First PPOR in NSW, made a verbal offer

Hi All,

I just made a verbal (actually written in email) offer to a RE agent for a 2br apt in Liverpool Sydney.

As I have very little understanding of prices I want to be able to back out with as little cost to me as possible. 

When I go to his office, will I be required to place a deposit and what is the legal minimum I can leave?  I don't think I have much competition for this place so I want to leave as little as possible in case by backing out I lose it.

I want to send in a valuer after this to see what the property is worth.  This will cost $440 and he will do a full inspection (not a drive by he tells me) for a valuation that is _not_ for use in obtainnig a mortgage (as I understand he would underestimate otherwise)  If the bank also does a valuation as a part of the loan, can I use this instead then back out, or will I be committed by the time I see the bank's valuation?

This is getting a bit ahead of myself, but regarding loan types, I understand westpac's 'rocket repay' is good, and the reason I would choose this is because the balance of my savings account would offset the principle, therefore reducing the interest to what it would be if I had paid back that part of the principle. This allows me to save a deposit for a second property more economically, and this is worth the extra ~0.5% that I pay over a plain vanilla variable loan?

Thanks for you help.

Hi D2

Congratulations on making the first move in the property world.

I am not sure there is any minimum requirement for payment of a deposit it is merely what the vendor will accept.

Now with regards to the payment of a valuation fee i think i would hold off as the lender will want to do one anyway so this could be $450 well saved.

Your Mortgage Broker could commission a valuation for you which wont cost you anything and will be acceptable to the Bank and this will kill 2 birds with the same stone. 

Also doing the valuation now will show how keen you are on and how you can move swiftly.

Secondly dont mind the Westpac Rocket product but depending on the loan amount believe you could do better.

Whichever way you go good luck and keep us posted.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

You can put as minimum as you want
generally 0.25% for the agent to remove it from the listing... under offer!!!
but you can try A$1 dollar
 

Thanks guys.  I made the deposit yesterday afternoon of 0.25% (slightly over 500$ as the purchase price is 227k).  There's an 8 day cooling off period before I have to drop another 10k deposit.   To prevent a massive case of buyers remorse I'll have to get the bank's valuation within those 8 days, or get my own done.  I think for peace of mind I may as well pay for it myself.

The loan amount will be $200k, I'll call a home loan broker to see if I can get something better than Westpac's Rocket Repay. loan.

Why not get Richard to do it for you.... and set it up properly

I took your advice gof_of_money and got Richard to find me a loan, he's saved me a lot of money and has been very helpful.

I've got approval now but unfortunately the bank won't let me see the valuation, so I've got the RPdata $49 estimation which tells me it's worth 225k +/- 6%.  I'm going to pay 227k so I'm at least in the ball park.

Previous sales have been

$37.5k Nov 87
$115k Nov 01
$216k Jun 03 (cha-ching!)

So... I'm not paying a huge premium over the price in 2003, but 2003 was the peak of the market wasn't it?  

I've been renting just around the corner for 2 years, and compared to some of the places that rent for $250 I think I could get $280-$300 for it, so it has potential.

Congrat D2

I am sure that you can get Richard to get you free RP data
or bank valuation

I think 227k is a good buy especially liverpool hospital is having major construction at this stage

GOM you are right with some lenders we can access the valuation but with this lender they will not release it to me or D2.

All we know is that the comments in relation to the property risk analysis were all low and i agree with you that i think D2 has a very good buy at the price he has paid.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Which lender is that?
just for curiousity...

Might get D2 to answer that one because of Privacy.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Might get D2 to answer that one because of Privacy.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.