Buying ? divorce sales.

[KangaBanga]

Hi all, I am looking to buy a 1 year old house in sydney listed as offers >900k for my PPOR, last bought from developer for 840k. Has mortgage on it otherwise easement free. main question bugging me before proceed to offer is whether this is a divorce sale...

Anyway to find out if it is?

Have not asked vendor directly/bluntly as he is selling house himself without an agent and states that the joint tenant is his partner(i expected him say wife?) when asked about his relationship to her. But evidence on inspection day shows he is living in the house by himself (WIR only men's clothes) and a set of computer and some furniture seen in online pics posted have already been moved away already.

Is there any side ways around this like calling his lawyer to check? (i have the contract of sale) do lawyers have to declare the clients are divorced in the contract of sale?

Anyone experienced in these matters please comment...

 

[wylie]

Will it make a difference to what you offer? If you want to lowball them, just do it and see what they come back with.

 

[pinkboy]

Hi all, I am looking to buy a 1 year old house in sydney listed as offers >900k for my PPOR, last bought from developer for 840k. Has mortgage on it otherwise easement free. main question bugging me before proceed to offer is whether this is a divorce sale...

Anyway to find out if it is?

Have not asked vendor directly/bluntly as he is selling house himself without an agent and states that the joint tenant is his partner(i expected him say wife?) when asked about his relationship to her. But evidence on inspection day shows he is living in the house by himself (WIR only men's clothes) and a set of computer and some furniture seen in online pics posted have already been moved away already.

Is there any side ways around this like calling his lawyer to check? (i have the contract of sale) do lawyers have to declare the clients are divorced in the contract of sale?

Anyone experienced in these matters please comment...

What do you hope to achieve by knowing if it is a divorce sale or not?

Calling his lawyer? Yeah, like they are going to spill the beans and break privacy laws!

Sounds a bit 'busy body' to me!

pinkboy

 

[beachgurl]

Why does it matter?

My husband and I are currently separated and we've just accepted an offer on our house for sale. The offer we accepted and the terms of the sale are no different than if we had put the house on the market as a co-habitating couple.

 

[KangaBanga]

everyone thanks for the replies

wylie : exactly what I was thinking, thanks i will proceed with lowball offer.

Pinkboy : as wylie said, it will make difference to my offer. Don't want to end up with a caveat placed on the house halfway, delaying settlement like I read in someone else's post..

Was just wondering if any experts here were aware of any disclosure rules for lawyers/sellers/agents with regards to divorce or divorce proceedings ongoing.

I find that I am just doing due diligence on my part. Isn't talking to neighbours about a property and its owners also considered being a 'busybody' but can potentially provide a wealth of background information which seller may be otherwise not willing to share?

beachgurl : for formal divorce there is no problem to the buyer as court has ordered property be sold and profits if any to be shared. I am worried about if a separated couple suddenly start formal divorce proceedings...

 

[MRO]

He has already told you about the joint tenant on the title so no reason why the partner would get upset when they are obviously going to sign any valid contract.

The only problem you would of have if he hadn't disclosed the other person on the title (which you could check and would be picked up well before settlement).

 

[KangaBanga]

thanks MRO

was just reading some horror stories down at the legal thread

http://somersoft.com/forums/showthread.php?t=80297

 

[buzzlightyear]

The sellers can authorise their agents (ie selling agent or legal representation), if asked by prospective purchasers about the reason for sale. If they do not, then any disclosure of that is in breach of the Privacy Act and is subject to penalties for memory of up to $20,000 for an individual and $200,000 for a corporation

To be honest, having it divulged legally, can work against you, as other prospective purchasers may think this is going to be a bargain and it ends up attracting more interest.

As a neighbour, if I was asked questions about a sale, I wouldn't divulge anything. Firstly, its not appropriate. Secondly, my interests as a neighbour are more aligned to the vendor in getting the best price possible, as it reflects better on my property.

Good luck with your due diligence.

 

[wylie]

wylie : exactly what I was thinking, thanks i will proceed with lowball offer.

Pinkboy : as wylie said, it will make difference to my offer. Don't want to end up with a caveat placed on the house halfway, delaying settlement like I read in someone else's post..

I hope you don't think I was suggesting a lowball offer... but that is what I thought the question was about. Plenty on here will and do lowball offer. It is not something I've ever done, and never would do. That might make me a chump, but I'd hate to know that I got a "real steal" due to someone's misfortune, death, separation etc. I once paid over the asking price, but generally try to negotiate a little off the asking price, and most vendors would know they will have to negotiate a little.

