Curly question about a finance clause

[Tuppence]

hi all, we're in the process of trying to buy IP2 in Ballarat. We're struggling a little with the pace they (real estates, legal teams etc) seem to do things up there.
We started with a verbal agreement two Fridays ago. We eventually received a paper contract on the following Tuesday. We signed it and I drove up to Ballarat on the Thursday (Dec 2) to return it and measure the property (at the conveyancer's insistence).
The vendors then took a further four days to sign the contract - December 6. I received an email copy of the relevant pages two days after that - the 8th - and have still yet to receive a proper paper copy of the contract (although I understand our conveyancers received one on Friday).
The issue is that our subject-to-finance clause also expired on Friday - the 10th. We warned the conveyancers last Wednesday (the 8th) that no-contract = no finance = equalled no deposit cheque, and sought an extension for a week. As of 5pm Friday, we had not heard from the vendor's solicitor to say that they had (or had not) accepted that.
So my question is - where does the contract stand now? We've paid only a $1000 holding deposit and still, assuming the contract hasn't been crashed, owe them the balance of the 10 per cent deposit.
[sorry for the long-winded post, and hope it's not too confusing with all those dates ]

 

[VIC Lender]

Are you going via a broker or direct with a bank?
Who is the lender?

Depending on the lender - you might be able to have finance unconditional faster than doing anything about the contract. E.g. If they can use the contract and RP data for the valuation it could be unconditional with 10 minutes (once again it depends who is doing the finance).

I'd also say that the valuation should have been completed if you at least had the extract of the contract showing the price etc...therefore the whole process should not have delayed the finance part. I personally would even order a Val without a contract and just supply the real estate agents contact details to the valuer.

In terms of the contract. Technically the cooling of period starts the day the buyer signs the contract ( not the vendor as some believe).

I would see if you can get finance unconditional Monday morning and then there would be no problem. If you had no reply to your extension request on Friday your options were to go unconditional ( as you have) or pull the pin on the contract.

 

[Tuppence]

If you had no reply to your extension request on Friday your options were to go unconditional ( as you have) or pull the pin on the contract.

I guess that was my real question - I'm surprised that we'd now be unconditional, given that we put in a request for a finance extension and they didn't respond by the time the finance clause expired. But that's why I'm asking ...
My issue is really not so much about the finance not being approved (and our broker did put in a request based on the emailed signed contract pages), and more the slow speed of the vendor's response. I would have expected that given we didn't pay the deposit by the due date, then - all else being equal - the contract falls over.
FWIW, the loan is with ANZ and we heard on Friday that we do have finance approval - subject to a PPOR valuation, which is happening Wednesday. I don't expect there to be any issues there, but it's a further delay.

 

[Bradsdad]

G'day Tuppence

if you have requested and extension and haven't heard back I belive that it's as good as the extrention being approved until you hear otherwise. Double check with your solicitor on this but I've been advised many a time that this is the case.

I'd also suggest your broker keep onto ANZ to ensure the valuation comes back in a timely manner. If he doesn't give him an earful

 

[Tuppence]

G'day Tuppence

if you have requested and extension and haven't heard back I belive that it's as good as the extrention being approved until you hear otherwise. Double check with your solicitor on this but I've been advised many a time that this is the case.

I'd also suggest your broker keep onto ANZ to ensure the valuation comes back in a timely manner. If he doesn't give him an earful

Thanks Bradsdad... we're getting a little bit of tone from the conveyancers, IYKWIM - as if we're pushy big-city folk who need to lighten up a little. I was just going to sit back and wait at least til Wednesday, when the valuer comes through our place, and then see where we're at.
Will take your advice re the broker too. cheers.

 

[Bradsdad]

OUCH .....just read my post and an "extrention" sounds kinda painful

 

[tobe]

Ballarat is a bit like that. What does the agent say? he is probably in the best position to keep your contract alive, as its his commission that rests on it.

 

[pwinne]

Ballarat is a bit like that. What does the agent say? he is probably in the best position to keep your contract alive, as its his commission that rests on it.

It sure is, I've bought 3 there in the last 12 months and I'm in the process of building one.

Boy oh boy, its just a big country town where your word is your word. They don't seem to give a stuff about the legals.

 

[Tuppence]

We're still ticking over, it seems. Signed finance docs last Friday and have gone unconditional... but still haven't paid the 10 per cent. Hoping to do that tomorrow or Wednesday (conveyancer shuts for Christmas after that so that could mean more problems ... or not). I'm now taking the view that unless we hear from the vendor with a ''nope, the deal's all off'', then it's still on.
It's true, it does seem like trying to do a deal in a country town - albeit one that is less than an hour and a half from Melbourne and with 90,000-plus people.
getting there, step by very small step ...

 

[Perp]

I guess that was my real question - I'm surprised that we'd now be unconditional, given that we put in a request for a finance extension and they didn't respond by the time the finance clause expired. But that's why I'm asking ...

(I'm speaking from a QLD perspective but I believe the same applies in Victoria.) The deadline for a condition is a limited time opportunity for the buyer to withdraw from the contract for a particular reason. If the buyer fails to act on that opportunity, and exercise the right to withdraw, the contract becomes unconditional upon expiry of the deadline. Your request for an extension should have been accompanied by a notification that if the vendor fails to respond to, or declines, the request for an extension, that you wished to exercise your right to withdraw from the contract due to failure to meet the condition.

Your representative (conveyancer/solicitor) should be thoroughly aware of that and was negligent (IMHO) if they didn't do it this way, but just put the request for an extension without the accompanying notification of withdrawal.

The fact that you haven't paid your deposit doesn't make the contract non-binding; it just means that, if you fail to settle, the vendor would have to sue you for the deposit rather than simply having it released from the real estate agent's trust account. They'd have every right to sue you and would win.

If I were you, I'd be very annoyed with your conveyancer/solicitor. It may well be that the other side have a similarly casual approach and it will all be fine, but that's no excuse for jeopardising your legal position. If your finance weren't eventually approved, and the other side knew and wished to enforce their rights, you'd be in an unenviable legal position. Turning up to Court and having your conveyancer/solicitor say "yeah, but we're from the country and we thought she'd all be right" is unlikely to cut it as a defence. You'd probably then have a subsequent cause of action against your conveyancer/solicitor for their professional negligence, but it'd be much preferable and less hassle to just do the job properly in the first place.

 

[Tuppence]

Thanks Perp, I appreciate the advice - and I suspect it's pretty sound down here as well as in Queensland.
Suffice to say, buying this Ballarat place has been a bit of a learning curve for us . We eventually paid the deposit yesterday (after some extremely deft jumping through hoops by our broker to escalate the funds to have the deposit available).
Real estate, conveyancer and, presumably, as we haven't heard otherwise, vendor all seem to be happy with the situation. We settle in a month.