Tuesday, February 17, 2009

First Time Buyer Trap or the ‘Contract Valuation Trap’

The 'Contract Valuation Trap'

Briefing on an issue in the Irish property market where buyers are unable to complete upon a purchase because lenders are revaluing properties before closing. Unlike the UK system, Irish property is bought by private treaty (generally) and people enter into unconditional contracts meaning they have to rapidly come up with the difference in cash or lose their deposit and potentially be sued to close on the deal as well.

Posted by karl deeter @ 04:06 PM (716 views)
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2 thoughts on “First Time Buyer Trap or the ‘Contract Valuation Trap’

  • this has been a constant thorn in the side of buyer and broker alike in Ireland over the last couple of months. If the contracts are signed the bank will pull a loan offer if the market value has dropped thus meaning clients have to go and negotiate again with the builder who wont budge on the price. This has resulted in a lot of unhapy consumers who find themselves either having to borrow from family to cover the shortfall on the property or risk being sued.

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  • Eternal Sceptic says:

    A classic case of buyer beware. But then the Irish property market is still in cloud cuckoo land and seems incapable of even a glimmering of understanding of Newton’s first law. By the look of what used to be open countryside in the SW, everyone and their dog seems to have become builders and speculators. I think many many of them are fixing to be severely burnt when reality finally kicks in.

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