Purchased at auction.. bank won't finance now. How to cancel?

Bit of a side issue but when I'm selling I always cross out the Clause that the agent gets the commission even if settlement doesn't happen. Would always relist with them and cover costs however.

 

Im glad u brought up that example, the fact that I asked for and actually listened to the advice bring given made a huge difference, PC and in particular some members really helped me out with their superior knowledge on the subject.

This OP has come in swearing about anyone and everyone to do with this deal. Everyone is a C, except for him. Everyone is at fault, except for him. 3 different valuers are wrong, he is right. The bank is unethical despite, it appears, still lending 90%. The agent is unethical if he/she gets paid for the job they successfully did.

The seller is unethical for not wanting to be out of pocket because the OP can't meet his legal obligations.

Basically everyone is a C, apart from the OP of course.

Sure i could've softened the language in my posts here but why soften it for someone who has largely ignored all the advice given so far
right and thinks everyone in the deal i a C?

There is advice there ive given, the OP needs to grow up and learn to take responsibility. Part of the reason this country is becoming so litigious is that people simply do not respect or honour the very same contracts they expect others to respect and honour. It does all the rest of us a disservice.

 

It happens

I'd have no problems with doing it . The vendor is relying on you to complete . You have entered in an enforceable contract and now an option is to stuff them around and walk away

They may have bought another place and be relying on your funds

They have taken the time to prepare their house and put it to market and they may have spent considerable thought in the timing of their sale . Moving jobs etc .

The vendor has a much greater and financial commitment to the sale than you do .

We sold our PPOR in Dec 2013 . Had a whole strategy worked around that and time with the tenant of our new PPOR moving out . Spent months getting the place ready for sale

If our purchaser had walked away from the sale , I would have had absolutely lost no sleep taking their deposit and then going after them if there was a short fall.

I value my time and it would have been incredibly inconvenient if they'd walked away and we would have been considerably out of pocket .

While the agent might have spent 1-2 days on the sale he may have spent weeks finding the sale ,going around pitching and missing out of other sales , and doing all the work you need to do to keep any business going .

I've bought several properties at auction , I know the rules ( they're clearly stated out front ) and I have finance locked in before I open my mouth or raise my card .

Cliff

 

@dublin_101 , I hope it all works out for you.

But this thread makes me curious, which suburb (belgrave?) in Vic gets such low sales that valuers don't have enough data? Would you be willing to share?

 

But seriously I'd consider;

-talk to the agent selling and make up some sob story. Maybe they would believe you?

- if not offer to lose half of the deposit to cover their costs?

-x Coll is your best option. And it's not the worst thing really just makes it harder to buy more propertys until you sort it out. A lot better than losing 50k deposit.

 

I had this with my last purchase. I had to change from 20% to 10% deposit with LMI and come up with the difference myself in cash. I ended up with a smaller loan than I was expecting, and no money left in my bank account.

I had mine valued against a sale from the housing trust to the tenant, not a private sale, so it was considerably lower than the purchase price. They're really conservative at times ...

 

OP has been given a number of options which might enable him to settle. If he is correct and the value of the property is closer to the auction price than to the three valuations, then he should endeavour to settle unless he wants to take up RPIs offer to look at the contract for a way out.

The idea of a deposit has always been that it is a sign by the purchaser of their serious intent in contracting. The other partyis going to beacting in reliance on this. If the OP wanted to have a right to pull out and get the deposit back that should have been negotiated before he bought at auction in competition with otherbidders who were willing to contract on the same terms as OP in fact contracted.

 

Any updates?

 

This whole episode reminds me of Mark Ricciuto's law suit. I'm not rich like an AFL footballer, but if I was the vendor and the purchaser decided to cancel the contract after purchasing at auction, I would definitely follow what Ricciuto did and commence legal proceedings. It's a matter of principles.

 

I had to sign over my soul & every empathetic bone in my body to become a licensed REA - buried somewhere deep in the regs for the PSBAA NSW.

 

Is this the form you signed?

 

15th like was mine. I somewhat agree.

 

wow a lot of colorful and righteous people in here and certainly many from such different views of mine..... i wonder if all of the keyboard warriors out there would offer the same advice to me in person (highly doubtful).

It seems many assumed i wanted to do a runner and not respect the situation at hand.....very wrong.

In my working life I've had many similar things happen to me, and I've lost my earnings. When legitimate and genuine cases occurred, I would hand back deposit (for tradesman work). Though inconvenienced when it would happen to me, I was still able to sleep well at night and not worry about karma and even worse, potential threats. When it wasn't legitimate I would argue the case and most time the person who paid me the deposit would leave the deposit or an amicable agreement would be worked out.

That said, I believe the situation has been sorted. The bank people told me to extend the settlement for one month and by that time the other recent sales would have settled and my property would fall into that bracket, so I'd expect the valuation to be something in line with expectations.

Thanks to all for the constructive advice, much appreciated.

 

I would be surprised if solution works.

 

While there were certainly posters with that attidude, it's wrong to say "everybody assumed" that. There was also a decent amount of solid advice given without any judgment.

Good to hear there is a possible resolution to this. I have been victim of a ridiculously low valuation as well and I could not find any way to fight it. In my case I was trying to refinance a property and got a very low valuation. I was lucky in that I choose not to refinance that property and ended up with a lower interest rate with the current lender. It doesn't help when you are trying to buy though.

Hopefully as the other properties settle you will be able to get a more realistic valuation. I know valuations can vary wildly from market value becuase this has happened to me too.

 

@dublin_101 I think your initial use of the 'C' word put a lot of people off. I've been known to swear as much as the next guy, the 'F' word comes up more than my wife would like. I do have a very strong negative reaction to the 'C' word however. This has probably coloured a lot of people's reactions to your predicement.

Delaying settlement may help you. Be aware that the vendor will charge you penalty interest for the late settlement and if it drags out they will offer a rescision notice and cancel the contract (which results in the loss of the deposit and the purchase not proceeding). I've seen plenty of people request an extension of settlement. Unless the vendor has caused the delay, penalty interest is applied every single time it runs more than 2-3 days late.

My opinion as a mortgage broker is waiting for better comparible sales is still a long shot and has a high chance of failure. I still think your best chance of success remains using equity in another property if available, or an equity guarantee from family or a friend. I'd pursue this avenue and if a later valuation is more favourable it's fairly simple to remove the guarantee.

 

apologies, you are correct, i've edited the post to say 'many'. thanks.

 

we'll find out in a month ... which gives me a month also to have failback plans (find cash, etc). thanks.

 

Seems like a risky move. As you are relying on a lot of outside factors for this deal to work.

I'd have the back plan of X Coll in place if this doesn't work