Agent putting pressure on to do a building& pest.

Discussion in 'The Buying & Selling Process' started by Bee-mumma, 5th Jun, 2018.

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  1. Bee-mumma

    Bee-mumma Well-Known Member

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    We wrote a few emails stating our offer. They went back and forth. But here is the oddity, the REA has given us a verbal confirmation that our offer has been approved. However, no written confirmation. The property does not state "Under offer" online. He has also pushed me to do a building and pest straight away. I've organized one that should be going ahead at 2pm today. But I want to make sure that acceptance of the offer is in writing first.
    The vendor has had this property on and off the market for a while, and my worry is that I get the building and pest inspection done only to find out that nope... they really weren't keen to sell! That would just be an exercise in how to loose $650 really quickly!
    What do I do?
     
  2. wylie

    wylie Moderator Staff Member

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    Tell the agent when you have the written contract, you will arrange the building and pest.

    And stand firm.

    (I'd cancel it for today as you could very well be wasting your money.)
     
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  3. willair

    willair Well-Known Member Premium Member

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    Maybe let the Legal team you employed take care of the next few steps . premature to spend your money until you know it's rock solid..imho..
     
  4. Bee-mumma

    Bee-mumma Well-Known Member

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    Well I suck. I managed to get a written email that states that the vendor have accepted our offer. Building and pest inspection are going ahead. Then they will organize the section 32 if we are happy with the b&p inspections. Seems all around the wrong way to me!

    I need to organize finance. I hate dealing with the banks. I find it much better to go with a mortgage broker, but even then that is a mind field of choices.
     
  5. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    A written email is not binding - it's a very odd way this is being handled.

    The only other time I've seen things like this is when the REA's contract with the seller had expired and the seller only wanted a concrete deal before spending money on updating contracts and agreeing to go back in contract with the REA.

    Personally I wouldn't have done it unless it was a huge bargain and I was happy to risk the B&P money.

    Now go choose a broker and make sure you are ready to go for finance if everything works out.
     
  6. Trainee

    Trainee Well-Known Member

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    You should have finance mostly organised before you even look at a place.
     
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  7. Trainee

    Trainee Well-Known Member

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    Why accept it then?
     
  8. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Mostly we would suggest buyers sort the finance ability long before spending time and money chasing properties.

    Doesnt necc need to be a pre approval, but a strong work through with a banker or broker can remove many assumptions or oversights that later may kill a deal.

    Yup, too much choice is a bad thing if one doesnt have a defined process in place to make what may be quite important decisions.

    Logically, that causes angst.

    ta
    rolf
     
  9. RPI

    RPI SDA Provider, Town Planner, Former Property Lawyer

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    Actually, there has been a couple of superior court cases saying that an email acceptance can constitute a contract in writing for property due to the various Electronic Transactions Acts (slightly different in each state I believe but key aspects are the same). It does depend on the wording in the email and it may not be sufficient in this case, also would the vendor spend money trying to enforce something. Further, if in QLD you can terminate under the statutory cooling off and if you didn't pay a deposit there is no penalty (normal penalty allows the vendor to deduct up to 0.25% of the purchase price from any deposit HELD). Likely to be different in other states.
     
  10. WellKnow

    WellKnow Well-Known Member

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    Hmm sounds like you have gone around the wrong way of buying a property.
    my steps would have been
    1 Speak to mortgage broker and know you borrowing power, get a pre approval
    2 find a property within your budget
    3 complete inspection and due diligence checks
    4 read through and section32 or get someone in the legal team to read through it
    5 put an offer in writing with subject to conditions
    6 receive confirmation in writing of the offer been accepted and time periods for subject to conditions
    7 start loan approval process
    8 complete B&P inspections
    9 confirmation of loan approval
    10 sign contract when all conditions are met
     
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  11. Bee-mumma

    Bee-mumma Well-Known Member

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    Finance is loosely sorted. Basically, we would prefer finance and have a loan on the property. It makes it easier tax wise. We have our accountant on board to provide the necessary documents.
    This has been put together very oddly.
    Realestate agents suggest to vendors that they don't get a section 32 done until they have interested parties so that they don't waste their $. But this makes it difficult for the buyers. Honestly, all a bit tricky. Hopefully all will come good in the wash.
    I really need a stepped out procedure for buying a property, in Victoria.
     
