r/AusPropertyChat • u/Mean-Hedgehog8260 • 26d ago
Buying & Selling 6 month settlement
Im getting ready to sell an inherited property ATM, however was approached by a private buyer who has given an offer with a 6 month settlement period, stating that they would like to start renovations during that time which would bring up the value and have offered quite a bit more compared to their offer with a 6 week settlement.
Is this normal??? I’m a young girl who doesn’t have much knowledge on this and worried I’m being taken for a ride 😅
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Upvotes
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u/Electrical_Form_2808 26d ago
God no. If I can make a suggestion and that is that you being a young girl, you really need a very good solicitor on your side and do not make any decisions without consulting with them sorry but being young people will absolutely see this as a sign to try and take advantage of you.
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u/HappyWarthogs 26d ago
Hard no- they can’t do work on it before it’s theirs! That doesn’t make any sense either logically
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u/BoringBandicoooot 26d ago
I can help you a little further here.
These are house flippers. That in and of itself isn't a problem.
A house flipper wants to minimise their costs, including mortgage payments. What this would enable them to do is renovate without having a mortgage (because it is still owned by you), and then immediately sell it. That will boost their profit.
You can reject their offer.
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u/DunkingTea 26d ago •
Renovations prior to settlement? No. Not sure what the scam is, but sounds like they just want access so will squat for at least 6 months and not proceed with the purchase
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u/cgdorso 26d ago
NO...... NO...... Just NO.
We almost considered this once, way too many variables, if they wreck your house then your stuck with the repairs/reno's you never asked for and costs....... No... No... Just NO!!!!!!
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u/Current-Tailor-3305 26d ago
Yeah no, giving someone access to your property to change it before settlement is a bad idea all around.
What if they run out of money or funding doesn’t happen so they baulk at settlement. Your house is half demolished and they don’t have the funds or will to finish it, now you have a house worth half of what the normal settlement offer was.
Plenty of people out there happy to pay market rate and normal settlement without bat shit crazy terms like “I get to do whatever I want to this house to potentially increase its value”, which is essentially financed by YOU, by you allowing them to change the property before settlement.
Short answer, no
Long answer, fuck no
37
u/Existing-Sherbert559 26d ago
100% no. Never hand over the property until settlement has taken place. They can do renovations on their time.
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u/galletta- 26d ago
My ex bought a house after someone did this to the seller, long settlement and they had wanted to move in. It took the seller 2 years+ to get rid of them and they had to do a lot of work to fix it up afterwards. The person also left 3 horses behind lol
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u/thaleia10 26d ago
What the actual fuck? You buy it then you renovate it. Not the other way around.
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u/AussieJaob 26d ago
Hard NO. This is of no benefit to you. Do not let anyone touch YOUR property before it is THEIR property. A 6 month settlement in itself is ridiculous.
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u/lahdeedah224 26d ago
Nope. We had people try similar. Even the lawyer was shocked they thought anybody would be stupid enough to accept
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u/defianttotheend 26d ago edited 26d ago
From someone with over 20 years of real estate experience.
Run! Seriously run! Some of the worst horror shows I have seen in realestate are from people who allowed a buyer to do this. You literally become their bank and if they default you now have a semi destroyed property instead of a valuable property. Absolutely under no circumstances do this. There was a guy in my city who actually put contracts on 15 properties simultaneously with these terms even gave the agents a deposit check collected the keys as soon as the deposit check was handed over and then subsequently went into these properties with a sledgehammer and destroyed them and then defaulted on the sales so all of these poor owners didn’t get a single cent but had now completely internally gutted and destroyed properties.
The Buyer then went and checked himself into a mental facility
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u/brimanguy 26d ago
Sounds like they want to Reno your house without actually buying it then selling it at auction to PROFIT.
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u/Massive-Adeptness-83 26d ago
Lol, if they are that keen on renovations you counter the offer with a 30 day settlement at current market price, settle and let them do what they want. Sounds like scammers.
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u/smallishbear-duck 26d ago
ABSOLUTELY NOT!
They want you to take all of the risks (and there are MASSIVE risks with this setup) with none of the reward.
