Making an Offer to Purchase a Property
Here are some tips that will help to guide you through the process of making an offer and eventually securing the property you would like to purchase.
If you are buying a property in a new building or development you will have to pay the price listed in the developer’s price list. You may get a discount price if you buy several units and at an early stage of the construction but even this will depend on the developer’s policy. Your real estate agent will advise you on this.
If you ask for upgrades or changes, be prepared to pay for them as well. The builder will submit a quotation for these extras and will expect to be paid in full. Again your agent may try to negotiate some of these extra charges but do not get disappointed if you have to pay the full price.
Together with the price list you will be handed over the payment terms. It is again customary that payment is spread during the construction period with the final payment to be made on completion of the building and possession of your property. Here there may be differences and some developers may ask for a larger down payment or more stage payments than others. Some will also be prepared to alter these stage payments to accommodate your finances. Again, here is where your agent can help and negotiate the best terms if possible.
However, when buying a property from a private owner the process may be different.
Once you have found the property you like you must secure it through an agreement that is legally binding between buyer and seller. The first step is that you give an offer of purchase in writing through your agent. It is advisable that this offer is backed by a deposit of around €6,000 to €20,000 to show the owner that you are a serious client. This deposit will be held by the agent in a special client account during the next days, generally a couple of weeks, until the private contract is signed. Should the offer not be accepted and negotiations end, the deposit will be returned to you.
The letter of offer should include the offered price, the duration of the offer with a time limit, the proposed payment terms and time for completion, what is to be included in the sale and whether it is subject to some contingency. A contingency is an offer with a condition or requirement attached to it and the agreement will only take place if the contingency is met. Sometimes there are contingencies with the offer, the counter offer or both. Some of these contingencies may be that you will purchase the property subject to some repairs being done or to the approval of your mortgage application for example, or the inclusion of some furniture, etc. The seller may decide to accept your offer, give you a counter offer or reject it. Once the offer is accepted then the next step is that a private contract is drawn up and upon signing it a minimum of 10% of the price is paid less the amount paid with the offer. It is customary that the completion of the sale will take place within 30-45 days.
As a buyer use the following guidelines:
Make a reasonable offer, it is likely that the seller will not respond if the offer is too low. Also he may not take you seriously and will be reluctant to give a counter offer. Find out what the real value is and also if the seller has turned down other offers. Do not give a rock bottom bid unless you are aware that the seller is open to them. If the seller is present during your visits to the property avoid giving your personal opinion about the property.
Make sure that you understand all the items included in the sale, for example furniture and fixtures. Although it is customary that items that are permanent attachments are included, make sure that they are part of the sale. However, if there are some special items such as a statue, lamp or chandelier, pictures and personal items, these will be normally excluded. Avoid discussions over a piece of furniture, which may have no real value to you, but it is valuable to the seller because there is an emotional value attached to it. We have often seen sales failing because of this. Let your agent do the negotiating.
It is also advisable to use a lawyer who speaks your language. The lawyer will check the land registry to make sure the property is properly registered and there are no liens or encumbrances and will prepare the private contract and also the public deeds of conveyance. If there is a mortgage it is customary that this is paid off and cancelled before or on completion when signing the public deeds in front of the notary.
As a seller use the following guidelines:
Price your house realistically and take into consideration how much you are willing to accept and also how long you are willing to wait. It is better to establish the right price from the beginning.
Avoid getting emotional and don’t be offended if the offer is too low. It is your agent’s obligation to submit any offer received. You can always reject it. Consider all items, terms and conditions of the offer before taking any decision. Make the best possible counter offer.
Avoid arguing over unimportant issues and particularly over fixtures and attached elements, which normally are included in the sale.
Be flexible if you have to compromise on time frame to accommodate the buyer’s wishes to move into the property and be prepared to consider making certain concessions.
Last reviewed on February 2014
01/06/2005 News and Articles