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Parents in law property

Parents in law property

Old Nov 3rd 2023, 11:07 pm
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Default Parents in law property

After two years on the market at a value I thought was 10 million forints too high it's finally sold at the same million forints less!
house sale contract signed but buyers needed a bank loan. First application rejected because of floor space despite property being 2,000m2. Second application proceeding but I'm alarmed no deposit was put down when house sale contract was signed. Currently prospective buyers are knocking through the kamra to garage to create additional living space so they can secure the bank loan. As mentioned no deposit has been paid to either my wife or Sister-in-law! When we bought our house we had to put down 50% and that came out of my personal bank account.
Is this normal?

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Old Nov 4th 2023, 8:13 am
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Default Re: Parents in law property

Originally Posted by FenTiger
Currently prospective buyers are knocking through the kamra to garage to create additional living space so they can secure the bank loan. As mentioned no deposit has been paid to either my wife or Sister-in-law! When we bought our house we had to put down 50% and that came out of my personal bank account.
Is this normal?
Do you mean that the prospective buyers are in the house doing works before ALL monies have been paid ?? That in my books is an absolute no,no. If they are in and something fails and they walk away then you will be left with a lot of expense to sort it out and probably a court case to try to get compensation.

10% is the typical deposit but it can be anything agreed upon in the contract. The deposit is paid on signing the contract with the remainder due on the date specified in the contract. Sometimes the full amount is paid on signing in which case possession is immediate having signed and paid. (I bought a flat by signing the contract then I walked to the bank with the seller, I transferred the funds and he gave me the keys - job done).
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Old Nov 4th 2023, 9:02 am
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Default Re: Parents in law property

Originally Posted by Peter_in_Hungary
Do you mean that the prospective buyers are in the house doing works before ALL monies have been paid ?? That in my books is an absolute no,no. If they are in and something fails and they walk away then you will be left with a lot of expense to sort it out and probably a court case to try to get compensation.

10% is the typical deposit but it can be anything agreed upon in the contract. The deposit is paid on signing the contract with the remainder due on the date specified in the contract. Sometimes the full amount is paid on signing in which case possession is immediate having signed and paid. (I bought a flat by signing the contract then I walked to the bank with the seller, I transferred the funds and he gave me the keys - job done).
Yes .... they are doing works on the house .... and Yes, no monies have been paid yet! I have told my wife many times they should have asked for 10% non-returnable deposit so if anything goes wrong they, my wife and her sister, keep it. I don't think Sister-in-law husband knows what's going on. He'd flip if he knew. The buyer is a builder and there's going to be six of them living there once bank loan goes through!

I have wondered if after the works are completed and the bank have a change in mind and the buyers has to pull out will my wife and her sister have to pay the builder for the improvements? I'm certain there's nothing in writing about this.

I originally considered buying the property and deceased mother-in-law had stated she wanted the house to remain in the family. I had drawn up floor plans for an extension and converting two outbuildings joined up to the house into living space but too many obstacles were placed to discourage me from going ahead so I backed out.



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Old Nov 4th 2023, 4:44 pm
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Default Re: Parents in law property

Our purchases / sales all included a deposit paid immediately on signing of contract, usually using the lawyer's computer to effect the transfer - and all the contracts had a clause that in the event of default / failure double the deposit amount became forfeit / payable.
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Old Nov 4th 2023, 5:14 pm
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Default Re: Parents in law property

Originally Posted by FenTiger
I have wondered if after the works are completed and the bank have a change in mind and the buyers has to pull out will my wife and her sister have to pay the builder for the improvements? I'm certain there's nothing in writing about this.
It depends what is in the contract. If there is nothing in the contract then IMO the builder is doing the work at his own risk and your wife and your S i L will have no liability, however I'm sure that the builder will try to give them a bill and may go to court to get paid (That court case IMO should fail)

You should read the contract to see what it actually says. E.g. if the contract says that the money is paid on a date then that is when you get the money - or the purchaser defaults and you will be entitled to sell to someone else having given due notice to the builder via a solicitor (but that will be an issue with the builder I'm sure) however if the contract says they will pay when the bank loan is available and they don't get a loan - they walk away and you can't sell the house because you have an open ended contract which the builder will have to agree to rescind - which he may do for a price.

