Getting out of an Unconditional Contract - Is it possible?

[Property Invest]

Under the terms of the contract they will notify you after the certificate of occupancy has been provided by council, upon which you have 14 days to get finance. But usually they will let you know much earlier.

If they are still at the slab stage you won't be finished for at least another 3 months.

That's exactly right, 14 days which is not enough time for me to organise finance, nor its their fault they cannot give me a date but an indication or estimation would help.
I have also worked out that it may be 3 months so that's why I'm trying to organise myself now.

 

[Aaron_C]

That's exactly right, 14 days which is not enough time for me to organise finance, nor its their fault they cannot give me a date but an indication or estimation would help.
I have also worked out that it may be 3 months so that's why I'm trying to organise myself now.

I'm not sure what your current broker has advised you but maybe it is best to avoid going for the home loan now while your credit file has been trashed. Try to fix it up for the next 1-2 months BEFORE you apply for the home loan. Then maybe you can get the loan with a normal lender and avoid the non-conforming area. But make sure your broker is familiar with the non-conforming area as not everyone deals with it - it ain't your normal residential bread+butter

 

[Dazz]

I don't think it's honourable asking for help to worm out of an unconditional contract, and I certainly don't think it's honourable to render that assistance.

Given the above, the only ones that can help you are lawyers.

You've made about 6 or 7 really fundamental basic boo-boos to get yourself into this position in the first place....and with your previous credit defaults, it's clear you haven't learnt too many lessons from previous mistakes.

Sometimes you have to face the music, and be forced to grow up financially.

 

[Property Invest]

I'm not sure what your current broker has advised you but maybe it is best to avoid going for the home loan now while your credit file has been trashed. Try to fix it up for the next 1-2 months BEFORE you apply for the home loan. Then maybe you can get the loan with a normal lender and avoid the non-conforming area. But make sure your broker is familiar with the non-conforming area as not everyone deals with it - it ain't your normal residential bread+butter

Did you mean the next 1-2 months or 1-2 years?
All my defaults have been settled and all but one has been updated to settled in the report. The other one is coming.

If I could get out of the contract I would wait another 2 years when all defaults drop off the report. Then I would approach a normal banker.

However if I get a non conforming loan I would refinance after two years with a normal lender.

I really appreciate you staying up and leaving some very useful comments

 

[Aaron_C]

Did you mean the next 1-2 months or 1-2 years?
All my defaults have been settled and all but one has been updated to settled in the report. The other one is coming.

If I could get out of the contract I would wait another 2 years when all defaults drop off the report. Then I would approach a normal banker.

However if I get a non conforming loan I would refinance after two years with a normal lender.

I really appreciate you staying up and leaving some very useful comments

No problems. Make sure all defaults are cleared before you apply otherwise you are going to have difficulty. You have another 2 months to make that happen so I think you should wait.

 

[Property Invest]

No problems. Make sure all defaults are cleared before you apply otherwise you are going to have difficulty. You have another 2 months to make that happen so I think you should wait.

When you say cleared, you mean updated to payed?
Because if not then they will not clear or drop off the report for another two years.

I didn't think any normal bank would look at me when having defaults, whether payed or not.

 

[Aaron_C]

When you say cleared, you mean updated to payed?
Because if not then they will not clear or drop off the report for another two years.

I didn't think any normal bank would look at me when having defaults, whether payed or not.

That's not true. They do look at your application, as long as the defaults have been paid and you can explain what happened. Happened to a client of mine, and we managed to get the deal through even with LMI. Never say die.

 

[Property Invest]

I don't think it's honourable asking for help to worm out of an unconditional contract, and I certainly don't think it's honourable to render that assistance.

Given the above, the only ones that can help you are lawyers.

You've made about 6 or 7 really fundamental basic boo-boos to get yourself into this position in the first place....and with your previous credit defaults, it's clear you haven't learnt too many lessons from previous mistakes.

Sometimes you have to face the music, and be forced to grow up financially.

That last comment I totally agree with, fundamental mistakes have been made here but I'm learning from them. However the more I ask the more I inform myself. Something I should have done earlier.

 

[Property Invest]

That's not true. They do look at your application, as long as the defaults have been paid and you can explain what happened. Happened to a client of mine, and we managed to get the deal through even with LMI. Never say die.

I have known of people that have been successful by writing explanations. I just don't have good enough reasons for them to consider me a low risk and a good investment.

Never say die, that's me though.

 

[Ergophobia]

I just don't have good enough reasons

want me to make some up for you?

Perhaps engage the services of a credit file repair man

 

[tobe]

Get an as if complete valuation done now, and use this to negotiate with the builder if it comes in low.

Note, its a long bow but usually the arguments we have with valuers for off the plan purchases and construction loans is because they WONT use recent sales from the same development. If the valuer uses these discounted sales from the same builder as comparables I would be very surprised. Im pretty sure the valuer cant actually use these sales as they havent settled yet. (this is the argument they use when they low val blocks that are yet to be titled)

Im not saying the val will come in at purchase, just saying its not a given they will come back low just because the builder is discounting new ones.