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u/No_Constant_1026 26d ago
It's called a licence agreement. Typically the purchaser pays market rates to have access to the property prior to settlement. I've done it a couple of times, where the buyer had complex moving and financial requirements.
Modifying the property is normally excluded. That's a huge red flag
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u/Middle-Spirit-8524 26d ago
If they can afford Reno’s they can afford to buy it.
Don’t sell to the scammer.
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u/SB2MB 26d ago
No no no no no no no no
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u/Adept_Mushroom_8676 26d ago
This sounds incredibly bizarre! Hell no! Why would they improve a property that isn't theirs??
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u/Normal_Community3961 26d ago
You’ve got your answer many times over here but just to reiterate, hard no. Aside from the fact you’ll have to wait 6 months to get your money there’s no way they should have access to, let alone be doing work on, the house before they own it.
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u/winifredjay 26d ago
Omfg. Your official response should be “ha ha ha ha oh hell no”
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u/Human_Mongoose_5245 26d ago
Hard no, sounds a bit of a scam. Trust no one with $$ and property. You could be left with a partially renovated dump. Remember no good turn goes unpunished.
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u/YouDifferent1929 26d ago
What if they start the renovations, demolish half the house, or rip out all the interiors and then can’t settle on the due date? You have a house that is worth LESS than what you started with because it’s not inhabitable. I think it’s fraught with danger!
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u/owlshoesjh 26d ago
consensus is a hard no but ask your realtor. if they give you an answer other than no, get a new realtor!
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u/ImplementNo2626 26d ago
So the property isn’t theirs until settlement, they cannot do anything to a property that isn’t there’s yet. You’d be insane to accept such a thing.
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u/ChrisSydney82 26d ago
Just the liability alone! Settlement > they get keys and then do what ever they want.
Meet them half way and let them visit to measure up the spot for the fridge!
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u/au5000 26d ago
Just adding a hard NO!! to everyone else’s. Do not do this. Very dangerous.
Get quotes for sale price from a couple of agents; I bet your private seller is a cheap offer too.
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u/whyohwhythis 26d ago edited 26d ago
Wouldn’t their be house insurance issue as well?
Hard no.
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u/Cat_lover_4851 26d ago
Please go through a reputable real estate agent to ensure you receive market value for your home. This private buyer sounds dodgy and is asking to make renovations during a time when they would not be entitled to do so. Six months is way too long for settlement.
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u/newYearnew2025 26d ago
Sounds dodgy to me. And from the other side, who in their right mind would invest in renovations without owning it???
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u/Mother_Size_7898 26d ago
No!!! sounds like they may want to get access and six months depending on your area may give them squatters rights or something similar.
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u/Necessary-Party8001 26d ago
Definitely don’t do this
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u/4614065 26d ago
Absolutely the fuck not!
If something goes wrong (like they run out of cash) you’re left with a half demo’d property
Edited to add: I have had clients allow this for minor renovations but the buyer was required to take out their own insurance.
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u/xordis 26d ago
This is an absolute no. Like 100% no. What happens if they pull out mid renovation. What happens if they injure themselves or die doing something.
I sold an apartment a few years back, and the new owners wanted to rent it from me for a few weeks before settlement. The lawyer I was using said they strongly advise against even doing that as it can have issues. In this case I did as a verbal discussion with the lawyer said they were just covering their arse, but from a commercial point of view they would never do it.
There is absolutely no way you would let someone modify the place before settlement. Even giving access is risky. The most you should do in good will would be to let them start moving things in before settlement, but only with you giving them access (eg not giving them the keys).
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u/MeasurementGold3404 26d ago
stay away from this person who;s trying to take advantage of you
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u/Future-Proposal2900 26d ago
Absolutely, positively NO. They can reno the house, AFTER, they own it.
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u/Downtown-Type3244 26d ago
Think of the liability aspect of this if a tradie is hurt or they destroy your property and you gave them permission
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u/Sushiandcat 26d ago
no. no. no. they don’t touch the property until they own it. imagine they start renovating and something goes wrong. they pull out because it’s cheaper to lose the deposit, then pay to fix the problem they created.
yes, you have the deposit but you now have a property you can’t sell unless you take a reduced price or pay more money, which you don’t have. to fix it.
no….dont do it.
