Someone is trying to gazump us after contracts have been exchanged!

Hi there,

I hope I am posting this in the right place, I am looking for advice on a situation we have found ourselves in with a purchase...
My wife and I are trying to buy a house down in hobart. Contracts were exchanged on friday and as far as I knew we were waiting on settlement on the 28th of may. We were notified yesterday through our conveyancer, that the vendors were cancelling the contract as the deposit was paid with bank guaruntee and not cash.
Speaking to the real estate agent it seems there is another buyer trying to outbid us.
Can they do this?
the deposit bond was handed over on the 7th of this month. They were in possession of the deposit bond when they signed and dated the contract. there is no mention in the sale contract of what method the deposit must be paid in.
We have been told to pay the bond in cash asap or we will lose the property to these other buyers
Anyone had any similar experiences with gazumping, or have any legal knowledge of this area?

 

Why are you not seeking legal advice? If a valid contract has been entered into it would be binding on both parties. So your contract must not have been entered into or they are breaching it. See a lawyer as no one here has seen your contract

 

all of this information has been passed onto me via my conveyancer. I also spoke to the real estate agent who confirmed that there is another interest buyer.
Our conveyancer is meeting with "their lawyers" this morning to discuss, so im sitting around waiting on what comes of that...

 

Conveyancer v lawyer yet again.

I always find the parts of the standard contract which the parties never see that is the knowledge of the lawyers to make interesting reading. If you dont fully understand all these pages it means a lawyer is definately needed.. Thats why a contract should be given legal advice prior to signing.

https://lst.org.au/wp-content/uploa...017-LST-and-REIT-member-use-only-01.04.17.pdf

This should act as a warning that the drafting and any changes to a contract require legal advice. eg Was the property withdrawn from marketing on acceptance of you offer, what about the 48 hour rule in Tasmania , did the contract mention the method for deposit to be paid. A deposit bond doesnt actually pay anything. etc....

Read page 12. was the standard contract varied ? If not..........B...Or C....They could demand the bond be paid now if they wanted.

It comes down to the contract specifics

 

I would not worry about what the real estate agent is telling you,I would be more worried once your team sits down you don't run into a serial Litigants .

 

Wow, gazumping going on in this market?

 

Thankyou! this is the information I was needing. No the contract wasn't varied. There has been no mention of the bank guarantee until now. I think our conveyancer has really stuffed this up as they said the bank guarantee was fine...

 

Which is why we always use a solicitor.

 

My question is "was there a cooling off period", which is standard of one week for residential properties. This catches a few people out when they buy rural, as rural has no cooling off period once contracts are exchanged.

If you are still inside this cooling off period (which, as a buyer you were allowed to dismiss) then the property is still technically up for sale.

I personally have always used a conveyancer. I find a GOOD conveyancer, who has done nothing but real estate settlements - everything from caravan parks to high rise apartments to cattle stations - for 20-30-40 years knows a heck of a lot more than any solicitor.

 

Can the vendor terminate a contract during the cooling off period?

Conveyancers can only give limited advice, best to avoid and use a solicitor.

 

Ah - appears there is no such thing as a "cooling off period" in Tasmania for either vendor or buyer. So no, appears the vendor cannot pull out unless there was a specific clause stating that the deposit had to be paid in cash - and that a bank guarantee or deposit bond was not acceptable.

This is my interpretation only - I'm sure, if you have a good conveyancer, they'll give you the right advice. Don't be bullied to take the "easier path"

Advice when buying or selling property

 

If using the standard REIT contract, there is a 3 day cooling off period which can be confirmed or waived at the purchaser's discretion. There is another clause (the shorter period clause) which allows the vendor to essentially force the purchaser to satisfy all the special clauses of the contract (finance, building etc.) within 2 business days. Needless to say we would always cross that one out! Not sure if that is relevant to OP's situation (don't know anything about deposits and guarantees), but as suggested, legal advice sounds like a good idea!

Best of luck OP. Where in Hobart are you buying by the way?

 

crabtree, near huonville