Trespassing?!

[rayss]

Reply: 5.1.1
From: Ray Summerton


I have just bought a property which had the settlement date extended by four weeks and the vendors moved interstate after accepting my offer. So who is going to look after the place til I receive the keys? What is my situation if the gardens are dead thro lack of water? It will surely affect the rentability of the place.I have been going around to water the gardens, with the help of the agent.I think if the new owner adds value to the place and the deal falls through then the vendor is surely better off for letting the new owner do improvements, or is that not so? Can the ( new owner) claim compensation for the improvements?
Regards Ray

 

[Jacque]

Reply: 5.1.1.1
From: J Parker


Ray,
I think you will find that it is not an easy thing for the vendor's solicitors to allow early possession for the purposes of carrying out improvements/renovations.

I know Michael Croft does it regularly but he points out that it isn't favoured by solicitors at all.

With my recent late settlement I was really stuffed up. I had the builder, sparky etc booked and my hubby up there to do some manual labour. I asked my solicitor to see if we could get early possession and offered to pay the vendors rent for those days. I was told an adamant no! Very frustrating but not much else we could do.
I guess, however, if you planned ahead and made this a stipulation of the original contract of sale (as I think MIchael would be doing) then you would have a better chance of carrying out work during settlement. You would have to organise insurance etc . Good luck!
Cheers, Jacque

 

[Michael Croft]

Reply: 5.1.1.1.1
From: Michael Croft


Hi Jacque,

Solicitors don't like it at all, which is why it needs to be negotiated with the agent or vendor before exchange. It's usually fairly easy to do, as the agent wants their commission and the vendor wants the sale to proceed. In fairness to the solicitors they normally deal with amateurs and must cover the worse case scenario.

The way I explain it to the agent is something like this; "well what has your vendor got to lose? I default!? they keep the 10% deposit and you get a renovated property to sell!"

Now I ask you, do you think this tactic works?? You betcha, the vendor usually insists that my access clause be included!

Michael Croft

 

[Rolf Latham]

Reply: 5.1.1.1.1.1
From: Rolf Latham


Hi Micheal

i do believe the position for the vendor is even better than just the 10 %. I have been reliably informed they can also chase you for other costs if you don't complete the contract, which effectively are limited only by the contract value.

Not ever having had a client in that position (gulp) I dont know how true it is.

Ta

Rolf

 

[Michael Croft]

Reply: 5.1.1.1.1.1.1
From: Michael Croft


You've hit the nail on the head in more ways than one Rolf. Yes the vendor can sue for more than the 10%, but how many actually do? Particularly if the property is in a better (demonstrated by valuation) condition for the access. The litigation would consume any gains the vendor may hope for and s/he would be worse off than if they had simply kept the 10% and resold. The resale would probably be at least 10% higher than the original sale as well.

Anyway this is what I do and NOT what I recommend anyone else do, all I can say is that it works for me - consider this a disclaimer.

Michael Croft

 

[Michael Croft]

Reply: 4.1.1.1.1.1
From: Michael Croft


Hi Sim',

Several ways to skin the proverbial and it's all done in the negotiation phase and involves determining the type of vendor you're dealing with and their level of motivation.

My desired outcome = unrestricted access before settlement.

My first effort is to try the "well what's the worst that could happen? I default and you end up with a renovated property to sell that will bring another 50K. I'll be down 10% plus my renovation costs". Agent wants commission, seller wants sale, and I get access. The agent/vendor see this as a win/win/lose (me being the potential loser), I sell it as a win/win/win and I believe it is.

If this doesn't work (and it usually does depending on the solicitor) I'll offer to pay rent 'til settlement in addition to the above.

I have offered a 20% deposit on exchange with covering letter explaining that in addition to unrestricted access I will gladly forfeit the full deposit if I don't complete. A $60k cheque stapled to a letter of offer is a powerful incentive.

I only do this on a property I want and have done my due diligence on. I always have an exit strategy. This usually involves on selling (negotiating) to another party (often the under bidder) before settlement (actual sale effected after settlement of course).

If I strike a very negative or hostile vendor/agent/solicitor I fold and move on to the next one. The next deal of a lifetime is just around the corner - literally.

Anyway the disclaimer you have to have; the above works for me and I in no way recommend it to others as they may expose themselves to considerable risk in following my example.

Michael Croft

There are other ways and they involved more risk again for the uninitiated.

 

[Sim]

Reply: 4.1.1.1.1.1.1
From: Sim' Hampel


Thanks Michael, concise and extremely useful information as usual !

 

[Owen]

Reply: 5.1.1.1.1.1.1.1
From: Owen .


Thanks for all that Michael. Geoff1 couldn't have said it better himself ;0)

So far I have only been in Jacque's position, an emphatic "No". Now I have a few other options to try, disclaimer noted.

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"