mortgagee sales in Perth

[7DD4]

Hi found a mortgagee sale i'm interested in putting an offer on Perth WA

Asked the agent to write up the offer with a clause that gives the bank 5 business days before my offer expires.

Agent told me that I was unable to put an expiry on mortgagee sales as the banks would take 3-4 weeks to look at all offers

advice appreciated

 

[Singo]

We have bought a couple of mortgagee sales. They may involve various parties. The bank, then the bank nominating a company to sell and then that company nominating a RE agency etc. So approvals do take time. Four weeks is a lot but not that lot as it is holiday season now. 5 days is too short to get an answer for a mortgagee sale.

 

[7DD4]

My option then is to put the offer in, then withdraw the offer should i find a better deal.

I assume i can withdraw the offer quicker than it takes them to look at it.

 

[Singo]

I reckon you can withdraw an offer any time before it is accepted. But probably you should ask the REA how you can withdraw the offer. A phone call is usually sufficient for normal sales, but not sure about mortgagee sales.

 

[eks883]

How do you find these mortgagee sales?

 

[paulie]

Hi 7DD4

singo is correct, you can withdraw an offer at any time prior to being informed it has been accepted.

I know offer expiry clauses are popular inclusions for investor buyers, but as most agents in Perth use the Reiwa Offer and Acceptance contracts, Offers can be withdrawn by the buyers at any time verbally or in writing - although reading into what the sellers agent is saying you might be trying to force a Sellers decision faster than the 3-4 week time frame being advised.

For the record on the typical O & A reiwa contract just under the finance clause section is a condition number 2 - it states something along the lines of "Acceptance of this offer will be sufficiently communicated to the Buyer if written or verbal confirmation is given by the Seller or Sellers Agent that the Acceptance has been signed by the Seller".

This clause is effectively explaining that any offer is binding on the Buyer only once the Buyer has received verbal or written confirmation that their Offer has been accepted and Signed by the Seller, in full with no changes. I've had a situation where the Sellers has accepted and signed a Buyers offer, I've called the buyer to notify them and before I've been able to say congratulations the Buyer has verbally withdrawn their offer.

I've had buyers withdraw offers with me via text messages, emails, voice mail, verbally on the phone and in person. All forms of communication are legally valid, but I'd suggest you text / email the agent first, then follow up with a call, as texts and emails have time stamps.

Mortgagee sales are interesting creatures, as I've sold a dozen or so over the years for various banks.

What's surprising is in every case I've been asked to initially list the property for considerably higher than what I have appraised it at. As I've since found out, the mortgagee (bank) must make an effort to recover the full amount of the debts accrued against a property, and costs to sell plus costs for the legal action that got control of the property - this is to protect the Bank from future legal action from the previous owner. Typically the "asking price" gets re adjusted (dropped) after three to five weeks to something just above realistic.

Also, ensure you do a full working order inspection prior to having an offer accepted, as banks only ever sell properties "as is where is" meaning there are no guarantees of anything being in working order or buildings being shire approved.

Finally, I have found mortgagee sales paperwork usually take 4-5 business days from an acceptable written offer being submitted, to the bank's senior staff actually signing the contract. Never has the case officer I've dealt with to arrange the sale, actually has the power to sign off on the sale. Some offers have taken slightly longer when the senior staff have been away.

I hope this helps.

Happy hunting

 

[paulie]

How do you find these mortgagee sales?

Agents will usually announce its a mortgagee sale only once you call or inspect the property. Most banks I've dealt with actually make it a condition of the listing with selling Agents, that advertising can not disclose the property as a Mortgagee Sale.

Unfortunately there is no central listing of mortgagee sales I know of in WA, although I expect there may be a public record of court hearings. As banks seeking possession of a property against a defaulted debt takes 6 to 9 months from the first significant default to when they actually get court granted possession.

Cheers

 

[Singo]

Paulie has given in depth details. Thanks Paulie.

The advertisements usually won't mention that it is a mortgagee sale. The clue is "as is" sale. As is sales are good opportunities to buy well as they could be mortgagee sales, deceased estates, public trustee sales, divorce sales, distressed sales, kids selling parents' house etc. (Or there is no council approval for certain parts of the building )

Usually if the price we offer is above what they expect, there is a good chance to get accepted. They don't prefer to counter offer much. So do the research and offer a reasonable price to get them.

 

[7DD4]

Thanks guys for all your info.

Paulie you were spot on. The house is over priced by about 30K for the work that need to be done on it.

We decided to hold onto our offer until 2nd Jan when business start to operate normally without holidays.

Check out this 48 hour clause

The bank can accept my offer, then if a better offer should come along they will give me 48hours to go unconditional. And i will be up for any expenses.

 

[thatbum]

Thanks guys for all your info.

Paulie you were spot on. The house is over priced by about 30K for the work that need to be done on it.

We decided to hold onto our offer until 2nd Jan when business start to operate normally without holidays.

Check out this 48 hour clause

The bank can accept my offer, then if a better offer should come along they will give me 48hours to go unconditional. And i will be up for any expenses.

Pfft, you should see some of the other clauses that a certain law firm in WA put into all their mortgagee contracts when acting for the bank.

Basically that they can terminate for no reason without penalty at any time, and can delay settlement for 90 days for no reason as well.

 

[Singo]

Pfft, you should see some of the other clauses that a certain law firm in WA put into all their mortgagee contracts when acting for the bank.

Basically that they can terminate for no reason without penalty at any time, and can delay settlement for 90 days for no reason as well.

We received pages and pages and pages and heaps of changes to general conditions that we couldn't understand at all. solid walls and roof the house had so we signed the contract. Settlement delayed for a month and our solicitor was unable to anything other than waiting. End of the day, it was a good deal though.

 

[thatbum]

We received pages and pages and pages and heaps of changes to general conditions that we couldn't understand at all. solid walls and roof the house had so we signed the contract. Settlement delayed for a month and our solicitor was unable to anything other than waiting. End of the day, it was a good deal though.

Haha I pretty much went through the same thing with one of my purchases. (Let me guess, CBA?)

Only difference is I mostly understood the changes to the general conditions but still got screwed around with a months delay.

Very much recommended to read through the additional paperwork and understand the risks if you're considering mortgagee purchases in WA.

 

[Singo]

Haha I pretty much went through the same thing with one of my purchases. (Let me guess, CBA?)

Only difference is I mostly understood the changes to the general conditions but still got screwed around with a months delay.

Very much recommended to read through the additional paperwork and understand the risks if you're considering mortgagee purchases in WA.

It was GE money or something like that. A non bank mortgagee sale. It was our first purchase and I thought all purchases came with paperwork like that. I didn't even check whether there are any easements, didn't even have a look at the certificate of title. So ignorant

The only thing I understood at that time was that the prices in that area was going to go up. (higher priced surrounding suburbs, rents increasing etc) So just signed the dotted lines and initialed all over the documents. Luckily for us all went well.