Where do I Stand ??

[Trying2Learn]

A few weeks ago ( 4 actually) we made an offer on a property it was accepted and we paid the $1000 holding deposit.

The bank has stuffed us around and while we have the credit approved there is one more thing that has to be done legally (smsf loan)

We have kept the real estate in the loop of where we are up to as it has cost us nearly $4000 to get to this point. But we have yet to exchange ! We have had our MB & 2 solicitors ring the RE to say that it will be exchanged and we have the money but these items just need fixing before hand.

I had a call from the RE today to say the property will be advertised in this weekends paper as they can't wait any longer. I advised him that we would exchange before Xmas and probably settle in 3 weeks after that.

My questions are -

* Am I entitled to my $ 1000 holding deposit back and if so when should I ask for it, now or wait to see if we exchange before someone else

* If someone makes an offer and the proceeds with searches, building and pest and then we come in and exchange over them is that really right ?

Thanks for your time

 

[Property Meister]

what was the agreement in the contract for the period or date, I think it would enitrely depend on what you have agreed

 

[GoAnna!]

Are you saying you are yet to sign a contract? If so they have been unbelievably patient with you. What certainty so they have if you have not signed a contract?

 

[twobobsworth]

I would be pretty PO if I was the vendor and the agent didn't continue to show the property to other buyers. Until contracts are exchanged your offer isn't worth diddley.

Your $1000 should be fully refundable.

 

[Collector]

Your holding deposit is not a holding deposit (i take it the property is NSW) your deposit is an expression of interest deposit)

On the back of the receipt that was issued to you (or on a seperate piece of paper - as per Legislation) should be a statement - " The principal has no obligation to sell that property or the purchaser to buy that property. The deposit is repayable to tat person in the event that a contract is not entered into between that person and the priciple for the sale of the property".

You will get your deposit back.


At this stage I would not ask for your deposit back - let them hold it in their trust account - reason= under the ACT - the agent must notify you if another party has made an offer. This way you know where you stand with the property - if you are still in contention etc.


Chances are you will end up buying this property, not much sells this close to Christmas.

Good luck

 

[Trying2Learn]

Patient - yes you are right, and that I understand but it is really not my intention. The bank is just being a right pain in the butt with the smsf loan.

Thanks for the advice collector I will leave it there as we are hoping it to exchange this week.

My point was more if our offer was accepted could they also accept another offer as well. Then have the other people pay for building and pest only for us to sign the contract ahead of them. Therefore the money they spent on the searches would be wasted. I am not meaning just not fair for us but not fair in general.

Maybe I am just still to new to this to get it

 

[Propertunity]

My questions are -

* Am I entitled to my $ 1000 holding deposit back and if so when should I ask for it, now or wait to see if we exchange before someone else

As Collector has said it is not a holding deposit just an EOI deposit. Entirely refundable to you.

* If someone makes an offer and the proceeds with searches, building and pest and then we come in and exchange over them is that really right ?

Yes you can. It is called gazumping. You are asking the wrong questions i.e. Is it fair? Is it right? Your question should be "Is it legal?" and the answer is Yes. Legal has nothing to do with reason, fairness or morals.

We have had a fair bit of "racing to exchange" lately in our area as buyers try to outbid/outrace to exchange contracts. I hope for your sake you manage to exchange first.

 

[GoAnna!]

Any reason why you can't sign the contract and sort out what needs to be sorted out during the settlement period?

An offer should only be made when you are redy to sign the contract. It would seem that you have jumped the gun and have made an offer when you are not ready to sign a contract. And you now expect the seller to twiddle their thumbs (and potentially lose another buyer who IS ready) while you sort yourself out. I am unclear why you think this a reasonable expectation.

The only real assurance the seller has that a buyer will go through with a sale is a signed contract. And so far you have resisted signing it.

 

[Propertunity]

The only real assurance the seller has that a buyer will go through with a sale is a signed contract. And so far you have resisted signing it.

GoAnna,

I think Trying2Learn's problem will be that he can sign a contract in the REA's office but this only gives him 5 business days to "cool-off" during which time he has to get pest & building done BUT more importantly get finance approval. This seems to be the sticking point as the bank is stuffing him around - since it is a loan for a SMSF.

He can recind in the 5 days but that just means the property is back on the market - not what anybody wants.....but clearly 5 days is not enough time for the bank to get with it for their SMSF product - must be all a bit new for them

 

[GoAnna!]

I may have misunderstood but 4 weeks has now passed. This is a lot longer than is normally requireded for loan approvals, builing inspections etc. So I can see why the seller is getting toey. That being said I have zero experience of smsf in this scenario so I'll be quiet now .

 

[Trying2Learn]

Propertunity you are exactly right ! Thank-you

GoAnna I understand what you are saying but we had a verbal approval from the bank after it took them 4 weeks to look through the deeds and to say we could borrow X amount so we went ahead and looked. We did ask for a pre-approval but the bank does not do them on an SMSF loan. Therefore with our verbal yes we looked, found, offered and put in the application to the bank.

We did think as it took 4 weeks for a verbal approval that the written would take 5-10 days max. In 5 days I had pest, building and been to the solicitors

I kid you not this is not an ideal situation for us to want to be in. We did expect to settle this week and renovate over xmas. It looks like exchange will be this week after quite a bit of forceful emails and phone calls to the bank. Fingers and toes all crossed.

The bank told as we are the 6th loan that they have processed like this, in my eyes it should be easy for them now then after 6.... My patience is all done with the bank !!!

 

[want2bewealthy]

Oh oh, Im afraid youve made a big mistake. .

'Trying2learn' is a bad name, I called myself want2bewealthy when I first joined up here and had nothing, 18 months later I control $1mil in property and now Im feeling quite wealthy. .

 

[GoAnna!]

The bank told as we are the 6th loan that they have processed like this, in my eyes it should be easy for them now then after 6.... My patience is all done with the bank !!!

My experience is that banks act as if each loan is their first. They seem constantly surprised and on the back foot. It does my head in.

 

[Trying2Learn]

Yeah Yippeeee

We finally exchanged on 19th Dec, the day we originally wanted to settle. We now have a lovely red sold sign on our first IP.

Not without more hassle on the 18th Dec after 5 weeks the bank sent a pre-approval doc to the solicitors not a unconditional approval well the language was not the best let me tell you. Our MB rang the bank and let rip rightfully so. It was all fixed within the hour.

Believe it or not we first put in our application for the smsf loan 2nd week of Sept.

Now to get the mortgage docs in the letterbox - why am I so nervous with this after all @ 6 weeks for a verbal yes and @ 5 weeks for the approval

 

[Propertunity]

We finally exchanged on 19th Dec, the day we originally wanted to settle. We now have a lovely red sold sign on our first IP.

Correction, your SMSF has a lovely red sold sign on its first IP

Believe it or not we first put in our application for the smsf loan 2nd week of Sept.

I do believe it - like GoAnna said "It does my head in".

But seriously, congratulations and well done! May you have a great tenant!

 

[Trying2Learn]

Thank you Propertunity, oops and yes your right our first smsf IP has a lovely red sold sign lol