Real estate woes (advice)

**Charliewool** · 07-07-2006, 11:27 AM

With our vast array of occupations & professions on FFA, I thought someone here might be able to help with my dilemma.
I have had my home on the market since March. After 6 weeks of open days & inspections finally we had an offer that was appropriate, and we accepted their offer. Contract was signed, albeit "subject to finance", $25,000 deposit paid (5%), and settlement asked (by the buyer) was 30th June. Our agent put "SOLD" on the ads on net & in newspaper.
2 weeks before settlement their conveyancer contacted ours and asked for an extension due to finance paperwork not having been finalised. We agreed.
At 4pm on the last day of extension they asked for another extension due to further finance complications and we reluctantly agreed again.
This has happened TWICE more, with settlement pushed out til July 31st.
Meantime there have been 2 valuation inspections by banks on buyers behalf.
Today at close of business is the final day of the current extension to make the sale "unconditional" and I can see another extension being asked for!

What do I do? Do I grant it? or do I tell them to take a hike, which means starting from scratch and putting the property back on the market?

There is also the small matter of both myself & partner having both signed leases on rental properties, and myself having moved into mine. A mortgage, a lease, child payments and all the associated costs with managing THREE homes is NOT too appealing!
I have also been informed that the buyer gets his deposit back because of the Subject to finance clause.
Doesn't the vender have ANY rights at all?

deesun · 07-07-2006, 11:45 AM

The old rock and a hard place trick eh. I think it's time to say put up or p155 off (nicely of course). Push them back instead of them pushing you. Tell them it's back on the market till they cough up.

henry 351 · 07-07-2006, 11:56 AM

The Vendor only has a right if the purchaser is in default. As you have agreed to the finance clause extensions, they are not in default. (They would be in default if they failed to settle for example, entitling you to keep any deposit monies)

If I were you, I wouldn't allow any further extensions. Put the property back on the market, you NEED a result. If they come good and get their finance, they can buy your place unconditionally. If someone else comes along, well goodluck to the new purchasers and you.

Sam_Boss260 · 07-07-2006, 11:58 AM

My 2 cents worth, if they ask again, clearly state that they have had many opportunities, and lets face it, getting finance should not take that long.

So, if they ask for another extension, put the pressure on and say that you have had other people through. So they either go unconditional, or get out.

The other alternative, is that you only accept the extension, but only if the buyer gives you a non-refundable deposit... ie they give you 5 grand for extending (which will cover your costs of holding the property for them.) if they end up buying it, it comes off the price. If they pull out, then you keep the 5 grand.

Lets face, you've held the property for 2 months for them, and you could have sold it by now...

**Charliewool** · 07-07-2006, 12:06 PM

Quote:

Originally Posted by deesun

The old rock and a hard place trick eh. I think it's time to say put up or p155 off (nicely of course). Push them back instead of them pushing you. Tell them it's back on the market till they cough up.

2 extensions back we tried hitting them with "interest penalties" for the duration of the extented settlement and they immediately said they were pulling out! (should have saw the writing on the wall then!) We relented, thinking the old "bird in hand".
Their letter of extension always finishes with.. "Please note, this letter is to be treated as our client's notice of termination should the vender decline the extension"
I just can't comprehend a motive on their behalf? Why would they waste their time if they haven't got the money? and why tie up 25 grand in a trust fund if they aren't genuine?

Racecraft · 07-07-2006, 12:35 PM

I am buying my first home at the moment and although I am not an expert a few things come to mind as per my situation

I didn't have to pay the 5% deposit until the 14 day "Subject to Finance" period was due.. I put a $1000 down "payable when Buyer signs this contract" which was done the same day the owner accepted my offer.. The balance of the 5% deposit was "payable on Finance Approval"

I cant understand why they would of put up the 25k when according to my contract anyway they are not obligated to until they have approval for the rest of the coin..

I can't find the exact paragraph here atm, but if memory serves me the buyer is charged .25% of any monies paid should they withdraw after the 72 hour cooling off period. In your case it would cost them $625 to mess you around..

Have you spoken with your agent? What does the agent think? I'd let him/her sort it out because they would no doubt like the 3% commision from your sale...

Racecraft · 07-07-2006, 12:39 PM

I cant seem to edit that post :(
But what I meant to say here was :_

"I cant understand why they would of put up the 25k when according to my contract anyway they are not obligated to until they have approval for the rest of the coin.. As they are asking for an extension on "subject to finance" period of 14 days? and the 5% would not be required until the new date

Yummy Mummy · 07-07-2006, 12:45 PM

Henry 351 is on the money. Don't accept another extension, give them the deposit back, and if they get their finance sorted, they can put in an unconditional offer.

