Couple loses $75,000 house deposit.
A Queensland couple had lost their $75,000 house deposit due to their finance not being ready at settlement.
On 20 October, the date of settlement, Westpac Bank was unable to settle and could not provide the required finance for the purchasers to complete the transaction. As a result, the deal lapsed and the sellers were entitled to the purchaser's entire $75,000 deposit under the contract.
The couples' pleas to the seller to extend completion for a week and then a day were rejected. Although the finance was sorted the following day after settlement, it was too late.
Unlike other states, Queensland has no grace period for completion.
The error of Westpac Bank placed the purchasers in an unnecessary situation of losing the property they dreamed to purchase, not to mention the emotional turmoil and distress in losing their life savings.
Although the bank later admitted to their error and subsequently reimbursed the purchasers, this situation could have been avoided by due diligence and the guidance of a conveyancer solicitor taking extra steps to ensure successful completion of the transaction.
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Too often brokers/finance providers make assurances to the purchaser that finance will be sorted and simply refer to a pre-approval to be sufficient to proceed with the purchase. However, this is not enough and in proceeding with the purchase on such basis, the purchasers risk the possibility that finance may not be ready within the contractual timeframe to complete the transaction.
A property transaction can take place without a real estate agent and/or a finance provider, however, it would be unwise not to engage a solicitor conveyancer who is responsible for the contract (to draft, review, advise and negotiate) and conducts the entire conveyancing process from start to completion.
Here are four tips to consider when purchasing property (not legal advice):
Never sign a contract under pressure and/or by impulse. Real estate agents use sales tactics to pressure purchasers to commit to a purchase. Agents have no legal obligations to the purchaser and any representations from them cannot be relied upon unless recorded in the contract.
Do not sign anything until you have thoroughly gone through the contract, obtained independent legal advice/legal representation, and have organised the finance;
Engage a conveyancer solicitor that is independent of the agent and the vendor. Retain their services before dealing with an agent.
Exercise the cooling-off period to allow time to attend to required reports and organise finance. In Victoria and Queensland, ensure that the 'subject to finance' clause is not removed from the contract.
For more than a decade, the principal lawyer of Odtojan Bryl Lawyers has undertaken property conveyancing matters which includes Queensland properties. Odtojan Bryl Lawyers have provided dedicated legal services to promote and protect the interest of its clients.
Contact Odtojan Bryl Lawyers at admin@odtojanbryllawyers.com.au for services in property conveyancing: sale, purchase, transfer or leases (commercial or retail), mortgages, reverse mortgages, and credit laws.
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