I am new to property game, and blindly making my way into buying first property. I have signed the contract, and an awaiting valuation to finalise finance – which is due tomorrow. The real estate has called today and stated that due to tennant they could not give access to the bank valuer, until tomorrow. This would be fine if I could extend finance, however…the sellor stated that he will only grant an extension on finance, if I extend the settlement date out by one month. I was hoping to move in following the tenants lease expiry in 2 weeks. The real estate agent implied that the sellor is more than willing to let the contract collapse. Hmm, it is all seeming very last minute and rushed. What is going on??
A couple of issues come to mind – firstly, what is your solicitor doing/advising?
Why does the banks valuer require access to the property? Vals for banks are usually done as 'drive-bys' ie external appraisal of the property – this confirms that the building exists (security for the lender), the state of the improvements and allows the valuer to prepare his valuation.
What is the difference between the settlement date and the vacation date for the tenants? ie is the premises being sold with vacant possession or with lease in place? Has the lease been terminated ie the tenants been given the appropriate notice in a timely fashion by the vendor/managing agent?
Why does the vendor require an extra month for settlement?
If the vendor is willing to recind the contract a) what penalties do you face b) do they have another higher offer in the wings?Thanks Scott, I have spoken to Solicitor who is confirming details with Real Estate – some of the dates that the real estate initially put to me were wrong, and the finance actually has one more day to be approved.
In terms of the valuer, the property cannot be viewed from the road, and has its own access which is why I would assume that a drive by won't suffice (I'm not sure).
The property is being sold with tennant in place, yet at the current settlement date (06/03/2008) the tennant has 3 weeks left on her lease (27/03/2008) and the new suggested settlement date would be the 28/04/2008.
The vendor is buying another property interstate and would like the settlement dates to ccoencide (but I am unsure why, this is the feedback from the real estate agent).
I can say that I really like property and don't want the contract to fall over, it meets so many of the requirements that I need in a property, I don't really want to have to start looking again.
So, what now? I am hoping that finance is done in time. I too fear that the sellor may have a higher bid in the wings.
If pushing the dates back isn't an issue for you ie your finance approval still stands, you are requiring vp (no tenant) etc and you still have a roof over your head (or can extend your current occupation) would there be an issue? You may be able to argue a price reduction equivalent to the rent that they are recieving (and you would otherwise have recieved).
I'll let you know REISA contract, may be different in your state. If your finance is due in 1 day time and you have yet to receive unconditional approval. The vendor can just let the contract lapse, the vendor needs to issue you with a notice of cancellation of contract giving you 7 days to comply before cancelling.
The vendor's wants to move the settlement day just to suit them…….. If you don't agree to the settlement day being changed and keep the date the same and the vendor fails to settle on the agreed day makes them in breach of the contract and you can issue them with a notice giving them 3 days to comply (settle). If the vendor does not settle within 3 days of you serving the notice you can charge them penalties equalling 2%points higher than the Adelaide bank variable rate charged back to the date they should have settled.
Note: I use and are familiar with Real Estate Institute of South Australia Residential Contracts it may be different in your state.
Your conveyancer/solicitor can serve this notice on your behalf.
Thanks so much guys, happy to know that property went unconditional today. I am still not sure what the go was, but after reading your posts, I decided to hand it all over to solicitor. Really appreciate the sounding board, and your thoughts…put my mind at ease.
Cheers until the next "need help" arises, hopefully not until i buy me next property, or the one after that.
catl wrote:Cheers until the next "need help" arises, hopefully not until i buy me next property, or the one after that.Hi there cat. If you can spare the time you might want to visit this forum more often than when '… the next time need help arises'.
I think that as an investor you should always be keeping your finger on the pulse and being pro-active with your investments. And this forum, and others like it, can help with this process.
I've only recently become a property investor, and I'm amazed at the depth of knowledge and experience here. I know I'll be checking in daily to see what my fellow investors are saying. My experience has been that the voice of knowledge is always one worth hearing. I'm all ears.
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