Im very surprised the builder is discounting these sales at all actually. They know this will create issues with the previous sales valuations. What they are more likely to do is offer a rebate or other incentive that doesnt show up on the contract documents, so it cant be used by the valuer to decrease other similar valuations.

 

[The Y-man]

Im very surprised the builder is discounting these sales at all actually. They know this will create issues with the previous sales valuations. What they are more likely to do is offer a rebate or other incentive that doesnt show up on the contract documents, so it cant be used by the valuer to decrease other similar valuations.

I'm actually surprised they went ahead building without more units sold.

Propoerty Invest - the other thing to keep in mind is that the cost of the legals in trying to get out of the contract may be greater than the 10% deposit!

The Y-man

 

[Property Invest]

want me to make some up for you?

Perhaps engage the services of a credit file repair man

Credit file repairers can't guarantee you success. Based on actual feedback from people who have used them, some have been successful others not, but the biggest problem here is they usually take anywhere from 2 months onwards for any result. Time is my enemy here (aside from myself

 

[Property Invest]

I'm actually surprised they went ahead building without more units sold.

Propoerty Invest - the other thing to keep in mind is that the cost of the legals in trying to get out of the contract may be greater than the 10% deposit!

The Y-man

Hey Y-man,
Long time no chat. Good to see you are still around.
I imagined that it would cost me a packet but not more than my 10% deposit. Nevertheless too much money either way.
The other issue with this would be the length of time it would take with the matter. Much longer than my anticipated settlement I think.

 

[Ergophobia]

Credit file repairers can't guarantee you success.

Its gota boost your chances tho


never say die

 

[Terryw]

You've made some fundamental mistakes - such as accepting 14 day settlement after being notified, relying on a verbal agreement by a broker etc.

Have a good solicitor look at the contract. There are ways to terminate if required searches are not included or there are variations greater than the agreed amount etc.

Then also look at the sunset date in the contract - this is the date when either party can terminate if the project is not complete.

Did you get legal advice before signing? Doesn't look like it but if you did then the solicitor may be negligent if you were not properly advised.

Would be hard to sue the broker as you would not have obtained full approval without the property being complete. If they did say you were fully approved then you may have a claim.

You may also have a case against the agent for false and misleading comments - but your contract for purchase probably says you have not relied on any representations made that are not included in the contract.

Lastly, prepare for bankruptcy. You could lose a lot more than your 10%. But, beware that putting assets out of reach of creditors now may be a criminal act. You said above that you don't have much so you may not look like much of a target for an expensive court case.

 

[RPI]

Tim O'Dwyer is a lawyer who claims to be able to get clients out of any contract, specially OTP. Have no idea if or true or not but might be worth a contact. Either way see a lawyer now.

 

[Property Invest]

Its gota boost your chances tho


never say die

It does boost my chances but only slightly. If they were to be successful they would not achieve it in time unfortunately.

 

[Property Invest]

You've made some fundamental mistakes - such as accepting 14 day settlement after being notified, relying on a verbal agreement by a broker etc.

Have a good solicitor look at the contract. There are ways to terminate if required searches are not included or there are variations greater than the agreed amount etc.

Then also look at the sunset date in the contract - this is the date when either party can terminate if the project is not complete.

Did you get legal advice before signing? Doesn't look like it but if you did then the solicitor may be negligent if you were not properly advised.

Would be hard to sue the broker as you would not have obtained full approval without the property being complete. If they did say you were fully approved then you may have a claim.

You may also have a case against the agent for false and misleading comments - but your contract for purchase probably says you have not relied on any representations made that are not included in the contract.

Lastly, prepare for bankruptcy. You could lose a lot more than your 10%. But, beware that putting assets out of reach of creditors now may be a criminal act. You said above that you don't have much so you may not look like much of a target for an expensive court case.

Hi Terry,

When you say accepting a 14 day settlement, you are talking about receiving certificate of occupancy, etc?

Your second paragraph is new to me and I didn't understand.

Sunset date is still 15 months or so away.

I did take it to my solicitor but he didn't say much, I was surprised by this. He is usually very diligent and has been for over twenty years. I would not want to take action against him, he has been very good for me until now.

They never said I was fully approved as I wasn't seeking a loan with them. It was simply a qualification that I am in a position to settle. After reviewing my credit file and doing some numbers on how much I earn, his much deposit I had, etc. They decided I was qualified.

Contract probably does say that, but are salespeople allowed to say anything they want? I wouldn't think so.

There is no need for bankruptcy and no other assets to worry about.

Good post there Terry

 

[Property Invest]

Tim O'Dwyer is a lawyer who claims to be able to get clients out of any contract, specially OTP. Have no idea if or true or not but might be worth a contact. Either way see a lawyer now.

Never heard of him but he seems passionate about what he believes in.
Has no website, just a blog.