Bad Property Get Out

[jewell]

Hi everyone

A few months ago I advised that we had purchased a property and it was not valued as we were led to believe and wanted to get out of the contract.

We are over the top - the best Christmas present we could ask for - we no longer have a contract with this company or anyone associated with them.

We have learnt some very hard and fast lessions - this experience will be in our minds for sometime.

I would like to thank everyone for their advice and assistance.

Merry Christmas to all.

Jewel

 

[Kevmeister]

Jewell, that's good to hear you managed to extricate yourself from a difficult situation.

Although, to play devil's advocate, isn't that what caveat emptor means? (buyer beware).

Can you pm me the name of the developer and which development this was, for my personal knowledge?

 

[asy]

Wow,

Well done Jewell...

If you don't mind me asking, how did you do it??

asy

 

[Peter_Tersteeg]

One of my standard clauses on a contract is that a registered valuer represneting my lender will value the property to at least the purchase price.

Most agents are okay about that clause. If they aren't, I ask why they're not confident that it will value at that price.

 

[Glenn]

Good work Jewell,

It's good to hear that someone who puts their faith in the laws of the country can be rewarded when someone tries to pull a shifty...you have done a good thing not just for yourself but for a lot of people by bringing this into the open.

Glenn

 

[phm]

Hi there PT Bear

Just a question regarding your clause. I thought that if the valuer for your financial institution didn't feel that the property was worth the purchase price, then they would reject it, and therefore your finance would not be approved, thereby releasing you from the contract. Am I missing something?

 

[investor]

Originally posted by phm
Hi there PT Bear

Just a question regarding your clause. I thought that if the valuer for your financial institution didn't feel that the property was worth the purchase price, then they would reject it, and therefore your finance would not be approved, thereby releasing you from the contract. Am I missing something?

Hi phm

That wouldn't work if he's like me, I buy the IP first and then organise the finance in the settlement period.

Regards

 

[Kevmeister]

I have also heard about other workarounds to the "finance" clause, if it is worded "loosely". A simple clause like "Subject to Finance", if it does not include for example the name of the bank, the maximum interest rate, the amount to be borrowed etc, could all be potentially circumvented by the vendor I guess.

For example, a regular bank might not give you the loan but a second-tier provider might take the loan on as a Low-Doc with higher interest rate.

 

[phm]

Hi Kevmeister.

Your finance clause can be worded something like, "subject to finance suitable to the purchaser" would prevent that problem with the vendor.

 

[Kevmeister]

Hi Phm,

Interestingly, this same comment was noted by Dolf De Roos in his book "Real Estate Riches", which I am reading at present...