Return of deposit?

Hi all,

I have made an offer on some land subject to finance approval and put down $2000 as deposit. It looks as though the finance may be declined as the LMI guys are not happy about the lands proximity to some power lines.

If the deal does not go through due to the LMI guys not being happy and me not getting finance, would my deposit be returned or is this non refundable? Not bought in Australia before as we only came recently.

Thanks for helping, this forum is such a good place to learn from.

Paul
 
I have always been a fan of "subject to finance approval by XXX bank" to avoid arguments later. You don't want them to argue you didn't try a lender as you had a change of heart over the proximity and are just blaming the lender.
 
Thanks all. I am in WA..
I have always been a fan of "subject to finance approval by XXX bank" to avoid arguments later. You don't want them to argue you didn't try a lender as you had a change of heart over the proximity and are just blaming the lender.
I had this happen in WA during the GFC. The lender approved my loan but then sent it to their insurance people and it got knocked back at that stage. Lender was not happy but it was out of hands. I just provided the REA with the letter from the lender and I got my deposit back.
 
If you have not exchanged you will get it back but if you have exchanged and are cooling off you wont. That is because if you exercise your cooling off rights by rescinding the contract you will forfeit 0.25% of the purchase price....in NSW anyway.

Fleur
 
If you have not exchanged you will get it back but if you have exchanged and are cooling off you wont. That is because if you exercise your cooling off rights by rescinding the contract you will forfeit 0.25% of the purchase price....in NSW anyway.

Fleur

NSW is quite unique with their contract process. Considering the OP's purchase location the deposit generally will be refunded.
 
It all depends on the contract. In NSW I have drafted special conditions for clients allowing the deposit to be returned in full if the purchase exercises their cooling off period rights.
 
I had a case where for a refi for a client, a valuer said the property was within 25 metres of power lines and MI knocked it back. I did a simple google map and the property was over the road from properties that backed onto the power lines, it would have had to been closer to 80m away.

I went back to the lender, who went to the valuer and mortgage insurer, the loan was approved.

It could be worthwhile to make sure first.
Good luck either way.
 
To Terry,

I don't understand why you would do that to a vendor. If the law allows a vendor to keep the 0.25% if the purchaser exercises their cooling off rights why on earth would you add a clause in the contract otherwise. After all the vendor takes the property off the market while the purchaser is cooling off and could miss other potential buyers; and

If you were acting for a purchaser and requested an amendment to the contract to add that clause, I, personally, do not know anyone acting for the vendor who will agree to that.

However, we all practice differently and I may learn something here.

Regards,

Fleur
 
To Terry,

I don't understand why you would do that to a vendor. If the law allows a vendor to keep the 0.25% if the purchaser exercises their cooling off rights why on earth would you add a clause in the contract otherwise...


Terry didn't do anything to the vendor: he only requested to add the clause, it was the vendor that agreed to accept it. Vendor could have NOT accepted the offer.
 
Yes, it is about acting in the best way to protect your client. Giving away money would not be in the client's interest.

But if I was on the other side I would have to advise my client to refuse such a request - subject to commercial considerations.
 
Wow, niiiice vendor. There you go a lesson to all of us as vendors....be nice to your purchasers.

I may actually give it a go myself when acting for a purchaser and I would like to be a fly on the wall when the vendor's representative reads it. Well what harm .... they will either say agree or not agree, .... right?
 
Back
Top