I own an IP in WA which I put on the market 2.5 months ago. I accepted an offer to purchase my IP, shortly after, subject to finance. The deadline for finance approval was 15 June.
The buyer did not meet this deadline, and despite the best efforts of my real estate agent, no communication was established for over a week! Finally the agent managed to get the buyer's mortgage broker details, who assured her the wheels were in motion, and to sit tight. It is now close to 4 weeks after the agreed deadline, and I have been told the buyer received approval at 90%, but he wants 95% as he doesnt have a sufficient deposit.
I find myself in a bad situation as the market has completely cooled down during this time and if I put the property back on the market I may find it unsold for a long period (it is unrented, so there is no income stream to help fund the mortgage during this time) or I may be stuck with a much lower offer. Hence it is difficult for me to face simply cancelling the contract and returning the property to the market!
My questions are as follows:
1. What is the result on the O&A contract, that the buyer did not communicate by the agreed deadline? Does this make it either void, or unconditional?
2. Does the fact the buyer now has finance approval, albeit not to his needs, but still approval, make the contract unconditional?
3. The buyer clearly hasnt made reasonable efforts to obtain finance approval within the agreed timeframes and didnt even bother keeping us informed. What does this mean for me? Could I pursue legal action for loss of profits and costs (as the market has fallen during this time, and back then I could have accepted another offer similar to his offer), and I have also incurred additional mortgage payments?Thanks all!
Chelley. You should realy get legal advice on this situation. I don't understand the full implications, however I have come across this situation before. I wish that there were some Solicitors on board here to clarify this one. From my understanding and I have no idea why it is so but unlike any other clause on a contract which is deemed as accepted if not answered by the deadline the Finance clause is not and from my understanding they can pull out at anytime up to settlement time.
If I were in your position I would cancel the contract (through you Solicitor) and put the property back on the market. The sooner you do this the better the chances of reducing your losses.
Jon
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