Home Economics
Sinead Ryan answers your property questions
We’ve gone ‘sale agreed’ on our house but, unfortunately, the property we’re moving to has fallen through and it has been taken off the market, leaving us having to find another home. We’re really upset about this as it took ages to find our perfect home. Our problem is that the buyers of our house are chasing us to close the sale — how long can we delay legally? This is unfortunate. Getting into a buying/selling triangle often poses problems like this. But the options you have depend on whether or not you have signed a contract with the purchaser of your home. You say you’re at the ‘sale agreed’ stage and, if so, then this shouldn’t pose a problem, as Susan Cosgrove of Cosgrove Gaynard Solicitors points out.
“If you are only sale agreed on your own sale, you can insert a clause in the contract to state that the closing date will be dependent on the closing date of your own purchase,” says Susan. “Essentially, there would be no fixed date until you find a replacement property to buy. The comfort for your purchasers is that they lock in the sale and the price, but they will have to wait on a closing date. They may seek a long stop date, i.e. six months or some similar time frame, and if you have not found a replacement property to purchase by then, they can walk away and their deposit is refunded in full.
“If, however, you have signed contracts already with your new purchaser, the situation is much different. There should be a fixed closing date in the contract and if you do not close by that time frame, your purchasers can issue what is called a Completion Notice to have you close within 28 days. If you do not close within that time frame, they can walk away from the sale and, again, their deposit is refunded in full. However, they also have the option to issue proceedings to force you to close.” I have around €300,000 from the sale of my house coming through, which I want to invest for around a year. I have moved to the UK for work and they are providing me with accommodation during this time. When I move back, I’ll buy a house. Where can I get both a decent return and a safe haven for this cash? I’m reluctant to leave it just on deposit since the rates are so terrible. I wouldn’t start by confusing ‘investing’ your money with ‘minding’ it. This cash is ear-marked for something very specific — i.e. a future house purchase — and for that reason, I expect you don’t really want to be taking a risk with it.
That said, deposit rates are so paltry that I understand your frustration at holding this significant sum in a bank. Between a decent return and complete security, you’re going to have to pick one or the other, I’m afraid, and I’d opt for the safety net.
You really don’t have enough time to get into ‘investing’ it. However, should your time scale change and you find you are prepared to wait three to five years or longer, then by all means, investigate your investment options with a feebased broker.
A better return is certainly possible, but it would involve, in almost every case, a level of risk.
For the meantime, you will benefit, albeit only slightly, by keeping your money in a fixed term or notice, rather than a demand, deposit account. Permanent TSB will currently give you AER 0.75pc (€2,250 gross interest) for 12 months fixed, KBC 0.5pc (€1,500), while Bank of Ireland will offer 0.35pc for a 90-day notice account (€1,050). Dirt payable at 39pc.