Is this normal?

[Electro]

Been looking at an apartment which went on the market just over a week ago. Auction is on the 16th April and the contract is still not ready. Is it normal to leave it so late?

The agents explicitly said the vendor was not taking prior offers (could be cause they knew it was going take so long to get the contracts ready). They agents said they organized the pre sale preparations (i.e. Painting, cleaning etc) an I have reason to believe the furniture is hire furniture. They seemed quite pleased with themselves that this was their first minor reno job...

Surely they're not stupid enough to think that potential buyers can organise finance and get their solicitors to go over the contract in less than a week or are they?

I know the poor organisation on their part could create a good buying oportunity come auction day but surely this can't be how it's done usually, leaving contracts this late?

Something doesn't add up. Is this a vendor looking for a quick sale hence the little time for agents to organise things or something else. Thoughts?

 

[Marty McDonald]

Just trying to sell it before Easter? Bought elsewhere perhaps. Sniff sniff....Could be a bargain if they have to sell on the day.

 

[andrew_de_a]

Sometimes the Owners Corp certificates can take a while to be distributed. I wouldn't read too much into it.

 

[gottabespotless]

I bought a house last year in a Mortgagee auction and the contracts weren't ready until a couple of days before the auction. Twice I had to cancel appointments with my solicitor as the contracts weren't ready to be looked at! Eventually it was ready though and all was good. I think it was just a major balls up though, I don't believe tactics were being used. Goodluck with it

 

[Electro]

Thanks for the responses all. I'm thinking now its just poor preparation on the REAs part. It's monday now and still no contract - auction is on sat.

Spoke to the agent just then and she said it will be ready tomorrow morning. Doesn't leave much time. I may not be able to get a solicitor to look over it in time and I've only got a pre-aproval for finance at this point so it just seems risky for me to bid...

Agent is suggesting property may go well above the quoted range based on interest (bla bla bla) but I'm not sure... It may well, I don't know. The area is doing ok.

At this stage I'm thinking I'll just attend the auction as see how it goes. If it sells higher than what I'm prepared to pay for it then so be it - I'll keep looking. If it doesn't get to what they are expecting it'll probably be passed in so I might just approach the agent then. If no-one else bids or attends the auction then I may get it at a good price (wishful thinking). I'm just going to wing it. I'd rather miss out then go in underprepared and get myself into trouble...

Damn I hate auctions

 

[Tuppence]

IME this is pretty common. I think it's because they (either the vendor or the RE, but usually the RE, I believe) don't want to sell it before auction. They want all the attention to come down to that auction time. No s32, no sale - so simply make sure the s32 is not available in time for a pre-auction offer.

 

[Electro]

Well, if that is indeed the case then IMO it's a stupid tactic. Leaving no time for buyers to organise pre-purchase tasks simply increases the risk to the buyer. High risk = reluctant buyer.

They'll end up with 100 people at the auction with zero bidders (or that one cashed up foreign investor who doesn't care)... All will probably be waiting for the auction to end so they can put in their conditional offers at the end OR buyers will just move on as the risk is too great.

 

[Tuppence]

I think many of them aren't that fussed. They only need a couple of keen buyers, and there are often many more than that (I don't know the specifics here, and this may just be cynicism, but ...).
Remember, at an auction, you can't buy ''subject to finance'' either. But how can you get your finance organised for a property if you don't know if you're going to be the winning bidder on the day? Many hundreds of home buyers in Melbourne have to get round that one every weekend.
Also, you buy under auction conditions if you buy within a certain number of days (I can't remember how many exactly, but I think it's three) of an advertised auction - regardless of whether you buy at auction or not. That means it's an unconditional sale. All part of the fun rolleyes of buying in many parts of Melbourne.

 

[Electro]

Well that sucks

I know auctions are unconditional and thats why I hate them. Generally in a private sale there is the cooling off period which will give enough time to more or less sort things out that need to be immediately sorted out when purchasing. If something seriously does not add up you walk away (minus deposit in some cases). Fine!

For example, I have finance pre-approved (subject to valuation of course) which does not really mean much but if I were to get a valuation done and conveyancing done on every property I've been interested in putting an offer down on or bidding for in an auction I'd be broke by now. Vendors simply are not willing to accept conditional offers where I have been looking.

The whole process stinks to me! It cost lots of money and creates a lot of stress... I just want to find a place, agree on a price and then say ok I'll buy this property for $x dollars but I just need to make sure the bank will give me the money for this exact property at this exact price and that my solicitor says your not making me sign my life away otherwise the law permits you to sue me. Thats it! I don't want to sign now and ask questions later.... The risk is simply too great!!

I don't know is this an unwarranted fear/qualm?

 

[Tuppence]

It does suck. It's probably cold comfort to hear that the system is weighted against you, at least in this. You're obviously looking in a fairly competitive market - one where vendors can set a few conditions of their own, such as going to auction or refusing to drop their price.
Maybe look at private sales that are on the market as a result of failed auctions. Sometimes their vendors can be a little more flexible (for want of a better word), especially if the auction was a little while ago.
Or widen your parameters - a different area, different number of bedrooms, different floor size or view or whatever.
I agree, you obviously can't get your finance approved for every potential place. No reason you should have to get any conveyancing done though, until you actually buy a place.
Good luck, something will come up.

