidance is legal, evasion isn't and what is suggested above is illegal.

As for the rising/falling prices, IMHO baring a change in stamp duty laws prices are unlikely to start rocket up again in January as suggested above as with rising interest rates the banks can't lend people the same amount of money as they were able to when rates were lower (say this time last year) and so if you can't borrow as much as you could previously then obivously you can't bid as much. With a rate hike virtually guaranteed in December and another likely next Feb/Mar this situation is only going to get worse (or better, depending on your perspective).


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## conor_mc (25 Oct 2006)

Dowee said:


> AFAIK its tax evasion, not avoidance. Avoidance is legal, evasion isn't and what is suggested above is illegal.


 
You're right - as the yanks say, my bad!


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## jfitzer (25 Oct 2006)

If your friend is going down the route with the small cash payment, I hope she realises that this must be done without the knowledge of her solicitor.  The solicitor has to sign a statement to say that this is the whole transaction.  Are the sellers going to stand at the door at the solicitors waiting to get €2.5k before they had over the keys.  As their is no legal binding contract, your friend could say that that she does not owe it and as contract is signed she owns the house, are the vendors going to be happy with this.  Do they just think that she will pass the 2.5k to her solicitor.


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## Mag2006 (25 Oct 2006)

She knows not to tell solicitor, she was fully briefed by estate agent so to me it sounds like a regular occurance. She is to meet the vendor the same day she signs contracts to give them the cash. Basically, outside the solictors office or something. Do you know what I think though, wouldn't it be very easy to catch out estate agents that do this as they seemed to have no problem telling her over the phone what the situaition was. Funny this, estate agent rang her asking would she be interested in buying some appliances off them that are in the house, like they should throw them in for the cash they are getting really!!


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## nelly (25 Oct 2006)

Mag2006 said:


> Funny this, estate agent rang her asking would she be interested in buying some appliances off them that are in the house, like they should throw them in for the cash they are getting really!!



being very honest i think when she agreed to the extra 2.5 she should have stated that this was teh contents, integrated appliances. this seems very very cheeky or a wonderful EA working for vendor


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## mprsv1000 (25 Oct 2006)

Regarding the 2.5k cash the E.A is suggesting I'd tape the conversation and nail the bugger. They are asking your friend to break the law and she trusts anything the worm has to say??


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## conor_mc (26 Oct 2006)

SPC100 said:


> Bryan Little from Remax


 
SPC, you gave me a fright there.... John Little's Remax agency in Drogheda are currently selling my house and I thought you were naming and shaming!!! They must be brothers or something.

Anyway, just for everybody else's clarity....

quote=SPC100;303774]Hi Brendan - One of my local estate agents, documents all bids and will show them to someone who wants to bid on the property.

I was not aware it was part of IAVI rules - he was selling it as a feature of his agency i.e. his point is there was no mucking buyers around.

Still thought, anyone can enter a ghost buyer on some paper and then later the ghost buyer can change their mind. The bid sheet would look very strange though.[/quote]


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## Mag2006 (26 Oct 2006)

Just to let you know that my mate has decided to walk away from that house...the estate agent was being very cheeky and her dad talked some sence into her last night. She rang them this morning and said €315k max and not to ring her back with another bid just yes or no from the vendor and that she does not intend on any cash deal of any sort, she was petrified ringing them. THEN, another house she looked at up the road from where she was looking came back and accepted her offer of €310k and she is having a 2nd viewing to make up her mind but it's looking good. It's a nice house and estate agent is much nicer and far more professional. They sound like they were working for her more than the other one was!!.


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## Satanta (26 Oct 2006)

Mag2006 said:


> They sound like they were working for her more than the other one was!!.


The EA works for the seller not for the buyer!!! The EAs job is to get the max possible (legal!!!) price.


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## Mag2006 (26 Oct 2006)

Satanta said:


> The EA works for the seller not for the buyer!!! The EAs job is to get the max possible (legal!!!) price.


 
Well the girl she dealt with is lovely and was very realistic about certain aspects of the house as it seriously needs freshening up. She said it to the vendor so that he didn't mess my friend around, he was looking for more initially but she went back to him and came back with an accepted offer for an excellent price in my book as it's got great potential in the right hands.
EA's are in the business of selling houses not ripping off and trying to make idiots out of buyers!!


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## Satanta (26 Oct 2006)

Mag2006 said:


> EA's are in the business of selling houses not ripping off and trying to make idiots out of buyers!!


Fully agree. If I felt a buyer was put off my property because they felt an EA was making an idiot of them I'd be extremely upset. 

I don't think I'd be too happy though if the buyer felt the EA was working for them and got them a great price, if it were below what I wanted.


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## Mag2006 (26 Oct 2006)

You'd be happy with the amv wouldn't you!?!. That's what he's after getting!. No more no less!


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## MandaC (26 Oct 2006)

My friend lives in Navan (not the Johnstown area) and told me that prices in Navan in general are currently taking a bit of a battering too. 

Her sister has recently bought back into Navan (past few weeks) for €5K less than the asking price. My friend told me that there are a number of houses in the Estate where she lives which are currently with two estate agents and no sign of sales.

