A report in the Sydney Morning Herald, by Stephen Nicholls, tells how a buyer who bid $2.3M for a house, and paid the required 10% deposit by cheque, was successfully sued by the vendor. By then the vendor had sold the property to another buyer for $1.95, and the Supreme Court ruled that the failed buyer must pay the difference, $350,000, plus interest.
The failed buyer's solicitor claimed his client had no money, but it turned out she owns several properties, although with significant liabilities.
So the key lesson is, if you can't raise the money in time for settlement, don't bid at auction! If your wealth is in property, then the disappointed vendor will pursue you confident that in time he will get his money.
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