Hi my partner & I cannot pay the deposit on a investment property that we were intending to go into. things have changed dramatically and over the past couple of months we dont know what to do. we had all good intentions going into the purchase but with what has happened there is no way we can do it.
what assistance is there or more to the point what can the seller do if we notify them of our circumstances basically saying we cant afford to do this any more????Depends on if you own other property with equity.
You could then get a deposit bond from a bank based on the fact that you could borrow the deposit amount from existing equity in other property.
You might be living in a house now that has heaps of equity that you are not fully utilising.
It is not usually recommended that you cross secure other property but it might be a way out of your situation..
Or you might be able to get a line of credit set up against the house you live in that has heaps of equity and borrow money for the deposit on the second house.You may be able enquire with the vendor to see if you can get vendor finance for the deposit from the vendor. Usually you offer the full asking price being asked by the vendor for the provision of vendor finance.
Did you have a subject to getting finance clause in the contract because if you can't get finance due to your circumstances you may be able to use the clause to get out of the contract.
Assuming the contract is subject to finance, a finance declination letter will likely get you out of trouble, and avoid any legal action from the vendor.
depending on the contract although it sounds to late you may be able to get out on the building and pest inspection
Thanks for the feedback – to answer some of your questions –
Looked into the deposit bond really cant be achieved.
No subject to finance condition from the time we signed the O&A to what has recently happened in the world there was no doubt we could place the deposit down. lesson learnt on that one for sure.
so i guess i leave it to the vendor now regarding what actions they may take. what sort of compensation could be applicable? the one thing that i feel is kind of on our side is that the apartments here in WA in the city are still been purchased and i hope we come out of this ok.
any other thoughts comments apart from the lesson to be learnt from this??
Bardon – the site is not even ready for site works yet. the building will be ready in 2 1/2 years time. so lets say we some how get a deposit how would this work?
thanks
Worst case scenario, you could be liable for any loss incurred by the seller, ie the difference between your contract price, and the price the apartment can now be sold for. (if any) This assumes the seller will take legal action, which often doesn't happen.
I would have a solicitor take a look at the contract, it's often surprising how many loopholes they can find to get you out of a contract, as the majority of contracts are often poorly written.
If it is the standard form sales contract, unless they go for specific performance you will definitely lose your deposit as a minimum (probably up to the 10% if you didn't negotiate for a smaller deposit).
Thanks again.
I will go to a solicotor to have read over it.
some points for thought: 1/ off the plan purcahse 2/ deposit is not yet due (no money exchanged yet) 3/ approx settlement 2 /12 years time.
many thanks again. any other points to consider?
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