This is a tough one – can anyone help please? All sugegstions are welcome!
There is a buyer who has put in 10% deposit to buy an off-the-plan IP & now can’t settle. The vendor is charging up to 16% penalty interest p.a on purchase price, calculated daily. Penalty interest has accrued since 8/10/04. A friend, the real estate agent wants to help – maybe help settle it first and then onsell after settlement, but this means there is not stamp duty savings for the next buyer!
What to do?? [confused2]Not much you can do. If they don’t settle soon, they will lose thier deposit and could possibly be sued. They could onsell to you, and have a simultaneous settlement, but you would have to pay stamp duty as well. There would be no way (legal) to avoid stamp duty, unless maybe the vendor rippued up their contract and you/someone signed a new one. But they would probably only do this if the property had dropped in value.
If it has increased in value substantially, you could lend them purchaser the money to settle or to qualify for a loan and then onsell with a profit sharing. But a lot of these places are not being valued up to purchase price.
Terryw
Discover Home Loans
Mortgage Broker
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Tough situation,
If it has been valued at less than the purchase price. It might be best to cut your losses and walk. An actual market sale straightaway would probably be less than a valuation anyway, you’d also lose transaction costs and repayments while finding a buyer.No point frantically buying something for 300,000 that can only be sold for 250,000 just because you have already thrown 30,000 (deposit) at it.
If your friend has been swindled, maybe see VCAT or some tribunal, or at least have a lawyer write a strong letter with the intention to go to court. You may get deposit back.
If it was me, I would look for a buyer BEFORE you settle, and have them sign on the deeds, this would avoid double stamp duty. When it gets to the stage that the penalty interest is just too much, and you can’t find a buyer….then you gotta walk.
Thats about as much as you can do legally.
lifexperience
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