HI, I would like to tell a tale.
We sold our home unconditional and 3 days before settlement we received written confirmation that our home would not settle as the buyers were unable to get finance. We had already moved out. Any way we are now going down the track of sueing them.
Definitely have a think about suing them – if they couldn’t get finance, then they may not have anything.
I hope you did get the full 10% deposit (less agents commission of course). Now put it back on the market – you could actually list it for a little less for a quick settlement, and still come out in front.
Or as Steve suggested, you could always turn it into an IP. Depends on your pressing need for the cash of course.
Thanks Steve and Mel for your reply
I am a real estate rep. The deal was a conjunct with another agency.
Every thing was unconditional. All the papers were signed even transfer of land by the puchasers. Then they said they couldn’t get finance. They have 3 properties, there own home has just sold for over $700,000 ( they bought our house for $830,000) and one other property is on the market.
What we are doing on Monday is issueing them a default notice, 10 business days to come up with the goods in the meantime $204.00 a day in interest will have to be paid by them we keep the deposit it’s only $4000 the house goes back on the market any shortfall they have to come up with plus we can sue for costs as we have already moved out of the house before we knew. Once the house gets sod again we may look at the situation as I dont want to go through all the hassel.I really thik it wasn’t that they couldn’t get finance but just couldn’t afford and are just trying to get out of it
Looks like they’re in the market to buy another house.
Which means they’re going to have to borrow money from the bank.
When you (or your solicitor) send them a letter demanding interest and damages, politely point out to them that if they don’t pay up by the deadline, you will be forced to sue them, and if you were forced to sue them, this may adversely affect their credit rating, because the lawsuit will be on the public record.
This might encourage them to cooperate and honour their contractual obligations (whether to settle on the house or cough up the interest and damages).
There is no law in any Australian State or Territory, as far as I am aware, that requires anyone to pay a minimum amount for a deposit.
The deposit is simply a contractual detail agreed upon by the buyer and the seller. You can offer a $1 deposit, and if the seller accepts your offer, that’s what you have to pay! Of course, you still need to pay the rest of the purchase price at settlement.
Caitlyn, as the seller, you’re entitled to reject an offer if you think the deposit is too small. It’s the same principle as increasing the purchase price – simply cross it off and write in the deposit you want, then get the amendment initialled.
Cheers
Elysium-M
DIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
You should be able to. In NSW I beleive that if they pay anything other than 10% and they don’t go thru, there is a clause that says you are entitled to the full 10%.
It may not even cost that much in legal fees to do, but may be worth it.
This is a tough one!.
Firstly as someone already said you should have got a lot more deposit on a property of that worth, tens of thousands more, if it`s unconditional they shouldn`t have any problem with it!.
I recently bought a house and instructed my solicitor to pull out of it with only a couple of weeks left, but there was a genuine reason why I had every right imo to pull out, the agent told me that the land was res b when it was in fact non urban which I did not find out until close to settlement, I thought long and hard and ended up buying the house.
Reason I mention this story is my solicitor said at the time this had NEVER happened before in his office but it was likely due to the obvious blue by the agent I would likely get all my deposit back.
This is not the case from the sounds of your deal, you should get compensated, maybe not 10% after all that is $80,000, you`ll never get that much, if thier true reason is finance they really need to pay up.
I would get my solicitor to write them a extremely threatening letter, this has an incredible affect at times especially when the party knows they are wrong and these poeple don`t have a leg to stand on.
Get your solicitor to write at the end of the letter a note that a certain amount paid to you (whatever you think is fair but don`t go nuts) will stop any legal action which will be very forcefully applied to get ultimate dollars, I would be very surprised if a cheque is not in the mail very smartly!, this way it costs you next to nothing, 1 letter, and you will salvage enough money to compensate yourself, again don`t make it too much remember the alternative will be drawn out and costly.
Good luck.
Thank-you for your suggestion markpatric
These people have 3 houses they have just sold their own home which they got around $700,000 for and it settles end next month.
So I say they are asset rich.
The track we are going down is:-
In a couple of weeks the house goes back on the market
When there is a offer I have to contact the solicitor to see if it is ok, if any short-fall they have to pay the difference.
They have to pay interest of around $200.00 a day until it settles
Any out of pocket costs to us they have to pay
Any solicitors fees on our side they also have to pay
I don’t want it to be drawn out and nasty, I just want what it has cost us.
I think once the house is sold again then we will know where we stand on how much we will loose if any.
Have they agreed to that?, if not I wouldn`t waste time as they may feel they have gotten away with it and may sense that you don`t want a drawn out legal fight.
Good luck, but still, I would get my solicitor to write the letter asap and salvage whatever possible right away, also legally, surely there is a way you could stop them buying another house until the matter is settled.
I remember reading in a Dolf De Roos book that you, as the seller, could offer them finance… that way ‘subject to finance’ becomes invalid because you’ve offered them finance.. If True… Not a nice way to go though : (
“The man that thinks at 5o as he did when he was 20 has wasted 30 years of his life”
On the other hand, though, the right (and it is a right) to claim interest and compensation equal to 10% of the purchase price is clearly set out in the contract. This is not a new thing, but something that’s been in standard sale contracts for years.
When the purchasers signed the contract, they agreed to the deal on that basis. And a deal is a deal, isn’t it?
Another way to look at it is that it’s the agreed contractual price for getting out of the sale.
So why should they not be made to honour their contractual obligation?
And if it’s a clear breach of the contract, how can they defend it? Ask your solicitor to seek summary judgment.
If they own a few houses, they’re not going to be foolish enough to get involved in an expensive court battle, which will not only cost a lot of money, but will also hurt their credit rating.
Cheers
Elysium-M
DIY Residential Property Settlements in WA – the book coming soon! When I can get my act together…
Thanks Guys,
As the deal was unconditional they have to prove they couldn’t get finance or at least try. They are blaming the broker saying he wasn’t working for them.
They told us verbally they had finance before finance was due when they came to measure up for there furniture.
They couldn’t come up with the full amount so we offered vendor finance they declined.
I did speak to the solicitor and he has to be careful what he writes so it doesn’t look like he is blackmailing them
They know it is costing us alot of money at the moment because we told them, they are hoping we will just cut our loses but we can’t afford to and we are in the right.We don’t want to go to court.
They did offer us verbally $24,000 to get out of the contact paying us when their house settles but who’s to say their house is going to settle ours didn’t.
I know its tricky but we are just waiting the 3 weeks then put the house on the market and think what we are going to do with them
Thanks again all the information is food for thought
As the deal was unconditional, it doesn’t matter what they prove. They can show you ten reject letters from a bank, but it won’t matter. Unconditional means ‘without conditions’. Subject to them obtaining finance is a ‘condition’. They owe you the full 10%. Don’t let them out of it.
offering vendor finance is a very innovative way to fulfill the finance condition! In WA would you need a credit providers licence for that though?
Don’t feel too bad Caitlyn – one of my first real estate sales went unconditional and the buyer – out of the blue and after fulfilling some pretty tricky conditions – just changed their mind. I couldn’t believe it. By the time the buyer mustered support from everyone including their local MP to get out of it and given that real estate contracts are heavily skewed in favour of buyers, there wan’t a lot that could be done. As one of my colleagues says “It aint unconditional until the property settles”.
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Blackmail?, I`m no lawyer but this is not blackmail, yes you would I suppose have to be careful how you word the letter, but there is no intention for you to defraud anyone, or even get the full amount you deserve by law.[]