Friend Wants Me to Back out of The House I Bought from Him

Wilson Wallace on 12/02/2022 - 02:34

So here is the high level detail of what has happened.

  • Friend was selling his house Which will fund another house he purchased.
  • he needed 1.2 million for the bank to give it the A OK
  • I’ve been to the house a lot, it’s on 800 m2,4 bed 1 bath, however it’s on a main busy road, next to a cemetery and petrol station. Cemetery is about 50 to 100 metres away, petrol station about the same.
  • had the house evaluated by 2 independent parties. 1 came in at 1.2M, another at 1.23m
  • He said to make a decision quickly, go around the house, see if you like it as he needs to tell the realestate agent to put it on the market, however he can save 6K and not advertise it. My girlfriend at the time didn’t see it and unfortunately, couldn’t bring until he put it on the market with the agent.
  • after the girlfriend seeing it, she said it looks good. We signed the contracts, I sent him 120k, paperwork was given to my conveyancer etc.
  • Agent still needs to legally sell it within 4 weeks, so offers were going in but they were being rejected until the time lapses with the agent, then he was going to tell the agent to pee off so he wouldn’t pay agent fees. However, 1 offer came in at 1.3.
  • friend messages me asking if I can pull out because it’s 100k extra. He has a wife and 2 kids, so I said that’s fine, I will put out.
  • I asked him if he wanted more money, he said he won’t take it off me because it’s not worth more than 1.23. I’d be risking potential upside and he won’t feel right if he sold it to me for more than what it’s worth. He also said with the money I’m paying extra for, I can buy something better.

I see friendship more valuable than money, I just feel really disappointed though. Just needing to vent to all but what would most of you had done? I was always quite hesitant of sleeping / living right near a main road, and yes it’s a busy road. Always had that at the back of my mind during the whole transaction.

Financial

Comments

  • MeesusEff on 12/02/2022 - 02:39
    +26

    As long as he gives you back the money you've spent (could throw in a bit extra if he's a good buddy), sounds pretty good. If you are planning on having kids, you don't want to be living near a cemetery - speaking as someone who could see graves outside my window. Also a petrol station gets pretty heavy traffic.

    • Wilson Wallace on 12/02/2022 - 02:49
      +5

      Yes he will be sending it back. Thanks for the tip, didn’t really think about the kids part l.

      • trongy on 12/02/2022 - 09:00
        +4

        I grew up around the corner from a cemetery. It never bothered me in the slightest, it was just a part of the neighborhood which we went past but didn't go itnto.

        I expect the traffic to petrol stations to decrease over the next couple of decades as electric vehicles become more popular.

        • c64 on 12/02/2022 - 10:37
          +8

          I grew up around the corner from a cemetery. It never bothered me in the slightest

          just you wait till the next zombie apocolypse

          • MagicTsukai on 14/02/2022 - 00:13
            +9

            @c64: He'll be ready, set up the peashooters and sunflowers.

        • Quantumcat on 12/02/2022 - 11:53
          +5

          I think having a cemetery near by is a good thing, they are neighbours that can't bother you, you have more space around you (no buildings), and gardens are maintained nicely so it is nice to look at. I didn't think of the kids angle though and I can imagine that freaking them out as they grow up so that is a good point.

          • MeesusEff on 12/02/2022 - 14:43
            +1

            @Quantumcat: my mum was telling me that day, that my 2.5yo screamed and pointed at a corner 'SHES LOOKING AT ME' and mum was like WTF (not the grave house) , but if it was me + grave house i would be pissing myself lol.

          • CandyMan on 13/02/2022 - 08:43
            +2

            @Quantumcat: Also perfect for beekeeping with all the flowers

          • belongsinforums on 14/02/2022 - 00:17
            +1

            @Quantumcat: cemetery across the road from my primary school. never thought much of it. i remember a teacher taking the class for a visit to trace the graveyard stones onto paper

    • 2190sarah on 14/02/2022 - 07:18
      +2

      Just for another perspective, we live near a cemetery - for our suburb it’s one of the highlights!

