Hi all,
I have a HIA New Homes Contract in front of me for a new build with a reputable developer…
On page three, in the finance section, it states that we can cancel the contract if we can't get a 'financier to give us a loan of at least $x …. for a period of thirty years and at an interest rate of 10% or less.'
My feeling is that, if my bank val comes in below the purch price and loan gets knocked back, then i am open to the developer saying, 'that's ok we can get you approved through Dodgy Brothers home finance at 9.5%' – and i will then have nowhere to go in the contract.
Has anyone seen this before? With an interest rate this high?
Would anyone sign this?
Thank you all…..
Most Finance Clauses read that the Offer need to be on terms acceptable to the buyer as otherwise the interest rate could be 6% but a 3% application fee and you forced to accept it.
Richard Taylor | Australia's leading private lender
Thanks Richard – i am being told it is a standard clause but i obviously had my doubts.
Brett
With any seller their objective is to get a sale. There is nothing 'stanard' about your circumsatnce… make sure it works for you.
I am sure they would accommodate a change in the clause to assist in the sale happening. Simply amend the section that to refect your requirement.
Good luck.
That's the other thing that got alarm bells ringing – they refuse the allow me to make an amendment…
Your solicitor will sort it out. Don't sign the contract if you don't like it. Tell your solicitor which clauses trouble you, and ask what your options are, but don't sign if unhappy!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
who is saying that? the agent representing the developer? If so, they are under obligation to submit all offers to the seller
is it the developer themselves? If so, tell them that if your terms were met would you proceed.
In any case Brett, I suggest you think about your position relative to their demand prior to the next step.
…it sounds a little hard nosed.
Anthony – the developer is telling me the clause is as it is and will not be changed…
The agent is telling me it will all be fine and that the developer has no interest in backing people into corners on finance – my response is that they should allow me to amend the clause if that is the case,
I am fairly certain i am going to take a pass purely on principal. It might be fine but contracts are supposed to protect both parties if something goes sour – seems this only protects one party.
Can they just not be bothered to edit and reprint the contract? Your solicitor will probably be able to put a line through the clause and handwrite whatever clause you prefer to see. Talk to your solicitor
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Brett, back your instincts and pass. You're right on the money. Too dodgey. Agent's will say anything. They're not bound.
Oh, and perhaps just for all the trouble they've been to for you you could organise some free publicity by sharing that little story with, say, Today Tonight or someone. Wouldn't that be fun.
There are people out there sadly not as switched on as you are, who may benefit from hearing a story like this before they get tricked.
Good on you.
Don't sign anything without running it by your solicitor.
Personally I would amended it slightly by specifying a bank and the loan amount. If they don't accept it you can say you will find someone else.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Indeed. It's not like this is the last house available to you on the planet. There are plenty of others out there…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Brett,
I work for a real estate firm. I always encourage my purhcaser to go to there local solictor and confirm and doubts you may have.
If you have a feeling that the VAL wont stack up then your probaly allready thinking that the house is over priced?To cover your butt "You can present a offer to the agent by law he must go the the vendor and present the offer". If the offer does not get accepted becasue of that clasue then its your loss and then you can move onto another property that makes you feel more comfortable.
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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