Vendor Changed His Mind AFTER Sale Contract Signed

[Deactivated] on 18/03/2020 - 19:49
Last edited 19/03/2020 - 14:34

Let's say , you've just bought a house with a mate. Contracts have been exchanged and you are about a week from settlement. Vendor now contacts you directly and begs to be released from the sale. What do you do ? Our solicitor has said that he can make it work for us whatever we decide.

JJB

Edit: Thank you for all the good advice. We've decided against the "financial reaming " approach. We will be letting them walk away from the contract relatively unscathed. In view of the uncertain times and the looming recession, we've decided that it might be best to get something more affordable anyway. So the old vendor is happy, the new one is relieved that he has found a buyer before "it all goes to shit" and my mate will sleep better tonight knowing that he has just shaved $80k off his future mortgage. Contracts are being drawn. Hopefully, we can get the keys before we go in lock down and can get started on the reno.

Home & Garden

Comments

  • stratbargain on 18/03/2020 - 19:54
    +2

    Ask how much financial compensation he is offering?

    • [Deactivated] on 18/03/2020 - 22:32
      +2

      $0 . They are "pleading to my human decency."

      • elgrande on 19/03/2020 - 08:43
        +8

        Well that was their first mistake!

        • [Deactivated] on 19/03/2020 - 11:40
          +1

          Not really….my solicitor called it "targetting the weakest link" aka me :(

  • Mechz on 18/03/2020 - 19:54

    Did you ask him why he's bailing? I guess it depends on how good the deal is, he might have got a better offer and just making excuses.

    • [Deactivated] on 18/03/2020 - 19:59

      COVID-19. They were originally going to share a place with another couple closer to the city until they find something suitable to buy. They are now worried about living being in such close proximity with other people. Also, I got the feeling that the bitter reality of a share-house has just started to sink in.

      • Mechz on 18/03/2020 - 20:01
        +11

        I would continue with the contract of sale. They can find a rental easy enough. Airbnb in the interim. No one is being put into hardship so don't stress about their regret.

        • mick123 on 18/03/2020 - 20:17
          +5

          You bought the house with a mate, but is it to live in or rent out.

          Can you do a short term leaseback or do you want to move in straight away?

          • [Deactivated] on 18/03/2020 - 21:21

            @mick123: It's for him to live in .

            Place needs renovation. Couple is a wannabe-block renovator: there's holes where walls should be and a massive walk-in-robe where a laundry should be. They've also laid the current flooring on top of the original, uneven slate floor. All pretty easy fix if you know what you're doing.

            I like the idea of leasing it back to them. Mate and I should be able to fix most of those things if we go into lock-down after we get the keys. Not sure what happens if we go into lock down before that. The potentially can live in the house for free and we won't have any recourse.

      • brendanm on 18/03/2020 - 20:10
        +5

        Lame reason, tell them thanks but no thanks.

      • JimmyF on 18/03/2020 - 22:37

        They are now worried about living being in such close proximity with other people

        Not a valid reason, they can go rent somewhere else by themselves if they want to.

  • redforever on 18/03/2020 - 20:08
    +2

    Are you planning to move in or in a rush to move in? Can you offer to rent it back to them?

    • [Deactivated] on 18/03/2020 - 22:33

      That is a possibility.

      • JimmyF on 18/03/2020 - 22:37
        +2

        Yes this if you're not moving in straight away. rent it back. But do it correctly, use an agent and get a bond etc, so its all above board etc.

  • [Deactivated] on 18/03/2020 - 20:08
    +1

    It doesn't matter whether you want in or out as well.

    You have the upper hand.

    What is the settlement worth to you? Use that as a starting point.

    • [Deactivated] on 18/03/2020 - 22:08

      Nothing . Personally, I'm happy to walk away from this deal if we're made whole. My mate, on the other hand, will be homeless with his 2 kids in 11 weeks if the deal falls through.

      • [Deactivated] on 18/03/2020 - 22:13
        +1

        Use that as a baseline for negotiation.

        Weekly rent, $600. Approximate 25 weeks for house hunting and average settlement time. $15k.

        Then there's the cost of moving and cost of the loan.

        Ultimately, how much is this going to cost the vendor if they don't want to go through with it.

        Somewhere between those figures should be a good starting point.

        • [Deactivated] on 18/03/2020 - 22:20

          Cheers!

          • ozbjunkie on 19/03/2020 - 11:52
            +1

            @[Deactivated]: As another alternative to the fine suggestions above of compensation to be released from contract, or you guys renting the place back to them, a friend of mine bought a house last year, vendor wanted to delay settlement by 6 months. My friend had the vendor pay his rent for the 6 months.

            Works out to be the same thing at the 15k I guess.

      • CheapSticks on 18/03/2020 - 22:23

        Ask for $15k to let them get out of contract !