  12. Bee-mumma

    Bee-mumma Well-Known Member

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    Thank you Well known! You must have been typing while I was. That is a great list. YEP... all around face on this one :(
     
  13. JacM

    JacM VIC Buyer's Agent - Melbourne, Geelong, Ballarat Business Member

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    There are several great mortgage brokers on these forums. Why not contact one of them? I note that @Rolf Latham has replied above..
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    For future reference:

    I assume this property is in Vic because there is talk of a Section 32.

    No section 32 = no (formal) offer. Similarly, cannot be "Under Offer" on the advert.

    There could be all sorts of things wrong with the property (outstanding council permits, wrong zoning, caveats, etc etc).

    NEVER talk $ until the sec 32 is seen and read.

    However we almost always do the B&P (where one is done) BEFORE making the offer. We adjust the offer accordingly.

    @Bee-mumma you could be up to lose a lot more than the B&P costs in your scenario.
    Have you paid a deposit? Has it been receipted into the agents trust acount? (read our story - we got out deposit stolen once).

    The agent may be trying to tell you there is some serious issues with the property and doesn't want to tell you outright (he is acting for the vendor) but doesn't ant you stuck with some termite infested fire hazard sitting on a nuclear waste dump (ok the last one the B&P may not pick up...)

    Luckily as far as the contract goes, there is a mandatory cooling off period in Victoria.


    The Y-man
     
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  15. Trainee

    Trainee Well-Known Member

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    A lot of investor wounds are selfinflicted. If people stuck to a decent plan it would save a lot of stress.
     
  16. Bee-mumma

    Bee-mumma Well-Known Member

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    The problem with getting a section 32, is that they won't get one until they know they have genuine interest.
    So the problem is one of what comes first, the chicken or the egg?
    I'll inspect the property.
    Our offer, was e-mailed. They did have time allowances.
    The building inspection has shown that the house is not a great state. All fixable, but will cost more than what we had anticipated.
    One of the stipulations on my offer was that building and pest inspections do not indicate that the property required more than 5% of the purchase price on repairs. As the building report suggests that this amount will be exceeded, I believe that my offers will have to be adjusted and that may mean reducing the asking price of the property. Or passing it up.

    Trainee- I agree. I would like to deal with a standard protocol for this type of thing. Yes, we have not gone to the bank for per-approval but we are also self employed, so we need to make sure all our ducks are in a row before even inquiring about finance.

    Interestingly enough. Y-man- our home had stated on the advert "Under Offer" once a verbal offer was accepted just weeks ago. They even put down a deposit. I then organized the section 32, pronto because they wanted a 30 day settlement. Then, they withdrew from the deal and got their deposit back 4 days later. Massive pain in the butt. Our REA advised us not to get a section 32 until we had a buyer. So??? Your understanding conflicts with what I have experienced just weeks ago. But yes... I think you might be right. Or conveyancer was under the same impression that you can't have an offer without a section 32.
     
  17. The Y-man

    The Y-man Moderator Staff Member

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    For all of the properties we have sold in Vic, we have always prepared the section 32 prior. There was one property that we tried to sell 3 times before we finally managed to offload it! However the s32 was cheaper the second and third time around as only the rates notices, OC material etc had to be updated.

    The Y-man
     
  18. The Y-man

    The Y-man Moderator Staff Member

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    Would not waste my time (or money) on it other than telling the agent "email me the s32, then we'll talk". If they don't do it, walk away.

    The Y-man
     
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  19. Bee-mumma

    Bee-mumma Well-Known Member

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    That is a good idea y-man :)
     
  20. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    Exactly the advice I give my clients.

    Step 1: the vendor presents the prospective purchaser with a complete and up-to-date section 32.

    If the vendor doesn’t like step 1 - there’s plenty of fish in the sea.