Give up 10% deposit pre settlement?

Discussion in 'The Buying & Selling Process' started by SarahSydney, 1st Apr, 2020.

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  1. SarahSydney

    SarahSydney Member

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    Hi,

    I bought a PPOR 6 weeks ago in inner west Sydney (3bed, 1 bath) and it settles in a fortnight...

    Pretty sure we timed the top of the market... after speaking to our buyers agent who has kindly offered to refund half of his fee it seems prudent to simply forfeit 10% deposit rather than face the 20-30% plus falls expected to happen this year....

    It’s a biter pill to swallow but the buyers agent is confident we can buy back same place for cheaper in future... also rents are dropping around us so cheaper to rent for next 12 months...

    Anyone else having to do this at the moment?

    ps wine helps!

    ta
    Sarah
     
  2. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

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    Wine sure does help :)

    Please seek legal advice asap.

    Your risk is not the 10 %

    Its semi unquantifiable

    If the vendor must sell, and is forced to sell at 20 % Less ( ur figures not mine) that risk passes to you under the default terms of most contracts.

    Great of your BA btw in the current times

    Feel free to name them and show them some love

    ta
    rolf
     
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  3. Trainee

    Trainee Well-Known Member

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    Your contract is probably unconditional now, yes? Check with your lawyer. You might be liable for the falls as well if the seller has to resell for less.
     
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  4. Stoffo

    Stoffo Well-Known Member

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    As per the other posts

    Buyers remorse ?

    PS your BA should know you will be liable for the vendors losses, so poor advice !
     
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  5. Ross36

    Ross36 Well-Known Member

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    I'm no expert, but I've been hearing property forecasters for many years and I tend to believe Christopher Joye's work. He is forecasting a small decline in value, followed by a sizeable upswing.

    Whether he's right only time will tell, but pulling out guarantees a minimum 10% loss by the sounds of it. My opinion only - but holding on if you have job security, cashflow etc. may be the best option.
     
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  6. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    Oh please - why are you listening to this BS?
    It's your decision what / who you listen too of course. But I bet you the other 1/2 of your BA's fee that we see nothing like a 20-30% fall - I'm thinking maybe 5%, followed by a quick recovery.
     
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  7. The Grinch

    The Grinch Well-Known Member

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    Property is a marathon not a sprint.
     
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  8. wilso8948

    wilso8948 Well-Known Member

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    Are you planning to flip? If it falls 20% in one year and rebounds 20% the year after, does it really matter?
     
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  9. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

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    I doubt very much the BA has provided any advice, just provided a gift if required.

    ta
    rolf
     
  10. Terry_w

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

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    perhaps you could renegotiate the terms of the contract.
     
  11. SarahSydney

    SarahSydney Member

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    Buyers remorse - absolutely!!!!
     
  12. SarahSydney

    SarahSydney Member

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    Thankyou Rolf, enquiring with lawyer...
     
  13. SarahSydney

    SarahSydney Member

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    Im not sure i can believe any forecast at the moment.. from memory Chris Joye is always pretty optimistic on property...

    I dont believe anyone really knows.. its the job losses and inability to service debt that worries me.

    In my demographic.. double income and a kid or two with a $1m plus mortgage... lots of job losses or loss of income and many are quickly realising that they can't last 6-12months on one income...
     
  14. SarahSydney

    SarahSydney Member

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    Thank you Terry. Enquiring.
     
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  15. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

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    what is ur income security like and have u got a formal loan approval ?

    ta
    rolf
     
  16. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    PPOR buys tend to be long term plays so you generally have time to ride out the market. If you are planning to live there for 5 or so years then it's likely this years blip won't be an issue.

    The others have spoken about the risk to you if you try and not uphold the contract so I won't go into that. I would suggest that the Seller will do their utmost to hold you to the contract.
     
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  17. Lizzie

    Lizzie Well-Known Member

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    Banks are giving 6 month mortgage holidays in the current crisis. What is to stop you settling then applying for this?

    I'm in the team that there may be short term pain ... but it will be short term, as in, 1-2 years max
     
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  18. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member

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    And a maximum loss that is on paper, vs a crystallised loss thats not quantifiable right now

    ta
    rolf
     
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  19. SarahSydney

    SarahSydney Member

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    Hi Rolf, yes loan approval.... my job security is like many I guess... middle levels of big corporate... safe now but also fair to assume a round of redundancies in 6-12 months due to loss of revenue...
     
  20. SarahSydney

    SarahSydney Member

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    My sense is prices will fall for years as frugal / sensible BEHAVIOUR will carry over and we won’t go back to max borrowing for double income anytime soon
     
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