My wife and I are in the lucky position of having a two-bedroom apartment which we bought some 15 years ago as an investment, but also as a possible plan-B option. Now we are both in our mid-70s and are considering downsizing to this apartment from what is now our oversized four-bedroom home where we have lived for the past 50 years.
Our four children have moved on and none have need for this property. We are seeking advice with a few questions on how we can manage the move with minimal stress and complications.
- We will require very little if any of our current furniture for the already furnished apartment. Is there a possibility that we could sell that property as a ready-to-live-in home for the new owner?
- Can we conduct the sale without having to advertise it?
- Can we restrict the sale to a cash-buyer to avoid delay of them waiting for mortgage approval?
- What are the essential legal issues we need covered to avoid delays in the conveyancing process?
- What are the tax implications of selling our current home and using our investment property as our new home?
- Are there any other issues that we need to consider?
Our current home is probably worth about €400,000. The apartment which we originally purchased for €190,000 may be now worth about €300,000.
Congratulations on having had the foresight to purchase an investment property which could also provide you with a suitable home for your later years. It now looks like your plan B will turn out to be your plan A. I presume the apartment is vacant and you can move at a time of your choosing. If not, requiring the property for your own occupation is a valid reason for getting back possession. I also presume your mortgage is cleared on the house and the deeds are with you or your solicitor.
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The Society of Chartered Surveyors Ireland (SCSI) together with the Law Society have recently published a consumer guide entitled “Speed up your property sale – a guide to avoiding the most common delays”, which is aimed at anyone considering the sale of their home. It will help you to identify and hopefully avoid potential delays in selling your property.
Presuming the legal considerations are in order, it is important that any extensions or alterations carried out to the property have compliance certificates with planning and building regulations. The main culprits are attic conversions, front porches and boundary/mapping issues. You’re essentially thinking, “what was done to the house since we’ve been here”. It would be a good idea to engage a building surveyor to prepare the certificates.
Then you need to consider the practical aspects, such as the presentation of the property. Does the house need cleaning, redecoration or modernising for example? But you also need to be aware that some upgrades can be costly. I tend to start with the basics: decluttering, cleaning and kerbside appeal. You should also engage an estate agent at this point. Check the SCSI website for agents in your area and select one you can work with.
There’s no reason in this market why a sale should be particularly prolonged or difficult. Demand is very strong due to the shortage of supply and once the house is properly marketed and priced there should be good interest.
Regarding your specific questions:
1. You could offer the property for sale with the furniture included, but I don’t recommend it. All of a sudden, the negotiations become about removing the sofa in the sittingroom and keeping that table in the kitchen (or was that the other way around), forgetting about the house itself. You are better to offer the house under normal conditions and deal with the furniture separately. Kitchen appliances are usually included as a matter of course. Sometimes the eventual buyer will take the furniture and, if not, there are several disposal options.
2. You could conduct the sale without advertising, but again, I don’t recommend it. Occasionally agents will have a buyer off-market, but to ensure you’re getting the best price, you should offer it for sale on the open market.
3. Cash-buyers can be quicker, but I wouldn’t necessarily eliminate a mortgage-buyer. Importantly, a cash-buyer is only that when they have the money in the bank and it’s ready to hand over. It isn’t someone who is “just about to close” on the sale of their own home and who will have the money to buy your home then. You can have cash-buyers with a slow solicitor, or mortgage-buyers with an efficient solicitor. Your agent will talk to the bidders, establish their suitability in the process and make a judgment call in consultation with you.
4. I’ve highlighted the main legal/conveyancing issues, and an early instruction to your solicitor to prepare contracts now would be advised – don’t wait until you’re sale-agreed.
5. I do not believe there are tax implications with your proposal. The sale of your principal private residence, where you’ve always lived, does not attract capital gains tax and as you already own the apartment, there are no further costs of acquisition, and so on. I presume all local property tax is up to date.
Finally, there is usually an unexpected “bump in the road”, but once you keep focused on the task at hand, almost all the issues that may arise can be dealt with.
Ed Carey is an estate agent and member of the Society of Chartered Surveyors Ireland
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