Why not just offer what you think the house is worth to you?

The other thing with trying to take advantage of an unfortunate family or life situation (death, divorce, financial problem) is that you could seriously pi$$ off the vendor and that could backfire for you.

 

[KangaBanga]

thanks MRO and BUzz for input,

Buzz I would like to have a neighbour like you instead of the old ladies across the street peering out through their window curtains...

wylie : you are a really nice guy and will have very good karma accumulated in your lifetime..

I am more of a value type when it comes to buying assets,
"Investment is most intelligent when it is most businesslike" - Benjamin Graham

in case of a divorce sale is there any way to check with the courts or registries? If I could confirm this then won't I be in a much better position to bargain?

 

[wylie]

in case of a divorce sale is there any way to check with the courts or registries? If I could confirm this then won't I be in a much better position to bargain?

I believe having to negotiate with two people, who may or may not like each other, could be more tricky than negotiating with a couple who are "on the same page".

Don't lose sight of the fact that a couple who are separating but have listed their house for sale, and subsequently must be agreed to do that, are likely both willing to sign the contract, but both will be looking to maximise the sale price because they are each only getting a portion of it.

I also would think that if they are separating and selling, the initiating of official proceedings to legally divorce is not something that would affect your contract (unlike the death of one party - which could cause delays).

 

[KangaBanga]

wylie : i would think in separation it is hard to tell, wife may want to get deal done ASAP and accept reasonable low offers that can cover their mortgage, even if offer is below their purchase price. especially if I am not using any finance to buy

which is another thing i think is important to know how much mortgage outstanding... any way to find out before exchanging contracts?

 

[eeho]

The situation may not necessarily be a divorce, perhaps the family is moving interstate/overseas and the husband stayed back to oversee the selling process?

Regardless, I agree with Wylie; just offer what you believe the property is worth, or perhaps a little lower if you want your bargain.

 

[Corey Batt]

Divorce sales don't necessarily equate to cheap prices. I had a client recently who purchased a divorced sale, the new girlfriend (read: gold digger) tried to get the vendor to pull out post contract signing as she thought he could get more, which could go to buying her a new car.

Another one recently had the wife complaining that she wanted x amount, whilst the husband was happy to accept lower to get it over with. The wife appeared to just be wanting to drag the process out to keep contact with the husband.

The best deals I've known of involve parties having a subject to sale clause in place which is near expiry. They will cut 30-40k without batting an eyelid if it's a sure thing and moves them on to their new shiny place.

 

[Andrew_A]

'Why are they selling' ... Often asked about this question and what the answer is. I think it's better to work around, after all why they are selling is not important to you, only the results of what they might expect in price and conditions.

Find out motivations for time, is shorter settlement a big plus = could bargain price down in compensation. And so on.

 

[KangaBanga]

Andrew A : why would the seller let on to me that the sale is urgent if it is? is this the norm in your experience? that would surely ensure that a buyer would exploit this information. I will try to ask anyway..

 

[Rolf Latham]

Andrew A : why would the seller let on to me that the sale is urgent if it is? is this the norm in your experience? that would surely ensure that a buyer would exploit this information. I will try to ask anyway..

pretty obvious when they want a 30 day settlement, a 3 day finance and 3 hr pest and build clause

ta

rolf

 

[KangaBanga]

update

I offered 850k cash purchase 2 days expiry. Suburb median price has been downtrend 9.5% YOY anyways and similiar houses same street 900k

Offer rejected with an ambiguous story of higher offer than mine already rejected and negotiating with another buyer. No mention of how much they are offering in either case. Invited to contact if ok for 920k.

Vendor has also since reduced list price, so a search with lower value shows the property, trying to generate more interest?

Feels like fishing going on.

told vendor to give me highest offer or call me back instead if he decides to sell less than 920k and i am offering other places

lets see what happens

 

[Big Will]

So what happened?

I agree with everyone else, pay what you feel the property is worth.

Divorces can be messy and if you are trying to screw on price cause of their misfortune then shame on you along with the fact that it will be harder two separate people to agree than one joint couple.

 

[Andrew_A]

Andrew A : why would the seller let on to me that the sale is urgent if it is? is this the norm in your experience? that would surely ensure that a buyer would exploit this information. I will try to ask anyway..

Usually it's the agent of the seller letting this information go, they want you to buy the property as well. Also if't it genuinely urgent there's probably a very good case for either pricing it that way or letting people know to try their fortune.