HELP!! Both vendor and I have agree on price but.....

[fullylucky]

(Property is in QLD/Brisbane) HELP!! Both vendor and I have agree on price but.....

Unconditional is 14 days subject to finance (21 days for finance) and 14 days for pest and building inspection.

But he says he wants 90 days for settlement... a change from the original 30 days.

Q1. -Answered- Is this normal for settlement to be 90 days? I thought the normal time is 20-30 days?
Answer: "90 days is absolutely fine....my preferred time frame in any case. Usual periods for settlement are:
30, 45, 60, 90 and 120 days.
90 & 120 are more uncommon but still "normal".
Agreeing to the 90 days is entirely up to you. Don't worry about what he's doing but more so how does a 3 month settlement suit your situation?
Many of my clients prefer 90 days as it allows more time to get things like insurance and finance in place with less pressure than say a 30 day period."

Q2. He's logic (he is not willing to change his mindset) is that since he "reduced" his price by a few thousand, let's say X thousand; to meet me at my price. It will take him 2 months to "earn" this X thousand back (since the property is positively geared.) Has anyone ever heard of this before? does it sound reasonable? (I tried to say I only accept if it's 30 or 45 days but he won't budge)

Q3. I'm fine with his thinking, it gives me more time but my biggest worry is that's not the real reason why he wants 90 days. I'm scared he has something up his sleeve. Just wondering what could happen in the 90 days? Like could he treat the house more roughly during the 90 days since he knows it won't be his anymore. Today is 04 March 2013. In 90 days it will be 02 June 2013, could it be that is a bad time to rent out since the students will go back for the holidays?


Q4. -Answered- Insurance?? Today is 04 March 2013. If the house burns down after the contract becomes unconditional do I still have to buy the house? When do I have to get insurance? If he wanted to could he trash the house and fire it down and I still have to buy it?
Answer: "For Qld, usually buyers insure the property from date of contract exchange."

Q5. -Answered- Is anything else I should watch out for? like say if there was a lease signed for 2 years for a tenant paying only 10$ rent. Could that stuff me up as well? What other things do I need to watch out for before I sign. (I agreed to sign the contract for 90 days settlement tomorrow but still have time to change my mind.)
Answer: "If there is a lease, you cannot move in until the lease expired. Even if you have settled, the lease over-rules the new owners. ensure that there is a clause in the contract making it clear what the current lease states, and make sure that the vendor cannot enter into any new lease between signing of the contract and settlement."

Thanks for all the help. Really appreciate it. Thanks in advance!

 

[Doovalacky]

Probably wants 90 days to have time to find a place to move to. I am assuming its his PPOR from your post. There is probably a way to word in a "subject to final inspection x days before settlement" that can be put on the contact.

Insurance there is nothing stopping you taking it out a week before settlement. That way your covered as soon as it occurs.

 

[Jamie M]

Hi there

A 90 day settlement is not that uncommon.

Is it a PPOR or an IP?

If a PPOR, I can understand the emotional aspect of wanting to gain access to your home sooner rather than later.

If it's an IP - I can't see it being too much of an issue. At least your mortgage repayments won't kick off for a while and you've got plenty of time to scope out property managers and start arranging a tenant.

Cheers

Jamie

 

[fullylucky]

Probably wants 90 days to have time to find a place to move to. I am assuming its his PPOR from your post. There is probably a way to word in a "subject to final inspection x days before settlement" that can be put on the contact.

Insurance there is nothing stopping you taking it out a week before settlement. That way your covered as soon as it occurs.

What section exactly do I put subject to final inspection x days before settlement in the contract? Special Conditions?

At first I thought it was because he needs time to find a place but he insisted it was to earn the X thousand back...

I did a search and it doesnt show he has another place but the agent says he has an appartment, maybe in a different name or under his son's name.

Can anyone else give me advice to protect myself in this situation?

 

[Terry_w]

1. Not normal. But not too uncommon and it may be nothing to worry about.
2. Sounds reasonable to me. It is 2 months you don’t have to pay interest while still getting any capital growth.
3. Anything could happen. He could paint the whole house pink. It could be like that old Chevy Chase movie where he walks around the house with you and says “I am taking that toilet” and you all laugh. Only to arrive in 90days with a number 2 locked and loaded but no toilet in the house…
4. Get insurance on exchange. If it burns down you may not have to complete, but you would have wasted all that time and effort.
5. Are there any leases in place? Is it sold on the basis of a lease in place or vacant possession?