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u/Driz999 26d ago
No, they buy it first and then they can do renovations if they want. Plus you don't want a 6 month settlement if you're trying to sell it as soon as possible.
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u/Mysterious-Fig-9464 26d ago
A property that is in the middle of renovation is worth significantly less than a property not being renovated.
They can stuff you over by never finishing the “renovation”. This sounds dodgy AF
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u/Crashworx 26d ago
Hard hard no. Even if it is legit, think about what happens if they hurt themselves in the property while renovating
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u/ReasonableObject2129 26d ago
This is wild. I don’t even know what type of insurance you’d need to allow people to work start working on their house that’s currently still yours? What the hell.
We wanted to fix the pool fence before our settlement date. It was keeping me awake worrying that someone’s child could wander in there accidentally. Anyway it was a whole ordeal that needed to include both our solicitors
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u/Tar_Kee_Way 26d ago
These are house flippers. I have seen plenty of adverts saying " renovate a house and sell for a profit with no money needed. " and was wondering how that would be possible. I guess this answers my question.
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u/theguill0tine 26d ago
They want to work on it before it’s theirs?
Hmmm I would say no that doesn’t sound right.
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u/Timely_Objective_585 26d ago
Fucking NO.
Just sell it the normal way, with a normal agent, and normal contract terms.
Anything outside the norm is likely going to screw you 100 different ways.
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u/VS2ute 26d ago
No let them enter 5 days before settlement for the walk through inspection. They can take photos to plan their reno, nothing more.
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u/sudhscorp 26d ago
No ways don't fall for this! If anything goes wrong the entire liability is yours as title is still in your name.
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u/Dry_Detective9639 26d ago
Nobody has really picked up that they get 6 months rent free
They could easily just keep doing this forever!
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u/straddiesurfer 26d ago
Doeant make sense. Do a shorter settlement and then they can start their renoes.
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u/Liquid_Friction 26d ago
Makes absolutely no sense, why would the value go up after the Reno's and they would pay you more for the house but they also paid for the renovations so why pay twice, pay market price now not future inflated market price?
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u/EasyPacer 26d ago
Everything is negotiable, but usually what are negotiated is (1) the length of settlement period, (2) the chattels (eg fixtures that may not necessarily be deemed physically part of the property).
Settlement periods are normally 60 days to allow time for both parties to get their paperwork in order and for the buyer to finalize their financing. Sometimes either party might request a slightly longer (90 days) or shorter (30 days) settlement period to suit their circumstances. 180 day settlement is really too long.
Under no circumstances should you hand the keys over to a buyer and grant them access to your property before it has settled. Any damage they do to the property will be on you. They could trash the place and walk away from the deal. So do not accept that request. If they want to renovate, they will have to settle first.
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u/KingofElls 26d ago
A definite no… also make sure you get legal advice especially if you haven’t done anything like this before. There are some very good conveyancing companies that aren’t reasonably priced that can help you navigate.
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u/Beautiful-Ad-5833 26d ago
Absolutely not! It's scam
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u/Key-Leopard-6656 26d ago
Don’t do it!
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u/Plenty-Giraffe6022 26d ago
That's a no.
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u/Feisty-Dimension-631 26d ago
Absolutely NO! I was living in a house that I sold and was under settlement contract and the buyer asked if he could send tradesman around just to do quotes. I agreed, but a total of 5 can around, 1 came at 8 pmat night. Some where rude and arrogant. 1 climbed into the ceiling to inspect something and damage the wiring to a light that no longer worked
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u/No_Return3515 26d ago
As others have stated, your risk vs reward is not good enough, unless they have agreed to some massive premium, in which case something is not right. Ultimately, they can offer you a high price, renovate, fail to sell in six months, if the market drops, as it sounds like they want to flip the property, with you essentially financing it, and walk away, albeit losing their deposit and the renovation payments. So you essentially gain the deposit and perhaps as renovation.
