Hi everyone,
We have had a house under contract for about 3 months, waiting for the vendor to get a legal issue sorted out so he can get the property in his own name before selling. So we have been waiting for a long time without much communication as to what is going on from both the vendor and the agent.
The house is on the market for $185 K, but the vendor verbally accepted 175 000 on a 60 day settlement [thumbsupanim].
The issue is, that we have just returned from holidays to find a contract in the mail, with the vendor wanting $185 000 again [thumbsdownanim. After some discussion with the agent about sticking to $175 but reducing settlement to 30 days, the agent warned that the price of the property could be increased above $185 000 as house prices in this area are booming.
The agent said that just because a place is advertised at a certain price, doesn’t mean it will be sold for that amount. Is this true under our circumstances? We get dodgy feelings from the agent as he has never been to forthcoming with information and so are not sure whether to believe him or not?
Thanks for the input in advance,
Regards,
Ian
Hi Ambo,
The agent is conning you and you have let yourself down too.
From your post you indicated that the vendor accepted a verbal offer. As you haven’t got anything in writing (until now) you weren’t even in the door. The agent and vendor were dangling a carrot while they sorted out the ‘issue’
Grab the contract – write your offer up at a figure below $175K and take it from there. You are letting yourself be manipulated at your cost.
As for the area still booming – yeh right!
The price is determined by a vendor and buyer agreeing on a price that suits both parties. It is not determined by one party or the other.
Welcome to the life and times of a REA who is looking after the vendors interests – NOT YOURS.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Hi Derek,
Thanks for that. In our defence however, I don’t think that we are letting ourselves down. This is only our second investment property and are still learning right from wrong. We are maintaining our original offer of $175 000, the only thing we have changed is the settlement time.
The price is determined by a vendor and buyer agreeing on a price that suits both parties. It is not determined by one party or the other.This is what I wanted to know. Thankyou, at least I know where we stand now.
Originally posted by Ambo72:We have had a house under contract for about 3 months,
The house is on the market for $185 K, but the vendor verbally accepted 175 000 on a 60 day settlement
The issue is, that we have just returned from holidays to find a contract in the mail,
Hi Ian,
I stand by my comments that you have let yourself down – there was no exchange of contracts until you returned from holidays. In effect for three months all you were was a hot lead – nothing more.
If the vendor had accepted your offer a contract would have been exchanged and signed off by both parties. Conditions about length of settlement and ‘issue resolution’ could have been worded into the contract.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.Hi again Derek,
I see where you are coming from and agree with what you are saying, but I should clarify the situation. On reading back on what I said originally, I forgot to mention that we actually had a contract for $175 which we had signed. You may be thinking well if that’s the case what’s the problem?
Well the way the agents work in this particular town is that they want you to sign the contract first to show the vendor that you are serious and entice the vendor to sign [eh]. Sounds dodgy, but this is the way all the agents we have spoken to do it in this town. It’s a bit back to front and had us in a bit of a tail spin when we bought our first house here but it worked out. The agents seem to push the 5 day cooling off period to put buyers at ease.
We made sure that we had all the special conditions in the contract that our solicitor recommended from our first contract, before signing this one. The agent didn’t tell us about the ‘issues’ until we followed up 2 weeks later as to what was happening as there had been no word, and to be honest we didn’t even think of adding a clause to the contract about issue resolution.
Personnally I don’t like doing it this way and would rather negotiate a price before signing anything, but as I said before we are still learning the in’s and out’s of investing.
The more I write about this the worse it sounds! Anyway, look forward to your reply…..I’m sure you will have plenty to say.
Regards,
Ian [biggrin]
Originally posted by Ambo72:On reading back on what I said originally, I forgot to mention that we actually had a contract for $175 which we had signed.
I assume you were the only party that signed the contract.
If this is the case and the vendor is yet to sign the contract it still means ‘diddly squat’ – a contract only becomes binding when both the vendor and buyer sign and agree to all clauses.
Well the way the agents work in this particular town is that they want you to sign the contract first to show the vendor that you are serious and entice the vendor to sign [eh]. Sounds dodgy, but this is the way all the agents we have spoken to do it in this town.
This is not unusual – the vendor publishes an asking price and the buyer provides their desired buying price. Any negotiations are triggered by a (would be) buyer completing a contract and the agent providing this to the vendor. The vendor can reject, agree or counter offer until you either agree or walk away.
I would get control of the agenda here by using a clause/condition along the lines of this offer is only valid until ‘XXX’ (you insert time and date here that suits your agenda)
Remember you are a buyer who could buy anything that is currently on the market anywhere – whereas the vendor can only sell this one property. In essence you do have a large advantage provided you do not get attached to this particular property and can be ‘business like’ in your negotiations.
Personnally I don’t like doing it this way and would rather negotiate a price before signing anything, but as I said before we are still learning the in’s and out’s of investing.
See above – negotiations should be done through the offer and acceptance or contract of sale so that written agreement is reached where possible.
Hope this is of assistance.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.
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