Problem with buyer of house

17 posts in this topic

 

Hope someone can advise our next steps now.  We are the sellers of a house in Berlin as we have relocated to Sydney.  We signed the purchase/sell contract the first week of July and the buyer was supposed to put the money in our account on the 2nd September.  At this point we were still living in Berlin.  The money did not arrive and after speaking to the buyer, he assured us that we would get it by the end of the week.  We believed him as he is a brother of a neighbour.  He is a wealthy man ( multi, multi millionaire) who owns many practices in Berlin and who wanted the house for a family member.  We were extremely unhappy though as we had planned to transfer the money to Australia that week having set up with a foreign exchange company.  We flew to Australia that week as planned once we had signed the house contract.

Since then the exchange rate has fallen considerably since the day we had planned to send the money so will get significantly less for our money when the buyer eventually pays.

We found out the delay was caused by the buyer bundling this house in with another project of his at the last moment and financing with a different bank at the last moment although his initial finance offer was just for our house and was with a different bank.  So he caused the delay himself by looking to maximise his profits at our expense.

We will get a daily late payment fee but this is negligible  due to low interest rates and does not come close to covering what we will have lost due to the now lower exchange rate.  In the contract there is a clause saying the buyer must also pay additional expenses caused by the delay but it is a general statement.

We have written to the buyer asking him to cover the difference between the amount the exchange rate was when we planned to send the money and what it will be when we finally get the money claiming this under additional expenses.  

After many emails sent by us that went unanswered by him, he finally replied yesterday saying he has transferred the money (15 days late) and will pay the late payment fee. ( not yet shown up in our account). He never answers our emails about the additional expenses. 

So my question is : as additional expenses can we claim the difference between the exchange rate we would have got when we wanted to send the money and the exchange rate we will get when we finally get the money and send it? For us it is an awful lot of money. 

Are there any other steps we should be taking at this stage?

Hope someone can advise.  We really believed we could trust this man and the stress all of this has caused is terrible.  

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You should be talking to the notary about this, not us. She's there to help you and it won't cost you extra to seek her advice.

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We contacted the notary some days ago who informed us their role is neutral and so are unable to give us advice.  

That is why I posted.  We do not know where to turn.

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You do not have a stand about loses for exchange rates against other currencies.  Your contract was in € and you were paid in €.

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29 minutes ago, Krieg said:

You do not have a stand about loses for exchange rates against other currencies.  Your contract was in € and you were paid in €.

Exactly.

 

9 hours ago, Wooks said:

We were extremely unhappy though as we had planned to transfer the money to Australia that week having set up with a foreign exchange company.  We flew to Australia that week as planned once we had signed the house contract.

Since then the exchange rate has fallen considerably since the day we had planned to send the money so will get significantly less for our money when the buyer eventually pays.

 

Sorry, that is a very poor argument.The current exchange rate is around year´s average. I´ve checked the history chart and you are talking about 1% loss... ridiculous claim.

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The exchange rate varies greatly.  We were sitting on pins and needles waiting for the money to transfer because even a small change meant a lot of money for us.  We were a bit disappointed that the rate that we eventually got was a little lower than we expected.  However a few months later, the rate dropped quite a bit and we would have lost a ton of money had we waited.  It is a gamble. 

 

Maybe by the time you actually send the money to Australia, you will find that it is higher than when he should have sent the money to you.  Would you then refund the difference?  

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although I tend to agree with the others that the exchange rate is your problem, and not the buyer's, it's rather immaterial whether popular opinion agrees with your assessment or not.

 

as is always the case, if you want legal advice you should talk to a lawyer.  I suspect you will need one anyway if you want to pursue it so...

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17 minutes ago, lisa13 said:

although I tend to agree with the others that the exchange rate is your problem, and not the buyer's, it's rather immaterial whether popular opinion agrees with your assessment or not.

 

as is always the case, if you want legal advice you should talk to a lawyer.  I suspect you will need one anyway if you want to pursue it so...

However, if you want to save the cost of the lawyer, maybe you should transfer the money first and see if you there are any damages (and how much) that you could theoretically claim...  Based on that you can figure out the cost of a lawyer and the pain-in-the-ass-edness of actually bringing a case to trial and you would probably find that your time would be better spent enjoying Australia and getting your new home set up.  

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You can't claim anything, it would be insane that you could claim damages based on exchange rates in another currency.   Because the international market currency is so dynamic that there is always currencies going up and down.   There is even a market with plenty of people trying to make money out of those fluctuations (Forex).

 

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12 hours ago, Wooks said:

He is a wealthy man ( multi, multi millionaire)...

... he caused the delay himself by looking to maximise his profits at our expense.

Which explains how millionaires operate. Too late for you Wooks, but this is not a coincidence. The lesson from this is to be careful who we do business with.

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Hello @Wooks, if it makes you feel better (they say misery loves company), I agreed a purchase price in Euros for my current home a month or so before the Brexit vote, and the deal completed shortly after the result. That was a real exchange rate hit. Of course, I could/should have transferred the money sooner, or hedged in some other way, or even pull out of the deal altogether, but I didn't.  

If the amount really is significant (for me the currency swing amounted to a fairly large five figure sum), then you could have an initial call with a lawyer: you might get lucky...but (to my non-German lawyer) mind, it seems a stretch to suggest that the Aussie dollar to Euro exchange rate fluctuation is a realistic "damage" that was contemplated by the parties when you entered the agreement (as opposed to time spent chasing payment, late fees etc, which could well be recoverable)...again, is it worth your time and money to chase this claim from the other side of the world?

Just think: were you intending to give the purchaser a rebate if the exchange rate had moved significantly in your favour?

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3 hours ago, BradinBayern said:

However, if you want to save the cost of the lawyer, maybe you should transfer the money first and see if you there are any damages (and how much) that you could theoretically claim...  Based on that you can figure out the cost of a lawyer and the pain-in-the-ass-edness of actually bringing a case to trial and you would probably find that your time would be better spent enjoying Australia and getting your new home set up.  

 

golden - agree

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16 hours ago, Wooks said:

So my question is : as additional expenses can we claim the difference between the exchange rate we would have got when we wanted to send the money and the exchange rate we will get when we finally get the money and send it?

Would you have refunded the difference to the buyer if the exchange rate went the other way?

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As far as I can see ( not a lawyer), the only issue would be the late payment.

Depends on contract signed, and lawyer needed.

Your decision to transfer money , why should buyer have to compensate  different exchange rates?!

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1 hour ago, RedMidge said:

As far as I can see ( not a lawyer), the only issue would be the late payment.

Depends on contract signed, and lawyer needed.

Your decision to transfer money , why should buyer have to compensate  different exchange rates?!

 

I agree.

 

I'm Australian and follow the exchange rate, and in actual fact you're lucky on at least one front, possibly two.

One, as the euro is pretty strong historically speaking at the moment, and has been for the last few years, you're transfering at a propitious time in history really - be happy that you didn't have to do this when it was really in the dunny.(I presume you're not moving to Sydney because the euro is strong against the Aussie peso.)

Two, it's getting stronger again right now. By the time you actually get around to making the transfer you might end up getting a better rate than you would have gotten two weeks ago.

 

Just a thought.

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