I know somebody else on the site said that Johnstown usually gets €10-€15k more than the asking price. I would be interested to know if this is still the case in the current market.


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## extopia (26 Oct 2006)

That's good news for your friend Mag, I really think she did the right thing. I wouldn't be surprised if her offer ends up being accepted, especially if the seller gets wind of her interest in the other house.


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## chippengael (26 Oct 2006)

From what I have read, the practice of cash under the table to the estate agent seems widespread...? Is this really the case?


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## Open_Window (27 Oct 2006)

Mag2006 said:


> They rang her back this morning saying the vendor is willing to do a deal at 317.5k + 2.5kcash as the other bidder cannot guarentee when they can close as they have a house to sell. I think she is going to go with it anyway and I am very happy for her, it's a lovely house just hope to god the market doesn't kick her in the behind and the house ends up being worth €300k, thing is it's a home they are buying for their family so it's not like they will want to move in the next 5 years anyway.



Walk away!!! Danger Walk away!!!!


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## Savvy (27 Oct 2006)

Open Window,
Please read the whole thread before posting. The buyer has moved well beyond this now


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## jfitzer (27 Oct 2006)

Unfortunately I have heard that it does happen quite a bit but as to whether it is common practice I cannot comment, many estate agents perceive that cash payment even for Furniture reduces Stamp Duty rates but to facilitate this is must be a doorstep deal with no involvement from the solicitor, tax evasion really. Personally I would not like to have the situation where I am standing on the doorstep after completion to receive a wad of cash, if I were the seller I would be nerveous that the buyer would not pay it over and as completion has taken place where is the proof that they owe me the money. The seller is putting complete trust in the buyer that they will keep their side of the bargain. That my opinion anyway.


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## Mag2006 (27 Oct 2006)

MandaC said:


> My friend lives in Navan (not the Johnstown area) and told me that prices in Navan in general are currently taking a bit of a battering too.
> 
> Her sister has recently bought back into Navan (past few weeks) for €5K less than the asking price. My friend told me that there are a number of houses in the Estate where she lives which are currently with two estate agents and no sign of sales.
> 
> I know somebody else on the site said that Johnstown usually gets €10-€15k more than the asking price. I would be interested to know if this is still the case in the current market.


 

My sister lives up there and when I was up visiting last weekend I actually did notice 2 For Sale signs in alot of gardens!!!. Mad!!.
Just for some interest though, check out this property in Bray that was going for €435k for months and it now €415k. Sign of the times!!. We looked at that before we bought our house recently and the EA told us there was an offer on it for €427k at the time!!. We didn't believe him and walked away, thank god. It's opposite a council estate where the houses are going for €280k, so it's a high risk in my book!!
[broken link removed]

Will I be breaking the rules posting this actually???. If so moderator feel free to delete it.


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## Mag2006 (27 Oct 2006)

Fitzer- very good point. Forgot to tell you that EA "updated" my friend on the house she walked away from yesterday. She said the vendor would only deal at €322,500k (€317.5k contract & 2.5k cash) and would throw the appliances in with it. She stuck to her guns and said no thanks!. She is a bit dissapointed though, she really liked the house. Apparantly the other bidders who have a house to sell bid €325k so they can have it. She did tell her she has an offer accepted on another property and they are going for one final look in the morning before they pay a deposit and EA never budged. Ah well their loss!


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## coinfused (27 Oct 2006)

Fair play to your friend. Its very difficult to walk away from a house you've set your heart on so it must have been a bit of wrench even though your head might be telling you its not a good deal. I'm glad the market is changing and those bloodsucking types of EA are not getting away with those under the table deals any more.


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## Mag2006 (27 Oct 2006)

I feel sorry for her though, they are fully mortgage approved, even had copy of loan approval sent to EA to help speed it up and still they didn't get what they want. I really hope they end up better off where they are going to buy, it's only 5 mins away from their first preference, difference is one is a bungalow and really quite cul de sac, the other is a tow story quite cul de sac but the green area opposite needs to be kept alot better!


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## jfitzer (27 Oct 2006)

All too often the buyer only has the EA word that the cash is being accepted on a doorstep deal as this is how it might have been discribed to them, many sellers will not entertain this for fear of not getting their extra cash or many are not aware of the implication and just think that the solicitor can just do a seperate contract for the contents or even state the amount in the contract, thus reducing their stampduty rate, not good to find out on completion that this is not the case.   A neighbour of my brother got caught out in this way, it was terrible, they are still living on floor boards as they cannot afford carpets as it took up such a lot of their cash, about another €10k.  If she had have known she would have bought a different property.


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## Mag2006 (27 Oct 2006)

That's really bad, personally if I was selling my own house I would not agree to a "cash deal", it's just too risky. I do think that EA's suggesting these deals should stop. There is no guarentee there at all that the buyer will pay up once contracts are signed. My friend was more worried about the PP and the risk about getting caught paying cash for a house that was apparantly going for €15k over the asking price. Maybe if enough people get the word around that it's risky and wrong EA's will have to stop suggesting it!
My heart goes out to that person €10k out of pocket!.


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