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Can I back out of buying a house after paying for a downpayment?

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  1. #11

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    Quote Originally Posted by foxwendal:
    Interesting. Curious, do they have any protection for sellers from buyers using that as a loophole for a free option to walk away if the market tanks? Or sellers just accept that comes with the territory but they’ll probably get more bids on the house overall, so balances out?
    Sorry I was referring more to standard existing property purchase rather than an 'off the plan' purchase that can take years to settle. For example, a standard purchase might have a 40 day settlement period, and is 'subject to finance approval within 20 days'. So then you pay your deposit, have 20 days to get finance approved, if you do then it becomes unconditional after that point, if you dont then you get the deposit back.

    For an off the plan purchase where you pay a deposit years in advance, the deposit is held by a solicitor, you can request the solicitor hold the funds in an interest earning account with interest payable to you, but you can't just change your mind and get the deposit back. If you dont want to go through with the deal through no fault of the developer, then they keep the deposit and can also sue you if they can not resell it for as much as they sold it to you for.
    foxwendal likes this.

  2. #12
    Quote Originally Posted by shri:
    What sort of down-payment? Given thst yiu have not closed 2 years later.. I assume this is a developer of sorts.

    Is the flat local or offshore?
    It's just a typical 10% downpayment. We bought it 2 years ago when it was still under development, it's a new apartment complex in Hong Kong. They're completing the project now and soon-to-be residents can get their keys in the beginning of 2023. So we're applying for mortgage now but unfortunately won't be able to get approved for a mortgage.

  3. #13

    What about in Hong Kong? We bought the apartment in HK.


  4. #14

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    Quote Originally Posted by icecreamlover:
    It's just a typical 10% downpayment. We bought it 2 years ago when it was still under development, it's a new apartment complex in Hong Kong. They're completing the project now and soon-to-be residents can get their keys in the beginning of 2023. So we're applying for mortgage now but unfortunately won't be able to get approved for a mortgage.
    You put down money - two years ago - for a flat you are just now applying for a mortgage?! Is this a normal buying timeline in HK? It sounds insane.

  5. #15

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    Quote Originally Posted by huja:
    You put down money - two years ago - for a flat you are just now applying for a mortgage?! Is this a normal buying timeline in HK? It sounds insane.
    I thought it was standard practice to get a mortgage up to 3 months prior to possession. I assume people get pre approval for stress tests, but normally banks dont hold rates for over 3 months.

  6. #16

    You'll have to check the contract, but at the very least you should expect to lose your deposit.

    If the contract is not clear, ask your solicitor to have a look at it.

    shri likes this.

  7. #17

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    Quote Originally Posted by D.YU:
    I thought it was standard practice to get a mortgage up to 3 months prior to possession. I assume people get pre approval for stress tests, but normally banks dont hold rates for over 3 months.
    The date of the mortgage start (i.e. funds transfered to the lawyer's client account) is not an issue - it can be the day you go sign papers and "take the keys" at the lawyers.

    We have always had some sort of approval in principle from our primary bank or had someone like mreferral ask around and get some approvals in principle or "preliminary approvals".
    @icecreamlover - do you want to back out because you cannot get a mortgage or is the "cannot get a mortgage" line an excuse to back out? If you cannot get a mortgate from your primary bank, consider approaching

    - the vendor to see if they have any mortgage specials / offers etc. their bankers quite often give riskier loans to their buyers
    - a mortgage broker like say Mreferral or CentaMortgage and see what they say
    - a solicitor as suggested by a few to review your sales / purchase contract and inform you of your rights

  8. #18

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    Quote Originally Posted by bdw:
    Sorry I was referring more to standard existing property purchase rather than an 'off the plan' purchase that can take years to settle. For example, a standard purchase might have a 40 day settlement period, and is 'subject to finance approval within 20 days'. So then you pay your deposit, have 20 days to get finance approved, if you do then it becomes unconditional after that point, if you dont then you get the deposit back.
    Even with these standard contracts of 40 days, with 20 days to get finance approved ... does that basically mean it's the same as a 20 day cooling off period? That if you were to change your mind, one could always claim no mortgage approved as a legit out , even if the bank may actually have granted you one?

    It sounds like if I were a seller in Oz, I'd try as much as possible to deal with a buyer who doesn't have mortgage conditions, maybe even at a lower price.