  • Melb69 on 18/03/2020 - 20:10
    +2

    Seller regret. What are they offering as compensation?

    Think of it this way. Are you happy to look at property every weekend and troll the realestate sites. I think you may have better use of your time like to enjoy the new pad. Good luck

    • [Deactivated] on 18/03/2020 - 22:12
      +4

      There was no mention of compensation. They are "appealing to my human decency". My solicitor had no idea what that expression meant.

      • GaryQ on 19/03/2020 - 08:02
        +1

        How many rolls of toilet paper are they offering? There is no human decency left!

      • HighAndDry on 19/03/2020 - 11:35

        Lol. I hope that didn't come from the vendor's solicitor because that's one fail of a reason.

        • [Deactivated] on 19/03/2020 - 11:46

          Nope. They contacted me directly, bypassing their solicitor, my solicitor and my mate who will be moving into the house. His name is also on the contract.

          • HighAndDry on 19/03/2020 - 12:23
            +1

            @[Deactivated]: Ah. I'd honestly ignore anything that doesn't come via your solicitor. Probably means the vendor's talked to their solicitor and have already also been told "lol no, not gonna happen".

  • CyberMurning on 18/03/2020 - 20:15
    +4

    Ask them to compensate you with 10,000 toilet rolls.

    • iDroid on 18/03/2020 - 21:22
      +4

      No one has that much money.

    • [Deactivated] on 18/03/2020 - 21:28
      +1

      The house has a bidet. Not a functioning one , mind you, and it is in what is technically the WIR but still, a bidet is worth quite a TPs. Might be the real reason they no longer want to sell.

    • JimmyF on 18/03/2020 - 22:38

      Ask them to compensate you with 10,000 toilet rolls.

      It would be cheaper to give them the house…..

  • tsunamisurfer on 18/03/2020 - 20:24

    I hope you financially ream them.

    Please share the story when you do.

    • [Deactivated] on 18/03/2020 - 21:36
      +1

      They are young, dumb and have watched way too many reno shows for their own good.Is that an offence punishable by financial "reaming"?

      • tsunamisurfer on 18/03/2020 - 21:39
        +1

        They have committed no offence, so punishment doesn't come into the equation.

        I still like to hear about the reaming nonetheless.

        • [Deactivated] on 18/03/2020 - 22:13

          You pervert, you!

  • ihbh on 18/03/2020 - 20:27
    +2

    Have a stab at the future opportunities - are prices going to be flat or drop a bit due to the CV? There could be less competition as fewer buyers are prepared to pound the pavement for example.

    If so, there could be a win-win situation for both parties if you release the seller from the contract after covering your costs (such as solicitor's).

    Sometimes in life it's not just about how you cut a pie. You might be able to enlarge it if you look for win-win situations.

    • TEER3X on 18/03/2020 - 20:30

      Curriculum Vitae?

    • [Deactivated] on 18/03/2020 - 21:40

      My thoughts , exactly! With the inevitable recession , there should be lots of good property bargains up for grab. I would be happy to wait but I'm technically the silent partner in this deal. Not sure why the seller has contacted me instead of his solicitor , our solicitor or even my partner.

      • TEER3X on 18/03/2020 - 22:14

        Recessions aren't typically correlated with house price declines… This may turn out differently however

        • [Deactivated] on 18/03/2020 - 22:43
          +1

          In other words….we don't know ?

  • [Deactivated] on 18/03/2020 - 20:30
    +1

    Only release if there is acceptable financial compensation or say no. They'd do the same to you if you had a change of mind.

  • deveshwar0 on 18/03/2020 - 20:48
    -1

    I work with mortgages and have limited experience in VIC towards property settlements.
    Honestly, I've never heard of the buyer getting any compensation in these instances.
    The vendor has the upper hand.
    There's not much that you can do when the settlement falls through because the vendor is not ready.
    I'm surprised that your solicitor has advised that they can make it work for you.
    Ask them what can be done apart from issuing a recession notice which will work in the vendor's favour anyway.
    Good luck!

    • Donaldhump on 18/03/2020 - 21:06

      you can sue them for performance, thats what you can do, you can force them to pay your rent/travel expenses till they vacate and any other costs you have incurred. Of course there is compensation available for a buyer

    • BinaryPirate on 18/03/2020 - 22:13

      Usually contracts fall over on the vendors' side when executing one contract is dependent on conditions external to the contract, such as their new house isn't finished being built yet or the contract for their new house being subject to finance which falls through. Unless they have such a clause & financing falls through, or they thought to have a 'vendor changed mind' clause included included in the contract, aren't they legally bound to abide by the terms of the contract?
      Otherwise, what's the point of having a contract?

      • [Deactivated] on 18/03/2020 - 22:24
        +2

        They originally wanted to include a change-of-mind clause but my solicitor laughed them out of it.

