I think you'll find that the mortgagee(/s) hold all the power to decide who sells what to whom and for how much.
Bought property which is unable to settled
- Thread starter newinvestor07
- Start date
I am afraind Propertunity is right. My solicitor told us: We don't have much rights as the contract was signed between us and the vendor. The vendor breach the contract and we have the right to get compensation from vendor. However, the vendor is disappeared; if we sue the vendor, we could win the case, but the vendor could not met his obligation. We will end up waste money on legal fee and gain nothing. Therefore we have no any rights. We don't what kind of contract we signed with agent. The real estate agent said that it was standed contract. We ended up only have the pages we've signed.
I don't know there is contidional or unconditional contract exist. I thought the agent use the same standed contract. The full contract is quite thick. How am I going to know the contract is unconditional? Everyone including us have to learn the lesson. We have learned the hard way.
In the future, I still don't know how to avoid this kind of things. Any suggestions?
Anyone with ideas re properties' price tendency in the following month? It will help me to make decision: offer the higher price or move out
.
Thanks guys
I don't know there is contidional or unconditional contract exist. I thought the agent use the same standed contract. The full contract is quite thick. How am I going to know the contract is unconditional? Everyone including us have to learn the lesson. We have learned the hard way.
In the future, I still don't know how to avoid this kind of things. Any suggestions?
Anyone with ideas re properties' price tendency in the following month? It will help me to make decision: offer the higher price or move out
.Thanks guys
Hi Ozperp,
Thanks for your concerns. I really don't know what kind of contract we signed. How can I find out?
Viv
yes i thought that was the case. can you outline how that works in practice?
for example, if there are more than 1 mortgages on the property and by now the property is a forced sale, who engages the agent and determines the price to sell?
also is this disclosed to prospective purchasers ? are these properties usually sold at auction rather than by private treaty?
regards.
OK, Viv, it's clearer now. You did have an unconditional contract to purchase the property, but the vendor did not have the right to enter into that contract with you (because it was insufficient to clear the debt), and did not have the ability to execute the contract.
As your advice suggests, you have a cause of action against the vendor for entering into a contract which they weren't able to perform (ie for breach of contract), but in the case of a missing vendor with no assets, this is of little comfort.
At this point, your choices are to pay more or miss out on this property, and chalk this up to experience.
Please educate yourself. Do not sign any more contracts for real estate until you've learned a lot more about your rights and responsibilities under contracts.
As your advice suggests, you have a cause of action against the vendor for entering into a contract which they weren't able to perform (ie for breach of contract), but in the case of a missing vendor with no assets, this is of little comfort.
At this point, your choices are to pay more or miss out on this property, and chalk this up to experience.
Please educate yourself. Do not sign any more contracts for real estate until you've learned a lot more about your rights and responsibilities under contracts.
This sounds like the situation the OP is in.
How does anyone avoid this situation in future ? Or is it such an unlikely event that it's not worth worrying about ?
yes i would like to know this also.
when an agent is engaged to sell a property, does the agent check that the person selling owns/has authority to sell the property?
do they get written instructions from the lending body if the property is mortgaged and have to agree to a selling price with that body?
are situations like this disclosed to the purchaser?
if there are more than one mortgages on the property i expect it would get more complicated?
regards.
when an agent is engaged to sell a property, does the agent check that the person selling owns/has authority to sell the property?
do they get written instructions from the lending body if the property is mortgaged and have to agree to a selling price with that body?
are situations like this disclosed to the purchaser?
if there are more than one mortgages on the property i expect it would get more complicated?
regards.
I,m still trying to understand this and the mess you are in,first of all get a copy of the contract and see for yourself what's in there in black and white,why did you sign something that you knew nothing about?..
May well be very hard to litigate against the vendor if you can't even
get them to complete a contract,I have bought a few properties over ten years ago from Banks Fire sales,and every time it has taken several times to settle always problems,someone
bangs on a "CAVEAT", a week before settlement ,that contract goes belly up then you sign a new contract i think what Token Funder said covers everything-..good luck willair.."Caveat Venditor"
"You haven't bought anything until it settles...which it hasn't"
Token Funder..
The agent would ask what names the property was in and would need those names on his selling agency agreement but that would be all. The rest is up to the vendor's solicitor to do when preparing the contract of sale.
No. The only time an agent would be taking instructions from a mortgagee would be when it is the mortgagee arranging the sale - MIP.
No. Unless in the case of a MIP sale - where the mortgagee is listed on the contract as the vendor.
Generally speaking this situation with the OP would not occur much. Mostly there is only one mortgagee and mostly the sale price is enough to clear the mortgage and pay the REA and the solicitor with some left over. This situation here with the OP is uncommon but not unique.
At the end of the day, the OP can pay more (I wouldn't) or let it go for now with the possibility of purchasing it when it becomes a MIP sale down the track. The mortgagee/s will still have to accept market value and if that is not enogh to settle the debt - well then they can make a claim on the MI if there was one, or write off the debt or pursue the vendor to pay the remaining debt or bankrupt the vendor or all of the above.
thank you for those answers. it is interesting how complex things can potentially become. the more informed or at least well advised we can be the better, to avoid situations like the one being presented by the first poster in this thread.
so if you sign a contract to buy and the vendor cannot proceed because of debt obligations, then the contract would be invalid and it would be wise to move on? any deposit would be refunded?
regards.
so if you sign a contract to buy and the vendor cannot proceed because of debt obligations, then the contract would be invalid and it would be wise to move on? any deposit would be refunded?
regards.
From what the OP said, I cannot see any way to have avoided this situation. The OP is still getting free rent which is one upside.
Well the contract would not be able to be enforced as the mortgagee's rights seemingly override the vendor's.