 

[fullylucky]

Hi there

A 90 day settlement is not that uncommon.

Is it a PPOR or an IP?

If a PPOR, I can understand the emotional aspect of wanting to gain access to your home sooner rather than later.

If it's an IP - I can't see it being too much of an issue. At least your mortgage repayments won't kick off for a while and you've got plenty of time to scope out property managers and start arranging a tenant.

Cheers

Jamie

For him it is his PROR but I know he has an apartment and his family is living in the apartment. he is living at the property to keep an eye on the tenants.

It will be an IP for me.

If it's an IP - I can't see it being too much of an issue. At least your mortgage repayments won't kick off for a while and you've got plenty of time to scope out property managers and start arranging a tenant.

I know that's EXACTLY What i'm thinking. it helps me too since it gives me more time to pay off my current homeloan.

But I'm worried about the other aspects.... Could it be a trick? If a fire happens... do i still have to buy it? How do I go about making sure everything works out?

What other stuff to do I have to put in the contract?

 

[Peter_Tersteeg]

I'd say 90 days is in your favor as it gives you time to get things organized. Honestly I don't think 30 days is enough time. Consider that you've got 3 weeks to arrange finance - it often then takes more than 1 week to receive loan contracts, sign them, have them verified (pray you don't sign incorrectly), book settlement and then actually settle.

You are entitled to a pre-settlement inspection, if there's something wrong with the property you can withhold funds to fix the problem or delay settlement until he fixes it. Most people don't write this into the contract, but there is a 'special conditions' section in the contract where you can be specific if you wish.

You should always get a cover note for insurance simply to protect your interests. The property is the vendors responsibility until settlement but just in case the vendor doesn't have adequate insurance, this will protect your interests and usually doesn't cost anything.

 

[L and P]

I'm almost positive in Qld that you should arrange for insurance to commence on the property the day the contract is signed.

 

[RPI]

agree very common

 

[fullylucky]

I'd say 90 days is in your favor as it gives you time to get things organized. Honestly I don't think 30 days is enough time. Consider that you've got 3 weeks to arrange finance - it often then takes more than 1 week to receive loan contracts, sign them, have them verified (pray you don't sign incorrectly), book settlement and then actually settle.

You are entitled to a pre-settlement inspection, if there's something wrong with the property you can withhold funds to fix the problem or delay settlement until he fixes it. Most people don't write this into the contract, but there is a 'special conditions' section in the contract where you can be specific if you wish.

You should always get a cover note for insurance simply to protect your interests. The property is the vendors responsibility until settlement but just in case the vendor doesn't have adequate insurance, this will protect your interests and usually doesn't cost anything.

So I automatically get this pre-settlement inspection. If there are things wrong with the house I don't have to buy it? is there a penalty?

How do I get this cover note for insurance? Where do I get it?

Taking it one step at a time... So for tomorrow, I just sign the contract? what else do I put in the special conditions section? Nothing?

 

[L and P]

You will need to call an insurance company. Do you currently have any property insured because that would be a good place to start.
Is this house in an area that floods ? I'd be trying for an insurance quote before you sign. Some areas are un-insurable and others are just over the top expensive.

What suburb is the house in ?

 

[fullylucky]

You will need to call an insurance company. Do you currently have any property insured because that would be a good place to start.
Is this house in an area that floods ? I'd be trying for an insurance quote before you sign. Some areas are un-insurable and others are just over the top expensive.

What suburb is the house in ?

It won't flood it is wayyy above sea level, one of the highest in Brisbane.

I have checked the flood maps no where near any blue sections.

I don't want to give it way until it becomes unconditional. Sorry.

Crime in the area is average not higher than any other area.

Has anyone on here experienced this before? Can you please list what to do? :'(

 

[L and P]

That's fine to keep it quiet. Just phone some insurance company's in the morning after you have compared their coverage in the PDS online. Compare apples with apples etc
I use Suncorp and Westpac insurance if that helps with somewhere to start

Contact your solicitor, they may want to look over the contract before you actually sign.

