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

i understand your view on the C word, but apologies, my view does not change on that topic...i just can't change my view sorry, i firmly believe to judge every situation on its merits and also to judge who is going to lose more - hence the comparisons of 3 years savings to one person to the 1-2 days of work I mentioned for the real estate agent. That seemed to draw the ire of many, and thats where i realised many of the posters of the fence were on the other side of the fence. Anyway each to their own, all good with me.


Delayed settlement, yes i made the inquiry with the agent and they relayed back that at worst case scenario i may have to pay the rent...the agent was very helpful and understandable.

 

Be aware it's not the rent you'll have to pay, it's penalty interest. I think it's charged at 11% (the specifics appear in the general or special conditions of the contract). The agent and vendor has nothing to do with this, it's the vendors solicitor that adds this to the settlement cost and your solicitor will simply agree to it.

 

You really should be dealing solicitor to solicitor for any extensions of settlement. I think you should also work on plan b and c if the valuations still don't come in after that extra month, you'd want to make sure that you can still settle.

 

It's irrelevant how much work yo think the agent did prior as you signed a contract...

However, the agent most likely didn't only do 1-2 days work. I currently have 2 of my properties for sale by auction. We haven't even got to the first open and he has done significant work already.

He prepared for our first appointment beforehand, giving me a market comparison report. First appointment we spent probably 2 hrs going over expectations, selling methods, market, property presentation etc. he then liaised with my conveyancer and organised building, pest and eer reports ( compulsory up front in my market). He attended my property with the inspectors. He also organised professional photography and will write the copy for the advertising and pay to advertise it in main websites.

He will have open houses in the weeks leading up to the auction, field enquiries and follow up leads. He will organise the auctioneer and pay their costs too.

Folling the auction he will liaise with both mine and the buyers conveyancer.

He rightly expects to be paid... And will be.

 

Brokers of the forum: my understanding was that once valuers had looked at a property it goes in the 'system' and subsequent valuations on the property would refer to that entry. If so, is the delaying tactic pointless or risky or ok?

 

My friend had a place in wheelers hill, vic that had similar circumstances sold for 1.6 mil and 10% deposit. Buyer couldn't settle so deposit was taken and the property was resold again at 1.65mil.
Vendor can also get a s27 out and wait on it to take deposit. Either way u're on the losing end if finance doesn't pull through And if vendor wants it done that way

 

I don't believe that's correct. If the same valuation firm gets the contract this would likely occur, but I've had different valuations both ordered via ValEx go to different valuation firms with very different results.

The real risk is that there's not that many valuers actually servicing any particular area on the bank or ValEx panels. Given there's already been several valuations completed, there's a high probability that the next valuation ordered will go to a firm that's already generated one of the existing reports. Over the period of a month or two, they're unlikely to amend their opinion even with new comparible sales as doing this exposes them to litigation from several parties.

I've discussed low valuations with valuers several times over the years. They're actually very reluctant to disagree with a purchase price, especially when it's an auction result. Many firms have a quality control process where the individual will have to justify a low valuation with their management. They can potentially be liable for a low valuation in certain circumstances.

Changing your mind is potentially admiting that a mistake has occurred. The question is was the mistake the first or the second time? Another firm has already producted their own report that essentially corroberates the first estimate, so an increase at this point is going to be tough to justify even with alternate sales evidence.

 

No, you could order valuations through different lenders and get away with it.

 

There's one other potential problem with a future valuation, at least with the CBA...

Even if the second valuation is higher, the CBA's mortgage insurer insists the CBA use the first valuation, they're not allowed to use an amended valuation or second opinion if the loan is mortgage insurered.

I imagine there's a time limit on this (probably 90 days) and I don't know if it applies to other lenders.

 

Yes that has happened to me just about every time i've refinanced...I've had about 4 done and unfortunately it has always been a very very low price - and when studied, I've picked the reports apart as being nothing but very low quality (copy and paste reports).

When I've verbally disputed I got nothing back - exactly as you say it they don't want to admit a mistake for there apparent 10 minutes of work compiling the report.

So I would dispute and write the same report with proper relevant facts (eg homes sold with a kilometre radius, not 8 kilometres away). When I've done it this way, documented report, etc, and official I have had success on two occasions.

So that's where I believe it's all about getting the right person doing the valuation... this is just my limited experience anyway.

 

Ill be very surprised if val jumps from $400k to $550k. Even in a booming syd market you will be hard pressed to find value jumping up that quickly. I cant think of any market booming this quickly atm?

Is the comparable property to yours are really comparables? Is yours easement free, environmental risk free?

All am i saying is you need to have plan b and c and d.

 

not expecting it to go to 550k i only paid 501k. I expect it to go to 500k or even within 20-30k of that is reasonable.

Yes the others are pretty comparable.

 

Give us an update when the 2nd cal comes through, I'm curious to find out what happens.

Have a plan B yet if val doesn't stack up?

 

Are you 100% sure they did that?

So they ended up selling it for another 50k extra plus kept the 160k deposit from the poor couple? That makes me sick to the stomach.... I could understand keeping expenses, etc, but capitalizing on somebodies misfortune like that makes me sick to the stomach.... karma will probably get them back worse.

 

yeh will do... And yes in the mean time will be making a few calls to a few ppl for plan b, c.

 

I think u're putting too much emotions into it. If everything was emotions, karma etc there would be no contracts. Well the seller already put the deposit on purchasing another property so he had an obligation contractually to follow his sale. There is a reason why auctions are unconditional.

 

nah not really, like i said, judge everything on its merit...the seller had an obligation, well he already had the the 160k so he would/could have used that...but later on when he re-sold his house and made even more (50k), it would have been very humane of him to to return the deposit minus expenses...that's me and my thinking anyway... like i said earlier, it was probably several years of savings for the buyers and who knows, they could be seriously depressed after that.

anyway each to their own, thats my opinion and it's so much easier to say "bad luck buddy" when you are on the receiving end of the cash, but if it were you, your sister, or brother you'd be feeling for them big time and thats reality.

 

Feeling for them sure, were all human.

But if contracts weren't meant to be honored they wouldn't exist.

 

It's a contract that you entered under no illusion or coercion. Hope it all works out.

 

Wow..this is an intense situation! I have no advice unfortunately but, I hope you find a solution