Hi All,
Just have this predicament for you. What would you do?
It is a long one.
A person has signed has signed a contract on a property. It is due to settle in the next couple of days. Finance has been formally approved and the vendors advised of status, therefore the contract has gone unconditional. Finance was approved by the due date.
The person has applied with a lender that does not process the FHOG, therefore needing these funds before settlement, then once settled will receive the FHOG when processed, about 3 weeks. The person thought a relative would lend them this money for the 3 weeks.
The day before formal approval of finance, the person was informed by their relative that they could no longer lend this money. So, the vendor was approached to lend this money, for 3 weeks. The vendor agreed.
A week went by clarifying with the vendor that the FHOG would take 3 weeks to process. (The vendor after verballing agreeing started research in when and how the FHOG is process. Some one told the vendor it could be done by solicitors and then they were informed it would only take 10 days to process. All incorrect.) It would take 3 weeks after settlement to process.
After last communication with the vendor and clarification of the process of the FHOG, it was still given the OK to proceed to settlement on the these terms.
Everthing seemed still OK!
Then next day, recieve phone call from buyers solicitor saying the vendor will not sign the agreement for the FHOG request and does not want to proceed. This was done by a message left with the solicitor’s secertary.
Now the vendor has travelled interstate and is unreachable. Finanly contactable and informs all parties that another contract has been signed on the property. It was signed the day after the message was left. (Which will probably be proven that it was signed even early, when discussing the FHOG)
Their reason is that they did not want to wait for the FHOG and therefore they went and signed another buyer. They assumed the person could not come up with the funds, that’s why they signed the other contract. Not only that, it is a better deal by the other purchaser. Anyway, the 1st purchaser has come up with the funds and is ready to settle. The vendors still think they are in the right.
Now the property is due to settle to the first purchaser in the next couple of days. Which the vendors will not be ready for.
So, the 1st purchaser can sue the vendor and put a caveat on the property. This costs approx $8000 min to do. They will only get 50-60% of that back if they win. Now, if they sue, the other buyer will more than likely sue as well. It then, comes done to a matter of who the vendor, would like to sell the propety too, and who they would be liked to be sued by.
So, if the 1st purchaser sues, and win, they will either end up with the property or a large sum on money. But the property now cost further legal costs.
If the property is already sold to the other purchaser, the 1st can still sue for damages and if they win, will end up with a large sum of money.
The risk is $8000 min to lose.
Now, keep in mind the 1st purchaser doesn’t have many funds available for legal costs.
What’s your thoughts?
I think it could end up to be a case of small guy loses again.
If they had the funds they would sue to the full extent of the law.[8D]G’day…
Who told you that it costs $8,000 to register a caveat? Could be done for less than a couple of hundred dollars.
You have a problem, in that your discussions with vendor re FHOG appeared to have not been backed up in writing.
Billfromoz
Billfromoz
1)$8000min is legal cost for placing caveat, lodging claim with district court, solicitors fees etc..2) It was sent to the vendors but did not want to sign. But that shouldn’t matter anyway, the contract has gone uncoditional and the 1 st buyer has now got the funds and is ready to settle, the vendors are not ready.
In regards to the FHOG it was only asked to the vendor, it was not a condition of settlement or the contract.
The client has done everything right.
Surely lodging a caveat will be sufficient to encourage the vendors to settle with the fist buyer.
The second buyer will not be able to settle with the caveat in place. Am I right?
This should prevent the need for litigation. As Billfromoz has indicated, this will be no more than a few hundred dollars.
The second buyer will of course have grounds for ligation.
Wayne
Quote:Billfromoz
1)$8000min is legal cost for placing caveat, lodging claim with district court, solicitors fees etc..2) It was sent to the vendors but did not want to sign. But that shouldn’t matter anyway, the contract has gone uncoditional and the 1 st buyer has now got the funds and is ready to settle, the vendors are not ready.
In regards to the FHOG it was only asked to the vendor, it was not a condition of settlement or the contract.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Wayne and I are both correct. Whack on a caveat…bugger all $$$. Let the vendor get sued by the second buyer….Billfromoz
I just had a thought with regards to coming up with the $7K for the deposit. It could have been done through a Deposit Bond. We recently did this and a deposit for $19K through the deposit bond company cost us approx $225. We figured it was cheaper than redrawing funds from our PPOR mortgage. Deposit bonds mean that you don’t have to come up with the money before you settle. Our mortgage broker arranaged it for us.
RE: FHOG – we got ours 3 days after settlement on our PPOR. Settled 1st March, funds Direct into our bank account on 4th March.
Good luck to Buyer No.1
Why are you buying this house? If for personal use then $8000 may be justified but if for investment adding another 8k into the equation does it still add up. There are plenty more fish in the sea does this one matter that much.
Obviously it’s for personal use, hence the FHOG
Sorry I do know that FHOG is only on private houses I still dont see the problem do you love this house so much or is it just that you want to get back at these people for screwing you around. If you love it sooooo much then I guess you will spend money you dont have to make sure you get it. Maybe it is time to step back and evaluate why you want this house.
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