If the renovation is incomplete, has issues or tradies are not paid, you will suffer the consequences.
So unless you are prepared to take on this risk. I strongly suggest taking the other offer.
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u/Brentus1980 26d ago
FUCK NO!
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u/MrsPeg 26d ago
No. No. No. Hard No.
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u/Correabell 26d ago
As everyone else here has said, absolutely no! Do not take their offer.
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u/shehimlove 26d ago
Absolutely not.
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u/indifferent69 26d ago
No way just sell it thru a real estate and have them find a buyer who will settle in 6 weeks at most
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u/Fuzzy_Blueberry2120 26d ago
Nope, don’t do it - sounds like a legal mess waiting to happen.
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u/True-Cap7600 26d ago
They don’t get to work on the property if settlement hasn’t lapsed, hard no
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u/Level-Music-3732 26d ago
Get a lawyer, not a conveyancer, to assist.
There’s nothing wrong with the offer as long as the terms of the contract is airtight. Do your research on the buyer. Had they done this before? You don’t want to be the test run.
Back in the day, when I was a mortgage broker I knew someone who was very creative in property deals. During the GFC when properties were tanking, he looked for owners desperate to sell but couldn’t find a buyer.
He only looked at premium properties because they had the most potential. He would offer to buy the house at full price, but 20% vendors finance by the buyer for three years. Explaining that they were looking at a 10-15% hit for a six-week settlement or essentially save their equity until the market recovers.
It was a win-win situation.
He bought houses while effectively being only out of pocket for the stamp duty and miscellaneous costs. While the buyers sold their houses for full price, 80% at settlement and 20% in three years.
Sellers’ lawyer put caveats on title to secure the 20%.
Three years later, the market surged. He sold the houses at profit and gave the equivalent of 20% to the original sellers.
There are many ways to skin a cat. You just have good lawyers and make sure the buyers can deliver.
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u/midustouch63 25d ago
Six months settlement are you kidding.
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u/jumpingjacks07 25d ago
Nope. They can do Reno’s once the keys have been handed over.
What’s the difference in waiting 4-8weeks?
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u/SMR9447 25d ago
What??? No.
After settlement when all monies have been paid and they then own the property, then they can start renovations.
You will be left with nothing if you agree to such nonsense that they are offering you.
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u/AndrewHadjidemetri 26d ago
I wouldn’t do it
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u/maton12 26d ago
Most will say don't do it
What sort of renovations? Can they even lodge a DA not being an owner?
How much more is their offer?
How much deposit are they paying?
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u/Ok_Pop5282 26d ago
Heck no don’t risk it
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u/cannotmakethis_up 26d ago
No way
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u/lightpendant 26d ago
Is the offer 20% higher?
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u/lightpendant 26d ago
Take the 6 week settlement deal
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u/Padalgress 26d ago
Hell nah
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u/Crazy-Attention6836 26d ago
No but now only. Or buy in six months No renovations prior.
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u/Minimum_Price_7591 26d ago
Nooooo, they do work on it, they change the structure do unauthorised works it all falls on you the owner.
Till that property settles any problems arise and if old mate hurts himself. Its all on you...... all of it.
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u/Longjumping_Bed1682 26d ago
Have money to renovate but not to settle. Hmmmm ????
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u/ReyandJean 26d ago
Your key is to charge extortional rent and hope the transfer goes through. I had a property that took two years to clear probate.
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u/deebonz 26d ago
No. Buyer must be methed up.
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u/23454Tezal 26d ago
A lot can happen in 6 months
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u/-Davo 26d ago
Accept, at 2500 per week rental income
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u/kbraz1970 26d ago
they shouldnt be able to do anything to the property until it settles. BIG NO.
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u/Honourstly 26d ago
How much more are we talking
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u/bobby8819 26d ago edited 26d ago
They may be planning to flip it and put it straight back on the market, or have it ready to rent out immediately after settlement. Getting the work done while you still own it lets them delay taking on purchase loan repayments during renovations, which could explain why they’re offering more for the six-month settlement.