 

[Monopoly]

The whole process stinks to me! It cost lots of money and creates a lot of stress... I just want to find a place, agree on a price and then say ok I'll buy this property for $x dollars but I just need to make sure the bank will give me the money for this exact property at this exact price and that my solicitor says your not making me sign my life away otherwise the law permits you to sue me. Thats it! I don't want to sign now and ask questions later.... The risk is simply too great!!

I don't know is this an unwarranted fear/qualm?

Sorry but am I missing the point here? Surely you would have gone to the bank, got an approval for up-to X amount of $ and then proceeded to go shopping? So regardless of what the price, as long as it is in the agreed range of monies agreed by the bank that they'd shell out, who cares if it's not that specific property? It may/can be the next one, again as long as it is within the approved range of bank funds.

Your biggest problem shouldn't be the amount (the bank will fork out) but the expiration date of the pre-approval.

Maybe I'm miss reading this...if so, apologies in advance.

 

[Electro]

I agree, you obviously can't get your finance approved for every potential place. No reason you should have to get any conveyancing done though, until you actually buy a place.

I don't mean full conveyencing, just having a professional look over the contract (pre-purchase advice if such a service exists - does anyone here do this?). I've read many contracts before and to me most seem fairly standard (i.e. to the untrained eye "no gotcha's") but I won't feel comfortable signing a contract unconditionally without at least having a professional take a look at it.

As for the finance, I've been assured by my broker that I can almost forgo the finance clause as he has said with the pre-approval in place and given that I buy at or around market value then the cooling off period should give enough time to get that side of things sorted out.

 

[Tuppence]

As for the finance, I've been assured by my broker that I can almost forgo the finance clause as he has said with the pre-approval in place and given that I buy at or around market value then the cooling off period should give enough time to get that side of things sorted out.

I agree with this, broadly - pre-approval should be enough. But your broker is talking through his hat if he thinks you're getting a cooling off period after buying at auction. Auction sales in Victoria are unconditional. There is no cooling off period, no subject to finance, no ''I've changed my mind''. At least, not without penalty.
See under ''when is the property sold at auction?'' on this page: http://www.consumer.vic.gov.au/CA256EB5000644CE/page/Buying+and+selling+property-Buying+property-Buying+property+at+auction?OpenDocument&1=50-Buying+and+selling+property~&2=020-Buying+property~&3=020-Buying+property+at+auction~

 

[Electro]

I agree with this, broadly - pre-approval should be enough. But your broker is talking through his hat if he thinks you're getting a cooling off period after buying at auction.

Sorry I wasn't implying that he was talking about auctions or this property in particular. He was talking about private sale. I am well aware this is not an option when it comes to auctions.

This is how the conversation went (talking previously about another property):

Me: "Is this pre-approval good enough to put down an unconditional offer?"

Broker: "I would still rather you put in a finance clause if you can, however, from what you've been telling me you may not secure the place if the offer is conditional. So, if the property is similar to the one you've showed me before and the price is around the price of similar properties in the area that have sold recently then there should be no issues getting the valuation through within the cooling off period."

Me: "Are you sure about that?"

Broker: "Yes. Based on your application for pre-appoval, my contact within the bank and given you have paid fair market value then we should be able to get it done."

Me: "Ok great."

 

[Monopoly]

Oh okay, thanks guys now I get it.

Electro...You've got pre-approval, but you've also got a dumbas$ broker who is advising you based on information he pulled out of his backside.

Got it...crystal clear now!! Thanks

 

[Sheryn]

I thought REA couldn't advertise property for sale unless they had contract in their office?


Regards
Sheryn

 

[Monopoly]

I thought REA couldn't advertise property for sale unless they had contract in their office?


Regards
Sheryn

They can advertise it, they just can't sell it (or so I believe).

 

[Electro]

Oh okay, thanks guys now I get it.

Electro...You've got pre-approval, but you've also got a dumbas$ broker who is advising you based on information he pulled out of his backside.

Got it...crystal clear now!! Thanks

Is there advice there somewhere in that sarcasm? Are you saying I should never sign without a subject to finance clause? If that is the case then there must be a lot of rich buyers paying cash all over the place if you know what I mean.

I'm not an idiot and I'm not taking his word as gospel nor do I think he was saying this for me to take it as gospel either. I think he was simply trying to say in his experiance given my situation there is a good chance it should be ok if I absolutely have to go unconditional.

 

[Electro]

They can advertise it, they just can't sell it (or so I believe).

This is also what I have been told.

 

[Monopoly]

Is there advice there somewhere in that sarcasm? Are you saying I should never sign without a subject to finance clause? If that is the case then there must be a lot of rich buyers paying cash all over the place if you know what I mean.

I'm not an idiot and I'm not taking his word as gospel nor do I think he was saying this for me to take it as gospel either. I think he was simply trying to say in his experiance given my situation there is a good chance it should be ok if I absolutely have to go unconditional.

Nope, no sarcasm...the truth...your broker is a numbnuts!

There is no subject to finance associated with auctions in Victoria, as Tuppence already told you. If your broker knew his stuff, and clearly he doesn't, the conversation would have been very different to the one you outlined above.

As for you being an idiot, I never said nor inferred any such thing. It takes a lot to ask a question when you're not sure, and only new, and for that, I commend your efforts.

All the best of luck in your property investing ventures Electro.