      Once a year there’s cemetery open day - it’s like a fair day - there’s free horse rides, petting zoos, face paint, the fire brigade, police, SES put up displays and the kids get to use the fire hose, all the cemetery’s digging machines, street sweepers etc are parked for the kids to climb all over and pretend to drive, free food, jousting displays…

      They also have free carols by candlelight at christmas - live band, free food, Santa comes and brings the kids lollies…

      Our cemetery is a popular place for our suburb to ride bikes with the kids or go for runs, it’s actively encouraged by the cemetery…

  • AustriaBargain on 12/02/2022 - 03:05
    -2

    If you signed the contracts and own the house then that extra 100k is kinda yours isn't it? Your friendship with him could be worth more than 100k though by the time either of you die. Good friends are harder to find in adulthood.

    • Wilson Wallace on 12/02/2022 - 03:26
      +15

      From a binding contract, yes. However, transfers etc were not completed.

      Indeed they are hard to find. We met at 12, so almost 20 years of friendship. It’s worth more than 100k.

      • AndyC1 on 12/02/2022 - 08:53

        You should never pay a deposit until the contract is completed.

        • Wilson Wallace on 12/02/2022 - 09:28

          The contract was completed. When you buy a home, 10% is mandatory to the vendor.

      • brawndo on 14/02/2022 - 00:49

        Is the friendship worth more than 100k to him though?

  • solidussnake on 12/02/2022 - 07:08
    +3

    Surprised you even went with a real estate agent and not worked it out privately to save a bit of cash for your mate as it's a fair bit of commission and advertising it probably would have worked out better actually

    • Wilson Wallace on 12/02/2022 - 09:30
      +1

      We did it on the side. However, he didn’t want to take the risk and wait for me to make the decision. So when he signed the agent, I also signed and said yes.

  • djones145 on 12/02/2022 - 07:38
    +19

    nothing wrong with living next to a Cemetery, the neighbours are always dead quiet!

    • SnowDragon on 12/02/2022 - 08:02
      +3

      Prime real-estate near the dead centre of town as well.

      • djones145 on 12/02/2022 - 12:26

        footy show fan too :P

    • Derrick Crane on 12/02/2022 - 10:02
      +4

      And the final commute is pretty quick.

    • ledifni on 14/02/2022 - 09:50
      +1

      Going home using Google Maps: "Destination is on the right. Final destination is on the left."

    • afah0447 on 15/02/2022 - 14:15

      Seems like everyone is dying to get into the neighbourhood!

  • Mokr on 12/02/2022 - 07:59

    Weird he won't sell it to you for 1.3

  • foxmulder on 12/02/2022 - 08:24
    +2

    What's this ' Agent still need to legally sell it'?

    • pipboy on 12/02/2022 - 08:52
      +1

      If OP’s friend has signed a sale contract with the REA, during the exclusive period (here it looks like 30 days) the REA will charge commission on the sale, even if OP’s friend found someone privately to buy it.

      So he could still sell it to OP but would have to pay commission on sale to REA

  • pegaxs on 12/02/2022 - 08:33
    +10

    I wouldn’t back out until you have 100% of any money you have paid them back in your account. If they want to cancel the transaction, let them cancel it, not you. If there are any penalties to pay, the party that cancels the transaction is the one who cops the fees.

    Just politely tell them that you are happy to have them cancel the contract.

    And I don’t know why you/they used a real estate agent for the transaction. They could have saved that $100k extra by simply going through the sale with you as private parties and using a conveyance service and not paying a REA a huge slab for basically nothing.

    And of course the REA wants them to back out of the deal with you, because the new deal means a few thousand more for them on commissions.

    Your friend isnt making an extra $100k because of REA fees that neither of you would have paid if you just did it as a private sale. Now he has soured a life long friendship over a REA’s greed.

    • Vinagirl on 14/02/2022 - 09:28
      +1

      Completely second @pegaxs make sure it's your friend who cancels the contract, rather than you pulling out. Reduces the risk of any further liabilities.

