.25% lost or refundable?

[ej89]

Hey guys,
I had put .25% down for a house in st marys but when I did the B & P inspection during the cooling off period I found a lot of damage from previous termites and decided to pull out of the deal.. They kept my .25% even though I tried to get it back. Does anybody know the legals behind this and whether I can get my money back? All other real estate agents said I should be able to get it back.. The cooling off period has obviously ended now but I wanna get my money back.. What do you advise?

 

[D.T.]

Hey guys,
I had put .25% down for a house in st marys but when I did the B & P inspection during the cooling off period I found a lot of damage from previous termites and decided to pull out of the deal.. They kept my .25% even though I tried to get it back. Does anybody know the legals behind this and whether I can get my money back? All other real estate agents said I should be able to get it back.. The cooling off period has obviously ended now but I wanna get my money back.. What do you advise?

Worth reading the Fair Trading website for more details http://www.fairtrading.nsw.gov.au/f...s/Buying_property/Contracts_and_deposits.page

The part you're interested in will be:
If you use your cooling-off rights and withdraw from the contract during the five business-day period, you will have to pay the seller 0.25% of the purchase price. This works out to be $250 for every $100,000.

 

[ej89]

Worth reading the Fair Trading website for more details http://www.fairtrading.nsw.gov.au/f...s/Buying_property/Contracts_and_deposits.page

The part you're interested in will be:
If you use your cooling-off rights and withdraw from the contract during the five business-day period, you will have to pay the seller 0.25% of the purchase price. This works out to be $250 for every $100,000.

So legally I have no right to get my money back? I didn't pay 10% it was just the .25%. I paid it up front to hold the property before it went to open home

 

[Terry_w]

You should read the contract you signed as this has the terms of your agreement. Generally you would forfeit the 0.25% under the standard contract - but this was open to negotiation.

 

[DaveM]

Did you sign a contract or just paid .25%? NSW does not have holding deposits, its either on market or is under contract.

If you exchanged contracts then cooled off, then you forfeit your .25%. If no contracts were signed (or you signed but vendor did not ergo no exchange took place) then you are entitled to your money back

 

[Propertunity]

They kept my .25% even though I tried to get it back.

They have to forward it onto the vendor.

Does anybody know the legals behind this and whether I can get my money back?

You are not entitled to your 0.25% back if you exercise your cooling off rights.

All other real estate agents said I should be able to get it back..

I seriously doubt that This legislation has been in effect for 30+ years in NSW, I think they'd know how it works by now.

The cooling off period has obviously ended now but I wanna get my money back.. What do you advise?

Put it down to the cost of doing business and also the fact that you had total control of the property for the 5 business day cooling off period. In that time the vendor could not pull out of the sale, could not increase the sales price, could not sell to another party. That's why you pay the 0.25% in exchange for these rights as a purchaser.

 

[Propertunity]

Did you sign a contract or just paid .25%? NSW does not have holding deposits, its either on market or is under contract.

If you exchanged contracts then cooled off, then you forfeit your .25%. If no contracts were signed (or you signed but vendor did not ergo no exchange took place) then you are entitled to your money back

Not exactly, but generally speaking you are correct.

There is an EOI deposit (a bit like the old "holding deposit"). But it does not stop you being gazumped. All it does it force the REA to contact you if there are other offers on the property. Mostly it is not used, especially in the market as it has been the last few years, as it holds no legal weight at all.

 

[DaveM]

Not exactly, but generally speaking you are correct.

There is an EOI deposit (a bit like the old "holding deposit"). But it does not stop you being gazumped. All it does it force the REA to contact you if there are other offers on the property. Mostly it is not used, especially in the market as it has been the last few years, as it holds no legal weight at all.

Yep its more of a gentlemans agreement but not legally binding and gives 0 protection to buyer

 

[neK]

I seriously doubt that This legislation has been in effect for 30+ years in NSW, I think they'd know how it works by now.

Other agents say that as a way creating mistrust in other agents - and hoping as a result you would deal with them instead. Sneaky %@!(#ers.

 

[macca446]

You signed a legal document ,suck it up do your research more before you put money down

Macca446

 

[Terry_w]

It amazes me that there are still people out there that do not read contracts. Every investor should be reading the standard contract and should know it well.

Then when entering a contract you just have to read the special conditions.

 

[Scott No Mates]

If you have signed the contract unconditionally then there is no recourse. If you have conditioned the contract subject to satisfactory p&, finance or warthog infestation then you may have stood a chance. By the sound of it, you've used the cooling off clause without fault, so bye bye deposit.

