Hi All
We have made a deal through a Rea (property manager of our property) for our tenant to purchase our industrial property.
The price was agreed on the 18-2-15, We signed on 26-2-15.
Next Wed 15-4-15 will be 8kws with no deposit or contract signed from the buyer.
I have looked at a few other topics on this forum about SMSF and they look a bit time consuming.
What info should I be asking the Rea in regards to the SMSF to find out what is happening?Thanks Ironlady
It is not really relevant whether the purchaser is an SMSF trustee or not. Some rules apply for all – if there is no written contract then there is no contract. Ask the agent why haven’t they signed a contract or paid the deposit and ask your solicitor to chase them up too. You can then consider if you should withdraw you offer, – maybe put a deadline.
Maybe give notice so you can show other potential buyers thru. That might hurry them up.
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
Tanks Terryw
Yeh we rang our solicitor and agent 2wks or so ago. Agent said he would contact them and get back to us. Heard nothing?
They will definately be receiving a dead line.Thanks again Ironlady
It could be that they are still establishing the fund (which can be a slow process or a swift process depending on how busy things are at the ATO and ASIC). Have they provided a purchasing entity name to the selling agent or your solicitor as yet ?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi JacM
No name of purchsing entity as far as we are awear of.
Rang our solicitor on Fri 10-4-15 and they rang the buyer solicitor and they said waiting on accountant.
We emailed the selling agent this morning and said he has until thu 16-4-15 to sign and put a deposit.
After ignoring us for 3 wks (we contacted him 3wks ago and were still waiting a reply) the sell agent emailed us and said, I have spoken to the buyer this morning and he said the bank is the hold up with the superfund being the lender. Agent told him we need a deposit. Buyer replied my accountant told me not to.AS I said in the original post it will be 8wks on Wed coming and no deposit.
We are finding it hard to get info from the rea and our solicitor doesnt seem to be getting much info out of the buyer solicitor
I will post after Thursday. Dont see much happening.Thanks Ironlady
I am assuming in your post above that rather than saying “the bank is the hold up with the superfund being the LENDER” you intended to say “the bank is the hold up with the superfund being the BORROWER”.
It sounds to me like they are still faffing about with the mortgage pre-approval stage (and possibly that the SMSF itself may not be entirely through the setup process). If the SMSF was set up and they’d been through mortgage pre-approval, then the accountant’s involvement would be about 15-30mins work setting up the buying entity (after which there is a name that can go on the contract and off you go).
I suppose you could have your solicitor or selling agent ask if the SMSF itself is actually set up with a bank account in place and rollovers complete, but these people are so unresponsive that even if these steps are already complete, it doesn’t necessarily mean you’ll see a signed contract soon.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi JacM
He said in his letter the bank is the hold up with the super fund being the LENDER. He may have made a typo?
He has also said in the past that they were setting up a SMSF family trust. Not to sure about that one, thought it was a property trust but I dont know a lot about SMSF. The agent could just be relaying what the buyer is telling him.There are a few things that havnt sounded right from the rea. I believe they are playing a game. Will find out on Thursday.Thanks Ironlady
Hope the SMSF is not lending money to a family trust. They are probably just confused.
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
Hi IronLady,
If the SMSF were the lender then there would surely be no need for a bank in the transaction, so I would imagine that the selling agent wrote “lender” rather than “borrower” in his update to you.
That is unless they are indeed planning to loan “some or all of the purchase price” from the SMSF to an SMSF member or member’s family trust. If they were loaning “some” of the money and approaching the bank for the rest then I suppose the selling agent’s comments make some degree of sense, however the SMSF is not allowed to loan its money to related parties and the ATO would be very very unhappy about this. In theory the ATO wouldn’t find out about it till audit time at end of financial year so depending on contract timing it would be their problem not yours, but either way it’s not a good situation. Their accountant should know better than to encourage this behaviour so it would be surprising if this was the path they were intending to tread down.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi JacM
According to the agent they were chasing up some money in the negotiation phase.They were taking to long to respond to the price we set (advice from rea). Can only assume they are using a bank for some of the money.
At the end of the day we are trying to work out if the buyer is genuine and taking to much time, just cant scrape up the money or others.
We can wait longer if needed and we know 100% they will buy the property, but they havnt realy conviced us that they will buy our property.
Hopefully will get a result either way on thu.Thanks again Ironlady
Wishing you the best of luck :)
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks again JacM and TerryW
Ironlady
Hi again
We received an email today from our solicitor Saying:
Dear Ironlady (me and wife)
Re: YOUR SALE TO XY BLABLA SUPERANUATION PTY LTD
PROPERTY: 000 AAA ST, SOMEWHEREWe refer to the above matter and wish to confirm that we have today received a phone call from the purchasers solicitor advising that his client is still awaiting finance approval. As his client is buying under their Self-Managed Super Fund the x Bank is “putting them through the hoops”, He confirmed that his client still wants to proceed with the purchase but unfortunately they require the written approval of finance prior to being in a position to exchange contracts. They will contact us as soon as their finance has bee approved.
They have not asked for an extension on thu yet. Would it be an impossible question to ask how long the bank could take. It would have helped if they coughed up more info, like how long their app for the money has been at the bank.
Should I ask for more info from solicitor or should the agent be chasing it up.Thanks Ironlady
SMSF loans do tend to take longer than non smsf loans (not that there is any reason for this!). You could try asking how long, but they may not really know the answer.
Your options may be to exchange now subject to finance, wait, or find another buyer.
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 – as Terry suggested, I can’t understand why they won’t go under contract with a subject to finance clause. At some stage the bank will require a contract anyway…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi Terryw
Now that we can see they are doing something we will wait.
Don’t see us getting a better deal in this market at the moment and we are happy with the sale price.
Besides we made a deal (only verbal to agent) to let him have first chance to purchase.
The rental contract runs out on the 31 Jul 2015 so if he doesn’t buy he will have to keep renting or move his business some were else and we will take possession of the property and run our business.
The best option for us is a sale, but if we don’t sell the property will not be vacant.Thanks Ironlady
Hi JacM
I am only guessing but they may not want to sign not knowing if they will get the money.
If they do get the loan approval before signing contract we can ask for not subject to finance.
Would rather it fall over now than down the track.
It sounds like I am contradicting my self because I was pushing them for a deposit, but I was assuming they had the money.Thanks Ironlady
Hi JacM and Terrw
Sorry if it sounds like i am not hearing yous guys. I wouldn,t see things that yous can see and I am pretty sure I will be wrong as far as going under contract subject to finance. Sounds like they dont want to take that road anyway.
I do appreciate your input on this forum / post.I contacted the Rea, thanked him for his input and asked could he keep us informed more often. He replied by saying. The problem with keeping you more informed is that the buyer is not being informed either. The trust details for the superfund are vetted by the bank for 1st timers, thats the real issue.
Thanks Ironlady
Ironlady – vetting of a deed by the bank should take just 1 day. Some ask for various documents which have been missed or maybe for amendments to the SMSF deed etc which could cause further delays, but it shouldn’t really take that long.
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
Hi Terryw
But does that mean the buyer will find it hard to get info about the sfund etc
Thanks Ironlady
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