Paying Cash for Property after Agreed Settlement Period after Auction?

Pepperchicken on 19/08/2024 - 09:34
Last edited 19/08/2024 - 17:08 by 1 other user

Hi all, I recently bid at an auction, it passed in and I won due to my shorter settlement period (45days).

I needed a LVR of ~40% then. However few days after I signed the contract, Family has offered to cover the 40%, and I essentially do not need a loan.

Now that I have the cash to settle even faster, would it be worth it to ask the Vendor for a discount? I haven't spoken to my solicitor, so not too sure if there are any implications since the contract is signed with the stipulated settlement date and price.

What do the community think?

Cheers

EDIT : It seems many of you are thinking I am asking for a cash discount lol. It is more the fact the earlier settlement than agreed.

Financial

Comments

  • Gunnar on 19/08/2024 - 09:38
    +15

    Yes and no

    Yes, you can ask

    No, Please don’t get your hopes up, esp. for the discount

  • Duckie2hh on 19/08/2024 - 09:38
    +9

    would it be worth it to ask the Vendor for a discount?

    Contract already signed. I imagine it would be messier to amend the contract now.

  • Seraphin7 on 19/08/2024 - 09:41
    +3

    Highly unlikely anyone is going to entertain a discount at this stage. By all means, you can try, but …

    • ATangk on 19/08/2024 - 18:25

      Not sure anyone is going to enjoy counting all the cash… It'd cost more than transferring…

      • CommuterPolluter on 19/08/2024 - 19:02

        Presumably it’s cash in the bank lol.

  • apu on 19/08/2024 - 09:43
    +5

    Very unlikely they would accept a reduced payment unless they were super keen to get the money (i.e. they were paying bridging finance at a very high rate of interest). If you think if of it in the eyes of the vendor, why would I accept less money unless I really needed it?

    Plus, the vendor may have already made plans to move out, settle etc. which may not make it worth the bother. Plus, you already have a signed contract with terms.

  • payless69 on 19/08/2024 - 09:46
    +1

    Yes, pricebeat!

  • boomramada on 19/08/2024 - 09:48
    +1

    Seller probably worried about the chargeback lol

  • KaTst3R on 19/08/2024 - 09:54

    It is risky for everyone to resigned a contract just to reduce the price slightly. Unlikely scenario but they could "accidentally" include a term in the new contract that is unfavourable to you and your lawyer didnt catch that.

  • RockyRaccoon on 19/08/2024 - 09:57

    Only if you threaten to pay them the 40% in small bills…

    In reality unless someone has a need to hide funds your "cash" or the Banks "cash" is exactly the same.

  • JimB on 19/08/2024 - 10:11
    +2

    If I was a vendor and agreed on a short 45 day settlement and the buyer wanted even shorter, I'd consider it if you gave me additional money.

    There's too much paperwork for everyone.

    Congrats on the new house.

  • rambao9 on 19/08/2024 - 10:12
    +6

    They wont discount because you're paying cash? You've already agreed to pay xx amount. Doesn't work like a restaurant / market unfortunately

  • JIMB0 on 19/08/2024 - 10:16
    +2

    Pointless asking here. You need to ask the vendor about an early settlement. It might not be possible if they have nowhere to go. On the flip side they may have already moved and settling early would be financially advantageous to them. Them sharing some of the savings is at their discretion and also a matter for you to discuss with them.

  • garetz on 19/08/2024 - 10:18
    +1

    Auctions are set in stone, they have no reason to discount the price after the fact. Even if you pay 40% cash, they will get cash from the mortgage anyway, so for them there is really no benefit either way. If i was you i would get an offset account on the loan, put in the cash, and you can use it as you want.

  • Dollar General on 19/08/2024 - 10:19
    +2

    Pay cash pay less is The Good Guys not Australian property

  • EightImmortals on 19/08/2024 - 10:19
    +2

    Why you need discount?
    How much interest is your family charging you?

  • star-ggg on 19/08/2024 - 10:20

    You can ask for early settlement if you want but nobody cares what tender you use to settle with.

