Bought property which is unable to settled

[newinvestor07]

Viv, you're getting all worked up and confused, but it's really quite simple. It seems that you can't force them to sell at the price you'd previously agreed. (Even if you could, your legal costs would far outweigh the benefit.) I think you are being confused and held back by thinking about the past, and dwelling on the deal that you thought you would be getting. It's really not relevant to your decision-making, because that deal was never finalised and it's no longer an option. Forget about it!

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Dear ozperp,

You are right. I have been living in the past and kept thinking how wise was the decision I made, as the property's price increased remarkably after we signed the contract. I really need to accept the fact, see what option I have at moment.
I really appreciate your support.

Viv

 

[Princess]

Is there any way to learn how many the vendor owes to their bank?
(in case a property is under only one mortgage)

As I understood, it really does not matter how much you agreed to pay for a property, but how much left on the vendor's mortgage against this property.

And another question is: If the vendor has say 2 more other properties under the same mortgage, is it a different situation to the case above?
(different in the meaning that a settlement day can not happen on the agreed date or even can not happen at all because of some bank issues)

Thanks in advance!

 

[Perp]

Is there any way to learn how many the vendor owes to their bank?

As a prospective buyer, you have no right to that information. You can always ask - but I imagine 99% of vendors would tell you "none of your business". You could, however, say that you intend to make an offer, but will only do so if the vendor tells you if they are aware of any financial impediment to the sale proceeding, such as if their debt exceeds your offer, or if there are caveats on the property. Then if you proceed to contract, make sure your solicitor includes wording that the vendor indemnifies you against any losses consequential to your reliance on their written answers to these questions.

As I understood, it really does not matter how much you agreed to pay for a property, but how much left on the vendor's mortgage against this property.

If the vendors have no other assets, yes. But quite a few vendors - particularly if middle-aged or senior - will have $100K or more sitting in the bank, and be prepared to tip in the "excess" if they really need to get out of the property (eg divorce, moving interstate, etc).

And another question is: If the vendor has say 2 more other properties under the same mortgage, is it a different situation to the case above?
(different in the meaning that a settlement day can not happen on the agreed date or even can not happen at all because of some bank issues)

You can end up in the same situation - in fact, it makes it twice as likely. Even if the property you want to buy hasn't gone down in value, if the other one has, they may want you to pay down more than the sale proceeds to keep the LVR down on the property which has gone down in value.

 

[Princess]

Thank you so much for the clarification!

My solicitor put no wording you mentioned, even I asked him if there were any things wrong or to be aware of in sec 32 (I saw it was under mortgage but I could not realize what it could result to). Silly me.

Eh, I feel so stupid that I receive nothing, even for money I pay, to make me safe as possible in the buying process. It's not a problem for me to learn some things to be aware of, but I thought that a law-professional should give an advice in advance.. Heh.

We put an offer, signed a contract, prepared all docs, and now waiting for the vendor's side. And I found out that the vendor's bank slows down all the process, so I thought to find out what issues can occur related to that slow down knowing that the property is under mortgage. And then I found this topic. A-a-a Settlement day is not so soon, but i'm already scared a lot .

So the only thing that we can do now is just sitting calm all fingers crossed. And to prepare to the worst scenario in advance

Thank you again so much!