I just settled on an IP. I had to ask for a weeks extension and they told me tehy would charge me 11% per day. So I got it down to an extra 2 days instead of the week. This interest cost me an extra $277. I thought this was a bit rude especially as I know they entered teh (whilst I wasnt there) property on the weekend AFTER it settled to retrieve a tricycle.
Of course its all learning. Next time I will refuse to pay it and will seeif they want out of the contract.
This seems to be standard practice – charging interest on late settlements. Don’t worry too much, it is a small amount, and you would have saved a little bit in interest by having you loan start later anyway.
Terryw
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I think I’d prefer the Trike to the cash personally. Send their solicitor a letter of demand for it. Then see of they offer your cash back instead…
Default or Penalty interest is common place now. I always put “NIL” in my contracts. This covers the seller as well, but, there are other ways to fix them if they are unable to settle on the appointed day.
Last batch of it I paid was somewhere around $1500 due to Bank not caring either way. Typical. Then they wonder why I got an attack of the Ford Pills and left heading to another Lender right after settlement…
Stuart Milne
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Mob: 0404 056 055i copped a late settlement once as well, only because the bank wouldnt accept the paperwork after 10 am[confused2]
after that i just put nil in the contract or extend settlement from 6 weeks to 7cheers
shaunLead, Follow or get out of the bloody way
Guys,
Can u please elaborate more on the “putting nil in the contract” bit? Where in the contract do u put it and does it waive penalty?
Cheers
DannyDanny
On most purchase contracts there is a section that relates to Default Interest.
Where no figure is inserted it reverts to the accepted Law Society rate for the State. In Qld at the moment it is 11.25% Per Annum charged daily.
All you need to is amend this figure to show an amount of NIL will be charged. Don’t forget the Vendor doesnt have to agree to the amendment.
Richard Taylor
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I was about to ask the same question Danny. Could you guys please elaborate on the nil factor?
hey thanks for the tip Stuart…ill be sure to put NIL in the contract next time.
and Terry you may say the interest charged is common practice now but the agent who sold me the property hadnt seen it done in the 15yrs she has sold houses.all water under the bridge….im happywiht my purchase and feeling sore but satisfied from doing a weeks renovation.
I think our default interest rate was 9% by going over settlement date- however, as it was the banks fault they wound up paying it for us..
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI think in WA theres a 3 day grace period after settlement before the 9% default rates kick in.
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