QLD property purchase - opting out?

[Watto2]

Can anyone tell me what the situation is in QLD if you just CHANGE YOUR MIND after the cooling off period for a property purchase. ie Point 3.1 of the contract doc says 'This contract is conditional on the Buyer obtaining approval of a loan for the Finance amount from the Financier by the finance date on terms satisfactory to the buyer. - But it then goes on to say - The Buyer must take all reasonable steps to obtain approval.

As far as i'm aware i will have finance approval - does this prevent me from pulling out?
thanks

 

[wylie]

If you have gone unconditional you have to settle.

I thought that unless you actually put in a specific finance clause, you cannot get out on that either (but it is a while since I've bought anything).

What has made you change your mind? Perhaps it is just buyer remorse?

 

[Watto2]

Firstly - what has to happen for it to go unconditional?

I'm reconsidering because i started the process through a company who i am now concerned are scamming me to some degree. And research is indicating that there are a few conflicting interests?

 

[wylie]

I'd get to a solicitor TODAY. See what can be done?

 

[marg4000]

Firstly - what has to happen for it to go unconditional?
UOTE]


Absolutely nothing.

Clauses in Qld contracts are "opt out" conditions. I.e., you have until a certain date to void the contract (pest, finance) etc. Unless you notify and substantiate that you cannot meet the clause before the relevant date, the contract automatically proceeds past that point.

For example, you may have 14 days after the date of the contract to obtain finance. If you cannot (and the seller can ask for evidence of this) and you are within the 14 day period, you can advise the fact and terminate the contract. Once that date has passed the contract automatically becomes unconditional.
Marg

 

[wylie]

Get in touch with peterw. He is an agent and will know the answers you are looking for. And then I'd be getting onto a solicitor today.

 

[Watto2]

So - just to be clear and before contacting anyone else - i beleive i have until the 8th January to advise of whether i have finance or not. I have not yet advised anyone of this. So they can't officially say it has gone unconditional as yet? I have received a request from the onsite manager wanting to organise the appropriate forms so that they can continue to rent the property.

 

[marg4000]

Just put the request from the PM aside until you sort the contract out. You don't have to reply immediately.
Marg

 

[Rolf Latham]

A lot will depend on what the finance clause says and how you have worded it .

If its an open ended amount with "satisfactory to the buyer", then ask your broker to set up a 100 % sole secured lend.................

declined no problem.

ta
rolf

 

[Watto2]

I'm sorry Rolf - i am not up to speed with all the lingo etc so not sure what you are suggesting.
The finance clause says 'This contract is conditional on the Buyer obtaining approval of a loan for the Finance amount from the Financier by the finance date on terms satisfactory to the buyer. The Buyer must take all reasonable steps to obtain approval'.

 

[alexlee]

I'm sorry Rolf - i am not up to speed with all the lingo etc so not sure what you are suggesting.
The finance clause says 'This contract is conditional on the Buyer obtaining approval of a loan for the Finance amount from the Financier by the finance date on terms satisfactory to the buyer. The Buyer must take all reasonable steps to obtain approval'.

Which 'Financier' does it refer to? Is it a specific bank?

This weakens the clause, because you have to 'take all reasonable steps'. The vendor can choose to contest this.

 

[Watto2]

The contract says "Bank or Institution but doesn't state who'.

The Financial Services Group that i am going through is organising the principal through Firstmac and i am organising the Interest Only component.

Wow - this is a steep learning curve....

 

[alexlee]

The Financial Services Group that i am going through is organising the principal through Firstmac and i am organising the Interest Only component.

I don't understand what this means.

 

[Watto2]

I'm not sure how much i can say on the public forum but i won't name names anyway. This group provide advice on investments which in hindsight i realise that they obviously have vested interests to get you to purchase property which they have some sort of stake in. They are up front about what commissions they get from lenders etc, but now pretty sure not about everything else. But, basically, they organise the principal loan to purchase a property and then i am required to organise the IO part of it through my lender.

