Timing purchase with impending lump sum..

K

Kerrygold

Registered User
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26
Folks,

Have a lump sum from US held shares, about 250K after CGT, that will be available in ~2 months (a company takeover, will take that long to close deal).

Currently own property worth 350K with 180K left to pay.

Have seen a property I am quite interested in (~630K). Is it realistic to put a bid in on this house now, with the expectation of having all the cash together in 2 months? Or will vendors/banks have requirements to have "cash in hand" before they take things seriously/move towards a contract?

Thanks.
 
Vendors don't need to know where funds are coming from so if they agree to sell to you and they are ready to go, they can issue contracts straight away. However, if you sign contracts, can you be sure that your funds are in place for the completion? What happens if there is a big hitch in the deal? And very likely it will be a condition of your mortgage that the mortgage cheque cannot be drawn down until all funds are in place.

It might work. It might not.

mf
 
Thanks for the reply.

Can I come at it from another angle - I will need to sell my own house first, so assuming that the vendor will conditionally accept an offer knowing this fact, this should buy me an amount of time upfront. I would assume it would be reasonable in this scenario to allow at least 2 months to close a contract?

As you have pointed out, the big uncertainty, is when the take-over will happen for definite.
 
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