Selling Untitled Land

Lordarainyday on 14/02/2024 - 11:57
Last edited 14/02/2024 - 12:16 by 1 other user

Hi beloved OzBargainers, help please.

Currently renting and building a house and moving into the property in April this year. I purchased land in Victoria in 2021 and paid 10% deposit = $37100 for land only 313 mts which will get titled shortly in 4 weeks March 2nd week and unfortunately won’t be able go ahead.

Advice from my conveyancer- The only option is finding someone where I can nominate them to take over - so no headaches or lose the entire money.

Advice from the real estate agents- As above what the conveyancer has advised as due to interest rates being really high - the price of the land for 313 mts is now close to $305k to $345k.

Advice from my lender- Nominate or settle the loan and wait for the right opportunity to sell it in the future or build a house and sell.

Could anyone please advise or have been in this unfortunate situation and what’s the way around it?

Thanks for your valuable output and hopefully no one gets into a situation like in this in the future and lose money ☹️

Home & Garden

Comments

  • Duckie2hh on 14/02/2024 - 12:01
    +5

    unfortunately won’t be able go ahead

    why?

    • jv on 14/02/2024 - 12:38
      -2

      why not?

    • Nugs on 14/02/2024 - 14:34
      +2

      it's a rainy day and they didn't save enough
      .

      • TheRealCher on 14/02/2024 - 17:18
        +11

        The dude whose friend owns a damn might want to trade

        • kiitos on 15/02/2024 - 08:17
          +4

          Only if he gives a damn.

    • JIMB0 on 14/02/2024 - 15:26

      Most likely they don't have a spare $65k lying around like most ozbargainers do.

  • pegaxs on 14/02/2024 - 12:05
    -6

    *Advice from…

    And you paid $371,000 for 313 square metres of land? Holy shit. That's part is the robbery. My place sits on a 600 square block and I can just about jump from fence line to fence line… and yours is half that size?

    Read your contract and seek advise advice from a lawyer on where you stand.

    • jv on 14/02/2024 - 12:40
      +12

      My place sits on a 600 square block

      Holy shit. That's part is the robbery. My place sits on a 800 square block and I can just about jump from fence line to fence line… and yours is three quarters that size?

      • joker0701 on 14/02/2024 - 12:48
        +2

        Holy shit. That's part is the robbery. My place sits on a 1700 square block and I can just about jump from fence line to fence line(im a giant)… and yours is half that size?

        • mapax on 14/02/2024 - 14:31
          +1

          Holy shit. That part is the robbery. My old place sat on a >60702846 square block and I couldn’t even see from fence line to fence line… and yours is that size?

          • TheRealCher on 14/02/2024 - 17:19
            +5

            @mapax: Luxury. Back in my day, my father made the land sit on us, jump the fence 27 kilometres a day, and then we had to appear on a reality tv show influencing our peers, all without Instagram. But you try telling young kids that today…

            • mapax on 14/02/2024 - 17:29
              +1

              @TheRealCher: It was pretty luxurious living on 6000 hectares, the nearest neighbours were over 5km away.

      • Lordarainyday on 15/02/2024 - 06:34

        The land I have bought is close to the bay

    • Hardlyworkin on 14/02/2024 - 12:47
      +3

      Many places in Vic where $371 isn't that much for a half size block. Personally, I'd rather a half size block in a great spot than a full block in the ghetto. Not saying yours isn't in a great spot however!

      • jv on 14/02/2024 - 12:55
        +5

        I'd rather a half size block in a great spot than a full block in the ghetto

        "And his mama cries…"

        • TheRealCher on 14/02/2024 - 17:22

          So what kind of side dishes are we going to enjoy this evening with our waffles?

          • jv on 14/02/2024 - 18:41
            +1

            @TheRealCher:

            with our waffles

            "'Cause if there's one thing that she don't need
            It is another hungry mouth to feed…"

            • TheRealCher on 14/02/2024 - 18:44

              @jv: You share that waffle with your friends JV!

              • jv on 14/02/2024 - 18:54

                @TheRealCher: Too many carbs…

                • mapax on 14/02/2024 - 18:59
                  +1

                  @jv: I’ve never actually tried them, but I could bring keto chaffles to the next goat sacrifice.

                  • jv on 14/02/2024 - 19:00

                    @mapax:

                    I could bring keto chaffles to the next goat sacrifice.

                    Game changer !!!

                  • TheRealCher on 14/02/2024 - 19:00
                    +1

                    @mapax: I'll bring the cheesy poofs

        • Thrift on 15/02/2024 - 00:03

          Sick of blowflies
          On a cold and gray Victorian mornin'
          A poor Lordarainyday is gone

  • angelkulit025 on 14/02/2024 - 12:06
    +2

    Nominate, if you can find someone who will take over. If you settle the loan and decided to sell later, consider a few things:
    * you will be charged capital gains tax on the land (CGT), plus commissions top agents which will end up pretty much the same as foregoing your 10% deposit.

    *paying for a house + your vacant land might constrict your budget.

    • JimB on 14/02/2024 - 12:30
      +2

      you won't be paying CGT if you're selling at a loss.

      You will paying stamp duty which you will never get back.

      OP, sorry to hear, I would be speaking to a few more agents ASAP and listing it before settlment.

      Why can't you settle?

      It appears that your lender will allow you to settle?

      • ifyareckon on 14/02/2024 - 13:31

        Won't pay stamp duty if nominating another party to settle as the ownership of the land hasn't changed hands.

        • JimB on 14/02/2024 - 13:52

          Correct, I meant, if you settle and then sell.