  • dtc on 19/08/2024 - 10:29

    Its a contract, it can be varied. If you dont ask you wont know. People are getting wrapped up around the 'cash discount' implication but what you are offering is earlier settlement. That might be worth something to the right vendor or it may not.

    Even if it is, the discount would probably be (at most) something like 50/50 on the interest they will save by an early settlement (there is no benefit to them in giving you the entire saving because otherwise they can just wait until the agreed settlement date and it wont cost them any more)

    Assuming their bank and other admin arrangements can be changed. For example, if they have already asked for water meter readings then it might cost to change the date of the reading.

    There is nothing wrong with asking if they will give a discount if you settle in 30 days rather than 45. Sure the amount might be a few $100 but people on ozbargain go nuts on a 50c saving…Perhaps you even make the offer yourself - will they give you a $250 discount if you settle on day 30

    Chances - low. Potential - for sure you can do it

  • Subere on 19/08/2024 - 10:29
    +2

    From the vendor perspective, cash doesn't make a difference. They get the full amount regardless if it's from a bank/loan or in a briefcase or direct deposit. It's up to the purchaser to source the money whichever way they can. Vendor doesn't care and just wants the money to appear in their account on the settlement date.
    The no loan is to your benefit, vendor couldn't care less.

  • DingoBilly on 19/08/2024 - 10:36
    +4

    You can always ask.

    As a vendor though - you've signed a contract with me for $500,000 or whatever.

    If you pay me in cash, or you pay me via a bank loan I still get $500,000.

    For bringing the settlement date closer by 15-30 days, reducing the price as a vendor means I'm then losing money in order to go and re-sign a few documents and scan them in etc., just to make something a bit quicker. Not really worth it.

  • jv on 19/08/2024 - 10:39
    +1

    would it be worth it to ask the Vendor for a discount?

    why?

    will it decrease their costs?

  • freefall101 on 19/08/2024 - 10:47

    Unless they really pushed you for 15-30 days as part of the negotiation, they're probably happy with 45 days. Had they already moved into a new home or was it still pending?

    Realistically, I wouldn't bother. Even if they have a million dollar bridging loan at 10% it's $4k to knock 15 days off it. Considering the agent won't want to do it, it'll mess with whatever timelines they've already setup, it's probably not worth it for anyone to do. I'd just stick the extra cash in whatever interest earning accounts you can for the next 45 days.

  • MarsTitan on 19/08/2024 - 10:50
    +1

    If the property is for investment than I would suggest you still take out the loan and put the "gift" money in the offset account. Even if it is a PPOR, I will advise to do the same. In both cases you do not pay any interest and some banks will give you cashback (e.g. ANZ) for taking out a loan. This way you will get some money and can actually keep churning to different lenders to get more cashbacks in future.

  • altomic on 19/08/2024 - 10:57

    but….cash is king!!!

  • capslock on 19/08/2024 - 11:05

    You can do a separate deal with the vendor outside of the contract. Ask them to pay you a small amount in exchange for an earlier settlement. Not sure why they would say yes unless bikies were chasing them for money and they need the money urgently.

  • overthinking on 19/08/2024 - 11:13

    you're way better off going to propertychat.com.au for this one….

    or just go straight to your solicitor!

  • elgrande on 19/08/2024 - 11:20
    +1

    Lol.

  • DashCam AKA Rolts on 19/08/2024 - 11:26
    +2

    Why would the vendor want cash? It is of no benefit to them in a property settlement. This isn't a Marketplace deal for a 2nd hand iPhone, or a Gumtree deal for a 2002 Corolla.

  • Pepperchicken on 19/08/2024 - 11:39
    -4

    I guess there are some misunderstanding to the question,
    The "discount" is not because it is paid in cash, but because its earlier settlement than agreed.
    It is a PPOR if it helps

    • JMosk on 19/08/2024 - 11:46
      +1

      The only way to know is to ask. Noone here will be able to tell you if the vendors will say yes or no.