        • MrBear on 19/03/2020 - 10:22

          They were already hedging their bets.

    • HighAndDry on 19/03/2020 - 11:37

      There's not much the purchaser can do if the vendor delays for a few days. But the vendor can't get out of the contract entirely. It would be an open and shut case costing the vendor a lot of money.

  • Peter Enis on 18/03/2020 - 21:41

    Perhaps a floorplan would help 😁

    • [Deactivated] on 18/03/2020 - 21:44

      My solicitor has advised against this. It's a very erm funky layout and easily recognisable.It was also previously advertised online .

    • [Deactivated] on 21/03/2020 - 20:12

      I can post the floorplan for the other house but I've done that before and ozb dissuaded me from buying it.

  • BertieBrown on 18/03/2020 - 22:09
    +1

    There’s a lot of theoretical things you could do. For instance, maybe you could sue them, but it will obviously cost you, and you aren’t guaranteed of a win, or even if you do win how much a judge might find in favour for you. But money isn’t the only consideration. You’ll have the angst of an ongoing legal proceeding. Taking time off of work. Potentially getting a loan to pay for legal fees.

    Then there’s the consideration of what you do in the meantime, in the hopes of having the contract honoured, do you incur costs hoping that they will eventually pay them?

    What if the seller just refuses to leave, and you find you need to get police involved?

    How long are you prepared to fight for this house, in the hopes that you’ll eventually win, when you could spend that time looking at other properties?

    What if you wait, sue the seller, incur legal fees, only to find that eventually the seller just refuses to pay you, or the judge doesn’t find in your favour? Or, that in order to actually recoup any of those fees you’ll be waiting years because the seller drags out their repayments to you. Or, you do win, but the judge only finds that the seller is obliged to vacate the property, but isn’t responsible for your legal fees, or your costs during the proceedings?

    I mean it just goes on and on.

    Bottom line, yes theoretically you could fight it, take it to court, etc, but you would really want to know that those costs won’t definitely outweigh any benefits.

    Perhaps what you could do, if you desperately want this property, is to instruct your solicitor to pursue the matter up until you have a set cost in mind for their services, after which you walk away. This provides an opportunity for you to test the sellers resolve to fight you.

    • [Deactivated] on 18/03/2020 - 22:31

      Lots to think about. Thanks :)

    • HighAndDry on 19/03/2020 - 11:40

      For instance, maybe you could sue them, but it will obviously cost you, and you aren’t guaranteed of a win

      Correct in most lawsuits. Incorrect here. OP would be basically guaranteed a win, and very likely to be awarded indemnity costs.

  • Ryanek on 18/03/2020 - 23:15

    This has been a surprisingly helpful thread.

    • [Deactivated] on 18/03/2020 - 23:18

      Are you in the same situation?

      • munecito on 19/03/2020 - 07:51
        +10

        He's the seller

  • [Deactivated] on 19/03/2020 - 08:06
    +1

    Depends on how much you like the house. I’d personally ask for compensation to cover cost incurred (legal fees, your time signing contacts, time off to do inspections etc.), regret and stupidity don’t mean you get a free pass. However, I do understand your view of waiting to get another now or in a few months when sellers are desperate.

  • elgrande on 19/03/2020 - 08:45

    They would still need to pay the real estate agent their comission either way.

    • [Deactivated] on 19/03/2020 - 08:46

      Private sale. No REA involved.

  • OzHunterNSW on 19/03/2020 - 09:53

    They may have a better offer….. find out what the reason is first.

  • [Deactivated] on 19/03/2020 - 12:06

    Hypothetically, if I was to make an offer on a place today and it was accepted, does anyone know how quickly I can take possession of it? Assuming, money is not an issue.

    • HighAndDry on 19/03/2020 - 12:26
      +1

      Possession and not legal title? As fast as the vendor can get their stuff out because it's possible to have early possession.

      Legal title would depend on banks - not just your own, I'm assuming you have a briefcase of cash - but the vendor's bank if they have a mortgage, fastest is going to be about 1-2 weeks.

      If the vendor doesn't have a mortgage and you have the cash ready, within 2-3 business days effectively.

      • [Deactivated] on 19/03/2020 - 12:29

        Cheers :)

        • HighAndDry on 19/03/2020 - 12:30
          +1

          No worries, but I can't stress this enough - talk to your solicitor. Practical plans can be made on best case scenarios, legal documents should still be drafted (and signed) on worst case scenarios.

          • [Deactivated] on 19/03/2020 - 12:33

            @HighAndDry: Of course. The hypothetical buyer's solicitor was in a meeting.

  • kiitos on 19/03/2020 - 14:26

    How did they get your email address?

    • [Deactivated] on 19/03/2020 - 14:33

      From the mutual acquaintance who put us in touch when he realised that they were looking for a buyer and I was in the market for a 3-bedder in need of renovations.

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