    • zathras on 14/02/2024 - 13:09

      He probably won't have to pay CGT, that is only paid if you make a profit (sale price minus the purchase price and all costs). And even so, after 12 months of holding the land, the tax on profit is halved anyway, so less than 23% tax on the profit if you are in the top tax bracket.

      • djkelly69 on 14/02/2024 - 13:21

        Land isn't titled yet so OP hasn't actually held it at all, they just have a contract to buy it.

  • geekcohen on 14/02/2024 - 12:13
    +1

    Your conveyancer is right, you need to find someone to take over the land and just get your deposit back, you won't really be able to make money from it and take a higher fee for it.

  • bargaino on 14/02/2024 - 12:24

    Does the contract limit your liability to the 10% deposit?
    Ordinarily if you break a contract you are liable for actual costs, which may mean a partial refund of deposit, or a demand for more money, depending on the sale price and extra costs.

    • angelkulit025 on 14/02/2024 - 13:15

      do you think land developers will go to this avenue and spend more rather than reselling, i don't think so

      • mskeggs on 14/02/2024 - 13:37

        If the selling price now is $305k the developer would be a fool not to demand OP cover the loss.
        Why should the developer take a $28k loss because OP won't fulfil their agreement?

        • angelkulit025 on 14/02/2024 - 14:47

          i don't see a $28k loss on the developer's part here as their taking OP's 10% deposit and reselling the land to someone else. More like gain, gain here instead of going to a lengthy mitigation just to make OP cover their losses.

          • mskeggs on 14/02/2024 - 15:45

            @angelkulit025: If the land can be sold for $305k, and the developer was getting $371k, they are worse off with just the deposit.
            If the land can be sold for more, the load won't be as great, but the real estate agent has no offers, just gave their estimate.
            It isn't in the agents interest to give a low estimate, they would over quote rather than under.

            • angelkulit025 on 14/02/2024 - 15:51
              +1

              @mskeggs: i understand your viewpoint but just stating what we have experienced last year with one particular builder going into administration. To make the story short, we decided to forego our deposit as there wasn't much time for a nomination to happen. Developer's lawyers sent us a rescindment notice and that's the end of the contract. They have kept our deposit and we both moved on our own ways. We have asked our conveyancers that question regarding breach of contract and going to court but they (conveyancer) said, they wouldn't go for small fries like first home buyers and residential customers so just sharing from my own personal experience.

        • ihbh on 14/02/2024 - 17:35

          Yes, in financial markets parlance, the contract is a forward contract. The developer doesn't care what the future market price is, it's fixed for them and the buyer.

          E.g. If the market value increased, the developer can't demand the difference to market value.

  • Almost Banned on 14/02/2024 - 12:31
    +1

    First thing is to check your contract. Does it give you the right to assign? Does it specify any limit on damages if you back out?

  • jv on 14/02/2024 - 12:36
    -3

    will get titled shortly in 4 weeks

    Which font ?

    • Sammy2000 on 14/02/2024 - 12:58
      +3

      Wingdings?

      • jv on 14/02/2024 - 13:01
        +3

        For the Wing !!!

  • ifyareckon on 14/02/2024 - 13:36

    Best bet is nominating someone else to take over the contract prior to settlement. Given the drop in the market, any sale after settlement is likely to be less that what you paid with the addition of various fees mentioned in posts above.

    • mskeggs on 14/02/2024 - 13:45
      +1

      If the value has fallen, who will take it over if there are other blocks selling 10% or 20% less?

  • Lordarainyday on 14/02/2024 - 13:55

    Thanks guys - will look into the contract and get I. Touch with the developer to see what are the penalties of breaking the contract and research

  • Brick Tamland on 14/02/2024 - 14:44

    No sunset clause, seems live a very long time has passed since signing contract

    • netjock on 14/02/2024 - 16:29

      Thought it was a good deal at the time and land + house prices only goes up

  • netjock on 14/02/2024 - 16:33

    Advice from my lender- Nominate or settle the loan and wait for the right opportunity to sell it in the future or build a house and sell.

    You need to calculate this.

    If you settle an empty block of land will just attract fees and loan repayments.

    If you are going to build on it, can get it done quick and flog it off to get your capital back if not at a profit then consider yourself lucky. But you need to get on it pretty quickly with whether you can get a construction loan and it is worth the time and effort to do it. Get quotes from builders quick smart. If someone is building nearby get onto those builders as many jobs in the same estate makes things cheaper (travel and getting labor onsite).

  • No user info on 15/02/2024 - 08:42
    +1

    What location in vic where land has dropped 20%?

  • Lordarainyday on 15/02/2024 - 11:59

    Geelong area

  • Lordarainyday on 15/02/2024 - 12:00

    Will be meeting the sales agent for the untitled land and keep the ozbargains posted
    Hopefully I have positive news

  • Lordarainyday on 19/02/2024 - 11:26

    Latest update

    Spoke with the developer and options below

    Extension can be provided in order to settle the land from the developer however, if the bank refuses the loan - then we lose the 10 percent deposit

    Lender. - advised to take a loan for the land and settle it rather than. Lose the 10 percent already paid

    Currently lender working on the number to see my eligibility

    Wondering even if it’s worth taking the loans and be more stressful as we need to still find a builder and get a house built and either sell it or rent it out in The future

    No idea what to do

    Worst case scenario- lesson learnt - walk away and lose the 37k. Or take. Loan and get even more stressed if the interest rates keep going high

  • Lordarainyday on 28/02/2024 - 08:31

    Lender got valuation done from bank
    Bad news - land just valued at 310k
    So I need to source around $110 k from savings to just settle the land

    Only option right now is to nominate someone to take over

    Looks like I have lost the 10 percent deposit

    No sure if any ideas out there

    Please help thanks

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