unconditional house sale may fall through. Agent keeps commission?

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#2493654 28-May-2020 13:43

kingdragonfly:

I might be a little unsympathetic to the buyer since he's, well, not a Kiwi.

He has to have citizenship or a residence class visa to purchase residential property.

So if he was eligible to buy they house he's pretty much as "kiwi" as most people around here...

If he didn't have PR then this is what may have tripped everything up,

Do Real Estate agents check this on offers? or is it simply assumed that purchasers understand the rules?

bagheera

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#2493665 28-May-2020 13:58

wellygary:

Do Real Estate agents check this on offers? or is it simply assumed that purchasers understand the rules?

Every time I have signed a purchase agreement, the first thing the agent has said - "this is a legal document that is binding, I strongly suggest that you talk to a lawyer before signing." If the agent has not done this, then they could be in trouble but if they have, and the buyer decides not to, then they should lose everything, plus the difference in the sale price if it sells for less. most people will be buying another house with the money from the sale, and when it an unconditional agreement, then bank etc are happy due to it being a legally binding agreement.

Nate001

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#2493670 28-May-2020 14:03

End of the day, its in your best interests the sale proceeds.

If it were me? I would be doing anything I could to help that.

mattwnz

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#2493679 28-May-2020 14:16

Surprised the buyer paid such a high deposit? Are banks tightening up on their lending or something due to Covid? What is the agent telling you about buyers and financing at the moment, because I wonder if it is a wider-spread problem? The lawyer though should be advising you the best thing to do in the current environment.

kingdragonfly

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#2493686 28-May-2020 14:20

Frankly Harcourt recommended the lawyer, which was my mistake.

She wrote me a long email praising Harcourts, and told me to calm down.

I had to remind her she is representing me, not Harcourt.

I asked if she had a conflict of interest, and she didn't reply.

heavenlywild

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#2493689 28-May-2020 14:24

This happened to me 18 months ago. The purchaser ended up not having the money to settle and lost $130k. The agent kept the fees and they had the right to according to the agreement, although another agency said they wouldn't have taken it. I had to fork out double mortgage for 6+ months and lost on the subsequent sale due to the falling market. ]

In the end the $130k was not to much a bonus although thankfully I had it.

I tried to go through the solicitor seeking compo from the initial purchaser but in the end it wasn't worth it.

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heavenlywild

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#2493694 28-May-2020 14:25

You will find surprising that most agency agreements have a clause that states they keep the commission even if the sale doesn't go through. Although ethnically, I am not too sure.

Imagine if the purchaser did not pay the deposit - you would be paying the agency commission directly out of your very own pocket!

esawers

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#2493704 28-May-2020 14:47

We have purchased a few houses, and we always make sure we are preapproved before putting an offer in, however the bank still advises us to use the finance clause. The finance clause also covers things like having satisfactory insurance.

Most S&P agreements now state whether the sale is subject to OIA approval

Daynger

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#2493706 28-May-2020 14:51

mattwnz:

Surprised the buyer paid such a high deposit? Are banks tightening up on their lending or something due to Covid? What is the agent telling you about buyers and financing at the moment, because I wonder if it is a wider-spread problem? The lawyer though should be advising you the best thing to do in the current environment.

10% is pretty much the standard deposit.

networkn

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#2493731 28-May-2020 15:29

Whilst legally not required, I would have accepted the extension.

kingdragonfly

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#2493741 28-May-2020 15:41

It strikes me if you're making an unconditional offer, and you ask for an extension, you're either inconsiderate, a fool, or attempting to play the system.

This is all the current COVID level, from advertising to sell.

Again, there was an offer higher than his conditional on financing, which I turned down.

So that buyer is either still looking, bought something (for probably more money), or hoping this deal falls through.

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mattwnz

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#2493758 28-May-2020 15:59

Daynger:

mattwnz:

Surprised the buyer paid such a high deposit? Are banks tightening up on their lending or something due to Covid? What is the agent telling you about buyers and financing at the moment, because I wonder if it is a wider-spread problem? The lawyer though should be advising you the best thing to do in the current environment.

10% is pretty much the standard deposit.

That maybe what is written in a standard contract, but that can be changed by the lawyer. I recall we changed it to 5%. Would have still been more than enough to cover the commission.

mattwnz

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#2493762 28-May-2020 16:02

kingdragonfly: It strikes me if you're making an unconditional offer, and you ask for an extension, you're either inconsiderate, a fool, or attempting to play the system.

This is all the current COVID level, from advertising to sell.

Again, there was an offer higher than his conditional on financing, which I turned down.

So that buyer is either still looking, bought something (for probably more money), or hoping this deal falls through.

We gave the buyers an extension, because they were in a chain, and the person who was buying their property was bringing money in the country and was delayed for some reason. But the sale then did go through. But I recall that was before it went unconditional.

mattwnz

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#2493764 28-May-2020 16:05

kingdragonfly: So my opinion, which might be wrong, is the Wellington market has topped out, and any delay could mean the selling price would drop.

Based on property prices at the moment in Wellington, I don't see any sign of prices falling yet.

networkn

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#2493767 28-May-2020 16:09

kingdragonfly: It strikes me if you're making an unconditional offer, and you ask for an extension, you're either inconsiderate, a fool, or attempting to play the system.

This is all the current COVID level, from advertising to sell.

Again, there was an offer higher than his conditional on financing, which I turned down.

So that buyer is either still looking, bought something (for probably more money), or hoping this deal falls through.

I tend to be a bit too nice in most situations. I'd be inclined toward assuming someone was genuine and had genuine issues, grant the 10-day extension at the $210 a day penalty because of the hassle of relisting and starting again, with the uncertainty right now... If they *are* having genuine issues insisting on executing the contract to the letter of the law is really going to cause them misery. Strictly speaking, not your problem, and I guess it depends if you are in a position to offer the extension in the first place.

Of course, you are within your legal rights to insist on the terms of your contract, but for *me* if I didn't stand to significantly lose out by extending, I'd probably consider extending. Obviously, if you are in contact with the other seller who offered you more, and they are still interested and the conditions are favourable, then you could try that. It's a lot of IF's though.

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