yogita_dabasia

Hi, arrived in Perth a few weeks ago, and have been monitoring the housing market in Perth for the last 6 months or so. We have made a conscience effort to see some houses during the home opens process. Last week we saw a house that we liked, arranged 2nd viewing and placed an offer. After a bit to and fro with the vendors, we finally settled on a price. It doesn't tick all the boxes, however my OH really likes it, and I would say I rate it 8/10. Now the weekend has passed, I have been thinking more and more about whether it is the right thing, and whether we have paid too much (offer accepted at $20k less than asking price), so final price is $560k. The offer is conditional subject to financing, and the real estate did do all the sweet talk to us, and we know that as well, so did take some of the crap with a pinch of salt. Also, he was just giving us 2 weeks to arrange financing, when I think you normally get 3 weeks. He also said that he would need written confirmation if the financing fell through...we also need to raise some money from the UK too. Just out of interest, is there anyway out now? The RE was also asking for a small deposit $5k(!) as soon as poss...but I said I couldn't provide this for another 2 weeks which he said was fine...he is happy to change dates etc, so very accomodating!! Does anyone think we have been taken as idiots from UK, yes we have our heads on, but maybe we should have had the weekend to counter our offer, and let the vendors and RE ponder a bit? I know the market is slow, and people are saying you can offer 20%(!) lower than asking price...is this true?
All help and advise desperately sought, please. If we can pull out, what are the implications?

bridie

You can pull out, ask your bank to send you a letter saying they've declined the finance. I spoke to REIWA when we were having "issues" with our real estate agent and she said if we changed our minds the bank would do this for us with no implications.

As for being taken for a mug it's definitely possible. Our agent told us becuase we had a house to sell we had nothing to bargain with and we'd have to offer full asking price, which we did. Turned out to be a lot of bullshit but what could we do? Unlike yourself we fell in love with this place and yes, we do feel it's worth the money but would have loved to save a few thousand $$$s as we're not exactly wealthy!!!!!

Are you sure it's not just cold feet though?

I know there were loads of times I quesitoned whether we were doing the right thing. We'd just built a home, our mortgage was hardly anything ($250 a week with overpayment) and we were about to sell up and move to a steel framed house with god knows what problems and more than double the mortgage...........

BUT for us it's worked out, we are so much happier now we've moved and it's all been worthwhile - maybe the same will be true for you?

Only you can answer I suppose, what I'm trying to say is dont let the cold feet put you off

Good luck

p.s. as for the deposit yes, usually you pay a small deposit but it's only as a goodwill gesture - we paid $1,000 on a property value of $499,000

POW148

a deposit of $5K is only a holding deposit and means absolutely nothing. The owner can still keep the house on the market and sell it to someone else if they so choose. It is a two way street, if they can renig on the the deal, then so can you. You can pull out of a sale anytime upto when contracts are exchanged. Do not believe everything that a RE tells you. They are only after the sale of the house and the commission that goes with that sale. As for a written letter from a bank stating they will not provide finance, I think that is a load of RE BS.

If you are not happy with the whole deal, pull out now before it goes to far. Remember, the seller believes they have a deal and obviously want to sell so let them know asap so they can continue to advertise there house.

Good luck.

Barney

medwaymark

I'm in NSW so might be different here....

We were in a situation where we had to reduce our offer....as long as it was done before the cooling off period, it was OK to do. We did actually pull out of the transaction at one point which meant that we would of lost our deposit, but they accepted our reduced offer in the end. I think that once the cooling off period has gone, you stand to lose some serious money by pulling out.

Phone your solicitor to discuss the options. Ours was very helpful & we had the cooling off period extended a couple of times.

Mark.

bridie

there is no cooling off period in WA

and as for RE BS - I was told that by the Real Estate Institute of WA and have since heard from other agents that this is the only way you can get out of the deal. there is no such thing as exchange of contracts here as there is in the UK. Yes, the seller can continue to market BUT they cannot accept another "subject to finance" offer. If they want to accept a cash offer then they have to give you 48 hours to either come up with the cash or the deal is off.

To the OP: to avoid misinformation take Mark's advice and either phone your solicitor or do what I did and ring the Institute for some advice.

Cheetah7

We paid a $5,000 holding deposit on our place and have known others do the same.

We were given two weeks to arrange finance, apart from a small glitch with the broker, it has gone smoothly and that 'glitch' with the broker has gone in our favour anyway (too involved to go in to).

I am having an excited day today and cannot wait till I can afford to sun loungers with a little table in the middle so I can lounge with a beer in MY house (sorry, getting over excited again!)

However, I think as someone has pointed out to you, you could be getting cold feet and having a panic moment. Take a few hours out and think back to why you wanted to put the offer in in the first place.

Good luck and dont let anyone push you into anything but at the same time, dont let panic affect major decisions.

Beppe

Yes, only offer 20% below in todays climate.
If you search on here several posters have posted news of sellers offering such large reductions in Perth.

The bad news coming out of the US this weekend only strengthens your position as a buyer.

