The sellers who were slammed for pocketing a couple’s $75,000 deposit say they are “devastated” after an unexpected cost from the debacle.
The Queensland house sellers who were branded “greedy” for taking a young couple’s home deposit have revealed they didn’t end up making a huge profit after all.
The couple – who insist they “did nothing wrong” – were set to walk away with an extra $140,000 on their Brisbane property sale after keeping the buyers’ deposit and then reselling the house for an extra $65,000.
But instead, they told news.com.au they ended up with almost nothing.
Last week, news.com.au reported Mark Trau, 30, and his fiancee Maddie Goyder, 27, lost their entire $75,000 deposit after their bank, Westpac, missed the settlement deadline of the Jindalee property they wanted to buy.
Although Mr Trau and Ms Goyder made two pleas for an extension on the looming due date of October 20, first for a week and then a single day, both were rejected.
Less than 24 hours later, at 11am the next day, Westpac was ready with all the paperwork.
By then, it was too late. The vendors, a retired couple who have since moved to Western Australia, terminated the contract and took the deposit, as they were legally entitled to do.
They then resold the four-bedroom, two-bathroom house within hours of the deal falling apart for $65,000 more than what Mr Trau and Ms Goyder had offered.
However, the retirees have now told news.com.au their profit was minimal because of various commissions, fees and a legal caveat placed in the contract.
“The [real estate] agent’s commission, advertising costs, staging costs and legals amounted to approximately $34,000 for the defaulted sale,” the vendors told news.com.au.
“We also had to pay real estate agents and solicitors costs for the second sale (these amounted to approximately $29,000).
“Agents commission was 2.7 per cent for both the defaulted sale and the second sale meaning we paid over $50,000 in selling costs.”
The sellers also claim they lost “tens of thousands” more on additional legal fees as they had to prepare for a Supreme Court hearing to remove a caveat over the property lodged by the buyers which could have blocked the second sale.
Mr Trau and Ms Goyder offered $965,000 for a four-bedroom, two-bathroom house in the Brisbane suburb of Jindalee where they planned to start a family.
However, it didn’t look like Westpac would be ready for the settlement date of 5pm, October 20.
Mr Trau made “a number of frantic calls” and pleaded with the sellers but in the end the sale fell through.
In most other Australian states a two-week grace period is given if a settlement goes under, but not in Queensland.
The sellers took the full $75,000 deposit, leaving the younger couple homeless for several days, and sold to somebody else.
Hours after the contract collapsed, the house was marked as being sold on a real estate listing for $1,030,000 – $65,000 higher than Mr Trau and Ms Goyder’s price.
On October 29, nine days after Mr Trau and Ms Goyder lost their dream home, they lodged a caveat on the Brisbane property.
A caveat is a legal document which protects the interests of the buyers by preventing the property being transferred to anyone else for three months.
Professor William Duncan, an expert in property law at the Queensland University of Technology, said a caveat is a usual practice when there’s a dispute over a property matter and they plan to litigate.
“This is a typical reaction of a buyer who feels wronged,” he explained.
The nature of the caveat means it can only be removed in the Supreme Court, which is very expensive.
With their new buyer needing to settle the property on November 10, the vendors had no choice but to prepare for court action rather than waiting for the caveat to expire.
If they hadn’t, the new buyer could have sued them for having to renege on that second contract.
They ended up having to pay for solicitors and a barrister on standby.
“This was devastating to us as it meant that we were now faced with the prospect of potentially being sued by the second buyer as well as being unable to progress any purchase of our own,” the sellers wrote.
“We were left with no option but to pursue legal action. The process to remove this caveat was extremely stressful and expensive leaving us significantly out of pocket to the tune of tens of thousands of dollars.”
Prof Duncan said that the costs of a solicitor when a selling house with no legal complications are usually around $1000-$1200 — something which the sellers had probably counted on when they chose to terminate the contract.
“I probably would have tried to talk them into giving the [one-day settlement] extension,” Prof Duncan said.
“Normally the sellers would have given them [Mr Trau and Ms Goyder] two more days to settle, but they likely did the sums [and thought] if they don’t settle on time, they can get the $75,000 and then the $65,000, they’re ahead.”
He said the sellers had got their “comeuppance” because: “They might have only got a small benefit out of it [choosing to end the sale], enough to only buy the patio furniture.”
The sellers have stressed to news.com.au that they did not decide to terminate Mr Trau and Ms Goyder’s contract in order to make money and said they had “been very accommodating throughout the transaction”.
“We have acted more than fairly to the couple at all times,” the sellers said in a statement.
“There was no other contract when we made the decision not to extend. This decision was based on legal advice and their repeated inability to meet deadlines which was a constant feature throughout this whole process.”
The sellers had previously granted two exemptions to Mr Trau and Ms Goyder at the financial clause stage – which is where the property purchase only goes through provided they get approval for a bank loan.
The sellers added that they “were devastated at this eleventh-hour request as were due to fly interstate the very next day and our beloved pet and all our worldly possessions had already been packed and sent. We had also intended to use this money to settle on a purchase interstate”.
The older couple said they had retirement plans that were up in the air as a result.
Professor Duncan said this case called to attention the fact that Queensland’s property laws may need a major rethink.
“In a sense, it is sudden death in Queensland. The time of the settlement is critical in Queensland,” he said.
He said the 14-day grace period given in other states “saves this kind of this thing from happening. Little things can go wrong, which is not the fault of either party”.
In other states, it takes a little longer to settle, between six to eight weeks compared to four or five weeks in Queensland.
“The law in NSW (and other states) is probably a little better,” he said. “I see nothing wrong with a longer period. This has been talked about on and off for years.”
Westpac agreed to reimburse Mr Trau and Ms Goyder as they acknowledged they had made a manual processing error.
This week, Mr Trau and Ms Goyder were given $100,000 by the bank. The cost covered the deposit as well as their solicitor fees. The bank also factored in $5000 each for the stress and anxiety it caused them over the last few weeks.
A Westpac spokesman said in a statement to news.com.au: “We apologise for the experience this couple had while trying to buy their home.
“We’ve done a review of this case and worked with our customers to quickly resolve the issue and put it right.
“While we are limited on what we can say due to privacy, we will continue to work with our customers to support them as they look to buy a home.”