Student, 24yr, loses $60k deposit on apartment

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Mad Scientist
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#2291193 6-Aug-2019 20:37

sbiddle:

I'd still love to know what the mother really had to do with it.

Story to me seems like a case of wanting to flip the property.. A "safe" deal because property prices were going up, the mother gets the commission, and you can then sell the property quickly after it's complete. Obviosuylt eh plan had multiple points where it could fail, including the fact a 24yr old student clearly has no way to fund a $600k mortgage.

I'm surprised this became news. But then again I shouldn't be.

elpenguino

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#2291213 6-Aug-2019 21:14

eracode:
All money has sentimental value to me.

I'll always remember my first hundred bucks.

It was special ......

Most of the posters in this thread are just like chimpanzees on MDMA, full of feelings of bonhomie, joy, and optimism. Fred99 8/4/21

snnet

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#2291216 6-Aug-2019 21:18

No sympathy for this one unfortunately -- standard clause she could have put in there is subject to finance. Could have even done it after she signed it during a cooling off period.

Mother mustn't be a very nice (or bright?) person.

Take it to GoFundMe if you must, NOT Givealittle. That's for something else like kids who are in dire need of medication that will cost $100k or THEY'LL DIE

edit: Ok so now it's for prostate cancer. At least she came to whatever senses she has left.

quickymart

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#2291275 6-Aug-2019 23:04

Looks like her Givealittle page has been taken down. Who would donate to an idiot like this anyway?

Geektastic

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#2291281 6-Aug-2019 23:42

My father used to rage over increasing amounts of rules and regulations which he regarded as existing for the sole purpose of "saving people from their own stupidity - usually at the expense of someone else!"

Although the purchase process here is quicker and more straightforward than the UK, at least there nobody would execute a property purchase without using lawyers - it's more or less impossible - and nobody would buy a house that had not been surveyed by a Chartered Surveyor because no bank would lend you a penny without the survey to prove that their security was (a) worth what you said it was and (b) was not about to fall down etc. (cf Leaky Homes etc)

Wheelbarrow01

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#2291282 6-Aug-2019 23:46

sbiddle:

I'd still love to know what the mother really had to do with it.

Story to me seems like a case of wanting to flip the property.. A "safe" deal because property prices were going up, the mother gets the commission, and you can then sell the property quickly after it's complete. Obviosuylt eh plan had multiple points where it could fail, including the fact a 24yr old student clearly has no way to fund a $600k mortgage.

Don't be silly.... It's only a $540,000 mortgage 😅

I remember how hard it was for me to buy my first property at 22 - it was $48,000 and I had a 25% deposit. It took weeks to find a bank who would take me on. I had a full time job and a part time job on the side. OK so it was 20 years ago but come on! Only a blithering idiot and her mother would believe that a bank would lend half a million dollars to a student.

As others have alluded to, I believe she never meant to go through with the purchase - she was going to ride the capital gain gravy train and onsell before settlement. Unfortunately there are probably 200 other speculators who bought off plan in the same building who are trying to do the same thing right now, and that is the crux of her issue.

Fred99

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#2291362 7-Aug-2019 08:30

Wheelbarrow01:

Unfortunately there are probably 200 other speculators who bought off plan in the same building who are trying to do the same thing right now, and that is the crux of her issue.

And if the data is accurate, there's been a 2/3 reduction in property sales to foreign buyers year on year, and a total collapse of sales to Chinese buyers.

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alasta

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#2291364 7-Aug-2019 08:33

snnet:

No sympathy for this one unfortunately -- standard clause she could have put in there is subject to finance. Could have even done it after she signed it during a cooling off period.

It would be extremely rare for an off-the-plans sale & purchase agreement to allow the purchaser to add clauses like this. Typically the content of these contracts is dictated by the bank that is lending capital to the developer. This is why it's important that off-the-plans purchasers have plenty of financial headroom so that they can be sure that they will get a mortgage approved when the time comes.