Either that or pm me, I'll give you my contact details to pass on to the estate agent and I will sort the finance for them! ......man, I'm just like an ambulance chaser.

henry 351 · 07-07-2006, 12:47 PM

The cooling off period doesn't apply over $250,000 and its only good for 3 business days after you sign the contract.

All interest on the deposit in the trust account goes to Bracksy.

jimt3te50 · 07-07-2006, 12:49 PM

My guess is they could even be delaying the purchase for the extra capital growth on the property before settlement- if it's been a few months now since the initial offer, then even at 10% p/a that's an extra $12,500 on a $500k property for nothing..... It could even be the basis for the deposit if they don't have it- it is a known investment tactic.

If I were you I'd endure the financial slog and go again- stuff them. You'll be better off fiancially for it.

Scott · 07-07-2006, 12:50 PM

Throw it on the market again. The buyer is obviously keen for the place but is having to jump through more hoops than they'd either expected or been told about. Typical of overzealous mortgage brokers. If they get their finance in order, they will still be quicker than anyone else with the $$ anyway. If they can't get the $$, at least you are not wasting anymore time.

**Charliewool** · 07-07-2006, 01:08 PM

5 mins ago my conveyancer phoned to say she's received a fax requesting ANOTHER extension (this is their FIFTH!!) til close of business on Weds 12th (settlement still 31st) Their excuse being "documents not having been fully signed for finance"
SO close???
What do I say back this time?
I think for 3 days I have to agree??

Re: Racecrafts comments... Exactly, they put $1000 holding deposit on signing contract THEN $25,000 which is not legally required. This is why I've thought them genuine!

Looks like ANOTHER stressed weekend to wait!

henry 351 · 07-07-2006, 01:08 PM

Quote:

Originally Posted by jimt3te50

My guess is they could even be delaying the purchase for the extra capital growth on the property before settlement- if it's been a few months now since the initial offer, then even at 10% p/a that's an extra $12,500 on a $500k property for nothing..... It could even be the basis for the deposit if they don't have it- it is a known investment tactic.

I doubt that with almost $26,000 in stamp duty to pay...

henry 351 · 07-07-2006, 01:16 PM

Quote:

Originally Posted by charliewool

5 mins ago my conveyancer phoned to say she's received a fax requesting ANOTHER extension (this is their FIFTH!!) til close of business on Weds 12th (settlement still 31st) Their excuse being "documents not having been fully signed for finance"
SO close???
What do I say back this time?
I think for 3 days I have to agree??

Re: Racecrafts comments... Exactly, they put $1000 holding deposit on signing contract THEN $25,000 which is not legally required. This is why I've thought them genuine!

Looks like ANOTHER stressed weekend to wait!

There is nothing to stop the selling agent showing through prospective buyers this weekend. Any offer received over the weekend can be subject to the first offer NOT becoming unconditional by the 12th.

I can't believe they're doing nothing to help. If they can't help you they don't get paid, it's that simple. It should be motive enough for them to pull their finger out and give their thumb a go.

Sam_Boss260 · 07-07-2006, 01:21 PM

I would be reading the writing on the wall..... first of all, finance papers or loan documents don't have to be signed before finance is approved. That is done between going unconditional and the settlement date. Banks will give a letter or approval, which is all that is required at this stage. And that takes around 7 working days. If they are stuffing you around now, chances are they will stuff you around five more times by pushing the settlemant date back. And it is the settlement date when you get your $25 grand deposit and the balance.

At the end of the day, it's your house charlie wool, just do what your gut feel is, and don't be scared to tell them to get stuffed... plenty of other buyes out there.

XRchic · 07-07-2006, 01:22 PM

Quote:

Originally Posted by henry 351

I can't believe they're doing nothing to help. If they can't help you they don't get paid, it's that simple. It should be motive enough for them to pull their finger out and give their thumb a go.

Yes, that is the problem I have too. Its quite disgusting.

I think you should put the house on the market, or look at any other offers you have had? Im assuming that you have had more than one interested party look at the place?

I really do think your agent has got to stand up for you and sort it out with their agent etc, and just tell them its not good enough.

ronwest · 07-07-2006, 01:48 PM

Quote:

Originally Posted by henry 351

If I were you, I wouldn't allow any further extensions. Put the property back on the market, you NEED a result. If they come good and get their finance, they can buy your place unconditionally. If someone else comes along, well goodluck to the new purchasers and you.

Spot on!

