Dodgy RE Agent (Part 982)

[jodes92]

Need to seek this forum's wisdom..

Am about to make an offer on an IP (located in NSW). Have been chatting to the RE agent about it for a few days (won't go into the dodgyness there..)

Want to make an offer subject to financing and adequate results from building/strata/pest inspections etc. I have approved financing but it is contingent on valuation of my PPOR and this place.

RE Agent is telling me if i put down a 0.25% deposit, it will be taken off the market and I will then have 5-10 days to do checks, financing accepted etc. (cooling off period). However should anything untoward happen (ie financing declined, dodgy building report), I will lose my deposit.

Is this true? I have been told by several people that I should be able to get a refund based on these things but RE Agent is adamant this isn't the case...

Advice welcome!

 

[Jacque]

Hi Jodes

Yes your agent is correct. Here in NSW once you exchange contracts with the vendor and pay the 0.25% deposit if you rescind (for any reason) the 0.25% is forfeited. To avoid this (though you take a risk that someone else may buy) try to do your searches beforehand. Best of luck.

 

[Mr. Fabulous]

What happened to the other 981 parts?

 

[Perp]

RE Agent is telling me if i put down a 0.25% deposit, it will be taken off the market and I will then have 5-10 days to do checks, financing accepted etc. (cooling off period). However should anything untoward happen (ie financing declined, dodgy building report), I will lose my deposit.

Yes your agent is correct. Here in NSW once you exchange contracts with the vendor and pay the 0.25% deposit if you rescind (for any reason) the 0.25% is forfeited.

My understanding is that this is a difference in practise between the states, rather than law (though I'm prepared to be corrected if I'm mistaken).

In NSW, unconditional contracts aren't "the norm", as they are in many other states. I understand that you can have a conditional contract in NSW - you can ask for any special conditions you want, provided they're legal - and if accepted, you can get your deposit back if the conditions aren't satisfied. Real estate agents have conditioned the NSW public that they "have" to use the cooling off period to conduct all their due diligence, and thus conditional contracts are unlikely to be accepted by vendors, but I would hope that in a buyer's market that agents and vendors have to reconsider this position.

Can anybody else confirm whether conditional contracts are prohibited in NSW, or (as I suspect), simply not common practise?

 

[twobobsworth]

Can anybody else confirm whether conditional contracts are prohibited in NSW, or (as I suspect), simply not common practise?

Just not the norm. I have yet to see a standard resi contract with conditions and my solicitor hasn't seen one in the last 10 years.

I once put in subject to bank val & the look on the agents face was one of confusion, put in the too hard basket & sent off to the solicitors to exchange.

 

[porp_e]

I think there's two parts to this: When we bought our place in NSW (last May) we intially had finance declined and were refunded our entire deposit including the intial 0.25% as we had a subject to finance clause in the contract. In NSW you only forfeit the 0.25% deposit if you decide to withdraw from the contract during the 'cooling off period' (5 days in NSW not 5-10days), this is to compensate the seller from change of mind purchasers.

Jodes92, it sounds like the RE Agent is trying to play hardball with you although I dont understand why? A subject to finance clause will cover you if your finance is not approved and this is usually '30 days subject to finance' although you can specify the time frame on the contract of sale. Its a good idea to get the building and pest inspection done during the 5 day cooling off period (and this is what my solicitor advised so not sure of people's experiences with it?)as its difficult to break a contract after the cooling off period for 'unsatisfactory' building or pest report (in NSW).

The buying process is a bit convelluted in NSW IMO and confusing! Seek advice from a conveyancer if still unsure or the RE Agent continues to give you misleading info.

 

[cu@thetop]

What happened to the other 981 parts?

Search the forum for them Mark. Gotta be at least that many

 

[porp_e]

RE Agent is telling me if i put down a 0.25% deposit, it will be taken off the market

There's also some more info on the NSW fair trading website that was super helpful when we bought our first place http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Buying_property.html

 

[BuildingBlocks]

A subject to finance clause will cover you if your finance is not approved and this is usually '30 days subject to finance' although you can specify the time frame on the contract of sale.

However as mentioned, not really done in NSW.

I requested to add this clause, or an extension of the cooling off period to a contract just before Christmas as people were on holidays which caused some delays in finance, however the request was rejected by the vendor's solicitor. I had to run the gauntlet without the exchanged contracts while waiting on the unconditional approval.

You could always give it a shot and ask though, however as a vendor I wouldn't want take my property off the market unless I knew almost for sure that the purchase was going ahead.