Buyer pulls out a week before settlement with no penalty?

Discussion in 'The Buying & Selling Process' started by Danieljk101, 7th Apr, 2020.

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  1. Danieljk101

    Danieljk101 Well-Known Member

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    Hi all, bit of a strange one here.

    I sold my property in February and it was due to settle next week. Then today I get an email from my solicitor saying that the buyers financier has revoked the loan approval therefore the Buyer has elected to terminate to Contract pursuant to the Covid-19 related condition on their finance approval.

    And now all I am entitled to is the $1000 they put down in February. Now I’m stuck with a property in the middle of covid panic and will have to sell for a lot less now.

    Am I out of options here or can I pursue legal action to at least?

    Thanks again.
     
  2. JasonC

    JasonC Well-Known Member

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    Does your contract have a finance clause in it? What’s the wording of it?

    What’s your legal representative say about it?

    Regards,

    Jason
     
  3. punti

    punti Active Member

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    That doesn't seem right...

    I would of thought you'd be entitled to the 10% deposit at least, regardless if it has been transferred.
     
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  4. twobobsworth

    twobobsworth Well-Known Member

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    Location of property?
     
  5. Danieljk101

    Danieljk101 Well-Known Member

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    Property is in Brisbane.

    The finance clause finished last week but the bank apparently added in an extra covid clause so they have an opportunity to pull out before settlement.

    will have more details tomorrow hopefully.
     
  6. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    who be the lender ?

    ta
    rolf
     
  7. Danieljk101

    Danieljk101 Well-Known Member

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    It’s Westpac
     
  8. Trainee

    Trainee Well-Known Member

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    Dont understand what this means. How does the bank add a clause to the contract between you and the buyer?

    Last week your legal representatives should have agreed that the contract had become unconditional?
     
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  9. shorty

    shorty Well-Known Member

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    The bank added a condition to the contract?
     
  10. Hetty

    Hetty Well-Known Member

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    Didn’t they put down a 10% deposit? Or at least 5%?
     
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  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Plus Member

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    A bank is not party to the contract of sale.
     
  12. Hetty

    Hetty Well-Known Member

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    This all sounds very bizarre. What did your solicitor say? They should be providing advice.
     
  13. Blueskies

    Blueskies Well-Known Member

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    It sounds like their bank has pulled their finance, if it settles next week you would surely be past the point of the contract being unconditional? It sounds to me like their solicitor is trying to word things in such a way that they are pulling out under the finance clause, which shouldn't be possible unless your contract gave them a very long time to sort out finance.

    You need to get advice from your solicitor. Also it highlights the importance of getting a decent size deposit, $1000 is not enough to deter these type of shenanigans.
     
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  14. Danieljk101

    Danieljk101 Well-Known Member

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    The buyer is claiming he lost his job / income so Westpac withdrew finance. The finance went unconditional last week but the Westpac included a clause giving them the option to pull funding.
     

    Attached Files:

  15. Trainee

    Trainee Well-Known Member

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    Talk to your solicitor, but if the contract is unconditional, its unconditional. The fact that the buyer lost their job does not change this.
     
  16. noomi_nooma

    noomi_nooma Well-Known Member

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    That letter doesn’t look legit
     
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  17. Trainee

    Trainee Well-Known Member

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    The letter is addressed to a trust?
    What letter starts with ‘M’? Usually it would be ‘Dear’?
    The grammar looks sus.

    talk to your solicitor in detail.
     
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  18. Morgs

    Morgs Well-Known Member Business Member

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    That letter does not look real to me. And in any case how could have there been a COVID clause when the whole thing had not even hit us in February?

    PS: Not sure if you've noted but you didn't redact that properly all the details can be read
     
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  19. TMNT

    TMNT Well-Known Member

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    This might be the common case of being legally entitled to 10% plus costs but you have to chase it in the courts


    Edit: do property deals have # associated with it?, let alone using the term "deal"??

    I interpreted it as "Mr"
     
  20. Danieljk101

    Danieljk101 Well-Known Member

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    It is “Mr Name Name”

    Seems odd that is is “cancelation if loan offer - deal #103847299

    Hmmm, I will dig into more details tomorrow morning and give update
     
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