Management/Agency Agreements usually have a one month notice period for termination – you cannot terminate at the drop of a hat (or a change in the direction of the wind).

Costs – the agent has spent money on advertising either hard copy or internet, these are part of the reimbursable costs to the agent regardless of whether or not they have found a tenant.

The property has been on the market for a month – this is not unusual even in periods of low vacancy. Prospects are just that, potential tenants, they do fall over for all sorts of reasons, the agent is doing its job.

You can advise the agent that you have withdrawn the property – be honest. You may have to pay a letting fee regardless.

On the other hand, willyour family member make a better tenant?

Why did the agent let it go for 6 weeks?

Jean, the biggest issue is that you will not have any equity in the property regardless of how much you are paying back to the vendor until the vendor transfers the title into your name. Can you not get finance through traditional means or another acceptable vendor finance deal?

Also look at the Department of Fair Trading/Consumer Affairs etc in your state for issues relating to this type of ownership. I am assuming this is some form of 'rent to buy' or the like. The biggest risks being if you are in default then you lose anything/money that you have put into the property as you do not appear on the title except by way of a caveat (if the vendor permits one to be lodged) and also a risk in the case of vendor mortgage defaults where you would become the bank's tenant.

It will depend upon your solicitor and whether or not it goes beyond the 'normal' conveyancing service.

Does anyone know what sort of payback period I should get on my motherinlaw & what the ROI should be? (Back to serious mode).

I was discussing a similar issue with a potential client earlier today. One of his suppliers had provided some top quality product recently from Qld which cost about double what he was previously paying for local goods, then given another kg of a chinese sourced product.  The first being the best he had ever tasted, the second left a bitter aftertaste but was acceptable (and less than the original product).

His supplier acknowledged that you don't make your profit in the sale, you make it at the time of purchase. Real estate & development is not different, if you pay too much for the property, you will never make it up.

There is no way of negotiating for these items unless they were deliberately hidden and further inspection was required to uncover them. Your main areas which are negotiable are things like pest infestations/termites, poor building practices/non-compliance otherwise you would be whistling in the wind and any solicitor worth their salt would be telling you that (or charging you $350++ per hour for the privelege).

Did the vendor get a 2nd or third agent to give a market opinion or just run with the managing agent (who may have had a buyer lined up already)?

A few questions – did the current agency put the present tenants in place? Did they do a preliminary inspection at the time of taking up the management? Did the agency undertake its obligatory (required) annual property inspections? If they didn't, then they could be in breach of the Fair Trading/VCAT licensing requirements (which state are you in?)

Did the agent take any photos during the tenancy?

This is part of the agent's responsibility, if you can show the previous condition reports showing that the railing was intact, then you can pinpoint the blame and get the agent to take it out of the bond.