Quite often buyers can't get their act together in a timely fashion (arranging finance; selling prev property; waiting for Aunt Clara to die and claim inheritance) but as you've allowed plenty of time for their contingencies it's now time to pull the plug on them.

pauljh74 · 07-07-2006, 02:03 PM

If you're willing to grant an extension, then do so but put a condition on them - no further extensions will be granted. So if it is as claimed - they haven't completed the finance documents, but it is about to happen, then they will accept it. If they have no finance arrangements and are still chasing them, then it's time to give them the flick.

Thunder · 07-07-2006, 02:12 PM

If it were me i would NOT grant them an extention and put the property back on the market. They know they can push you so they will keep trying.

If they sort out their finances tell them it still available but your only willing to offer an unconditional contract.

Your real estate agent should not have put a "sold" sign up because the contract was conditional. By him doing so he has prevented anyone else from making an offer.

**Charliewool** · 07-07-2006, 02:34 PM

Quote:

Originally Posted by henry 351

There is nothing to stop the selling agent showing through prospective buyers this weekend. Any offer received over the weekend can be subject to the first offer NOT becoming unconditional by the 12th.

I can't believe they're doing nothing to help. If they can't help you they don't get paid, it's that simple. It should be motive enough for them to pull their finger out and give their thumb a go.

Agent is telling me It's illegal to offer a property for sale when its still under contract of sale! (Including showing people through)

XA Coupsta · 07-07-2006, 02:50 PM

Quote:

Originally Posted by charliewool

Agent is telling me It's illegal to offer a property for sale when its still under contract of sale! (Including showing people through)

Nah thats incorrect. Well im in QLD anyway (and im a very interested reader of your thread!).

I have my property on the market and am looking at the moment too, so going through everything that you are talking about and more.

We viewed a property that we liked, but then it was under contract. And we were asked if we'd like to also put a contract on it that is 'behind' the original one if it falls over. OR if the original contract keeps asking for an extension, then the seller (you guys) can say "Nup - there is another contract waiting - we'll bounce yours and accept theirs".

Now this is for conditional contracts. Im pretty sure if it was unconditional its then illegal to still offer the property for sale.

Be sure to keep us informed because as I said im going through it too......

jimt3te50 · 07-07-2006, 03:30 PM

Quote:

Originally Posted by henry 351

I doubt that with almost $26,000 in stamp duty to pay...

The fact that he's had the house appraised twice makes this a very real possibility. The capital growth in the interim could well be above my example- I have a house that's gone up 23.9% in the last 12 months- on a $350,000 property that's nearly $21,000 in 3 months- enough for a deposit for most investors, considering some banks will lend 110% of purchase price.......

I'd decline the extension...........

**Charliewool** · 07-07-2006, 03:54 PM

Just as a side note... The buyers are from W.A. and are relocating to Melbourne. Could it be that WA does things a little "s l o w e r"?

:

Here tis... Note date of "SALE"!

http://www.realestate.com.au/cgi-bin...=&fmt=&header=

Sam_Boss260 · 07-07-2006, 04:39 PM

Mate, nice place. I doubt that this would be an investment property... geez if I was in Melb I'd buy it.

Good luck with it..

XRchic · 07-07-2006, 04:47 PM

That is a very nice place mate, and I suspect a good price for Melbourne too!

Best of luck mate, it must be so frustrating. Anything to do with real estate seems to be full of dramas and details and problems. Lets hope you can sort it all out soon and get it off your mind.

I really do think that your agent needs to fight for you - that is their job as per the definition of agent... they are acting on your behalf, legally. Solely for your interests - you are paying them to do that role! Im sure they will take their percentage at the end of it all! Make them earn it!

Good luck!

brenx · 07-07-2006, 04:53 PM

I'd be declining the extension.What you may find is there are looking for a bank that will loan them enough to buy your home. What they maybe coming unstuck with is;

1) The bank may only be allowing a loan of 90% of purchase price inc mortgage insurance etc etc
2) The paperwork for your house may have been signed @ $250,000 for example but the bank might be saying the house is only worth $220,000.

If 2 is the case? They will be going through the hoops of various banks to find out the one that will lend an appropriate amount. Problem is if 2 is the case? They may never find one.

I've had 2 happen on my current home. I had real estates throught my home stating the my home could be sold for no less than $390,000. When it came to refinance the bank valued @ $300,000. We changed to a bank that valued @ $310,000 so we were able to refinance.

My home is on the market too but I'm 1) not in a hurry to sell. The longer I sit the more it's worth. 2) I'm not stupid enough to sell for less than what the house cost to establish unlike other people in my area are doing. It's these idiots that are making it hard to sell my house.

The idiot across the road bought for $299,000 now 3 years later he's selling for $289,000! What a fool. The interest charged on a loan of that type would be $15,000-$25,000pa. Real estate agents around here are bs'ing home owners making them believe their houses are worth less $. Since when does a house ever drop in value? On my last house I doubled my money in 5 years.

