Well well well…..
I'm in a dilemma ???
What we have is a 25acre property with a 2 bedroom cottage and other outbuildings and bungalow in Wedderburn, Nth west Vic.
It's been on the market for a few months, we've dressed it up inside a bit and had no enquiries… until last week.
We accepted an offer, below cost but just thankful for it be gone and free up our cashflow BUT…
Today they have altered there offer as they can't get finance ???
THIS IS WHAT THEY'VE OFFERED
Pay $5000 deposit today.
Place $20,000 in a 12 month term deposit.
Live on the property for 12 months and pay rent at market value – $130p/w.
WITH an assurance of purchasing at last weeks agreed offer in 12 months time.
How would we go about drawing up a contract for this sale ???
Am I within my rights to demand they must pay up in 12 months or do I just take their offered $20,000 + interest as their goodwill ???
COULD I write a contract stating that in 12 months they forfeit their term deposit to me and continue renting the property on a month to month basis until the property eventually sells at todays agreed price?
If so, can I make them liable for the agents sale costs if I am expected to pay agents fees at the signing of this contract for this sale today.Finally… I am in total awe at the inventive thinking of these prospective buyers and I look forward to meeting them personally to asses them and discuss our options further.
Their kind of ingenuity would be the perfect asset for property investing…For me, if they are first home buyers and surviving on struggle street… this may be their only opportunity to own their dream property and I will do whatever I can to help them achieve this… BUT
We are in a tight spot and have been relying on this sale for 3 months to chase other opportunities…
For us to agree to the above terms we will be putting on hold other plans.
Therefor, we see that we would be taking a great risk by accepting their goodwill without a legal contract that protects our interests, although it may trap them and cost them a lot if they still can't get the finance in 12 months.
Also, we have clear title on this property, so any rent would be positive… but, there's a lot of cash sitting there that we can't access…
I sincerely appreciate any advice that can be offered.
Thanks
Darrenget a lawyer to draw it up. be carefull and make sure if they cant come up with the finance after 12 months they loose all dollars paid to you. make sure they cant get out threw a loop hole
Are they First Home Buyers ?
If so why not sell it to them on an installment contract basis with the terms you mention above.
In addition you assign the $17,000 FHOG to yourself and this is payable after possession so another lump sum payment.
The $20K should be placed in a Term Deposit A/c in your name or at least in your Solicitors account released in 12 months time.
A good lawyer will be able to draw up the terms contract for you and could well be a win win situation for you and them.
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Are they First Home Buyers ?If so why not sell it to them on an installment contract basis with the terms you mention above.
In addition you assign the $17,000 FHOG to yourself and this is payable after possession so another lump sum payment.
The $20K should be placed in a Term Deposit A/c in your name or at least in your Solicitors account released in 12 months time.
A good lawyer will be able to draw up the terms contract for you and could well be a win win situation for you and them.
Hi Richard… we meet again !!!
This prop is owned by our father in law who is willing gift all proceeds to us for the purpose of investing if we can provide him shelter in a comfortable residence in a small town and take care of him in the future…
My other post is why it's imperative for us to make a sale on this property… BUT I feel a moral obligation to help a guy out after the struggle we've been through to get this far ??? Especially as it's entirely the buyers idea !!! Who would have the courage to offer such a proposal to an average joe ???
We do have other options to advance ourselves but this would really open up some faster capital gains opportunities to reinvest into our CF+ portfolio…
Ok maybe i'm cynical, but i'd be very wary of this offer. It sounds to me that they simply wish to purchase an option on the property.
My parents in law recently had their house on the market and were bombarded with offers of 'i'll pay you $10,000 today and the asking price in 2 years time and in the meantime i'll pay rent at market value'
In my view it's simply a ploy to hedge their bets. If they have been refused finance now, what makes them so sure they will get it in 12 months time in a declining market? It sounds slightly odd that they can't get finance, even given that it's a rural property. They obviously have at least 25k in cash readily available, someone with that sort of liquidity could no doubt lay their hands on a bit more and even though you don't mention the purchase price, at $130pw rent, it can't be a huge amount. In addition if they are first home buyers as Richard said, they have more than $40,000 to contribute to a deposit which you would think would be enough in all but the most exceptional circumstances.
You have already stated it's less than what you want to accept, why would you essentially want to accept the same amount but in 12 months time? If the property is genuinely hard to move definately try the vendor finance option as mentioned above.
Thanks Bootlace,
Exactly my thoughts… I'm very skeptical but could accept an offer for a first home buyer if I could draw a contract putting all liability for either purchase or on sale in the hands of the prospect… The cover my a*? strategy !!!
BUT… What I have found out today is it is a single middle aged man, not a first home buyer… The agent has advised he is hoping I will just offer vendor terms…???
I'd love to… but it's my in laws prop and we're in no position to take out vendor terms that could tie it up for years… we have more important things to do with the cash.
The prop is currently on realestate.com and is in the town of Wedderburn about 40k's from Bendigo.
It is a small small town and I have herd the major banks are getting wary of such props, even at 80% lend…
Not surprising though… we have dropped it from $130k to $115k and spent $2k inside hoping someone will take it…
And at that we've lost a bit… Mind you, it is a great elevated 25ac bush block with views across valleys…Dad wanted to live out there in the bush so he brought it… After finally retiring and finally getting out to the bush he's lasted 6 months and spent most of time back in Melbourne annoying us all !!! He now agrees something in the country within a small, but not as isolated town would have been a better option for his retirement…
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