Rebate Was Really A Penalty!

Posted on May 1, 2007 by | 1 Comment

Consumers Beware!What if the sales rep tells you that you’re getting the property for $330,000 but has you sign a contract for $350,000?

We offer a comprehensive pre-purchase contract and disclosure statement checking service to our clients, and we often find nasty contract conditions appearing like wolves in sheep’s clothing. The following situation serves as an example of the way an apparent “sweetner” can be the exact opposite. Our client came to us for pre-purchase advice, explaining that the sale price of the property was $330,000. We pointed out that the contract, prepared by a company we’ll call “What-A-Con”, stated that the sale price was in fact $350,000.

“Oh that’s OK, the estate agent said that “What-A-Con” have to make the contract out for $350,000 but they give a rebate of $20,000.”
Sure enough, there was a special condition in the contract regarding a “rebate”, but in our view the rebate was no more than a penalty of $20,000 paid in advance!

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1 Comment

  • Doug Disher says:

    Interesting case study. I’m guessing that the buyer would be liable for the stamp duty on the gross amount? One could speculate on the reasons for a rebate. In any event it would seem to be less than transparent. Either the sellers bank or future buyers are at risk of being misled by the inflated price.

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