  • Jimothy Wongingtons on 12/02/2022 - 08:40
    +11

    Easiest pay day for the REA lmao

    • life is suffering on 12/02/2022 - 14:32

      Sorry can you explain please ? The sale didn't go thru right

      • CalmLemons on 14/02/2022 - 01:49
        +3

        REA have exclusive rights for a certain period of days. So if OP had signed with his friend during this period, and agent finds out, agent still has right to be paid.

        OP should just back out of sale anyway and get his money back, location seems awful

  • MS Paint on 12/02/2022 - 10:02
    +8

    Find a new house and a new friend.

    He sounds like a peanut.

    • mountaineer on 14/02/2022 - 09:22
      +1

      his friend doesn't seem to like/value the house himself due to the location (mind you some cultures are very sensitive to be next to a graveyard). From the way OP described the lead up, his friend was quite chill on the sale. He apparently didn't want to OP to bid against the other buyers knowing the potential issues. I see no evil in OP's friend's action.

      On the other hand, if OP truly wants to buy and respect the friendship, he can bid more to be fair to his friend.

  • pharkurnell on 12/02/2022 - 10:22
    +7

    Never do business with friends.

  • El cheepo on 12/02/2022 - 11:29
    +3

    It’s easy to be annoyed at the friend for backing out, but if you had acted quickly at the beginning it wouldn’t have gone onto the market with an agent and open to other offers.

    Realistically a lot of people would take the extra 100k and lose the friend.
    Be happy that even though it’s annoying and uncomfortable, your friendship should survive it because you are both trying to amicably work through this delicate deal that was broken.

    (If i were that friend getting the extra 100k (minus the commission for rea) id probably throw a few grand your way as an apology for the inconvenience but not everyone is like that. )

  • popsiee on 12/02/2022 - 11:35
    +3

    `^ me OP .
    This so called friend welshed on a contracted deal with you .
    I don't care how long you have had his friendship for is worth 0 and I would have taken the house that worth probably a lot more than 100k + more now .
    I can't stand #icks that you can't trust and for what a little more dough .
    You took the risk and I can assure you if the market went down , you would have got it .
    Your friend is a Slimy Worm and I would treat him as so .
    If you have the option I would continue the contract .

    • Wilson Wallace on 12/02/2022 - 13:05
      +4

      I did offer more money, much more. He said he won’t take it as it’s not worth it. The banks and individual evaluators put a 1.2 price tag on it. This main road is busy, very busy.

      He declined my extra money because he doesn’t think it’s worth it. at the beginning before we negotiated, I said 1.26, he denied it and said 1.2 is fine and that’s all I’ll ask from you.

      Yes I could have continued with the contract. My solicitor said I can still enforce it. However, I’m just not that person. At my age, I can only count friends on 1 hand. There will be other opportunities, many houses will be on the market, and if the market drops it’s a bonus.

      • leiiv on 14/02/2022 - 00:11

        Wait, what?? Did you actually really want the house? Why? Did you tell your friend honestly about it?

      • CalmLemons on 14/02/2022 - 01:51

        Nah don't force it. Will be plenty more properties. No worth it especially with a friend. Not talking big bucks here.

        Technically if he did sell it to you, he would still be liable to pay the agent as your contract was signed during the agents exclusive period.

  • SF3 on 12/02/2022 - 13:46
    +1

    I see friendship more valuable than money,

    Famous last words.

  • wei13 on 12/02/2022 - 14:13
    +1

    Sounds like a nice story - I'm not too sure what the issue is?

    Your friend got more money than he needed, you got to exit a house which has quite a few downsides that
    you have mentioned yourself.

    Your conversation with the friend seems quite amicable and respectful.

    Sounds like you are disappointed you didn't get a house, which you already have issues with. But there'll always be another house coming up for sale. Unless you were very desperate and needed a place urgently?

    Westpac's crystal ball currently predicts 14% price drop over 2023-24.

