Hi,
I have purchased a property for $1,000,000 on a licence agreement and put a purchasers caveat on the property.
It has come to our attention the the vendors owe $800K on the mortgage and have borrowed an additional $650k as a business overdraft secured against the property effectively owing $1,450,000 on the property. During this period their company has been placed in to receivership.
I applied for finance with the bank that currently holds the vendors loan… I was told that my loan was "red flagged" and that I was approved for the amount that I applied for but I was declined on that property! ???
I have since applied for finance with another bank and my loan has been approved.
Will the vendors bank stop settlement?
What is the chance that their bank will write off $450k?
Thank you for your help.
Freddie
I'm no solicitor, but I cannot see how the vendor's bank would allow settlement to go through. They are owed nearly $1.5million, but the sale will only fetch $1mill. Ask your solicitor, they will have encountered scenarios like this many times over and will explain what it means to you.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi jacM,
Thanks for the reply. My solicitor has been dealing with the vendors conveyancer and the only response that she keeps getting is that they are negotiating a settlement price.
It just doesn't make any sense to me.
I'm no expert but it sounds to me like you need a new solicitor. May I suggest you consider posting your thread in the Getting Technical forum…. it is more likely to get a response from those in the know. TerryW is the man I'm thinking you want to fish for a reply from.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks mate.
I really appreciate it.
ps the Getting Technical forum is here;
https://www.propertyinvesting.com/forums/getting-technical
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
my reply here https://www.propertyinvesting.com/forums/legal-accounting/4346019#comment-271397
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
How does one do all the necessary checks so this doesn’t happen to them in the future?
When entering into an agreement to purchase you would do a title search and find out that the property is mortgaged.
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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