How common is this case?

Discussion in 'The Buying & Selling Process' started by Antlerfil, 10th Apr, 2017.

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  1. Antlerfil

    Antlerfil New Member

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    I attended an auction 5 weeks ago, and lost the bid to an older couple who lived near by, much above the market price for the area. I got a call from the REA this morning who told me that an opportunity has came up. The couple who won the auction is settling next week and after settlement, wants to sell this property off the market because they change their mind and does not want that place any more. The REA said that he is now calling up people who were interested in this property and the other bidders (I was the only bidder apart from that couple) to get an interest because they are keen on selling this off the market.

    I was just wondering if this has very happened? I seems a bit fishy to me, why they bought and changed their mind. Could there be something wrong of the house that seriously made them change their mind?
     
  2. Foxdan

    Foxdan Well-Known Member

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    Quick way to get double the commission!
     
  3. David Chin

    David Chin Member

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    It may be worth further investigation. What checks did you make before deciding to bid? Is a 5 week settlement period normal for your area?
     
  4. Antlerfil

    Antlerfil New Member

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    It is a normal 6 week settlement, they are settling next week, the REA called me 1 week before settlement date to tell me the new owners wants to sell already and the reason was that they changed their mind. We did a building and pest inspection report and had a solicitor check the contract before we went into auction.

    The property was sold at 1.8mil so that means they would have had to forfeit their 10% deposit to pull out of settlement, so obviously selling it at a similar price would make sense for them to make minimal loss (still losing 80k to stamp duty).

    At the auction, no one else's made the bid, only the old couple and myself. No competition but a huge crowd (20+ spectators). He was pretty aggressive in his bids, and pushed the price way higher than the market value to the point I stopped because it just wasn't worth it any more. In the end, it was already 120k over then price guide.

    The REA now wants to give me this property at the last bid I put 5 weeks ago. How much room do I have to negotiate a better deal?
     
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  5. Joynz

    Joynz Well-Known Member

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    Just offer the price you are happy to pay.

    This might even be less than your final bid if you got a bit caught up at the auction and it was overpriced.
     
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  6. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I've never heard of it happening.

    If you do proceed - get an excellent solicitor on board to check over all searches.

    I'd also get a very thorough building/pest inspection done.

    Grill the agent too - if there's something wrong with the property then they should disclose it.

    Cheers

    Jamie
     
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  7. The Y-man

    The Y-man Moderator Staff Member

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    Plausible they could not get finance.

    We bought our PPOR when the purchaser's finance fell through. Gave use the opportunity to make a conditional offer.

    The Y-man
     
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  8. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Last year I had a couple that turned over a 1.6M property because they changed their mind about the property and location. They sold their house, bought this one, changed their mind, sold that house and bought a new one.

    The whole exercise cost them about $200k in selling costs and stamp duty.

    This situation could be that simple, or it could be that they discovered something about the house and don't want it. If you like the property, offer what you think it's worth but get a building and pest inspection first.

    Or it could be that they can't get finance. I think we'll be seeing more of that in the future.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    @Antlerfil
    • it could be any of the reasons above
    • Are the buyers going to settle?
    • Who will be the vendor (defaulting purchaser or outgoing owner)?
    • If the successful purchaser is defaulting & going to lose the deposit, this is to your advantage as the vendor may accept less (possibly it's 5-10% being the deposit paid by the successful buyer)
     
  10. neK

    neK Well-Known Member

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    I'd be getting in direct contact and see if the "new vendors" are willing to a memorandum of transfer before they actually settle.

    Agent would lose out on commission, but may be willing if they get paid twice, but ultimately its not their call, but a call between the current vendor and purchaser.
     
  11. Anthony Brew

    Anthony Brew Well-Known Member

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    The thought of wasting 200k makes my head spin.
     
  12. Wendy Chamberlain

    Wendy Chamberlain Well-Known Member

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    This happened in Melbourne last year. We were looking at purchasing a property for a client that auctioned on the Saturday. We passed on that one and purchased another house on the Friday, the day before. The property sold under the hammer that Saturday.

    Three weeks later the agent rang me to ask if I had a buyer for the property. The people that bid at auction and won could not settle. Settlement was in 90 days. Turns out the husband was not a permanent resident and the wife did not meet serviceability. So they could not get finance. This couple were very very lucky in that the elderly owner did refund them their 10% deposit (over $60K) as she felt sorry for them.

    Just wish I had another buyer client at the time as the agent offered it to us at the same price as was agreed at auction. By settlement, the market had moved such that this property would now be worth $60k more in just 6 months.

    Find out the reasons why the original buyers no longer want the house. It could be a legitimate reason