Settlement Question

From: Mike .

Hi All,

If settlement is not completed on the date as specified in the contract for sale and the fault lay with either the buyer's solicitor or mortgage broker or lender, I believe the vendor is entitled to charge interest until settlement is finalized. What recourse does the buyer have to seek reparation from the professional at fault?

Secondly, if bank valuations need to be done on multiple properties, including interstate properties, as part of the loan approval process, is 2 weeks sufficient time to get a loan approval? Bear in mind that tenants are entitled to 7 days notice in giving access (to a valuer, in this case)?

Thanks in advance, Mike
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Reply: 1
From: Terry Avery

I think if settlement is delayed due to solicitor's fault then you should
first tackle the solicitor. If that does not resolve it you can complain to
the law society for compensation. For banks the same deal, first to them and
then to the bank organisation then the ombudsman. Not sure about mortgage
originators/brokers though.

I experienced delays with valuations due to tenants not cooperating (after
having agreed to do so) so yes I would say two weeks is too short a time to
get the valuations done and get loan approval. Even if you have a
pre-approved loan the bank might not actually tell the valuer to do anything
until you let them (the bank) know they can proceed. The other problem I had
with the valuer is that they only called the tenant during office hours.
When I was told this by the bank officer I just looked her in the eye and
said "Well someone is going to have to ring the tenant after office hours
aren't they?" She looked very uncomfortable but agreed and guess what an
appointment was arranged.
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Reply: 2
From: Rolf Latham

Hi Mike

Cant speak for other brokers, but I can and do cover my boo boos out of my own pocket.

Rare, but mistakes and oversights do happen.

Where the amount is huge, most decent brokers should carry proff indemnity of at least 1 mill. If they do not ???

If the penalty interest is due to banking issue, then I will attempt to recover the cost from the bank.


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Reply: 2.1
From: Mike .

Thanks guys, for your thoughts.

I'm embarrassed to say, but I've been caught out and have been paying $80 interest to the vendor since Monday. I still haven't received the Mortgage documents! Hopefully, will get those tomorrow and settle Friday or next Monday.

The property is in Brisbane, so using a Brisbane solicitor, the Mortgage Broker is in Newcastle, NSW and the loan originator is in Melbourne. 3 properties had to be valued.
My solicitor had me sign a 28 day settlement as they thought that would be plenty of time. The solicitor tells me that communications with the lender have been "difficult".

I may have lost some money, but I intend to get a full explanation from someone.

Just for future reference, how involved should a purchaser get with checking that settlement is progressing as intended and will not overrun? I did receive reports that things weren't all well and that the settlement date was going to be revised but I was only told today that interest was being charged from Mon 12th. What could I have done, anyway? Was it a simple case of the short settlement period being too optimistic?

Regards, Mike
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Reply: 2.1.1
From: Rolf Latham

Hi Mike

Qld is a quick settlement period - have been caught on the hop just recently !

Would suggest that it depends on the broker, although even we do make mistakes and overlook things. Broker should be in touch every 3 days, more often if diff or time short deal.

$ 80 bucks a day - tax deductible ? Big loan obviously.

A good negotiator in the form of conveyancing solicitor can save you lots sometimes.


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Reply: 2.1.2
From: Rosemary McKenzie

We refinanced (an existing) and bought (a new one) through a mortgage broker because we thought the process was going to be complex, and we had such a short time.

He didn't seem to do anything with our applications unless we were sitting there at his desk. Valuations weren't arranged unless we were sitting there, papers weren't filled in, or phone calls made unless we sat there and watched him.

I went to America for a 5 day conference and he said that it would all be organised by the time I got back, and I would only have to sign the mortgage papers.

When I returned there was nothing done and I spent the next day, sitting on people's door steps to pick up papers, deliver them to the next point, wait for signing/printing, and move them on ... it was good they weren't in 3 different states.

We were lucky and got all the stuff done by the settlement date, but we resented any and every cent that this mortgage broker got because of our business through him.
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