Hi guys.
Recently l had a deal fall throughl could not unfortunately get the finance for .
The situation is 6 mths ago l signed a contract to purchase an IP I had big plans for . The place was vacant and through a big company , so l was free to start fixing it up while we waited on settlement .
Admittedly that was a bit of a gamble but l was told the finance would go through ok .
lt was my fault l admit and l don’t hold any grudges towards the company in any way but l have spent 7,000 on the place and added we think around 60,000 to 90,000 in value according to a valuation l had.Would l be entitled to a share of that when they resell .
Or do l have – well morally if nothing else, the right to ask for say 1/2 of anything above a certain amount , or would l have to rely on reasoning and maybe some fairness on the compnies part.I’m thinking well l lost the buy but have done the work and spent the bucks – maybe all is not lost as my share of a resell if l had one would still be 30-50,000 say 50/50
Cheers
MkcHi mkc
I have been wondering what would happen if you got early access to do reno’s and something went wrong. As all the books I read say to do that.
I do get in early to measure and size things up and make plans, go shopping, but not to do any work.
I my self never thought that was a good idea – to scary for me.
I would at the least wait for all approvals / get out clauses etc were finalised and the contract was unconditional.
Why did you start B4 offical finance approval?[eh]
Celeste
It was a gamble.
If your reno is substandard you could even be asked for compensation to restore it yourself.
This is a high risk strategy as you found out.
I hope it all works out for you.
Cheers,
Simon Macks
Residential and Commercial Finance Broker
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0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Only thing I can think of is that you could give a solicitor a phone call. They will tell you quickly whether your idea has worth.
I would think the big company will tell you to “go whistle”.
Last year we took the same type of risk, got owners permission to start renovating and the more we spent, the more anxious I became about the “what if settlement doesn’t happen” scenario.
We had our finance in place and our contract was unconditional but I still didn’t like the feeling of ripping out walls and the bathroom and spending money on (technically) someone else’s property (not to mention the hours of blood, sweat and tears we put into it). I don’t know if I would do such major work prior to settlement again, but we were heading to the US the day after settlement and the quiet Christmas period was straight after that and we needed to get it renovated so we could get some cash flowing as soon as we could.
I would guess that you probably have no claim on the money and may need to look on it as experience and a lesson, but it is worth asking. You would probably have a better chance if it was a private vendor, but big companies are only interested in the dollars (in my opinion).
Perhaps they would reimburse you some of your costs (but don’t hold your breath).
I really feel for you but don’t get bitter if the answer is one you are not happy with because it will eat away at you. Just pick youself up and move onto the next one and rack it up to experience. We all do things that don’t work out or that we regret, and none of us have the benefit of hindsight.
Good luck, Wylie.
Yeah it was scary , all the what if’s worried me sick the whole way through not being that well off. The ironic thing was that l had this last 6 mths completely free , yet when the place was due to come through , all sorts of crap was on so it seemed crazy not to.
Then the place would be ready to let out and l could do the rest when l had the chance.
Damn solicitor was only interested in all his paper work being nice and neat and easy but he new my plans , needless to say l’m looking for a newy now.
Yep , thinking they’ll probably tell me to take a hike .
About 1/2 the stuff l’ve put in l could take out again easily, no mess – last resort but atleast l’d get something back .Plus a 1,000 bucks worth of brand new beautiful treated pine fencing rails that just happen to be only tacked in place at this point . I wonder if ripping that down would cause any trouble. They’d notice it gone that’s forsure but l don’t suppose they could say much .
It doesn’t sound too promising but l will ring my old solicitor [ pre present solicitor ] this guy was a tiger but he moved interstate .
If anyone else happens have any further imput please add [especially] if it’s in my favour hu !!!Thanks for that
MkcIt never hurts to ask. Legally, you could probably argue that you have an equitable interest in the property now that you have spent money on it, but your contract probably states that if you fail to settle then you get nothing. Long shot – just ask and see what you get.
Terryw
Discover Home Loans
Parramatta
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Sorry to hear mkc. Cleans the digestive system out I’ll bet….. Without knowing your circumstances as to why your finance fell through (servicability?) I’m just wondering if you had considered looking for finance elswhere, and as a final option with a non conforming lender as opposed to a bank. YEs, higher fees, interest etc etc, but if you have spent all that money, and genuinely believe you have added that type of value, it may be a better choice than flushing the lot. Just a suggestion, like I said without knowing the details. HEard of a similar deal recently, where the financier pulled the pin on the vendor at the last moment when they were about to sell their property for about $20k less than it was morgaged for (having been overvalued by overzealous valuers in the first place) , with the intention to pay balance off via alternate means……The prospective buyer had already done the knock out the wall things with early access etc etc, and had it ready to onsell at a 75k profit at settlement time…..uh oh. Solution? The buyer/renovator ended up paying the difference…..and losing nearly half his profit , as opposed to losing the lot. anyway, all the best, and hope it works out.
Thanks for those .
Yeah l agree Terry . l’m going to politely give it a shot . My solicitor said today [ old solicitor ] pretty much what you’ve said and by all means ask as we have made big improvements . But he doubts they will as they’ll say it’s costed them and now more to resell .
Thanks V8 , no afraid that parts over. l tried all sorts of things and the contracts well and truly counselled now .
Cheers
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