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Old Nov 4th 2023, 5:20 pm
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Default Re: Parents in law property

Surely the onus of risk (in terms of the building work) should be on the buyer / builder - having proceeded without secured funding.
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Old Nov 4th 2023, 5:34 pm
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Default Re: Parents in law property

Originally Posted by Finknottle
Surely the onus of risk (in terms of the building work) should be on the buyer / builder - having proceeded without secured funding.
Yes if there is no contract - but the builder won't see it that way, otherwise it depends what any contract says.
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Old Nov 4th 2023, 5:39 pm
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Default Re: Parents in law property

Originally Posted by Peter_in_Hungary
Yes if there is no contract - but the builder won't see it that way, otherwise it depends what any contract says.
But the builder is the buyer, or have I misunderstood?

If so, would a contract really be executed which places the risk on the seller - quite extraordinary if so!
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Old Nov 4th 2023, 6:54 pm
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Default Re: Parents in law property

Originally Posted by Finknottle
But the builder is the buyer, or have I misunderstood?

If so, would a contract really be executed which places the risk on the seller - quite extraordinary if so!
I have not seen the contract! But my wife has said the format is better than how our solicitor drew up the contract for the purchase of our own house.

I studied Business Law 40 years ago so I am aware of the possible pitfalls if it all goes Pete Tong! I ain't dipping into my own bank account if asked!
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Old Nov 4th 2023, 8:04 pm
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Default Re: Parents in law property

Having myself been ripped off by a Hungarian lawyer, this does indeed sound very dodgy! In my case I was lending money to another expat but the loan was meant to be secured against his house. The lawyer did the loan contract but not the security one and the guy never paid me back!
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Old Dec 5th 2023, 2:37 pm
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Default Re: Parents in law property

Still no funds received!
I'm regularly asking about the latest but the feedback is zilch!
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Old Dec 5th 2023, 3:34 pm
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Default Re: Parents in law property

Originally Posted by FenTiger
Still no funds received!
I'm regularly asking about the latest but the feedback is zilch!
Is work still ongoing, or are they occupying the property?
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Old Dec 5th 2023, 9:06 pm
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Default Re: Parents in law property

Originally Posted by Finknottle
Is work still ongoing, or are they occupying the property?
Buyers are not occupying the property. I'm getting different answers every time. Last time I was told the buyers bank won't loan them the money unless the living area is extended. That's via the kamra to the garage but I can't see that extra space making much difference to getting approval. The garage roof is pretty low due to the house being built of a slope.

Three years ago I offered to buy it, look after mother-in-law, pay all mother-in-law every day bills, but Sister-in-law wanted a share of profit if we sold in the future after home improvements, extending property and buying her 25% share at the time. Fat chance! I think a massive mistake. My wife isn't happy with the situation because she's under pressure now.
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Old Dec 6th 2023, 3:10 pm
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Default Re: Parents in law property

Reading this from elsewhere in Europe, I'm amazed, and in my admittedly limited experience - it all seems rather dodgy. Hopefully everything will turn out ok.
There's no way I'd allow changes to be made on a property prior to full payment being received, or at least a significant deposit paid. I understand it's normal practice for the keys to be left with the agent or solicitor to allow them to visit with prospective buyers, but for the keys to be provided and left with a potential buyer without your consent just reeks of abuse. Even if the property was left unlocked, for structural alterations to take place without your consent, as already stated should be an absolute no-no!
On our purchase here we had to read and initial each page of the 30ish page contract together with the prospective buyer. As the contract was in French, there were just a few points I queried with my wife and the agent, and when these were clarified and I agreed to having understood, I added my signature. And of course the estate agent then handed us back the keys until the full payment had been confirmed.
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Old Dec 6th 2023, 5:21 pm
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Default Re: Parents in law property

Originally Posted by FenTiger
Buyers are not occupying the property. I'm getting different answers every time. Last time I was told the buyers bank won't loan them the money unless the living area is extended. That's via the kamra to the garage but I can't see that extra space making much difference to getting approval. The garage roof is pretty low due to the house being built of a slope.

Three years ago I offered to buy it, look after mother-in-law, pay all mother-in-law every day bills, but Sister-in-law wanted a share of profit if we sold in the future after home improvements, extending property and buying her 25% share at the time. Fat chance! I think a massive mistake. My wife isn't happy with the situation because she's under pressure now.
You really need to get hold of the contract and see what it says so that you know what you are up against and you can decide on your options.
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