Family lose £170k life savings on dream home due to weird contract detail
A lot of people save up for years to be able to buy their dream property.
However one family with three young kids have lost their $320,000 AUD (£170,000) life savings after a seller kept their house deposit in a legal loophole.
Sam Gayed, 42, and his wife Nardine, 37, moved to Australia with 'big dreams'.
They were looking to relocate from Bendigo to Melbourne in 2019 for the education of their children – who are all aged under 12.
The couple saved their deposit money over 10 years since they arrived from Egypt and found the perfect home in which to raise their family – a $3.2 million AUD (£1.7 million) four-bedroom, four-bathroom house in Balwyn.
They secured the house by paying the $320,000 AUD (£170,500) deposit and were getting ready to settle on the property in December 2019 when the deal collapsed.
The sellers had removed a section in the contract's fine print that a standard home sale agreement will usually contain, called a 'subject to finance' clause.
This clause allows the contract to be voided and the deposit returned if the buyer's bank loan isn't approved.
"It was a bit weird when they removed the subject to finance clause [but] we had got emotionally attached to the house," Mr Gayed told News Corp.
He claims the real estate agents told him there was strong interest in the house and it could be sold to someone else, so he signed the contract.
"The agents have great sales techniques, they sell 10 houses a month, I buy one house every 10 years," he added.
Sam applied for the same loan he got to buy his first house – a doctor's scheme loan which would cover 90% of the house value without having to pay lender's mortgage insurance.
However, after he had signed the contract, the bank told him there was a $2 million (£1.1million) ceiling on this type of loan – which completely blindsided him.
This meant he could only secure 85% of the house value, which left him $160,000 (£85,000) short plus another $160,000 on stamp duty.
"At this moment, we became very stressed and sought every avenue to arrange the additional 5%," he said.
The family tried to sell their Bendigo home and part ownership of Sam's company but neither could be completed on such short notice.
The dad said he asked the vendor if he could have a little longer to pay the remaining 5%, but they refused.
The due date on the contract arrived and vendor reportedly cancelled the deal and kept the $320,000 deposit.
In the next few months, the couple maxed out their credit cards and overdrew their bank account trying to stay afloat.
Sam said he and his wife and three children are now renting a 'very tiny house' in Melbourne, have no savings, and can't bring themselves to tell their children.
Meanwhile, the Balwyn house has not been sold to anyone else as the owner instead kept it and rented it out.
The real estate agent who handled the sale said the 'subject to finance' clause was removed at the direction of the vendor, according to Mail Online.
"We can't suggest… we let every purchaser know what their rights and their obligations are. They are free to make their decisions," they said.
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