    • Wilson Wallace on 12/02/2022 - 14:32
      +1

      I didn’t need a place urgently, however, I did want to move closer to family. During the pandemic, I lived alone which was quite hard at the time. Living and working in a 1 bedroom unit the size of a toilet was tough, so this was kind of my gateway to get closer to family and have some more room. I will however, try to find something else, see how the market reacts, use my deposit money to reinvest back into the market somehow.

      • life is suffering on 12/02/2022 - 14:34
        +4

        You will find something nice OP dont worry

  • Wyzard on 13/02/2022 - 04:16
    +4

    I can understand the difficult situation your friend is in, and also yours. Assuming neither of you are billionaires, then choosing between a lifelong friend or losing a significant ~$100k opportunity is difficult for him while losing a house you had your heart on is difficult for you. However as you said " it’s on a main busy road, next to a cemetery and petrol station." It doesn't sound like your ideal place anyway.

    Despite previous agreement, you've offered him significantly more money and not force him into the original agreement. That's a huge gesture of respect on your side. He's turned around and said, it's not worth that much and he isn't comfortable selling it to you at the new price shows that he at least has a conscience. I'm not justifying the fact he reneged on the original deal cos I'd be very pissed off, but with $100k on the table, his predicament is just as difficult as yours. Some friendships are worth more than $100k. Some are not. You need to decide whether this friendship is worth more than $100k and it seems you've already valued the friendship is worth more.

    Having said that, empathy, friendships, brotherhood, loyalty, wolf pack, rainbows yadda yadda is all good, but as @Pegaxs said above, "I wouldn’t back out until you have 100% of any money you have paid them back in your account. If they want to cancel the transaction, let them cancel it, not you. If there are any penalties to pay, the party that cancels the transaction is the one who cops the fees."

    Sorry I don't have black or white advice here, but just food for thought. You both sound like decent people so hopefully your friendship trumps this awkward situation.

  • funnysht on 13/02/2022 - 23:40

    Why you don't do business with friends..but this is kind of diff. But just ask for your money back and pizza and forget about it.

    Tip pizza I'd for eating not throwing it at his face

  • pompompom on 13/02/2022 - 23:52

    Firstly why would you spend over a million dollars and chose to live next to a cemetary and on a noisy main road. Imagine watching funerals or ppl morning every other day across from your window or while going for a jog.
    Secondly why the hell is the land next to a cemetery valued at 1.3 million.
    These house pieces are going absolutely bonkers. You know what they say, it all works out for the best. You dodged a bullet there.

    • leiiv on 14/02/2022 - 00:13

      Beside psychological reasons, what are the downsides of having to live next to a cemetary?

      • pompompom on 14/02/2022 - 08:31

        The ones I mentioned above. Property value depends alot of the view. A property with a sea view will usually cost significantly more. Similarly an identical apartment facing the backside of another appt building will cost significantly less while there is no apparent downside to living in one.

        The question is why would you want to be constantly reminded of death day in and out, and watch ppl mourning esp when you spent over a million dollars for a property.

      • bmxr on 14/02/2022 - 10:19
        +1

        We have lived near cemeteries for about 6 years. It's great, the community uses them like a park, a nice passive green space to walk, ride bicycles and walk the dog. Mourners and people having ceremonies seem to like that people enjoy being there for other reasons than grieving.

  • MagicTsukai on 14/02/2022 - 00:16

    whose going to pay your conveyancer fees if you back out?

  • garetz on 14/02/2022 - 02:37

    What if the 1.3 million bid falls through, and your friend cannot find someone else to buy it at the 1.2 million mark, then accept 1.1 million and then sue you for the difference because you reneged on your contract.

    Doing what they ask leaves you open to litigation.

  • afah0447 on 15/02/2022 - 14:09

    Ask for a $1k sweetener for all the stuff around. He will still be $99k better off so it's really not much to ask.

  • jv on 15/02/2022 - 14:21

    but what would most of you had done?

    What does the contract of sale say?

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