Unless you are absolutely smitten with the house and it meets all your requirements for the next 10+ years, I would try to pull out.

POW148

[QUOTE=bridie;6784154]there is no cooling off period in WA

there is no such thing as exchange of contracts here as there is in the UK. Yes, the seller can continue to market BUT they cannot accept another "subject to finance" offer. If they want to accept a cash offer then they have to give you 48 hours to either come up with the cash or the deal is off.



After buying and selling a few houses here, I can assure you that there is an "exchange of contracts" here in Australia. Up till that point, either party can pull out of the deal. At the point of exchange of contract, the buyer has to put down a minimum of 10% of the value of the house. If the buyer pulls out after this stage, the 10% deposit is forfeited to the seller.

When I sold my last house, at the last minute the buyer tried to get me to drop the price by $20K or he would not sign and exchange contracts. I politely informed him that if the contracts where not signed that day, I would place the house back on the market, and it would not be available for him to buy. He did sign and exchange for the agreed price. This was all after he tried to get the exchange of contracts and settlement to be extended from the standard 6 weeks to 4 months as he was going OS for 3 months and "didnt see why he should pay the mortgage whilst he was away" but apparently it was all right for me to pay the mortgage for him and fit in with his OS travel. The cheek of some people.

Barney

gobbyjock

Well I know when we put an offer in on the first house we liked (we are in WA) once we had both done the to-ing & froing with prices ourselves and the vendor signed against the final figure and that was it binding. We paid $500 deposit (refused to pay anymore as told it was a goodwill gesture) unfortunately what happened then was a bit of a cock up between mortgage advisor and bank (take your pick I never really found out who was to blame) despite having a pre-approval cert the bank questioned my hubby being on probation with work (despite that being the reason we went with that bank). Anyway long story short it all fell through and our bank spoke to the selling agaent and provided written confirmation - we got our deposit back within a week. We then bought another house a few months later no problems up for sale at $375,00 and we got it for $360,000 (again $500 deposit) have to say it needs work but it`s home and love it - perhaps you are experiencing buyers remorse??

ABCDiamond

Different States have different rules. You may get many differnt answers, but only listen to those who have experience in the STATE you are dealing in.

I "think" that WA is the same as QLD, and is different to NSW, the two States that I have experience with, and confirm with a local solicitor.

In QLD when you sign the paperwork making an offer to purchase, you are actually signing a CONTRACT to purchase, and when the seller signs, the contract is finalised.

In NSW you are only making an OFFER, which does not leave you committed.

In QLD, I "think", we now have a 5 day cooling off period, but that is only a recent change.

Regarding the offer being subject to financing, I always recommend the wording "conditional subject to suitable financing". The vendor may offer their own finance to you at 15%, anad then you can't get out of it by saying no finance available.

ABCDiamond

That sounds like the system in operation in New South Wales.
I have had three houses in NSW, and two in QLD, and the real estate systems are very different.

Rudi

The rules are different in every state so you need to check what the rules are in WA. The person below is saying that you HAVE to put down a 10% deposit.....well yes, in NSW that is the normal thing to do, it could be 5% though, or something different, it depends what you negotiate.....in Qld, you usually put down a "good will" deposit - usually around $10k, but again it's negotiable and could be nothing.

As to exchange of contract....again, it's different in every state. You DO exchange contracts in NSW and can pull out anytime before exchange without penalty, but in Qld you DO NOT - you have a contract which is a signed contract right from the word go, you have a cooling off period, but if you pull out during that time you are required to pay .25% of the price (I think that's the percentage), although this is not always asked for by the vendor. You can also get out of the contract if you have made it subject to pest and buildings / finance, if there are problems with those.

Please make sure what the rules are in your state, because people here in other states are giving you wrong advice.

Rudi

[QUOTE=POW148;6786482]

yogita_dabasia

Hi all, I just wanted to say a BIG THANK YOU to all of you that have responded. It have helped greatly. I think I just feel hard done by the agent, as we actually paid the price the sellers were after, WHAT MUGS WE must be!!! It is subject to finance, and also my husband is on probation period, so these can be potential hurdles with the bank...will just have to wait and see...i think I feel a bit better now, maybe it was cold feet. I have also upset my hubby by saying that I've been unsure, when he likes the place very much...I guess its our fault really, should have pitched an offer much lower and negotiated from there rather than offerring what we did. Once again thanks everyone...can anyone recommend a settlement agent please? The RE agent reckons we can pay around $400-$500, is this true? I've had one quote, and its $1300, not quite what we were expecting..need to get the ball rolling I guess now..

northernbird

We used Focus Settlements in Joondalup. There is a set figure by law for settlement fees but they are negotiable although I can't imagine anyone doing it for as low as $400. We paid around $800 plus disbursements.

Nu-Shooz

I had an offer on my house in Perth last month, contracts signed etc..., but they pulled out 2 weeks later.
Nothing was done about it, so i just put house back on the market and they got away with it, so it's just as simple as that.
I was told once a contract was signed in WA that was it, deal done. But that's all BS too.