I made an offer to purchase a property in VIC on Friday, and included building inspection condition on the offer, using the standard wording. And I arranged a building inspection on Wednesday the week after. The vendor accepted the offer on Sunday.
Wednesday at 4.30 pm, the inspector called me, advised me that the building is in poor condition. Some of the main items requiring rectification were exceptional poor electrical connections and junctions due to modification in the electrical installation, and the carport is in dilapidated condition displaying substandard construction. They recommend demolition and rebuilding.
I am surprised to know this because the property looked ok when I inspected it (yes, I am amateur). And when I inspected the property before making the offer, the vendor and his teams were renovating the carport (the agent told me that the vendor was the builder). I did not inspect the property again.
I made big mistake for having the inspection on last day of the cooling off period. And the time was short for me to think whether I should withdraw the offer.
I just received the written report on Thursday, and the report states that there is no major structural defects. So I cannot get out of the contract with this condition.
Someone then referred me to a solicitor who said that he can help me. That person who referred the solicitor, also said that I can work around my finance, which sounds like work around so my finance is not approved. But actually my finance has been approved.
If you were in my position, what will you do? The purchase price was a bit under median price. It is a 50-years old house but renovated in some part of the house.
Can I really work around my finance so it seems that my finance is not approved? Would it be risky for my credibility for future finance seeking?
Can I ask the vendor to fix those things?
Has anyone had experience to pull out of the contract even after the cooling off period?
Have you actually signed a contract of sale? If so, what was the exact wording of all the subject to clauses? eg subject to finance, subject to building inspection etc
Where is the house located, and what is the size of the land?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Yes I have signed the contract of sale. The agent asked me to sign the contract when making the offer. Yes it is subject to finance and pest and building inspection, which I can get out of the contract if there is a major structural defects only.
The house is in Broadmeadows, and the land is around 300m2.
But does the subject to finance bit say "subject to finance acceptable to the purchaser"?
Also, has the bank seen this building inspection report? Would the finance still be available to you if they saw it? (I wouldn't recommend offering to show it to them without first discussing the idea with your solicitor).
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I forgot the exact wording. It think it says "subject to financial approval", and nothing is mentioned about acceptable to the purchaser.
The bank has not seen the building inspection report. I don't know whether the finance still be available if they saw it.
My solicitor just told me to accept that property. Even the brand new property has some defects, he said. I don't think he acts on my best interest.
My mortgage broker also seems not wanting me to not proceed with this.
Well if you don't proceed, your mortgage broker doesn't get paid at all. So his advice at this point won't necessarily be in your best interest. If you don't proceed, your solicitor will earn less money.
I would probably call another solicitor and ask them what they would do in this situation. It is generally better to try and use a solicitor that is familiar with the area you are buying in (ie Broadmeadows). If you struggle to find a decent solicitor in your area, try Barbara Evans at Callea Pearce (main office in Werribee). http://www.calleapearce.com.au/ They close at 5pm. You might still catch them today…
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
I would reduce my offer by what it is going to cost you to have the issues rectified or ask for the vendor to rectify them prior to settlement at your original offer price (that is if you still want the property?)
I would reduce my offer by what it is going to cost you to have the issues rectified or ask for the vendor to rectify them prior to settlement at your original offer price (that is if you still want the property?)
JacM wrote:Well if you don't proceed, your mortgage broker doesn't get paid at all. So his advice at this point won't necessarily be in your best interest. If you don't proceed, your solicitor will earn less money.I would probably call another solicitor and ask them what they would do in this situation. It is generally better to try and use a solicitor that is familiar with the area you are buying in (ie Broadmeadows). If you struggle to find a decent solicitor in your area, try Barbara Evans at Callea Pearce (main office in Werribee). http://www.calleapearce.com.au/ They close at 5pm. You might still catch them today…
Yeah…that's the thing…
Thanks for your advice
maree_bradross wrote:I would reduce my offer by what it is going to cost you to have the issues rectified or ask for the vendor to rectify them prior to settlement at your original offer price (that is if you still want the property?)Can I? I wish I could do that. The contract has been signed by both of me and the vendor.
I would negotiate further the price knowing the car port is in poor condition.
Suprisingly, you are brave enough to write your own contract without showing it to solicitor..I am in a differemt state, so the law may differ.
Get independent legal advice if you really want out. I got out once on the building clause due to evidence of a roof leak. Finance had been unofficially approved (ie verbally). It was a bit dicey but the vendor decided not to pursue it.
Determine what you stand to lose by continuing and what you stand to lose by terminating.
If you decide to make a lower offer, involve your solicitor (the one doing the conveyancing for you).
Next time consider "finance to the satisfaction of the purchaser" and "building and pest reports to the satisfaction of the purchaser" and having a trusted solicitor review your contract before signing.
Most properties have problems, especially 50 year old ones.
I would try to withdraw your offer and then make a lower offer – work out approx how much it would cost to fix.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
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