I’m in my late 20s and I’ve been saving to buy my first place. On a single income I’m hoping to buy just a one- or two-bed in a Dublin commuter town. Recently I was talking to my cousins in the US, and they said that in addition to the offer they made for their house, they offered the seller 60 days in the house free of charge after the sale as part of a “post-occupancy agreement”. Because their seller was in a chain this was very appealing to them. I currently live with my parents so I could potentially offer a seller extra time in the house to make my offer more attractive. Is it possible to offer a sort of “occupancy agreement” in Ireland – either with a specific amount of time free of charge or with paid rent?
On first reading, my immediate reaction was a flat no. But upon reflection, given the state of the property market at this time, I think it is well worth considering. However, I might still disagree on the important detail of how this “post-occupancy agreement” might work.
In fact, I think it would be better to call it a “preoccupancy agreement”, for that’s what it is: an agreement allowing the sellers to remain in the property after the sale is agreed but before the sale has closed. Or, to put it another way, you agree an extended closing date.
Speaking to a number of agents, particularly in the Greater Dublin Area, a recent feature of the market is the number of “chain sales” taking place, where the sellers are making an onward transaction. For example, a couple want to trade up/down, but there’s hardly anything suitable, and anything that is, they won’t take their offer unless they are at least sale-agreed. And they don’t want to put their own property on the market until they find somewhere else. It’s the classic catch-22 situation; they can’t offer unless they have a buyer, and they can’t give their buyer vacant possession as they don’t have their onward purchase lined up.
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Attempting to co-ordinate a sale/purchase transaction is very difficult at the best of times. So I think you should say to the agent for any of the properties you’re looking at: “I have my loan approval, I’m more than happy to go sale agreed and willing to wait a number of months before the sale closes.” As you’re mortgaging the property, the bank will require vacant possession on closing. So instead of closing the sale and leaving the sellers in the property (irrespective of the arrangement), which is something I wouldn’t recommend anyway, you agree to sign contracts but have an extended closing.
There are shortcomings/risks to this for both of you; primarily, a change in either of your personal circumstances may warrant the deal void. People need certainty and never more so than in a property transaction. Buyers need to know that if their offer is accepted, and sellers need to know that if they accept that offer, the deal will conclude.
Unfortunately, illness, job changes and unexpected events happen that can cause a fundamental rethink. The longer the closing date, the greater the possibility of the unexpected occurring. You will both need to commit to the proposal. The only workable way I can see is exchanging contracts and having a “close no later than” clause. Otherwise, it’s a laissez-faire arrangement that you can each walk away from with neither having a responsibility to the other.
Ed Carey is a residential estate agent and a member of the Society of Chartered Surveyors Ireland
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