Situation When Seller Can Back out?

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  giu on 14/01/2016 - 19:38

  http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…?

  Specifically - http://www.fairtrading.nsw.gov.au/ftw/Tenants_and_home_owner…?

  Paying an expression of interest
  Once you have made an offer, you may be asked to pay an initial deposit as an expression of interest. This won’t mean that the property is yours or that it gets taken off the market. It only proves to the seller that your offer is serious. The seller or agent can take as many preliminary deposits as they like for the one property. However, when you pay this deposit, the agent must provide you with a receipt and tell you in writing that:
  * they have no obligation to sell the property to you
  * you have no obligation to buy the property
  *they will refund your deposit if you don't end up entering into a contract to buy the property.

  The agent must also tell you if someone makes a later offer on the same property, as soon they become aware of it.
  Remember that the agent selling the property is not working for you, but for the seller (or owner) of the property.

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  hongco1990 on 14/01/2016 - 19:42

  Thanks for your reply. However, my situation is different. I will be paying a 10% deposit PLUS signing the contract tomorrow. Will the seller be able to back out if they haven't signed and contract has not been exchanged?

  • 

    whooah1979 on 14/01/2016 - 19:48

    +2

    a contract is only binding if both the buyer and vendor signs. the buyer cannot force a vendor to sell without a contract.

  • 

    ozhunter on 14/01/2016 - 19:54

    +1

    Yes, he can back out, he hasn't signed the contract. Just because you sign it, doesn't make it binding.

    • 

      kipps on 14/01/2016 - 21:42

      hongco1990, you should be altering the contract so that the deposit is only payable once the seller signs the contract. The contract governs, amongst other important things, the ways in which you can get that deposit back!

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  giu on 14/01/2016 - 19:46

  I recommend you reed the site:

  Before exchanging contracts, the seller may negotiate with other buyers for a higher offer, even if you have made an expression of interest payment. If the seller accepts another offer and exchanges contracts with that party, any prospective buyer who misses out on the property (despite a verbal agreement) is gazumped.

  So as I understand, you have agreed on a price. But haven't paid anything or signed anything. In the meantime, the real estate agent can call around, tell every other potential buyer he has an offer, and see if they want to pay more. Then you might get a call saying they have a better offer. Hence why r/e agents are up there with the likes of lawyers and used car salesmen.

  Even if you provide a deposit, the seller hasn't signed. So there is no agreement. So you just have to cross your fingers and hope everyone is honest.

  I have been burnt before - r/e agent shakes hand, tells me it is mine, I bring the deposit the next day, and then tells me if I want it, it is going to cost me more. Another time, the agreed price is what we exchanged. So good luck with it. But it sounds like you are on the right track.

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  resubaehtgnolhcs on 14/01/2016 - 20:34

  Also, isn't there a cooling off period for contracts?

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    airzone on 14/01/2016 - 23:41

    Not for the seller. And once exchanged, not for the buyer either.

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      whooah1979 on 15/01/2016 - 06:53

      +1

      Not for the seller. And once exchanged, not for the buyer either.

      this residential property is in nsw. nsw buyers have a 5 business day cooling-off period.

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  ozhunter on 14/01/2016 - 22:40

  Also paying a higher deposit than required doesn't make the seller have a lower chance of not being able to back out of the deal. Considering the seller hasn't signed anything, he isn't even backing out of anything.

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  hongco1990 on 17/01/2016 - 23:08

  Thanks guys. So is it a common practice if I ask my solicitor to put a clause in the contract, saying if after I sign contract, vendor does not sign within 24 hours, my offer will lapse? This is to prevent real estate agent delaying the exchange process to seek higher offer