XRchic · 07-07-2006, 05:01 PM

Quote:

Originally Posted by brenx

I'd be declining the extension.What you may find is there are looking for a bank that will loan them enough to buy your home. What they maybe coming unstuck with is;

1) The bank may only be allowing a loan of 90% of purchase price inc mortgage insurance etc etc
2) The paperwork for your house may have been signed @ $250,000 for example but the bank might be saying the house is only worth $220,000.

If 2 is the case? They will be going through the hoops of various banks to find out the one that will lend an appropriate amount. Problem is if 2 is the case? They may never find one.

I've had 2 happen on my current home. I had real estates throught my home stating the my home could be sold for no less than $390,000. When it came to refinance the bank valued @ $300,000. We changed to a bank that valued @ $310,000 so we were able to refinance.

My home is on the market too but I'm 1) not in a hurry to sell. The longer I sit the more it's worth. 2) I'm not stupid enough to sell for less than what the house cost to establish unlike other people in my area are doing. It's these idiots that are making it hard to sell my house.

The idiot across the road bought for $299,000 now 3 years later he's selling for $289,000! What a fool. The interest charged on a loan of that type would be $15,000-$25,000pa. Real estate agents around here are bs'ing home owners making them believe their houses are worth less $. Since when does a house ever drop in value? On my last house I doubled my money in 5 years.

Yeah, you are right. Its best to sit on it a bit longer if possible. We paid $350K for ours a year ago and it has appreciated significantly since. We happen to be in the biggest growth area in the state at the moment though, and the area is just about out of land.

Its a couple of years old, 3 bedrooms, 2 bathrooms, double lockup garage, double car SHED out the back with drive through access, 850m2 block, massive rumpus room with direct outside access, kids play area with outdoor access too, tiles throughout, ducted reverse cycle air con, the whole house is set up for internet access through some router thingy in the roof, and it even has an internet access point in the shed.... heaps of stuff. Im thinking it might get a bit more than $350K now.

We are not selling any time soon though, despite the mortgage being out of control at the moment... tempting though.

But the dramas we went though to buy it.. charliewool, I sympathise... buying and selling real estate is just a headache!

Black XR6 · 07-07-2006, 05:13 PM

The multiple evaulations are probably from seperate banks the buyers have approached. You have probably made up your mind already but I would grant them the extension on the proviso that if they are not ready at the end of this extension the house goes back on the market. The deal is off, and if they end up getting their finance together then they can make another offer later.

I have bought and sold two houses including building one through a builder. I would recommend anybody buying or selling to get hold of a book called "dont sign anything" by neil jenman. It will really open your eyes to the real estate game and the tricks and tactics used. Buy it at most book stores like angus and robertson etc. WELL worth it.

brenx · 07-07-2006, 05:14 PM

Quote:

Originally Posted by XRchic

snip

But the dramas we went though to buy it.. charliewool, I sympathise... buying and selling real estate is just a headache!

A very appropriate comment. I find real estate agents are very similar to car salesmen or women. You have to stand your ground.

Selling a home is like asking a carsales man/woman for a decent trade-in

It's like pulling teeth.

XRchic - Our agent is weird they sold an unfinished 4 bedroom 21sq home for $320,000 around the corner from my house. Imagine how small the rooms would be. This home had nothing but ducted heating! Due to the small house size it looked like it had land ;)

I'm sitting on a 3yo 31sq home also not quite finished. Ducted heating and cooling, spa, 2 bathrooms, practically a 5 bedroom house. One room was converted to a study. I spent roughly 30-40k establishing bits and paying for options that I could afford. I didn't go for the backyard option as such. I wanted my land on the sides. I have my garage on the opposite side of the house. That way the rear garage door doesn't open onto the proposed already concreted pergola area. I hate houses planned like that. I can fit 4-5 cars down one side of my house (behind the garage) and I have the pergola area concreted ready for a pergola. The side behind the garage needs completion. I planned concrete and a carport. If I don't sell? The concrete and carport will happen ;) I've also got double gates on the pergola side to I have access to both sides of the house unlike quite a few others. I'm tempted to list and sell the house myself. That way I can inform the buyers of the useful points and why things were done a particular (practical) way.

Bearman · 07-07-2006, 05:16 PM

Clearly they want out and they're trying to get YOU to knock it on the head so they get their deposit back. Ask for PROOF that their finance has not been approved. If they have not stipulated on the contract which finance company will be providing the money all you need to do is prove that a company will take them on and make them aware of it (even if the interest rate is ridiculous). They're playing games.