Have You Ever Had a Buyer Not Settle on the Date?

Just a hypothetical scenario and to learn more about property investing in case this situation ever arose...

Have you put a property on the market, gone through cooling off and then when it comes to the day of settlement the buyer was not able to proceed or needed more time?

What did you do? Did you just take the deposit and cancel the sale? Did you allow them more time or did you give them the deposit back or some of it?

Also, what happens if the sale is stopped and you collect the deposit, do you have to continue advertising it with the agent if there is still time on the contract you have with the agent even if it has gone to the "sold listings" on the websites or has a SOLD sticker on the ad board? I would assume if you don't continue you have broken the contract with the agent and would have to pay them and solicitors full fees. I would assume you have to pay all the fees anyway?

All these questions will help me and others for the future investing procedures as I want to know where I stand legally in these situations in NSW especially.

 

More time required, extended contract, lawyer changed contract date and settked on new date. Happen frequently

Recent sale, builder would not settle unless I provided x, y, and z which was not written in contract

Got my lawyer to resind contract if we did not settle. They settled, otherwise 10% would have been on the line. Damn wish they did not settle

 

I have both had one, and been one.

Both times the Parties have granted extensions and moved on.

 

Yep last week
Was a 6 month settlement
Buyer emailed land titles in night b4 settlement
Solicitor said can I drive hour n half out of my way to sign
I said No way.

Week delay & 1100 penalty for buyer

 

In NSW you can't just keep their deposit. You will need to issue then a notice to complete demanding that they settle. Then you could possibly keep their deposit.

You agreement with the agent will depend on what you agreed to - this is a contract. They might be entitled to a comission even if it doesn't settle if the agreement was for them to find a buyer to exchange contracts with you.

 

Chatting to someone today, there are major issues with developers getting their money out of China.

He was getting about $2k/day in interest on the delayed settlement (had been extended a couple of times and developer was tied into 10% PA). Now deposited 3 months @ only 2.5%.

 

Was recently a buyer and missed intended date twice. House was previously had been DHA and therefore had that lease on the title. It was in the contract the seller had to get that removed prior settlement.

First date was missed by seller, could not get DHA lease removed in time. Mutually extended.

Second date missed as my bank could not make arrangements in time after notification of DHA lease removed. Mutually extended.

If there are motivated parties, and good comms, the sale will go through.

 

I forgot about the penalties charged. I have had a few ask if I would waive this, I don't do this as it is costing me money

 

Yes well the buyer on the day of auction agreed I could get a tenant in, a week later RE rings and says he wants half the rent for the 6 month of settlement, and I fix any maintenance issues..
Told them to stick it & I kept it empty.
He wanted access to measure up and advertise for future tenant
also told him to jam it

So somewhat Karma

 

Are you kidding, that is crazy stuff, half the rent, I would have done exactly what you did.

Karma is a biartch

 

I love karma, but it doesn't always happen. Which is why I like to become karma and make sure it plays out.

 

For me, I don't think I ever had a property settle on time and it wasn't me but due to the vendor. And like the rest, I usually asked my conveyancer to extend the time.

 

thanks for the feedback. I have a property sold to settle before July 1. I really want the money in my account before then so I can pay very little CGT as my income has been very low this tax year as I started a new business after been unemployed when I lost my job. The business is still a work in progress and will study from July as well. I need the money to cover outstanding bills that were put on hold when it sold.

Next financial year I expect my income to pick up substantially and if it does not settle by the due date in June I would prefer to keep some of the deposit and take it off the market. But now I'm not so sure that is a normal thing to do as it sounds like this is not that common and it might not be that straight forward in NSW. The real estate sale contract also expires on July 1.

But then again there is no reason for me to be concerned as there has been no red flags, I'm just thinking of the worst case scenario so I know where I stand if I get a call to say there are problems.

 

I guess if there are problems then I could just extend it to late June so they get some extra time but if they can't get sorted out by that time then I'm covered so I can claim some of the deposit and pull it off the market.

 

Did you request an earlier settlement date to fall this financial year?

 

No, it was a standard 6 weeks that I had no say in but was organized by the solicitors of both parties. I did request an earlier settlement recently and got a few days earlier but still at the 6 weeks if they can't make the earlier date. But the settlement date is mid June so that should give me enough time to make the July 1 deadline I do not want to go past.

 

The CGT event is occurs when the contract is signed not when settlement takes place.

 

that's our situation right now. I am the buyer and settlement was supposed to be today. However last week on pre settlement inspection noticed laundry and bedroom have sustained water extensive damage from washing machines hose outlets leaking, and to top it off different water damage to the kitchen. our settlement is delayed until everything is fixed on the owners insurance. anyone experienced this nightmare?

 

That does sound bad. Could that sort of thing damage the foundation? (I have no idea if this would be caused by what you're describing, I just recall my mother having a hot tub leak and this somehow damaging the concrete slab under their driveway/garage).

 

really, well that is good to know, thanks! So if the deal fell through for any reason I would still have a few weeks in June to get a new contract started with a new buyer ( I assume after cooling off is passed then it starts?)

Good luck with it.

This brings up more questions, so can a buyer demand to stop the contract on the pre-settlement inspection for any issues that they did not notice? For example, a stain on the carpet that was already there but they might no have noticed or does it have to be quite serious issues?