I think you'll find that the mortgagee(/s) hold all the power to decide who sells what to whom and for how much.
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You need to get clear answers to these questions:
1) Do I have an unconditional contract to purchase the property (at that lower price)?
2) If I do have an unconditional contract, am I able to push for "specific performance"? (ie settlement as per the contract)
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I think you'll find that the mortgagee(/s) hold all the power to decide who sells what to whom and for how much.
This sounds like the situation the OP is in.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.
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?..Hi Ozperp,
Thanks for your concerns. I really don't know what kind of contract we signed. How can I find out?
Viv
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.when an agent is engaged to sell a property, does the agent check that the person selling owns/has authority to sell the property?
No. The only time an agent would be taking instructions from a mortgagee would be when it is the mortgagee arranging the sale - MIP.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?
No. Unless in the case of a MIP sale - where the mortgagee is listed on the contract as the vendor.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?
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.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.
Well the contract would not be able to be enforced as the mortgagee's rights seemingly override the vendor's.so if you sign a contract to buy and the vendor cannot proceed because of debt obligations, then the contract would be invalid
Yes or buy later at the MIP saleand it would be wise to move on?
Yesany deposit would be refunded?
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..No. Unless in the case of a MIP sale - where the mortgagee is listed on the contract as the vendor.
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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.
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
Dear 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.
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
In the future, I still don't know how to avoid this kind of things. Any suggestions?