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January 2016

Question

I am currently selling my house and we have an offer on it. We are considering accepting and going sale agreed. My question is, in the meantime can we bid on a new house or will our bid be taken seriously? We can’t afford rent of say €1,500 month for a year and so would prefer to buy quickly. What is the best approach to progress selling our current house and purchasing another?

We have mortgage approval until mid-February and we don’t want to go through the whole application process again. It would be great if you could provide us with sound advice.

Answer

Buying and selling properties can be very stressful and any mistake can be expensive. I would suggest that anyone in your position should not rush into a decision which they may regret later.

If you have an estate agent acting on your behalf, it would be advisable to discuss the offer to determine if, in their opinion, it represents the best possible price for your property. Moreover, they can also clearly set out any conditions attached to the offer such as mortgage approval, a sale of a property, survey etc, any one of which could have a significant bearing on your ability to sell the property and in turn purchase a new one.

When a purchaser is in a chain, it can make it very difficult to either make offers or secure a property. This is why cash purchasers are in a far stronger position as they can act with certainty. There are so many variables involved in the process most of which you cannot control.

There are no rules against submitting an offer for a property which you may be interested in. However, it would be prudent, and indeed ethical, to be clear when making the offer, of any conditions attached so the vendor can make an informed decision. Purchasing any property is a large financial commitment and you should be very certain it is the right property for your medium- to long-term needs. I have seen clients, who having sold or agreed the sale of their property, frequently end up purchasing the wrong property.

Unless you can secure an extending closing period on the sale of your own property, it is likely that you will have to rent for a time. It appears that you cannot afford to pay rent of €1,500 per month and therefore I assume that your mortgage payments are going to be lower than this.

If having talked with your agent, the offer is the best price that can be secured, you should give meaningful consideration to it.

With respect to your mortgage, it is highly likely that you won’t have found and secured a new property before mid-February and therefore you will have to go through the application process again. However, your bank will have all of the paperwork which will make it far easier. Your bank will not be able to finalise the mortgage process until such time as you have agreed terms on the purchase of a new house and a valuation has been undertaken.

Gerard O Toole is a chartered residential agency surveyor and a member of the Society of Chartered Surveyors Ireland.