Yes or buy later at the MIP sale
Yes
That would be the first item you would look at "Who's"name is in the contract,before you even open the front gate prior to walking onto the site ,once you know it's in the hands of the bank then it is a different ball game,it can work well in a down market,where all the bank wants is fair market value and you have limited numbers of buyers with high numbers of properties that just don't sell, that has happened several times over the past 20 years, not so sure it would work that well in the market we are in but all markets change..imho willair..
Thank you, Ozperp! What should I do now? I have offered orally $10k less to the real estate agent who was going to discuss with mortgagees. It has been 2 days. No answer yet.
Please let me know how I am going to do next. If they accepted my offer, do I sign contract with agent first or let them sign first? I don't know what I am looking for...
plenty thanksssss
Viv
Dear VivThank you, Ozperp! What should I do now? I have offered orally $10k less to the real estate agent who was going to discuss with mortgagees. It has been 2 days. No answer yet.
Please let me know how I am going to do next. If they accepted my offer, do I sign contract with agent first or let them sign first? I don't know what I am looking for...
plenty thanksssss
Viv
Before I saw your thread. I listed mine. I am in the situation in reverse to yours. My thought on yours:
1. All people suggest you to walk away but you did not want to --- you love the property and thought it would be a bargain. That is the problem. If you wait at the auction you could have it for less price. What is the price of the house you buying? $23k over 1m is not much? but $23k over $200k is too much.
2. I do not see you have much rights - you can claim for demage -- what demage has the vendor done to you? nothing but stress as you claimed.
I want to pull out of the contract because the bank wants me to pay their high unreasonabe fee and I do nto want to bother taking the bank to court to get the money back. I sold to the buyer myself. I am studying any implications to me - I am reading the conditions of sale and could not find much they can claim against me as long as I refund the deposit to them.
Hi TheAnalyst,
I did think about moving out, but I didn't. The reason are:
1. Moving house will cause me headache
2. The important reason: I don't think I can buy the property back on the auction or another similar one by spending the same amount, as I looked around this area, people is getting crazy to buy properties. The purchaser bit each other to offer 50k-120k over the higher price. I thought the price would be slow down after end of september, but there has no signs of it.
I bought it (signed the sale contract )at begining of Jun, the properties' price have increased remarkablly since then. I don't see I have any chance to get it back
Am I thinking right? I doubt about myself sometimes after all the tortures.
Thank you very much!
Viv
I suggest you sit tight (enjoy the free rent while you can).
At the same time, look around at properties for sale. You will then have to decide whether you WANT to offer $23K more for the one you are residing in, or if you can get a better deal elsewhere.
If you do decide to offer the $23K (or less if you can get them to agree which is unlikely), you will be letting everyone off the hook. For that reason I suggest you negotiate for a long settlement (90 days at least?) to extend your rent free period.
Ensure you obtain confirmation that this will pay out ALL mortgages and that settlement will not be delayed again.
Marg
At the same time, look around at properties for sale. You will then have to decide whether you WANT to offer $23K more for the one you are residing in, or if you can get a better deal elsewhere.
If you do decide to offer the $23K (or less if you can get them to agree which is unlikely), you will be letting everyone off the hook. For that reason I suggest you negotiate for a long settlement (90 days at least?) to extend your rent free period.
Ensure you obtain confirmation that this will pay out ALL mortgages and that settlement will not be delayed again.
Marg
Thanks Marg for clearing my head, I am going to do what you said. The real estate agent did ask me if I can settle in 30 days if they agreed with the price I offered. I real don't know how long I am going to need. How am I going to convince them that I need 90 days? Please help me with strategies:
.Thanks for all your supports and ideas, really really appreciate!
Help........
I received the call from realestate agent today: my offer was rejected after mortgages' discussion. They asked us either to accept the price ($23k more) or move out in 28 days--according to the agent. They apparently consulted with another real estated agent about the price and result was this property can be sold over the price they offered me. I think this is true currently as sale market remains crazy.
I wanted to move out now emotionally, but I am afraid that I can never buy the similar house in this area again. I don't feel the price will drop back in JUNE 2009.
Does it mean I will lose more money if I move out?
Any thoughts and suggestions ???
Viv
I received the call from realestate agent today: my offer was rejected after mortgages' discussion. They asked us either to accept the price ($23k more) or move out in 28 days--according to the agent. They apparently consulted with another real estated agent about the price and result was this property can be sold over the price they offered me. I think this is true currently as sale market remains crazy.
I wanted to move out now emotionally, but I am afraid that I can never buy the similar house in this area again. I don't feel the price will drop back in JUNE 2009.
Does it mean I will lose more money if I move out?
Any thoughts and suggestions ???
Viv
All mortgage interests would be listed in the section 32 for Victoria.
Cheers,
The Y-man
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!
You're now living for free in a property, and you now have the option to buy it. It's as simple as choosing between the following three options:
1) pay the price they're asking,
2) take your chances at auction, or
3) move out and find another home.
It sounds as though the market is quite hot, thus I'd be tempted to forget about option 2, but that's only based on the impression I've gained from your posts, I have no idea whether your assessment of the market is correct or not.
We can't tell you which of these is going to work out best for you - only you can decide that. Good luck.
You're now living for free in a property, and you now have the option to buy it. It's as simple as choosing between the following three options:
1) pay the price they're asking,
2) take your chances at auction, or
3) move out and find another home.
It sounds as though the market is quite hot, thus I'd be tempted to forget about option 2, but that's only based on the impression I've gained from your posts, I have no idea whether your assessment of the market is correct or not.
We can't tell you which of these is going to work out best for you - only you can decide that. Good luck.
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