Home loan deposit urgently needed
Recently I had a phone call from a couple with an unusual dilemma. Their $1.2 million home is on the market and due to be auctioned in 3 weeks time.
They have a “hand shake” agreement with the vendor of a $660,000 Unit (conveniently around the corner) and had paid a $1,000 deposit.
The vendor changed his mind and decided he wanted a further $39,000 in deposit funds. He saw this as creating more certainty that the Unit was actually sold.
A Contract was drawn up showing the $40,000 deposit and was signed by all parties.
Only problem was, the purchasing couple did not have the additional $39,000 and needed to come up with it quickly.
They decided to go to their bank which already had a $235,000 mortgage over their house and request a further $39,000.
When they got there the cupboard was bare….they were told they were too old (younger than me) and didn’t earn enough income.
The bank entirely disregarded that they had nearly $1 million dollars equity in their home, was being sold in a red hot market and were buying another property for half the price which they would fully own.
They would have no debt and about $220,000 in the bank!
Shattered and without apparent access to $39,000, they found their way to me.
There they were on my telephone telling me their tale of woe and there I was furiously trying to work out what I could do about it.
I asked questions like:
1. How much of the $39,000 do you actually have?
Answer. None, we put all our money into renovating our house.
2. Have you asked your family/relatives whether they can give you a short term loan?
Answer. Yes, but their money is tied up and it will cost them thousands of dollars in lost interest if they pull it out.
3. Will the seller of the Unit wait until you can access deposit monies via a section 27 once your house sells?
Answer. We have a signed Contract saying an additional $39,000 must be paid in 3 days and, besides, we only have contact with the vendor via his selling agent.
4. Do you know about Deposit Bonds? They are a promise to pay if you default on the deposit. Maybe that would satisfy his “need for certainty”. Why don’t you ring the Agent and see whether that is acceptable?
How did it finish?
The couple contacted the Unit’s selling agent, told him their problem and somehow negotiated a reduction of the $39,000 down to $4,000 with the balance payable once the section 27 monies were available on the sale of their house. I organised to have them paid $4,000 (in advance) by a family member of mine for whom the husband was doing some renovation work. He thanked me very much and said it was the questions I asked him that prompted him to come up with the solution.
So the vendor was happy, the couple were (very) happy, I was happy and the bank….well, let’s not talk about them.
Moral of the story
I get great satisfaction out of being useful. If you need a home loan or just a helping hand…..you should call me. I’m not a miracle worker but I will always try my best!