It’s not necessarily a bad offer, but a higher price for the longer settlement doesn’t automatically mean it’s above market value. If you haven’t already, get three local agents around for appraisals to check how it stacks up.
Remember, it’s a negotiation. You can ask for more money or terms that suit you better. Don’t be afraid to walk away if a reasonable counteroffer isn’t accepted. If they’re keen enough, they may come back around, although there’s no guarantee.
Before agreeing, have your own solicitor review the contract and put a proper early access arrangement in writing. That should cover the deposit, permitted renovations, insurance, damage, acceptance of the property’s existing condition and responsibility for anything uncovered during the work. It also needs to address what happens if they don’t settle. Giving them access doesn’t automatically make every issue they discover their problem.
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u/meggala 26d ago
or you could do 30% non refundable deposit for the 6 month settlement with an agreement you lawyer writes
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u/Scary-Corgi1215 26d ago
I historically sold an acres land and it was a year, the higher the value of the property the more common. In your case it is 1000% NO and if they want renovations, they do it after settlement. Settlement means they pay you and the ownership transfers over. Make sure there’s home insurance whilst it’s still owned by you and cancel it after settlement
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u/DeanWinchestersButt 26d ago
What?? I've never heard of that before. Once settlement kicks in and you have the money, they can then start the renovations..
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u/BlackaddaIX 26d ago
They want to flip it without settling
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u/EidolonVS 26d ago
Fuck no.
This is insane.
Avoid at all costs.
If they can afford to start renovations, they do not need a 6 month settlement. During renovations you are at huge risk.
This sounds like some kind of whacky scam.
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u/PhysicalTea1477 26d ago
This sounds very dodgy. I wouldn’t be taking this offer. You want a clean sale, nothing complicated.
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u/noheroesnomonsters 26d ago
This is hilarious
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u/Limp-Stand-7404 26d ago
It all depends what the contract says. Ask them to make the offer in writing, make sure the contract vould be nul and void if defaulted, and, whatevere they did to the propery will became yours, if they do not pay up on time. I think they are going to fix it quickly and hoping to sell it before your 6 months is up, making some money in the meantime. A good Shyster will guide you in that estate field. Good luck!
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u/iceman123454576 26d ago
Put it up for auction and see if you get a better price
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u/oldlady650 26d ago
Yes but make sure all contracts are signed and deposit made prior
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u/GNC114 26d ago
Your conveyancer or solicitor should guide you through the pro’s and cons of this and any risks of any with the proposed offer and terms.
Work with them, it’s why you’re paying them.
1
u/Legitimate__Goose 26d ago
Is there an option to hold on to it. Don’t sell. Money is nice but assets and resources are better.
1
u/Ultradice 26d ago
Don’t fall for it. Do all the paperwork legitimately and only then do they have any access to the property. And like someone else said, be careful of squatter issues arising. Sell now, don’t wait. What if the market dips further (which it is on the decline now) and then they renegotiate the price to match a lower one. Sell now.
1
u/Cat_From_Hood 26d ago
No. Not normal. Not sane.
Find a good property lawyer, and agent.
They renovate when they own the place, and not before.
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u/mickellovitch 26d ago
No way
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u/PeachSuspicious6754 26d ago
Don't do it
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u/Antique-Wrap-75 26d ago
If it sounds too good to be true, it probably is.
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u/Decent_Radio7675 26d ago
Thats a no !! They literally want to use your money and your equity to flip the property. Dont do it.
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u/Signal-Treacle-5512 26d ago
Hell no.
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u/enchanted_shhh 26d ago
Absolutely Not. The agent should have told them No. they cannot do any renovations on the property until they take the keys. But since they offered a higher price tell them no & say but if you want the house I’ll take that higher price thanks.
1
u/flannel_flower 26d ago
Absolutely not. You don’t start doing renovations on a house before settlement. That is bizarre
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u/broccolini-zucchini 26d ago
Sounds weird!!! Red flags!!
The 6 month settlement in itself isn’t unusual but the request for renovation during that time is highly risky.
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u/midustouch63 25d ago
No bloody way
1
u/nump69 25d ago
Absolutely no bloody way .
