Selling a house to finance a new house

Can I ask different ideas from this forum members for the following situation?

I bought a house with a long settlement (4 months) . Lender approved the loan subject to sales of my current PPOR before the settlement date.

CBA values my PPOR $985K. 3 professional estate agents' sale appraisals are between $950K- 1.1m. Happy if I can sell it between $950K - $1m aligning with bank valuation and sales appraisal.

It was 6 week pass. My house has not been sold. Auction was cancelled last week due to no interests. The only current offer is $820K. It is a big gap. I am not sure of the problem is my false expectation or estate agent's marketing campaign issues. The agent knew that I am in urgency and pushed me accept the offer.

There are options for me:

1. Change estate agent - pay double commission because current agent still has authority in another 60 days.
2. Quickly apply loan from a different lender i.e. Pepper which does not require sales of PPOR
3. Get back to lender to ask if I can sell an interstate IP in a hotter market instead of PPOR
4. Sale PPoR anyway. Accept a price below market value/bank valuation
5. Cancel the buy contract and lost the deposit 10% i.e. $150K
6. Keep waiting another 4 weeks and hope getting a reasonable offer. Settlement date is in 10 weeks. Ask the vendor for the settlement date extension if I do not meet the settlement date. Penalty interest is very high (18%pa) on the unsettled balance. So, I will use as much cash as possible to pay the vendor on the original settlement date to reduce the penalty interest.

and other better option?

 

I would be wary of option 6. Default could mean penalty interest or they could cancel the sale and you lose all you have paid PLUS they can sue for further losses. Switching lenders may be more flexible and allow you to hold this property AND leverage for the issue. Then you can wait out the agent contract and terminate it.

 

Thanks for replies

Vendor agreed to extend 4 week for settlement. After that, vendor will forfeit the deposit and I have to pay all the vendor lost.

Still stuck with current estate agent.

Will look for switch lenders and bridging loan option by Monday.

 

It may be hard to meet serviceability because of a recent increase in the interest buffer if switching into another lender.
Note the current loan had been applied before interest buffer increased.

 

Thanks Rolf

1. Possible, Google Maps sent my buyers to another house sale nearby on the same street. Today, I picked up a buyer (with appointments) and send them to my estate agent who was opening for inspection. I hung out around and saw a buyer who tried to navigate and enter another house open for inspection. I approached them and asked which house number they searched for. He told me my address.
2. Will talk to a mortgage broker on Monday i.e. Pepper option

 

hello

I am in exact same situation right now …as the vendors of the property we bought wanted a long settlement by the time we put out property prices have dropped

just want to understand how did you work out on this situation.

Thank you