Forums / Getting Technical / Legal & Accounting / Please Help: Can Vendor Withdraw Signed Contract?

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  • Profile photo of blazeblaze
    Participant
    @blaze
    Join Date: 2007
    Post Count: 60

    Hi,

    I am a vendor in this case and recently got an okay offer on the Thursday, 9th July 2009 for one of my IP. On the late afternoon Friday the 10th the purchaser signed the contract and paid the 10% down payment with settlement of 60 days. I slept through it and signed the contract the next morning, Saturday the 11th.

    Today, Sunday the 12th someone else offered 15K higher than the offer I have previously accepted (signed). Now should I just bang my head on the wall or can I withdraw/ cancel that signed offer in order to accept the new better offer?

    Please advised.

    Thanks,

    blaze

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    If you have not exchanged you can. Does the other party have your signed contract?

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of blazeblaze
    Participant
    @blaze
    Join Date: 2007
    Post Count: 60

    To be exact. I received the contract signed by purchaser via email from the real estate agent. Then I print it out then signed it and scan it and send it back to the real estate agent. After that I am not sure where it is now. But I am assuming then my email is forwarded to the purchaser's email.

    So there is nothing I can do? like cooling off period or such?

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,840

    Cooling off period only applies to the purchaser (if they haven't signed a S 66W).

    As you sent the signed contract back on Saturday, the likelihood is they have already sent it on to the purchaser's solicitor & it would be unethical for them to disregard the contract signed by both parties in favour of the later recieved offer. (Who said agents were ethical?)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    Ring the agent and stop it. Talk to a lawyer and then decide what to do.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,840

    Technically, a 'gazumping' but if you can stop it, it's worth a try.

    Profile photo of js2js2
    Member
    @js2
    Join Date: 2003
    Post Count: 758

    No i would go for being a bit more genuine and honest and banging your head against the wall. But i mean there is no point there is hundreds of deal where it can go the other way and make double your 15k back!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,110

    a house isn't sold until the contracts are exchanged.

    What ended up happening?

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of keikokeiko
    Participant
    @keiko
    Join Date: 2008
    Post Count: 513

    if you sent it by email you may be able to pull out as you have the original, when borrowing money from the bank they dont want an emailed copy they want the original or no deal.
    but before you pull out think carefully as you have 10% deposit which is a good deposit, is the other person willing to put down 10% and what are there conditions as you may find away out of the 1st contract and sign a deal on the 2nd which may fall over. then you have no deal

    Profile photo of gatsbygatsby
    Member
    @gatsby
    Join Date: 2003
    Post Count: 708

    That's actually quite a valid point Keiko.

    Profile photo of blazeblaze
    Participant
    @blaze
    Join Date: 2007
    Post Count: 60

    What you guys said above are right.

    I guess I owe you guys the rest of the story:

    Back to the very fist offer I accepted, that was 340K. Then the higher next day offer was 350K. I calculated 15K difference because the 1st offer is from REA and the 2nd one is from my friend. Hence I saved at least 5K commission there if I sell to my friend. This was a deal draw start from the beginning with the REA. If I managed to sell it myself then I do not have to pay any commission to them.

    I talk to a lawyer, my solicitor. He said I can cancel the contract but then the purchaser might sue me and I will lost the case if he did. Then I talked to my REA, he said the purchaser most likely will not sue me. If the contract got canceled he would then buy the apartment above mine. It is exactly the same, selling 5K less just the rent is lower than mine – old tenants with old rate I presume.

    The REA (Of Course) advise me not to cancel the contract because he said the offer was above the market price.

    My friend was also lacking of down payment. He is first home buyer – pursuing 95% LVR or even higher with LMI included on the loan. His bank valuer quickly evaluate the property and surprise2 the valuation come back 328K!

    Oh ya the 1st purchaser is paying cash…

    So thank God everything went well. The settlement was done yesterday. Cash no drama. 14 days settlement. now waiting my cheque to clear.

    Thanks everyone for inputs.

    Have a good weekend

    Profile photo of DDDD
    Member
    @dd
    Join Date: 2004
    Post Count: 508

    Ok big flashing lights here too. What you havent considered if you sell it to your friend is that you probably have an exclusive contract to sell it with the agent. If you just turn around and sell it to your friend within the exclusive period with the agent, you are up for the agents commission anyway. Thats even if you sell it yourself.

    Please make sure that you read yout contract you have with the agent to sell it and determine whether or not you signed for a 60 or 90 day exclusive with the agent, when that expires, and do not mention your friends interest to the agent or you will have disclosed an interested buyer to them. If you take the property off the market with the agent and then sell it yourself to your friend, but still within the initial period signed with the agent, they will just check on sale date through RP data in a few months and send you the bill.

    Of course this is a footnote only for other readers, Im glad it didnt get complicated for you and the sale went through anyway, but be aware you can get caought out if njot reading the fine print.

    Regards DD

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