Help Needed

[coltan]

Hi Everyone i am just new to this forum. We currently have our house up for sale and are in the contract stage. Both parties have signed contracts and are now just waiting for the 10% deposit. In the contract it is subject to mortgage approval and that the deposit was due today. At 4.40pm i received a call from our conveyencer saying they have asked for an extension until June 17th. Our settlement date is July 10.

I am really concerned about this as at any point the buyer could pull out at anytime up until this date, and we are left in limbo about whether the house is sold or not. This is the second time they have asked for an extension and i just find it a bit ridiculous that it doesnt change settlement date.

I guess what im wanting to know is this legal??

 

[marg4000]

It is legal if you agree to it - but you don't HAVE to agree.

To be fair, I have heard that mortgage approvals are taking several weeks these days. However, I would be reluctant to continue the contract if you are not holding any deposit or only a minimal amount. I would suggest 5% payable now, and the other 5% on mortgage approval, with the initial 5% refunded if finance is not approved. This will ensure the buyers are serious about the purchase.

A lesson for the future, always insist on a decent deposit on signing a contract.
Marg

 

[craigb]

If the buyer wan'ts the home , as it seems they do! i wouldnt worrie too! much, Valuers and banks are draging the line a bit , and i would say ok if thats the reason the extended time is needed,

 

[gg1965]

I'm in the other position here - I'm one of those people who are waiting for the bank to respond to me about an investment mortgage. YES - the banks are taking much longer compared to previous times and the consensus is that the banks are backlogged by all the FH buyers. This is what I've been told.

I've been to my mortgage broker, done the preliminary check, got the initial approval, got deposit in cash, the offer on the property is accepted, the mortgage application gone in - and the bank has said that it'll take a month for a reply with a formal approval.....So the agents, the solicitors, the vendors and myself just have to wait.

However my MB has said that it is against his company policy that i do the exchange before formal approval from the bank has been given. I'm not arguing with this policy as i think it is a good safeguard.

But my hope and plan is that formal approval and exchange, and my payment of stamp duty etc is all done prior to June 30.

So, along with everyone else related to this sale, are just waiting....

I would've thought though - that in this day and age of electronic commerce; data matching and tracking technologies; and finally, the amount of financial data that is shared by government and other financial institutions - that mortgage applications would just be a matter of inputting data, verifying details and getting an almost immediate response... maybe that is not the case. oh well. I just hope everyone is patient.


G

 

[BV]

coltan

Loan approvals take forever these days so I wouldn't worry too much about this but if you need to secure the sale try to get a bigger deposit if possible.

What are your other options?
Do you have another buyer?
If you do you could use this as a negotiating tool for a bigger deposit
which would essentially secure the sale.

 

[Ms Jade]

coltan, when was the contract signed? If this is their 2nd extension, does that mean they've already had 4 weeks?? Hopefully not. I would be worried. They may well want the house more than anything but that doesn't mean that they will get the finance. It's possible that they have already been turned down & are now applying somewhere else. I would think about doing what marg4000 has suggested.
At the very least, speak to your REA about other possible buyers. By granting an extension until June 17 the buyer has effectively taken your house off the market for all this time. As mentioned, you are under no obligation to agree to their request.

 

[coltan]

Thank you everyone for your replies. They have been a huge help

Ms Jade the contracts were signed on 12 May. On the contracts the 10% was supposed to be paid on the 27th May, my conveyancer said that she didnt understand why that was on the contract as ususally the 10% is paid when the loan gets approved hence why it was extended another week to 3rd June.

They have paid a $1000 deposit so the house has been off the market since then. I guess because all we are getting told is they need an extension, no reason why has us worried. It may very well be about time issues with the finance but according to the contract they are only borrowing a little bit more than what the deposit is and if thats the case where are they getting the rest of the money from to pay??

The RE guy has been pretty unreliable to be honest and we have been the ones contacting him saying did you know they have applied for another extension etc.

 

[Ms Jade]

Thank you everyone for your replies. They have been a huge help

Ms Jade the contracts were signed on 12 May. On the contracts the 10% was supposed to be paid on the 27th May, my conveyancer said that she didnt understand why that was on the contract as ususally the 10% is paid when the loan gets approved hence why it was extended another week to 3rd June.

They have paid a $1000 deposit so the house has been off the market since then. I guess because all we are getting told is they need an extension, no reason why has us worried. It may very well be about time issues with the finance but according to the contract they are only borrowing a little bit more than what the deposit is and if thats the case where are they getting the rest of the money from to pay??

The RE guy has been pretty unreliable to be honest and we have been the ones contacting him saying did you know they have applied for another extension etc.

I have never had a contract state how much the buyer was financing. I don't know how much the property is worth but not being able to get 10% - or even 5% - together by now would be a big concern to me. Sounds like perhaps they are trying to get a 95% loan (?)

The REA is kind of sidelined by this point, BTW. The buyer's solicitor / conveyancer is working directly with yours. As they have not paid the deposit they are outside the terms of the contract so in reality the contract is void. I would instruct my conveyancer to tell them that you are not happy to extend, and require answers. It's not possible for you to make a decision without the facts. It may well be that everything is "fine," but they really need to convince you of that.

 

[craigb]

This is what and how i se it, When the normal week is busy with work and kids, and dinners and all the other sensless things consume our lives, weeks and months seem to fly by, but when your waiting on other people and its a big thing in your life like selling and /or purchasing things go slow motion , and its easy to loose patience, , others do what they can and as they are only human, things do not meet deadlines as promised, , be patient all it should be ok!

 

[RumpledElf]

We bought a mortgagee sale last year and had to deal with a big faceless financial institution instead of a Real Person.

You want delays on delays, try one of those!

But had the same problem selling some land many many years ago, had one extend and extend and extend and then fall through, and the next extend and then finally buy it. Lots of nailbiting waiting. And of course then there was a boom in land prices and my difficult-to-sell block was suddenly worth a fortune and in hot demand *sigh*

 

[The Y-man]

I guess what im wanting to know is this legal??

Yes it is - and part of the game.

They MAY legitimately be waiting for a finance approval - OR they are alooking at other properties, and keeping the "options open".....

You need to cover by having the Agent keep getting potential buyers through and registering interest in case the deal falls through.

It's for this reason when I am selling, I am willing to accept a lower price unconditional contract than a higher price conditional (and one reason I offer lowball unconditionals when buying)

Cheers,

The Y-man

 

[coltan]

UPDATE

They have asked for another extension until Next Thursday. The RE guy came yesterday telling us they have been approved for the loan so i dont understand what is going on??

I think i am better cutting my losses on this one and put the house back on the market, something isnt right.

 

[zaph]

UPDATE

They have asked for another extension until Next Thursday. The RE guy came yesterday telling us they have been approved for the loan so i dont understand what is going on??

I think i am better cutting my losses on this one and put the house back on the market, something isnt right.

give them an extension subject to it being put on the market. put it on the market. let them sort their s8%t out and see what else is out ther