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NSW Property Law - Changing Price of House After Negotiations Began

Discussion in 'Property Law Forum' started by Hallakah, 21 November 2015.

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  1. Hallakah

    Hallakah Member

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    For the past few months, I have been negotiating with my sister who is selling my parents' property and wants me to buy it. I asked for a total amount she would want for the property with some maintenance to be carried out in that price.

    I used this amount as the basis of our negotiations, and after not being able to lower the price I offered her exactly what she had asked for. She has now declined our offer and upped the price.

    Is this legal under Property Law?

    All negotiations were via text message (no real estate involved or solicitors at this stage), however I still have all of our communications.
     
  2. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member

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    Hi Hallakah,

    Until you have a Contract signed by both parties, the terms of the negotiations can change... and this includes the price.

    Who is the current owner of your parent's property?

    Why are you negotiating with your sister?

    Is your sister the current owner, Executor of your parent's Will, or does you sister hold an EPOA - Enduring Power of Attorney?

    If so, what are the exact powers your sister has under the EPOA.. can she make financial decisions, or just sign documents on behalf of your parents (if they are out of the Country and provide her with instructions to do so)?

    If there is no EPOA, and even if there is... talk to your parents directly, if they are the owner's of the Property... what price to sell for, is up to them...

    If they are unable to decide financial decisions for themselves... and your sister has EPOA, or your sister is the Executor of their estate or the current owner, then you will have to continue to deal with your sister, if you still want to buy the Property.

    Do you still want to proceed to purchase the Property at the increased price? or do you want to attempt to negotiate a reduction, or to proceed at the originally agreed price?

    Before you continue to negotiate, have your parents/your sister get a formal Contract prepared by a lawyer or conveyancer.

    Once this Contract has been signed by you, and the legal owner, Executor who has Probate, (or valid attorney pursuant to an EPOA), you will then have a binding Contract (but you can decide not to continue within the cooling-off period, or before the finance date, building and pest inspection date, and any other conditional clauses added by your lawyer have expired).

    If your parents or sister want to sell the Property via an agent, they will have to sell the Property at an even higher price to recover the commission payable to the agent, plus any advertising costs, etc.

    You should calculate what these amounts will be.... so you can deduct them from your offer, of what you think the Property is worth.

    Have you obtained a valuation as to what the Property is worth?

    You should always have a lawyer review any Contract before you sign it.

    Let me know if you have any question regarding the above.

    Kind regards
     

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