Losing 10% deposit

[vaughan]

...find out broker has dodgied the figures and approval was based on falsified information.

It's more likely that the applicant (buyer) has falsified or withheld information to get the loan, not the broker.

But in the end the applicant signed the paperwork for the loan, so ultimately people still have to take responsibility for their actions.

The legal system IS fair and equitable: it's just people don't understand the rules.

 

[Deltaberry]

Amazing how people want their cake and eat it too.

Last year in the CBD, someone tried to sell a $10m site to some local Chinese people. The local Chinese put $1m deposit down, thinking the $9m was going to come from their offshore investors in China. The offshore investors changed their mind last minute.

The vendor ultimately had to take the property through another sale process and only got aound $8m this time around. The local Chinese lost their $1m deposit and owed another $1m.

Morale of the story? Greed is good, only if you have a brain. For the rest (like the local Chinese in question), stick to watching TV.

 

[sash]

I am in a similar position...I read that you have a 500k Euro job.

The $4m you mention...is that including value of your PPOR and Super?

I too am about your age....

Well 18 October has come and gone. All settled amicably and everyone happy.

I now find myself with over a million bucks sitting in the bank and a managed share fund. I still have blue chip properties in Sydney, a small holding in Atlanta, plenty of stock in the company I work for, and a healthy super balance which I can access when 60.

My next challenge will be what to do with the cash. I have always said I would live off everything and stop work when someone tells me to. My wife is talking of a "retirement" plan within 3 years. I'd be 51 then. We love traveling.

This is a nice problem to have (retire early or keep on going), could be the subject of a new thread?? ........

Really? I am fast approaching $4MM in net value and know that if I keep going to 60 the sky will be the limit.. It's a difficult time.

 

[MRO]

The legal system IS fair and equitable: it's just people don't understand the rules.

In theory. yes but in practice no.

I worked for a property developer who sold a lot of apartments off the plan at huge prices pre GFC. Lots of people (like Ausprop) didn't want to settle on completion due to the value of the property being less than the contract price. The product was completed better than advertised but the GFC smashed the value. The company had borrowed against presales and when more than 70% of people chose to or could not settle the company was in big trouble. It took more than 2 years going through the court system and we were quoted almost $300k in legal fees each apartment if they were to go the full distance. Most of the unethical and broke purchasers forfeited their deposits and paid very little if any in damages. The reasons provided for non settlement were varied including a gentlemen who pretended not to speak English, another who pretended to trip over something during his inspection and countersued for the same value, etc.

End result was a company that almost failed and all but one of the staff made redundant.

In theory the system is fair and equitable but to enter the system there is great cost and a lengthy time frame. Even the lawyers were suggesting we walk away from a lot of the court action despite a very good chance of winning. In a fair situation the company should have been quickly awarded the deposit plus damages (sale value versus contract value) - this was never going to happen.

 

[Ausprop]

Lots of people (like Ausprop) didn't want to settle on completion due to the value of the property being less than the contract price.

just to clarify, the story i recounted was not OTP

 

[Ausprop]

The legal system IS fair and equitable: it's just people don't understand the rules.

LOL, can i assume then you have never had to fully litigate a matter of quantum? for a relatively simple matter you can expect 2 to 5 years of stress, a legal bill of $200k+ and odds of success akin to a roll of the dice regardless of how strong you think your case is. the system is so messed up that you can make a business out of litigation - knowing that people won't defend small claims up to $100k as its just not worth it... give me $50k and we can call it quits....maaate, it's just business

should add some other aggrivators... corrupt judges, loopy judges, family law court judges adjudicating on commercial matters, don't even get me started on the corporate insolvency landscape in this country

 

[redwing]

I'm curious, why not use K for thousands and M for millions?

Originally Posted by Oscar View Post
Really? I am fast approaching $4MM in net value and know that if I keep going to 60 the sky will be the limit.. It's a difficult time.

 

[Oscar]

The $4m you mention...is that including value of your PPOR and Super?

Hi sash. I'm a renter with no PPOR. I include my super holding in the value of my assets.

 

[Oscar]

I'm curious, why not use K for thousands and M for millions?

M is roman numeral for 1000, so common to use MM for 1 million...

 

[vaughan]

In theory. yes but in practice no.

I worked for a property developer who sold a lot of apartments off the plan at huge prices pre GFC. Lots of people (like Ausprop) didn't want to settle on completion due to the value of the property being less than the contract price. The product was completed better than advertised but the GFC smashed the value. The company had borrowed against presales and when more than 70% of people chose to or could not settle the company was in big trouble. It took more than 2 years going through the court system and we were quoted almost $300k in legal fees each apartment if they were to go the full distance. Most of the unethical and broke purchasers forfeited their deposits and paid very little if any in damages. The reasons provided for non settlement were varied including a gentlemen who pretended not to speak English, another who pretended to trip over something during his inspection and countersued for the same value, etc.

End result was a company that almost failed and all but one of the staff made redundant.

In theory the system is fair and equitable but to enter the system there is great cost and a lengthy time frame. Even the lawyers were suggesting we walk away from a lot of the court action despite a very good chance of winning. In a fair situation the company should have been quickly awarded the deposit plus damages (sale value versus contract value) - this was never going to happen.

