Imagine thinking you’ve just snared the deal of a lifetime – a property for a fraction of its worth, secured with a handshake and a swift deposit.
For one Aussie investor, that dream quickly unravelled, leaving him out of pocket and with a stark warning for every homebuyer chasing a bargain in Australia’s red-hot property market.
Seasoned property investor Charles Corby believed he’d hit the renovator’s jackpot when he stumbled upon a charming character weatherboard house in Moree, regional NSW.
It was oozing with potential, as for the price? A jaw-dropping $50,000 – well below local market value.
Property data shows the house last sold in 2001 for $77,000, but could be worth somewhere between $189,000 and $278,000, based on similar sales within the area.
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“The seller had inherited the property and agreed to offload it to me under a gentlemen’s agreement. He said he didn’t want it and was keen for a quick cash sale,” Mr Corby recounted.
“We agreed on terms, his solicitor sent us Trust account details, and I paid the 5 per cent ($2,500) deposit into the solicitor’s trust account that same day.
“We then waited for the signed contract to be returned by the vendor’s solicitor – but it never came.”
Seasoned property investor Charles Corby believed he’d found a renovator’s jackpot when he stumbled upon a character weatherboard house in Moree, regional NSW, brimming with potential.
He swiftly made an off-market offer to a seemingly motivated seller, securing the property for a mere $50,000 – well below typical local prices.
However, the seller ceased communication and ultimately refused to proceed with the sale, even after Mr Corby (pictured) doubled his offer to $100,000.
Despite weeks of persistent follow-up, the seller went silent.
Then came the bombshell: they refused to proceed with the sale, even after Mr Corby, desperate to salvage the deal, doubled his offer to $100,000.
“Eventually the seller’s lawyer apologised and said that her client had instructed her to terminate the agreement and that she would have to refund us the deposit, which we are still waiting for,” he explained.
“It’s a good reminder that until contracts are formally signed and exchanged, buyers have very little protection, even if money has already changed hands.”
Mr Corby’s experience highlights a critical, often overlooked, trap in the pursuit of a property steal.
The veranda of the weatherboard home.
While the allure of an off-market deal or a direct-to-seller negotiation can seem like a shortcut to savings, it’s fraught with peril.
He noted that he’d already purchased supplies for the project, impacting his cash flow, a common scenario for buyers who jump the gun.
“Many may commit to additional costs, like buying furniture, booking removalists, or even selling their existing home – only to have a deal fall through if the seller doesn’t proceed,” he said.
“While it’s not common, it’s a very real risk,” he warned, particularly for first home buyers and less experienced investors.
The legal tightrope: When a signed contract is your only shield
So, what happens when a deal does go south, even after contracts are signed?
Mr Corby’s lawyer, Adwar Alkhamesi, sheds light on the legal protections that kick in once paperwork is formally exchanged.
“Once a contract is unconditional and signed by both parties, the seller is legally bound to complete the sale,” Mr Alkhamesi clarified.
“If a seller simply refuses to settle, the buyer does have legal options to enforce the contract.
“The first step is to issue a notice to complete once the seller defaults and then taking further action. It may vary slightly from state to state but in NSW, after 14 days of issuing a notice to complete and the vendor not complying (provided the purchaser is ready, willing and able to complete), the purchaser can terminate the contract and sue the vendor.”
The kitchen.
Mr Alkhamesi added that the primary legal remedy was “specific performance,” where a court can order the seller to complete the sale as agreed, potentially alongside damages for breach of contract.
“Realistically though, it usually doesn’t get all the way to a final court order,” he said.
“What typically happens is the buyer’s lawyer will issue a formal notice to complete and, if the seller still refuses, commence legal proceedings. The threat of court action and the potential costs involved usually brings the seller back to the table fairly quickly and the parties 99 per cent of the time will work things out eventually.”
The home has seen better days.
Alternatively, if a buyer decides enforcement isn’t practical, they can terminate the contract and pursue damages for their losses.
This could include legal costs, valuation and lender fees, building and pest inspection costs, and in some cases, the difference in value if they’re forced to buy another property at a higher price.
“While you can’t physically force someone to sign documents on the day, once signed and exchanged, the law does give buyers strong remedies to compel the sale or recover their losses if a seller refuses to complete,” Mr Alkhamesi concluded.
The ‘sunrise clause’ nightmare: A $1.2 million lesson
The perils aren’t limited to off-market deals.
Queensland retiree Daniel Sinclair also recently learnt a brutal $1.2 million lesson about the hidden dangers of off-the-plan purchases.
He’d signed for a three-bedroom apartment in Brisbane’s Ruby Ruby development for $2.6 million.
But just days before Christmas, his contract was terminated under a “sunrise clause” – a developer’s escape hatch allowing cancellation if construction doesn’t start by a set date.
He was then asked to pay a staggering $3.8 million for the same unit.
Mr Sinclair’s experience is a chilling reminder to scrutinise every line of an off-the-plan contract.
“The sunrise clause is really called ‘latest date’. If it’s more than a year in the future then don’t sign,” he warned.
“Do not buy off the plan unless a builder is in place, and place a clause that if the builder pulls out then you can too.”
He acknowledged the Catch-22 many buyers face: “Trouble is you want to buy early to get the best apartment at the best price, so you are stuffed either way.”
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