  • Subere on 19/08/2024 - 12:11
    +2

    As a vendor, I'd wait the 2 weeks for the agreed price and not entertain a discount at all. Why would I want to lose money?

  • tsunamisurfer on 19/08/2024 - 12:33
    +1

    Put yourself in the vendor's place.

    Would you want to give up thousands of dollars just to fast forward a couple of weeks?

    Worse, you're probably thinking ten of thousands.

    • boomramada on 19/08/2024 - 13:16

      for $1m loan as an example, more like $2k discount for 14 days. OP can keep the money in the bank for 14 days and save $2k lol

      Family has offered to cover the 40%

      I assume, parents, which mean OP has to stuck with the parents for another 14 days lol

  • eek on 19/08/2024 - 13:19

    You'll have to provide the vendor with some kind of upside. Hard to say really. Also given the time frame, pushing settlement forward isn't that big of an incentive (personally). I've pushed settlement of some of my residential properties out to 3 months because I was traveling around Europe on vacation for 2 months. Really depends on specific circumstances of the vendor. No harm in asking…but I couldn't be bothered messing around with an executed contract.

  • Trying2SaveABuck on 19/08/2024 - 13:42

    You can ask and they will 99.9999999% say No

    I dare say the agent wouldnt even pass that question to the Vendor a good agent would just so No the vendor is happy with the current deal

    There is no reason to provide you with a discount, paying cash or you getting a loan doesnt benefit the vendor, the fact you think it does is a bit strange - good on you for having family covering you i wish someone would do the same for me

  • CurlCurl on 19/08/2024 - 14:11
    +1

    Seriously! Some people.

  • Lunarboogie on 19/08/2024 - 14:14
    +2

    This community member thinks you're a fool for even dreaming this scenario up.

  • Tee Rex Arms on 19/08/2024 - 14:22

    Cmon be real it’s not like it’s the good guys or somewhere pay less pay cash Fark me

  • TheMindsetTraveller on 19/08/2024 - 15:11

    Unless the vendor needs funds quick or has commitments elsewhere, then I doubt a vendor would want you to entertain a quicker settlement for a discount.

    If you are keen, you can tell the vendor you can settle earlier which I think they would entertain.

  • ihbh on 19/08/2024 - 16:06

    Now that I have the cash to settle even faster, would it be worth it to ask the Vendor for a discount?

    Worth a try, but the vendor might have to pack up and empty the place, and need all of the 45 days.

    Whatever the case, tell your family you need the cash now. Put it in the safest, highest deposit you can for however many days. Even if the vendor says yes, compare the discount to the interest you can earn and go from there.

    • Ponsonby on 19/08/2024 - 17:40

      OP is very fortunate to have family stump up 40%. If I was the family, I would supply my generous gift at settlement and no sooner. It is for the house, not anything else.

      • ihbh on 19/08/2024 - 17:42

        1. He's just earning interest to save some down the track.

        2. If you were him, you want to make sure you've got it in your hands well before the settlement date, in case he needs to apply for a loan.

  • Brianqpr on 19/08/2024 - 17:45

    Contract price would be binding I would think, therefore no discount. The discount is not having to pay loan interest, be thankful for that.

  • MrThing on 19/08/2024 - 19:01
    +1

    lol a discount

    I wouldn't even give you the time of day to respond, just be radio silent until settlement day

  • JimmyF on 19/08/2024 - 19:02

    Now that I have the cash to settle even faster, would it be worth it to ask the Vendor for a discount?

    You can ask, but there is no 'cash' discount. This isn't the local Asian eatery, the vendor isn't paying 'credit card' fees.

  • wordplay on 19/08/2024 - 19:24

    tell the seller you will find another joint if they don't lower the price for cash. tradies are knocking off 15% for cashies without a receipt or warranty. I would expect at least a 10% discount on a house for cash, get rid of the middle men agents and conveyors and you have saved them and you a packet. may need to bring a couple of mates to make sure you keep an eye on them counting the money.

    country is stuffed if we don't use cash for these everyday type transactions.

Login or Join to leave a comment
Login Join