I also disagree with some comments suggesting that she couldn't on-sell it before settlement, at least in theory. It should be possible to reassign the sale & purchase agreement to another party, provided that there is no clause preventing that from occurring. Even if there is a clause preventing reassignment the developer would usually only enforce it if there are unsold units in the development and they don't want competition from resales. The fact that the purchaser has not on-sold the property would suggest that it has declined in value by more than $60k and she has no other assets to cover the balance of the devaluation along with the marketing and legal costs of re-selling, etc.

It seems to me that the developer should take the $60k and run. Even if the capital value has declined more than $60k there is little point in incurring all the hassle and expense of suing for damages when the purchaser probably has no other assets.

SirHumphreyAppleby

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#2291369 7-Aug-2019 08:37

Fred99:

And if the data is accurate, there's been a 2/3 reduction in property sales to foreign buyers year on year, and a total collapse of sales to Chinese buyers.

The data isn't accurate. Searches for Asian-sounding names and foreign addresses don't give a complete picture. Use of office and hotel addresses is common.

surfisup1000

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#2291371 7-Aug-2019 08:43

FineWine:

No sympathy here.

I have some sympathy. Young kid, took advice from people close to her, as young people do. House prices have been increasing as long as she has been aware of such things.

A whole generation of aucklanders who have grown up thinking house prices will increase 20% or more a year.

I don't know why they don't teach more about such things in school.

However, as you say, lesson learned. Hopefully other young people will learn from that too.

surfisup1000

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#2291373 7-Aug-2019 08:46

Fred99:

Wheelbarrow01:

Unfortunately there are probably 200 other speculators who bought off plan in the same building who are trying to do the same thing right now, and that is the crux of her issue.

And if the data is accurate, there's been a 2/3 reduction in property sales to foreign buyers year on year, and a total collapse of sales to Chinese buyers.

The peak of chinese buying was when IRD started requesting IRD numbers from house buyers. The last thing a chinese person earning lots of money in china wants to do, is let the IRD know that they are financially taxable. Deer/headlights...IRD...

Batman

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#2291409 7-Aug-2019 09:52

surfisup1000:

Fred99:

Wheelbarrow01:

Unfortunately there are probably 200 other speculators who bought off plan in the same building who are trying to do the same thing right now, and that is the crux of her issue.

And if the data is accurate, there's been a 2/3 reduction in property sales to foreign buyers year on year, and a total collapse of sales to Chinese buyers.

The peak of chinese buying was when IRD started requesting IRD numbers from house buyers. The last thing a chinese person earning lots of money in china wants to do, is let the IRD know that they are financially taxable. Deer/headlights...IRD...

that's assuming IRD shares information with China?

wellygary

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#2291428 7-Aug-2019 10:02

Batman:

that's assuming IRD shares information with China?

Agreement between The Government of New Zealand and The Government of the People’s Republic of China

For the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance

"ARTICLE 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2. "

http://taxpolicy.ird.govt.nz/sites/default/files/tax-treaties/2019-dta-nz-china.pdf

Batman

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#2291429 7-Aug-2019 10:08

wellygary:

Batman:

that's assuming IRD shares information with China?

Agreement between The Government of New Zealand and The Government of the People’s Republic of China

For the Elimination of Double Taxation with Respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance

"ARTICLE 26

EXCHANGE OF INFORMATION

1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Agreement or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Agreement. The exchange of information is not restricted by Articles 1 and 2. "

http://taxpolicy.ird.govt.nz/sites/default/files/tax-treaties/2019-dta-nz-china.pdf

you learn something new every day!

now if only they pass a law to require every existing property owner to provide an IRD number ... that would clamp down on money laundering in 60 seconds ... but alas, can of worms and maybe they don't want to know

mclean

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#2291435 7-Aug-2019 10:12

A general comment: People look after money they've had to earn. Easy come, much easier go. I know this was an inheritance but it's something you can observe throughout the gravy-train sectors of our society.

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