 

[ej89]

Gee there are a couple of tough ones on here ay..I'm a first timer so I thought i'd ask for your help..Just wanted to make sure as it was very disheartening when it happened a month ago and then i got over it.

I thought I couldn't get it back too but I had been told by multiple agents that I could so I was a little confused and needed some clarity..

To those that helped make it clear, thanks. I'll learn from my mistakes. I overpaid them $2.50 and they've been calling me for the past 4 weeks to give it back and I don't want it so they're copping a bit of a hard time from me.. Figured i'd be a bit of a grub and make em work for their money..

The owner knew there were termites in the house. The floorboards that had been eaten by termites were left under the house and the inspector saw it when he went under there..

 

[Jacque]

Gee there are a couple of tough ones on here ay..I'm a first timer so I thought i'd ask for your help..Just wanted to make sure as it was very disheartening when it happened a month ago and then i got over it.

I thought I couldn't get it back too but I had been told by multiple agents that I could so I was a little confused and needed some clarity..

To those that helped make it clear, thanks. I'll learn from my mistakes. I overpaid them $2.50 and they've been calling me for the past 4 weeks to give it back and I don't want it so they're copping a bit of a hard time from me.. Figured i'd be a bit of a grub and make em work for their money..

The owner knew there were termites in the house. The floorboards that had been eaten by termites were left under the house and the inspector saw it when he went under there..

Hi ej

Yes it can be a hard lesson to learn however take heart and learn from your mistakes here for next time. Alan, Terry etc are correct in that the 0.25% is non-refundable unless your solicitor has put a clause in that was acceptable prior to exchange (some vendors agree but most don't as the 0.25% is considered a penalty for having the property off the market and unable to sell to anyone else).

When you secured the property with the 0.25% deposit you should have ideally signed an Authority to Exchange form in the real estate agent's office that looks something like the attached. This clearly states your rights here. Better luck next time

 

[neK]

Gee there are a couple of tough ones on here ay..I'm a first timer so I thought i'd ask for your help..Just wanted to make sure as it was very disheartening when it happened a month ago and then i got over it.

Tough love.
Good thing is that the loss of your 0.25% + harsh words = a lesson you will never forget

 

[Paul@PFI]

Next time consider - a subject to P&B being satisfactory without major defects noted within X days clause. Nobody will agree to an any defects clause or leave it open for weeks. P&B can usually be done in a few days (harder if its tenanted).

I have pulled out of a buy for this before without loss of a cent. If someone wont agree to an inspection its worth asking why. Do they know of a defect ? If you ask the agent they must tell you if you ask too !!

 

[Paul@PFI]

Next time consider - a subject to P&B being satisfactory without major defects noted within X days clause. Nobody will agree to an any defects clause or leave it open for weeks. P&B can usually be done in a few days (harder if its tenanted).

I have pulled out of a buy for this before without loss of a cent. If someone wont agree to an inspection its worth asking why. Do they know of a defect ? If you ask the agent they must tell you if you ask too !!

Its also worth seeking legal advice before signing any contract. All good lawyers in property will make time to talk before you sign. If not, find another.

 

[Choc]

Hey guys,
I had put .25% down for a house in st marys but when I did the B & P inspection during the cooling off period I found a lot of damage from previous termites and decided to pull out of the deal.. They kept my .25% even though I tried to get it back. Does anybody know the legals behind this and whether I can get my money back? All other real estate agents said I should be able to get it back.. The cooling off period has obviously ended now but I wanna get my money back.. What do you advise?

One thing I learn from my solicitor is to never pull out of a contract under the cooling off period terms; there is a penalty for that, as you have found out. If you can, always insert a due diligence clause that allows you to withdraw from the purchase without any penalty - get your solicitor to word that.

RE agents will typically stress that this looks bad on paper and owners will not agree to it, bla bla bla. I've not had one offer rejected based solely on this clause and it protects the buyer.

In QLD, you can withdraw from purchasing a property without penalty by using the P&B or finance clause. But if you exit on cooling off terms, exit penalty applies.

 

[Terry_w]

Or simply insert a clause allowing you to get the full deposit back if you pull out during the cooling off period.

 

[neK]

Or simply insert a clause allowing you to get the full deposit back if you pull out during the cooling off period.

Would this actually work though? As a vendor, I wouldn't be willing to accept it. Its pretty much opening the vendor up to get screwed. I would love to insert this clause - have you had any success with this for NSW?

Exception to the rule would be where there no one even looking at the property after multiple weeks other than the one person.