Sold my unit .. But buyer can't 'settle'. *HEADACHE*

So recently I sold my unit & was due to settle approximately 8 days ago .. Buyer requested an extension. Which was fine.

It's now been some time & they still can't get money together to settle. They will be paying a daily interest from tomorrow & will have 2 weeks before possibly "losing their deposit" ..

The tricky part is, I feel terrible for them if they were too lose their bond.. That's a huge kick in the face to anyone, and I wouldn't wish it upon nobody

On the flipside, I've got bills & have recently committed to a financial venture assuming that settlement would go ahead as normal ..

Has anyone been in a similar situation ?

 

Yeah I would hate to have to keep someone's deposit too. If they were real pricks in the transaction sure, but if it was just APRA or some other hardship it's tough for all.

 

See I wouldn't have a problem with it. They have stuffed you around when they could have just got preapproval. Also if you have to put your property back up for sale potential buyers may assume there is something wrong with it. I think it would depend on the circumstances for me. i.e. how much inconvenience it has caused you and how much effort you have to go to to get another buyer etc

 

Pre-approval isn't 101%

There's still a lot that can go wrong.

I had an application waiting for finance approval within days of all the huge APRA changes. Fortunately the bank I went with set the policy change date based on application date and not financial approval date. But if I wasn't so lucky I would have been screwed.

 

Yea it's a tricky situation.. I'm ultra stressed about it because I recently purchased a new car, not expecting this.

Also, with prices 'potential ' going down in Sydney, I would hate to struggle to get a sale again. It was already tough as I got in just after the peak - a few months too late I guess

Yea I would feel really uneasy about taking someone's money, like I'm potentially ruining somebody's life.

 

As bad as you may feel for them, you have been more then lenient in allowing them time to get their act together. It sucks to be them, but it isn't your fault and you will have associated costs with all of this (REA and soliticors fees, etc). The deposit may very well only just cover those costs.

 

Maybe request to know how much they are falling short by, if you think you may be willing to budge on price a bit to get it over the line.
But thats a big 'if'...

 

I couldn't do that .. I feel like they're already getting a great deal.. I sacrificed quite a lot of price already to get the sale. Definetely a big IF

 

Pre approval doesn't guarantee anything. Loan could still be denied for any number of reasons, circumstances or criteria changes, valuation coming in under price paid, if borrowing >85%, LMI lender might not approve, etc.

Agree that it could make selling more difficult afterwards.

 

I even got the case myself where the bank formally approved my loan for an IP. I passed the information to the seller's conveyancer, and therefore the purchase became unconditional.
Few days later, the bank withdrawn their offer letter to me (!!!). They just said that they did a mistake in the approval process and it should not have been approved in the first place.
It ended up that I had to change the purchasing structure to get the loan approved (with the same bank).
Surprises can come at any time...

 

Sure this is not the buyer?
If not, he'll surely ask the same question here soon.

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

 

Tuffin up, it's a business transaction. Take it or take a loss.

 

If the reason for failing to settle was genuine and a real attempt was made, I would take whats required to cover my own costs inc. bills, legal, holding, selling, shortfall of next buyer if there was a price difference etc.

If this happens to encompass the entire deposit so be it, but at least there is a calculated reason behind taking someone else's money rather than personal gain

Personally, I have been in the buyer situation many times before particular when I've bought at auctions on a whim without proper preapproval. Other times, it was a matter of failed documents travelling interstate which were completely out of my hands and can cause delays of weeks to get new loan documents reissued, resigned, resent etc.

I have paid default interest on multiple transactions that exceeded the settlement date and know how stressful it can be knowing they can take my deposit and run. In one instance, the seller was waiting for me to settle before another property he had purchased could settle as well. As a result, he penalised me $2.5k on the spot plus the default interest until I was ready to settle for their additional "legal costs" - it certainly lit a firecracker for me to get a move on and is something you could consider doing as well. You'd know pretty quickly if they were just stuffing around or not.

 

ahh...isn't that pretty dangerous.....your definitely braver than I am..

 

Only for the cracker deals

Yes in hindsight very dangerous but this was pre-APRA and I always did the modelling with my broker to know I could finance....standard QLD settlement period for auctions is 30 days and that can be difficult to meet even with banks opening their doors wide open for you. Basically you need every single piece of paper expedited, signed, dated and dotted correctly, and in express post for it all to go smoothly - and your broker to have a great relationship with the banks BDM.

Any slight hiccup and you can expect a weeks delay

 

As long as you are fair and reasonable by allowing extensions...at the end of the day - a contract is a contract.

 

@Simon L your broker must love the adrenalin rush to get it all done against the clock..hehe

But well done mate.

 

pre approval does not = you can settle

these positions could be avoided most times if people did jobs properly and both sides not in such a rush.


OP if the other side bought and had cooling off etc, they should have indicated if finance was good to go etc, if it is just a banking delay, then find out exactly what is going on so you can make the right decision, well your solicitor should be presenting the possible decisions actually..

 

I can't see how you would be "ruining their life" by keeping the deposit...

How much was the deposit?

 

You could always offer vendor finance for a second mortgage to get them over the line if you want.

Personally though they entered into a contract pay up or lose deposit and risk being sued for any money lost after resale.