I cannot see any problems with the law here. Cost and time to process the law are not the law's problem.

 

[sash]

Great thanks...I thought so...I am targeting to have a super balance of $1m in the next few years.

My portfolio is 95% property across Australia...I am presuming yours is much more balanced between Shares and Property?

I am presuming you will be using your assets to generate income and continue to rent?

Hi sash. I'm a renter with no PPOR. I include my super holding in the value of my assets.

 

[MRO]

I cannot see any problems with the law here. Cost and time to process the law are not the law's problem.

The law may be fair and equitable but the system set up to implement the law severely limits the likelihood of most people receiving the outcome the law was set up to achieve.

 

[Oscar]

My portfolio is 95% property across Australia...I am presuming yours is much more balanced between Shares and Property?

I am presuming you will be using your assets to generate income and continue to rent?

looks like I'm a bit more balanced sash - I've never done this before but my breakdown looks like this;

Australian property (sydney blue chip) 51%
Shares (high yield australian shares) 20%
Cash (AUD, EUR and US$) 17%
US property (Atlanta) 6%
US shares (Healthcare) 6%

I just have some loans (a bit over a million) on the Oz property which I plan to pay down over the next 3 years. By 51 I should be completely debt free with $5MM net equity and the choice of a comfortable retirement. At that time I would probably live in one of my current IP's.

Or I could continue to work but seriously would have no additional use for the money other than to give it away at some point.

 

[oc1]

looks like I'm a bit more balanced sash - I've never done this before but my breakdown looks like this;

Australian property (sydney blue chip) 51%
Shares (high yield australian shares) 20%
Cash (AUD, EUR and US$) 17%
US property (Atlanta) 6%
US shares (Healthcare) 6%

I just have some loans (a bit over a million) on the Oz property which I plan to pay down over the next 3 years. By 51 I should be completely debt free with $5MM net equity and the choice of a comfortable retirement. At that time I would probably live in one of my current IP's.

Or I could continue to work but seriously would have no additional use for the money other than to give it away at some point.

From one Oscar to another , great stuff!

 

[sash]

I looked at what you did am not as exposed as I thought to property...my breakdown as follows. Note figures are on net wealth only:

Australian property equity 67%
Cash (Australian $A) 24%
Super 7%
Direct Shares 2%

looks like I'm a bit more balanced sash - I've never done this before but my breakdown looks like this;

Australian property (sydney blue chip) 51%
Shares (high yield australian shares) 20%
Cash (AUD, EUR and US$) 17%
US property (Atlanta) 6%
US shares (Healthcare) 6%

I just have some loans (a bit over a million) on the Oz property which I plan to pay down over the next 3 years. By 51 I should be completely debt free with $5MM net equity and the choice of a comfortable retirement. At that time I would probably live in one of my current IP's.

Or I could continue to work but seriously would have no additional use for the money other than to give it away at some point.

 

[Oscar]

great stuff sash.

I looked at my equity and looks like I'll reach 4 million equity in March this year. That's only 1 year, 5 months since I got to 3 million. I'll update in the "woke up a millionaire" thread when that happens with some details on how.

 

[superAndrew]

If you can legally keep the deposit then it's up to you what you do with it.

At the end of the day you are the one who is going to live with your decision. Some will feel that they missed out on some "free" money but others will feel bad for the buyer and will just keep enough to cover their expenses

My decision would be based on how the loss of the 10% deposit would affect the buyer.

If the buyer is wealthier than me and just changes their mind then I'd keep the money. If the buyer is an inexperienced investor and made a mistake then I wouldn cover my expenses they caused me and return the rest since it would have a bigger negative impact on their life. I wouldn't want to gain anything from someones loss.

Cheers

Andrew

 

[TMNT]

If you can legally keep the deposit then it's up to you what you do with it.


Cheers

Andrew

What happened to your spruiking of cashflow positive property????

I see its no longer in your signature?

 

[TMNT]

dbl post error! sorry

 

[Zos]

Good for you. Take all this person's savings and leave them completely screwed because it benefits you and you have a legal right to do so. Don't even blink while you potentially destroy someone's life.

I love it. A real sense of self centred "it's all about me and my legal rights" mentality with no thought for the impact on others. The world needs more people like that, we don't have enough already.

And of course this is "all about business" and human compassion and emotion should not factor into it. They made a business commitment and they did not fulfil their end of the bargain so they deserve to suffer the consequences.

Strange how you can only reach that conclusion after you remove human compassion and emotion out of the equation first.

Look all that's fine. If that's the sort of person you are then go ahead. You're not the first. But don't try and hide behind excuses for not having compassion here.

You are blatantly deciding to harm someone else for your own benefit when you have the choice not to. Proclaim it loud and proud.

Have to agree with Tim. Someone losing 80k because finance fell through is a bit harsh of a penalty. That could easily be someones 5 years saving and people would take it because they lost time with the sale. Do you think 80k penalty is a fair amount to take off someones hand.

Contracts are a piece of paper that can be thrown out and terms discussed about with some common sense.

As Tim mentioned this could potentionally destroy someone financialy and emotionally.

I certainly would feel like an absolute tool taking someones money like this especially 80k.