How family lost their $320,000 life savings after buying their dream home and noticing a ‘weird’ detail in the contract that allowed sellers to keep their money AND the house
- Gayed family became Australian citizens 10 years ago after arriving from Egypt
- The managed to save enough for a house deposit since arriving the country
- In 2019 they chose a four-bedroom house in the Melbourne suburb of Balwyn
- But deal fell through and seller kept their $320,000 deposit leaving them broke
A family with three young kids who moved to Australia with ‘big dreams’ have lost their $320,000 life savings after a seller kept their house deposit in a legal loophole.
Sam Gayed, 42, and his wife Nardine, 37, were looking to relocate from Bendigo to Melbourne in 2019 for the education of their children – who are all aged under 12.
They saved their deposit money over 10 years since they arrived from Egypt and found the perfect home in which to raise their family, a $3.2 million four-bedroom, four-bathroom house in Balwyn.
The four-bedroom, four-bathroom property in Balwyn, Melbourne (pictured)
Sam and Nardine Gayed (pictured) lost their $320,000 deposit because of a legal loophole and are now renting a ‘tiny house’ in Melbourne
They secured the house, paid the $320,000 deposit and were getting ready to settle on the property in December 2019 when the deal collapsed.
The sellers removed a section in the contract’s fine print that a standard home sale agreement will usually contain, called a ‘subject to finance’ clause.
This clause allows the contract to be voided and the deposit returned if the buyer’s bank loan is not approved.
‘It was a bit weird when they removed the subject to finance clause [but] we had got emotionally attached to the house,’ Mr Gayed told News Corp
He said the real estate agents told him there was strong interest in the house and it could be sold to someone else, so he signed the contract.
‘The agents have great sales techniques, they sell 10 houses a month, I buy one house every 10 years,’ he said.
The vendor had removed the ‘subject to finance’ clause in the contract for the house (pictured)
The Gayed had arrived from Egypt 10 years ago and saved all their money for a house deposit
He applied for the same loan he got to buy his first house – a doctor’s scheme loan that would cover 90 per cent of the house value without having to pay lender’s mortgage insurance.
But after he had signed the contract, the bank informed him there was a $2 million ceiling on this type of loan – completely blindsiding him.
Mr Gayed could only secure 85 per cent of the house value – leaving him $160,000 short plus another $160,000 on stamp duty.
‘At this moment, we became very stressed and sought every avenue to arrange the additional five per cent,’ he recalled.
This included trying to sell their Bendigo home and part ownership of his company but neither could be completed on short notice.
He explained he asked the vendor if he could have a little longer to pay the remaining five per cent, but they refused.
The due date on the contract arrived and vendor cancelled the deal and kept the $320,000 deposit.
The real estate agents said the clause was removed at the direction of the seller
In the following months, the couple maxed out their credit cards and overdrew their bank account trying to stay afloat.
Mr Gayed said he and his wife and three children are now renting a small house in Melbourne and trying to make ends meet.
The Balwyn house has not been sold to anyone else as the owner instead kept it and rented it out.
The real estate agent who handled the sale said the ‘subject to finance’ clause was removed at the direction of the vendor.
‘We can’t suggest… we let every purchaser know what their rights and their obligations are. They are free to make their decisions,’ they said.