All Topics / General Property / House purchase from hell!!! Help!

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of FreddieA

    Hi,

    I have purchased a property for $1,000,000 on a licence agreement and put a purchasers caveat on the property.

    It has come to our attention the the vendors owe $800K on the mortgage and have borrowed an additional $650k as a business overdraft secured against the property effectively owing $1,450,000 on the property. During this period their company has been placed in to receivership.

    I applied for finance with the bank that currently holds the vendors loan… I was told that my loan was "red flagged" and that I was approved for the amount that I applied for but I was declined on that property! ???

    I have since applied for finance with another bank and my loan has been approved. 

    Will the vendors bank stop settlement?

    What is the chance that their bank will write off $450k?

    Thank you for your help.

    Freddie

    Profile photo of Jacqui Middleton

    I'm no solicitor, but I cannot see how the vendor's bank would allow settlement to go through.  They are owed nearly $1.5million, but the sale will only fetch $1mill.  Ask your solicitor, they will have encountered scenarios like this many times over and will explain what it means to you.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of FreddieA

    Hi jacM,

    Thanks for the reply. My solicitor has been dealing with the vendors conveyancer and the only response that she keeps getting is that they are negotiating a settlement price. 

    It just doesn't make any sense to me.

    Profile photo of Jacqui Middleton

    I'm no expert but it sounds to me like you need a new solicitor.  May I suggest you consider posting your thread in the Getting Technical forum…. it is more likely to get a response from those in the know.  TerryW is the man I'm thinking you want to fish for a reply from.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of FreddieA

    Thanks mate.

    I really appreciate it.

    Profile photo of Jacqui Middleton

    ps the Getting Technical forum is here;

    https://www.propertyinvesting.com/forums/getting-technical

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Terryw

    my reply here https://www.propertyinvesting.com/forums/legal-accounting/4346019#comment-271397

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of jmsracheljmsrachel
    Participant
    @jmsrachel
    Join Date: 2012
    Post Count: 711

    How does one do all the necessary checks so this doesn’t happen to them in the future?

    Profile photo of Terryw

    When entering into an agreement to purchase you would do a title search and find out that the property is mortgaged.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 9 posts - 1 through 9 (of 9 total)

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