Obviously as a part of building equity they plan to support you over a 10 year period and take a fee out of the first loan.

While i may appear gullible, the whole principle seems sound, but i just have concerns about the conflicts of interest amongst those involved.

I think i will continue to push the solictors in relation to where i stand with the contract as Marg4000 suggested and go from there.

Its an annoying time of year to be trying to get answers on anything!

 

[Terry_w]

I'm sorry Rolf - i am not up to speed with all the lingo etc so not sure what you are suggesting.
The finance clause says 'This contract is conditional on the Buyer obtaining approval of a loan for the Finance amount from the Financier by the finance date on terms satisfactory to the buyer. The Buyer must take all reasonable steps to obtain approval'.

Read the contract from first page to last page very carefully. Finance Amount is in captial letters so it may be defined in the contract somewhere (or it may be just you capitalising?). If it says $399,500 and your loan approval is for $388,490 then you may not have met the definition of finance approval under this clause.

Alos, are the finance organisers connected to the company that has sold you?

See your lawyer tomorrow before you are locked in.

 

[Player]

I'm not sure how much i can say on the public forum but i won't name names anyway. This group provide advice on investments which in hindsight i realise that they obviously have vested interests to get you to purchase property which they have some sort of stake in. They are up front about what commissions they get from lenders etc, but now pretty sure not about everything else. But, basically, they organise the principal loan to purchase a property and then i am required to organise the IO part of it through my lender.

Obviously as a part of building equity they plan to support you over a 10 year period and take a fee out of the first loan.

While i may appear gullible, the whole principle seems sound, but i just have concerns about the conflicts of interest amongst those involved.

I think i will continue to push the solictors in relation to where i stand with the contract as Marg4000 suggested and go from there.

Agree, juts as Marg has suggested, you need to seek legal advice. Just make sure it is independent and not one of their providers in their one stop shop.

Its an annoying time of year to be trying to get answers on anything!

Despite the conflict(s) of interest to which and allude and have concern, and giving consideration to your own investing criteria (assuming you have them) does the investment stack up on its own merits anyway?

 

[Watto2]

Despite the conflict(s) of interest to which and allude and have concern, and giving consideration to your own investing criteria (assuming you have them) does the investment stack up on its own merits anyway?

Alos, are the finance organisers connected to the company that has sold you?

THe investment does seem to stack up but I'm still not sure i'm on top of all the possible implicaitons of going into this without much knowledge or confidence about their motives and commitment.

And yes - i think the finance organisers may be connected to the sellers, but my limited research skills can't seem to pin it down with any certainty.....?!

 

[Nemo30]

Without details of the company you are going through, can you give details of what you have bought?

Price, location, rent and expenses.

I could be wrong, but sounds like the company is involved in the management of the property as well - how much does that cost you?

 

[pinkboy]

But, basically, they organise the principal loan to purchase a property and then i am required to organise the IO part of it through my lender.

This bit rings alarm bells for me!

The way I read it: This looks like a 'no money down' deal. Are they providing you with the deposit which you have to pay back to them (P&I component) over a set term, and then you show this as your deposit to get a separate financial institution (a lender) to provide the further funds to complete the purchase (at IO)?


pinkboy

 

[alexlee]

But, basically, they organise the principal loan to purchase a property and then i am required to organise the IO part of it through my lender.

Obviously as a part of building equity they plan to support you over a 10 year period and take a fee out of the first loan.

While i may appear gullible, the whole principle seems sound

Still don't understand how the financing works. What do you mean you arrange the io? If the property was 400k, how much do you have to borrow separately? And if the first loan has a first mortgage over the property, can you get a loan as a second mortgage? And what is this 10 year period? Do you have to pay back the loan after 10 years?

How are you judging the principle to be sound? Have you done it before or have investment experience to evaluate it?