What are my rights?

[Celivia]

Hi people, I'm in an awkward position, don't really know what I should do.
I made an offer on a property, it was one of those Dutch auctions, where you have a price range. We made an offer at the top of the range, for $275,000 because the agent told us that we could easily get $350 rent per week for it. I did do reasearch before going to inspect the place, and my husband (who's in the building industry) and I did think this was a good price to pay, and the $350 rent would be a bit too high, the agent exaggerating a bit, we expected it to be $330 at the most.

But after our offer got accepted yesterday, the agent suddenly said that he had talked to the management department and that we probably would get a rent of $250-$280 a week instead of the $350 he first claimed we'd get.
I was really lost for words, listening to his exuses. Now he's drawing up a contract, I've contacted my solicitor etc, but now I think it's unfair, because if we had known that this house might only get $250 rent, we would have made lower offer.

SO the question is, now that he has drawn up the contract, which is probably already on its way to our solicitor, can we still withdraw our offer? We haven't signed anything yet. But is a verbal promise of an offer not binding as well? I feel bad for the seller if we lower our offer now, but even though the value of the house will be worth around $275K, I still feel a bit cheated.
Can someone tell me if I have the right to lower my offer?

Tell me I'm naieve and should never have believed an agent! I know this now.

Advice needed!!!

 

[Simon]

Celivia,

Absolutely. If you haven't signed a contract you can do whatever you like. Have the agent explain it to the vendor!

Good luck,

 

[D.T.]

Hi,

I didnt think they could hold you to anything without having it in writing?

-Regards

Dave

 

[paul_s]

I'm yet to actually buy an IP myself so I could well be out, but my understand is legally oral contracts can be binding except when it comes to property transactions where something in writing is generally needed.

Hope it goes well for you sounds like a very slimey agent.

 

[asy]

Hiya Celivia,

Wow, what a situation....

You are CERTAINLY NOT bound by anything unless you have signed it.

If you are really not happy with the price you offerred in light of this information, my suggestion would be:
Wait until the contract turns up, go in and sign it, but cross the price out, and put in the price you now wish to pay. Have your solicitor mail it directly to theirs with a covering letter explaining the facts. See what happens. The purchasers may accept your offer, they may come back with a counter offer, or they may just accept an offer from someone else. (If you do this, you MUST be prepared to lose the property if they call your bluff).

The other thing I would like to add is, whilst the agent has behaved reprehensibly, if the deal is still a good one, with respect to other houses in the area, don't back out on the deal just because you are angry at the agent. (I hope that makes sense and you understand that I am NOT defending the agent, just saying don't cut off your nose...)

I would, at the very least, let the principal of the agency know what's gone on, so they can better train their staff.

So, to sum up...

YES, you can back out on the deal.

YES, you can still lower your offer.

BUT, if it's a good deal, it may still be worth looking at.

hope this helps,

asy

 

[Aceyducey]

Originally posted by Celivia
Tell me I'm naieve and should never have believed an agent! I know this now.

Better to learn now than after it's binding

Everyone's given good advice - just don't let the agent pressure you - he'll want a quick sale now before you reconsider & will probably lie about your obligation to purchase (considering his conduct to-date).

Remember - he knows that if you speak directly with the vendor than he will be exposed as a cheat AND he knows that you can still escape his noose until an unconditional contract is signed....so YOU have the power!

Cheers,

Aceyducey

 

[Celivia]

Thank you, every one of you, you've helped me a great deal, I was so nervous I got the runs and no sleep!

My husband and I are going to talk it over tonight, to decide what to do. He still really wants he house, it is beautiful and not above market value we think, and yes Asy I feel like getting out of the deal only because of the lousy agent, but this is not a good reason to get out, is it.

I will certainly let the principal of the agency know what happened, so that it may not happen to someone else.
And there's no way I'd let this agency manage the property if we decide to buy it, so that's their loss.

Aceducey, you are exactly right about that he will lie about our obligation to purchase, (he did!) that's why I got so nervous. He announced over the phone that our offer was accepted and said, "So now you have bought the house" , about 3x in our conversation.

I wish I was a bit more quick-thinking, AFTER a conversation like that I always think of millions of things I could have/ should have said! Anyway, looking on the bright side, I got more experience from this, and a good education doesn't come cheap.

Thanks again. lovely people!

 

[Cosmo]

Here’s another angle. Due to the massive oversupply of rentals in some areas rent have plummeted lately due to fierce competition. What was the rent last year and maybe the year before that? Was there a trend upward that has been changed of late? Has this area had at least 2 lots of 20% p.a increases yet ? It might still be a good deal considering everything.

Just a thought

 

[Aceyducey]

Originally posted by Celivia
I will certainly let the principal of the agency know what happened, so that it may not happen to someone else.

Celivia,

Just don't expect much from the principal - they may be aware of or encourage this type of conduct...why else would the agent be able to do it (and I would doubt that this was his first time).

If you do complain to the principal, do it in writing.

Send copies to the Real Estate Institute in your state, the state Fair Trading Department & Neil Jenman (www.jenman.com.au).

Make sure that in the letter that you make them all aware of where you have sent the letter.

Keep it factual with dates & times and reference any docs if there are any (I doubt it - I bet your RE Agent does everything verbally to avoid an incriminating paper trail).

You may find there is a fast and positive response in this event

Cheers,

Aceyducey

 

[BUNDY]

Celivia,

Best of luck with everything. Keep us update on what eventuates.

Have you thought of having another agent go through the place and let you know what rent they think it may achieve. Sometimes sales agents have no idea of rentals as they leave it to their property managers.


Even though the agent may have mislead (lied) to you, and I don't know where you are purchasing, a 5% return is still pretty good in todays climate.

BUNDY

 

[Macca]

Well, in my opinion.............

What a BS artist!!!

It's agents like this that cause people to distrust RE agents, as others have already said, if you haven't signed anything then you are under no obligation to proceed.

Perhaps you and husband should have another look at a few properties in the area, compare them and the prices and decide if you wish to proceed or not on this one.

It is YOUR call, do what you wish , tell the RE agent to wait while you decide if you still want the place.

 

[Celivia]

Thanks people, just want to let you know how the story ends. We made the decision to still buy this place. The vendor agreed to all the inclusions I wanted and signed the contract, it's now on its way to my solicitor. It is still after all, as a few of you mentioned to me, a good deal, AND the vendors have agreed to rent it back on a monthly base until they find the house of their dreams, and they're in no hurry. They agreed paying $325 rent p.w. and they're feeling comfortable with that. After that, even if the rent would only give me $250 we'll still manage. (We won't be putting any voluntary superannuation in anymore, have stopped it already, much rather put it in this property. So there isn't less cashflow for us this way.)

As for the #*#%$@ agent, I had a word with him, told him exactly what I thought and how I felt about what he did. He did then apologise (and made lots of excuses until I felt a bit sorry for him ) . He has actually become much less pushy now and even helpful, believe it or not.
Now I've got my anger out of my system by telling him what I thought of him, I don't feel like persuing the matter anymore, it's all so stressful. (Anyway, Karma will hopefully sort him out. and from his excuses I can tell that Karma has been chasing him for a while LOL) and I rather concentrate my energy or what's left of it on my loan application forms now. Thanks Simon for your help with this!!!!!!!!

 

[Les]

Woohoo, go Celivia......


I've come in a bit late on this one, but wanted to add a thought that I heard some years ago (it made sense then, and, in your situation, you might relate to it too)

Some solicitors will advocate that even a verbal contract is binding, and will happily spend YOUR money in attempting to prove this is true

Probably doesn't quite fit, but I'm sure you get the idea......

Regards,