Rescinding Property offer for existing apartment unit

Discussion in 'The Buying/Selling Process' started by JohnHenry, 17th Jun, 2015.

  1. JohnHenry

    JohnHenry Mister

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    People,

    As a newbie who is now trying to buy Investment Property, I've got some question regarding the making an offer between two properties below within the same building complex and same address but different level:

    Unit A: 1st Inspection Thursday 6PM, Agent-A says offer above $600k
    Unit B: 1st Inspection Saturday 12PM, Agent-B says offer above $580k

    Since it is on the same apartment building, I'd like to know:

    If I make an offer in Unit A for $601k and hand out the 0.25% check to the agent on Thursday night, Can I still rescind the offer and get full refund suppose Unit B Vendor accept the offer for lower price $581k ?
     
  2. neK

    neK Member

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    Why do you think that it being in the same apartment block has any relevance?
    Owner of apartment A doesn't care about owner of apartment B.

    Assuming you're buying in NSW, there are clauses in the contract that disallow the refund of 0.25%.

    If you put down 0.25% and the vendor accepts, you lock the vendor in, meaning they can't sell to anyone else, even if someone offers them a higher price (unless there is something sneaky written into the contract).

    By locking the vendor in, only you can choose to rescind. But in doing so, you forfeit your 0.25% deposit.

    In the scenario where you make the 0.25% deposit, if the owner does not accept you can get your cheque it back as the contract has not been exchanged.
     
  3. chilliblue

    chilliblue Member

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    If these are properties down your way make the offers without the deposit. If accepted then place monies down.
     
  4. JohnHenry

    JohnHenry Mister

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    Yes, I'm buying in NSW.

    So in this case I won't get the deposit back supposed I rescind the offer ?
    but if the vendor rejected the offer, then I can get my refund.

    But for the safe, I shouldn't give the deposit to the agent while waiting for the vendor reply. --> is that correct ?

    Just got the call from the agent that, he need me to give the 0.25% first so that he can convey the message to the vendor, otherwise my offer won't be considered.
     
  5. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Hard working agent if he gets back to you this early.

    They are obliged to put all offers to the owners regardless of greasing palms
     
  6. JohnHenry

    JohnHenry Mister

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    Yeah, my assumption is that I give the offer in writing or through email, and then when the vendor accept it, I will transfer the 0.25% to the R/E Agent bank account.

    and if within 5 working days I have got another offer from different vendor/ IP I can rescind the 0.25% deposit fully.

    Is that correct ?
     
  7. Big Will

    Big Will Member

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    If you cancel your offer there is no charge.

    However

    If the offer has been accepted (now contract) and you wish to cancel there will be a cooling off fee or you would lose the deposit depending on how far in you were.

    The 0.25% deposit is part of the initial deposit the REA is going to ask you for, the deposit will likely be 5-10% (inclusive of your initial deposit).
     
  8. chilliblue

    chilliblue Member

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    I have brought several properties down there and have never needed to pay a deposit before an offer is forwarded.

    Forward the offer in writing without any monies advising that they will be forthcoming once the offer is accepted by the vendor and copy in the offer to the vendors solicitor.
     
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  9. JohnHenry

    JohnHenry Mister

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    Yes, that does make sense.

    So in the night after the inspection, I can then write the email to the agent regarding my offer so that the next day when vendor accept my offer, I will then send the trasnfer receipt 0.25% to the agent bank account.

    But yes, if the next day I've found a better deal, I can then rescind with full refund when the vendor has not accepted my offer.
     
  10. Big Will

    Big Will Member

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    You can withdraw your offer at anytime and without reason.

    If you get really technical (in VIC anyway) you can withdraw your offer even if the vendor has signed it but as long as you haven't received a copy of the COS.

    E.g. the vendor signs at 6:30pm and you don't receive your copy until 7:00pm you could technically withdraw your offer up until 6:59pm, this would be a very big dick of a move and would blow all relationships with vendor and REA.
     
  11. JohnHenry

    JohnHenry Mister

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    Thanks Will,

    So based on this screenshot of the NSW contract:
    [​IMG]

    Section 3 is wording rather confusing.

    Does it means that once the 0.25% deposit is transferred I cannot withdraw it anymore ?
     
  12. Terry_w

    Terry_w Member

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    It means once you have entered into a contract you can rescind this contract within the time period and the vendor will keep the 0.25% and return the rest.

    If they haven't accepted your offer then there is no contract. But the difficulty you have is once you tell them you withdraw they could say that they had already accepted.
     
  13. Phiber

    Phiber Member

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    You could also submit an offer for unit B, conditional on your inspection.
    Why don't you try to get another inspection organised with unit B, on Thursday night?
     
  14. JohnHenry

    JohnHenry Mister

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    Hi Phiber,

    UnitB agent B doesn't available on the same day, hence I will need to wait until the weekend.

    Since I already got the Contract of Sales document (from email) on Agent A, I guess it should all be the same except the floor,

    Unit A is on ground floor hence asking for higher price
    Unit B is on 2nd floor but asking for slightly lower price (maybe to attract more buyers).
     
  15. Big Will

    Big Will Member

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    This, same as what I was eluding to.

    Your offer has no fees involved to withdraw.

    But to use your cooling off (withdraw) on a contract it would be 0.25%.
     
  16. Befuddled

    Befuddled Member

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    Hypothetically, if there is a subject-to-finance clause in the COS (and assuming no penalties for that), would you be able to avoid the 0.25% penalty if you invoked that instead of the cooling off period clause?
     
  17. Terry_w

    Terry_w Member

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    No, not unless there was a special condition.
     
  18. Big Will

    Big Will Member

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    You would need to show reasonable attempt in obtaining finance, not just changed your mind and let the REA know didn't get finance.