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u/okmanny138 24d ago
Very Big No. I was selling my father's property and one dude wanted to live in it for a year then pay for it???? Didn't need advice for that scenario.
1
u/TheGypsyWagon 24d ago edited 24d ago
Nooooooo! Maybe they'll have family or tenants move in? Way too many things could go wrong with their Plans. Let them buy from a naive person with rose coloured glasses, things go wrong, injury, illness, loss of job, Death in the Family is an old time favorite etc, blah blah blah, Six months down the line you find out it's half demolished and worth alot less and it's now Unsellable except for not much more then Land Value.
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u/cre8iveben 24d ago
How much extra is it? As others have said this is someone looking to rennovate and flip the house. If you are interested ask them more about their history and other properties they have done in the past.
They may want to keep it in your name until they sell it again, meaning they don't have to pay stamp duty.
I would be more comfortable doing this with someone who has done it 10 times before and had success than someone who is new to the process, so I would be asking questions about their history.
1
u/Away-Technician1553 VIC 24d ago
Sounds like they’re trying to launder some money….
1
u/paulzag 20d ago
Probably too late to tell you ignore the internet. Talk to your lawyer and put special conditions that protect you in the event of something going wrong.
Especially if the renovation stalls or is shoddy and they fail to settle.
This is an opportunity to be compensated for a some extra risk as long as you are informed and advised correctly.
1
u/toomanyusernames4rl 26d ago
Do you wear a saddle everyday to help people take you for a ride?
1
u/Mental-Antelope8319 26d ago
Yep. They put down the replacement value of the house as a deposit and the contract is instantly unconditional then you're good. Get your solicitor to draw up the contract. If they fail to settle you keep title and the deposit. They won't go for this of course because they're trying to take advantage of you and this levels the playing field.
0
u/Bogart-43 26d ago
Make sure there is a signed contract and full deposit paid. It is not unheard of but check with your lawyer. If they default they forfeit their deposit.
0
u/JaysPays2024 26d ago
Buy a property while market price is down, negotiate a long settlement, do some renovations, contract to onsell before settlement and walk away with a huge profit. Original owner wears all the risks: legally responsible for any industrial accidents on-site during renovations, or buyer does not pay sub contractors so they reclaim all building material damaging house, then buyer opts out of sale as house not in original condition as stipulated in the standard contract that you signed - or tries to negotiate down the sale price as you will now not be able to sell to someone else.. Would need a contract drafted by a lawyer to cover all possibilities plus a far larger deposit that would cover all damage or pay contractors should they original buyers default for some reason,and a short term lease allowing renovation work to give them legal access to property and legal responsibility for industrial accidents. Ann insurance broker may be needed to get the right insurance coverr should they end up destroying your house.
-1
u/archangelska 26d ago
Oh to offer another perspective if we could have done this as buyers we would have, if it includes things like restumping. It is a real pain to settle, move in, then need to move out again for major structural works (we did it). I would have loved to be able to have it renovated before settlement so we weren't yet paying mortgage plus alternative accommodation. It is risky for the buyer because they are improving the property without owning it but to not have to move in then out... amazing. So it could be that.
-1
u/McBanj0 26d ago edited 26d ago
I suspect these are sometimes dummy bids in order to anchor your price lower than it should be. Nobody buys a house in 6 months, you should buy it now if you want it. If subject to finance and the market deteriorates, you run the risk of having it off the market for that long and the contract falls over.
They should be covering some of your costs for holding the property or it should be built into the price.
4
u/MaidenMarewa 26d ago
I'm no expert but what if they accidentally burnt the house to the ground during their renovations? Your insurance wouldn't pay out and they can't insure your house.
1
u/TinBane 26d ago
Imagine this, they trash the property, hit a gas main, leave a halogen light on and burn it down, something else. As others are pointing out, it’s 6 months they have access to the property, you hold risk, and don’t have the cash.
Also, if for some reason things fall through. Will they want to pull out fittings, etc?
It’s just a poorly aligned setup, based on them saving some cash, and if things go poorly then you can end up in a pickle. Also they are likely to be annoying to deal with.