Under contract properties coming back on the market

Hi,

Maybe it's a coincidence or maybe it's the changing lending market. I usually have several properties saved in various states and territories to see how long the property may stay in the market or what it sells for at the end, but been noticing an increase number of properties that were "under contract" coming back on the market. Maybe it's the tightening lending market or maybe it's the B and P report that deters people from going forward. Some areas I am more aware of the properties and feel that the property was priced accordingly....

 

It could also be people's finance clause falling through, I probably talk to one person a fortnight who made an offer to purchase based of a pre-approval received over >18 months ago. They make an offer, come to sort out their finance believing it's no problem as they had a pre-approval recently, only to discover their borrowing power is much lower than they expected.

 

You mean in QLD ? Always seems to happen there. I am not seeing it where I look in NSW , I was expecting a few to fall over, but nope.....

 

There were one or two I have been really keen on in the past that I hoped might fall over. But they never did.

Related to this is seeing places that come back on market within 6-12 months after selling. Always wonder what the really reason for selling is - is it flipping? Finance related? Agent usually told me owner needs funds to focus on a development. Or owner got divorced. Hard to know for sure.

 

can you share which States??

 

A few in Qld now and then 'contract crashed' or quietly relisted. Guess a fair few are falling short of finance under the new regime.

 

could also be falling short in terms of valuation? I have heard this happen before. QLD is a fragmented market, not a booming market.

 

None of that happening in the specific markets I am watching in Melbourne, short listing times before SOLD is slapped on them!

 

I'm seeing a few quietly coming back on the market after just a few months of being sold. The most recent one I've found is in Helensvale, some others in Hollywell barely 12 months with no reno. I'm keen to find out if it genuinely is financial pressure that's finally starting to show, or a flip. They're asking 50k more as a start, so they'll not come out with much in the end if they manage to even sell for that. Helensvale has done pretty well in 2016, Hollywell not much.

 

This one's a Helensvale renoflip 6 month-er. What do you think of the kitchen / bathroom choice? (imo not something I'd want). I'm curious to see how this goes and if it was worth it. I'm guessing they've got access to cheap builds

before Onthehouse.com.au: Your Home for Property Research

after 13 Armidale Crescent Helensvale Qld 4212 - House for Sale #124281974 - realestate.com.au

 

I am a firm believer of really knowing the current circumstances of the market which is good for the SWOT analysis, bargaining power and etc.

I know for one of the real estate agents I deal with, I told him he was agent of pain and suffering as his listing seems to consists of deceased and divorcee estates.

For reference.

Tasmania- Houses
Canberra- Mainly units and townhouses
NSW- Houses (not in Sydney itself)
Adelaide- Houses
Queensland- Houses and townhouses

 

Many of my best buys have come from periods where others are suffering. I usually buy at bottom of cycles and can't tell you how many times I've bought cheap from an investor who loaded up with 3+ properties close to peak and now is desperate to sell off to salvage what they can to avoid bankruptcy. I don't take any pleasure of the others suffering but I do take pleasure of my own foresight and patience in buying bargains.

 

Nothing wrong with that in my opinion. I have bought properties that were deceased properties and the people were just happy to get rid of it. The only issue for me is trying to keep my portolio growing in the current lending regime because the banks seem to dislike investors. Maybe will have to do some reno work.

 

I currently have a QLD property waiting for settlement and contract gone unconditional weeks ago but agent is still advertising it as 'Under offer'. I asked him to remove the listing and he told me that this was norm in QLD.

This wouldn't be normal in NSW and would be considered unethical and misleading to keep receiving enquiries for a property not in the market.

For certain suburbs, most of Brisbane properties listed on RE.com are no longer in the market and hence I wouldn't bother calling an agent unless an inspection time was specified on the listing and even then 50% of those would be under contract.

 

I believe it's normal to do until the contract has settled. The justification is that it's not actually sold until the sale has settled. And if it fails to settle it remains open for others to buy.

But it annoys me a bit too as a buyer as seeing it advertised does increase the risk of someone coming in with a higher offer and gazumping the original buyer. For this reason, in a rising market such as the Gold Coast it is important to have a reasonable penalty clause for failure to perform. I would suggest 15-20%.

Agents probably also keep the listing with the home of generating Enquiries and building their client base - that's just a guess.

 

Kind of silly to still advertise it when the contract is unconditional. I don't have that much knowledge about the Queensland market and how they deal with real estate.

 

Yes I agree. Well remember re.com shows for sale and sold properties. So the half way point between the two is "under offer". When doing a search you can always set the filter to exclude "under offer" properties

Fair trading laws are federal and re.coms website is also accessible Australia-wide. I personally think it's not misleading. What actually is the "misleading" part of this?

 

A sale has following steps:

• Available
• Under offer
• Under contract
• Sold (As soon as contract goes unconditional).

As a buyer the risk transfers to you the minute contract goes unconditional. If the house burns down to the ground, it's buyer's loss. Technically the sale has taken place and settlement is merely finding a convenient data/place for all parties to close the books.

While a seller can refuse to settle, they will be up for legal damages and a smart buyer can place a caveat on the title which will make seller's life hell forcing them to complete the sale or negotiate damages.

Nobody can gazump the buyer after the contract has gone unconditional.

This is the only reason but this is at the expense of misleading perspective buyers about the property. Legally, you can't advertise which you are not in a position to sell.

 

A house where contract has gone unconditional is technically not under contract. It has been sold.

Some agents would keep listing properties as 'under offer' up to the settlement date which is not accurate description.

Now most important thing - It really hurts the buyer in a way very few people know.

Auto valuation softwares like RP date monitor listing age and factor them into future value of a house. If a house sells quicker than average listing age in the suburb, it is valued higher by the software.