All Topics / Legal & Accounting / What happens when I default on a contract?

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  • Profile photo of joekjoek
    Member
    @joek
    Join Date: 2005
    Post Count: 3
    February 11, 2005 - 1:13 am

    Recently I made an offer on an IP. The offer was conditional on finance. It was not accepted because the owner wanted an unconditional offer.

    This lead me to wonder what if I had made an unconditional offer, and then was not able get finance?

    Can anyone advise?

    Thanks.

    Profile photo of luckyoneluckyone
    Member
    @luckyone
    Join Date: 2003
    Post Count: 148
    February 11, 2005 - 7:29 am

    You would lose your deposit (whatever is written into the contract for this amount, usually 5%-10% of purchase price). Also, you would still have to pay your solicitor’s fees.

    If you don’t have preapproval NEVER go into a contract without a finance clause. You just never know what the banks might see as a problem that you hadn’t forseen.

    Thanks,
    Luckyone

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    February 12, 2005 - 1:40 pm

    You could have been forced to buy the property. Best case secario, you would have jsut lost you deposit, worst case, you would have had to come up with any short fall if the property subsequently sold at a price less than what you agreed on (plus costs etc).

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 3 posts - 1 through 3 (of 3 total)

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