If you don't need the property before 90 days then I don't quite understand the problem ....

 

[RPI]

Hi

If you havent signed yet get a solicitor to look over it.

Darryl

 

[Jake Milne]

Usual periods for settlement are:

30, 45, 60, 90 and 120 days.

90 & 120 are more uncommon but still "normal".

Agreeing to the 90 days is entirely up to you. Don't worry about what he's doing but more so how does a 3 month settlement suit your situation?

Many of my clients prefer 90 days as it allows more time to get things like insurance and finance in place with less pressure than say a 30 day period.

I'd check the contract to see who's liable for the property from when the COS is signed. Some agreements mean that if you've signed to buy it and the place burns down it's your problem rather than the vendors.

The lease is a good point, as an investment it's important to get up to market rent asap. You'll need to get a copy of the existing lease or an email confirming what the situation is, rent is, and the period the agreement is for.

Your conveyancer should be explaining all of this though - seek legal advice.

 

[Rolf Latham]

Has anyone on here experienced this before? Can you please list what to do? :'(

Please take the below in the spirit it is provided, I am really trying to be helpful


I think Terry has pretty much summed it upon the mechanical side.

On the pre-psych ward side..........................


Judging from your other posts I would recommend either

A big long tall Gin and Tonic ( if you are into booze)

or

An extra strength properly infused Dilmah

then............

Purchase some Relax Muzak Cds and a blood pressure monitor

Purchase additional life and Income protection insurance because you may have a melt down.

Yes its serious stuff, for most a 90 day settlement will be no issue, but with your current approach I think it will do your head in.

So the risk isnt with the property, its more likely with yourself

Can I garner you are an Engineer of some sort , because your nick of Fully Lucky doesnt ring out with your catastrophe outlook and HyperVigilance of things that may go wrong.

ta
rolf

 

[Aaron_C]

90 days is absolutely fine....my preferred time frame in any case

 

[Jamie M]

90 days is absolutely fine....my preferred time frame in any case

I'm with you. I'd rather the luxury of additional time over a quick settlement - especially for an IP.

My most recent purchase was our new PPOR. The vendor wanted a 120 day settlement - not to burn the house down or make my life miserable, he just wanted some extra time to find his next home (they were downsizing).

The vendor was nice enough invite us over to the house during this period to have a chat about little quirks in the property and to see if we wanted to keep any of the outdoor furniture.

So it doesn't have to be a terrible experience.

I like Rolf's advice above. Sit down to a beverage of some sort, put your feet up and enjoy your recent purchase.

Cheers

Jamie

 

[thepeoplesagent]

Q1. Is this normal for settlement to be 90 days? I thought the normal time is 20-30 days?

As Milne Said, not normal but does happen.

Q2. Has anyone ever heard of this before? does it sound reasonable? (I tried to say I only accept if it's 30 or 45 days but he won't budge)

Yes I have heard it before, but rarely is it the real truth.

Q3. my biggest worry is that's not the real reason why he wants 90 days. I'm scared he has something up his sleeve. Just wondering what could happen in the 90 days?

Once contracts are unconditional neither party can change their mind or change conditions without penalty.

Q4. Insurance?? Today is 04 March 2013. If the house burns down after the contract becomes unconditional do I still have to buy the house? When do I have to get insurance? If he wanted to could he trash the house and fire it down and I still have to buy it?

No, if the home burns down you do not have to buy it. I trust you get a final inspection prior to settlement in QLD? The property needs to be in the same condition (within reason) to which you exchanged.

Q5. Is anything else I should watch out for? like say if there was a lease signed for 2 years for a tenant paying only 10$ rent. Could that stuff me up as well? What other things do I need to watch out for before I sign. (I agreed to sign the contract for 90 days settlement tomorrow but still have time to change my mind.)

Is there a 2 year lease for 10c in place? If there is a lease, you cannot move in until the lease expired. Even if you have settled, the lease over-rules the new owners.

It won't flood it is wayyy above sea level, one of the highest in Brisbane.

Toowoomba is 700 meters above sea level…

 

[fullylucky]

90 days is absolutely fine....my preferred time frame in any case

oh ok that makes me feel a bit better!