[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 4, 2011 - 2:38 am

Thanks for the advice

So what happens in the scenario (very common im sure) where the banks are only prepared to give a buyer 70% finance, when he was relying on 80 or 90%?

If financially, the buyer is in no financial position to come up with an addtional 10 – 20% deposit, surely the vendor has no right to hold onto a buyers 10% deposit?

The deal was subject to the buyer getting finance to purchase the property, which he didnt.

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 4, 2011 - 2:02 am

Well thats exactly why i put 'satisfactory finance'.

What happens if the bank only offer me a 70% mortgage and a interest rate of 8% and a short term i.e 20 years?

These conditioans are unsatisfactory to me and were not how i have structure the deal, so i'm not obligued to accept the banks offering just for the sake of it.

I dont expect the bank to provide me with a letter anything, ill just explain to the seller, with reference to the special condtion, that the finance offered to me was unsatisfactory, so i am unable to proceed with the purchase. This happens all the time and is just elaborating on the general 'subject to finance' condition.

I dont seen anything rwoing with it, do you? You just protecting yourself.

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 4, 2011 - 1:51 am

Would it better to say the following? :

"This offer is subject to and conditional upon the purchaser obtaining satisfactory finance from an institution of the purchasers choice”.

So once the bank has done their valuation and presented you with an offer for finance, are you able to ask the bank what their valuation of the property is before you accept or decline their finance offering?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 4, 2011 - 1:26 am

Thanks Micheal, much appreciated.

I fully agree in using the good old fashioned way, which you mentioned, but i just feel that an online estimate is a good starting point which will quickly help you from sifting your potenial deals verus deals which are a no go. This rough guidline could save you hours and hours of time by not having to do all that research on properties deals which are a no go. Once you have the deals which might interest you, then you do you due deleignence the good old fashioned way.

Out of interest, what software are you currently using?

With regards to the below I suggested, do you think it could work?

“This offer is subject to and conditional upon the banks valuation of atleast $200k”.

This way I am safe guarding myself and ensuing that the banks do find value in the property. This is also an ‘escape’ clause to get out the deal. What that work?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 3, 2011 - 11:25 pm

We going slightly off the topic, which was the accuracy of property estimates of Residex and Rest Estate Investar..

Anyone else found them to be fairly accurate?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 3, 2011 - 11:24 pm

grantos_champos , lets paint a picture for you..

A few years back you bought your property for $100k and got a mortage of $80k. You loose your job and your debts (credit cards, car repayments, electricty, water, gas) are pilling up. You are unable to service your mortgage repayments and the bank is about to start the process of repossessing your home.

Time is running out for you. You consider selling your property via an estate agent, but you are advised the average days on the market is 2 months.. you dont have 2 months.

You know your property has a market value of of $200k, but this is not going to help your siutation. If you wait 2 months to sell your property, the bank would have already stepped in to reposses your home, leaving you with $0 and a bad credit history.

If an offer comes in at $150k, you have $80k to settle your mortgage, leaving you with $70k to repay all your other outstanding debts as well as some spare cash to keep you offloat for a while until you get back on your feet and the piece of mine of being debt free.

What would you do in this situation? Its a no-brainer.

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

November 3, 2011 - 10:34 pm

Thanks for the feedback.

Lets say my strategy was to buy atleast 20-25% below market value as my intention was to refinance as soon as possible to use the funds for my next investment.

So I find a property on the market (via and agent or privately) for $220k. I have no idea if this asking price has been inflated by the agent or vendor to get a better price, so the quickest and easiest way is to get an estimate. You run a computer aid estimate / valuation and it comes back as a $200k. I can then compare similar properties in the street or suburb to get a better feel and to confirm this estimate.

My next step is to try get the vendors expectations to something more realistic ($200k), which is where i’m hoping these online estimates come into play.

Once both myself and the vender come to a understanding that the market value is closer to $200k, I am now starting at a better base to begin negotiations.

As my investment strategy is to buy 25% below market value (for refinance purposes), i offer the vendor $150k and depending on his circumstances, will either accept or decline.

If he accepts, i want to know that i will be able to extract some of the equity from the deal for my next purchase. The online price estimate was partly used in arriving to a market value of $200k, which is why i need to be slightly confident that the banks valuation is close to the online price estimate.

Something which i thought about last night..

Lets say i relied purely on the online price estimate, which was $200k. When i put an offer for the property for $150k, would i be able to add the following into the special conditions of the offer:

“This offer is subject to and conditional upon the banks valuation of atleast $200k”.

This way I am safe guarding myself and ensuing that the banks do find value in the property. This is also an ‘escape’ clause to get out the deal. What that work?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 30, 2011 - 9:35 am

Dont get me wrong, what she is going is great.. its a win win situation for all parties involved and shes doing a great job

I'm just very keen to learn as much a posible about the rules and regulations in the industry here in Australia, thats all.

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 30, 2011 - 8:02 am

O ok.. even though she is fully disclosing what she is doing (to the owner), i would think she would still need a real estate agents licence in order to receive money in terms of property letting?

Would the same rules apply if she was selling a property on behalf of an owner,  whom she fully disclosed what she was doing, and received any sort of payment for the sale (in the form of a commission or referal fee)?

Interested to hear from other real estate agents on the forum.

Sorry for all the questions, but I'm just very keen to know exactly how thing relating to property (in terms of making money) are done in Australia.

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 30, 2011 - 6:31 am

Great idea! Does she need to hold a Real Estate Agents licence in order to receive a commission in terms of property letting?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 30, 2011 - 3:20 am

Great.. look forward to interacting with her on the forum. i'm sure Carole will benefit tremendously from being on this forum

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 30, 2011 - 1:51 am

Hey Angel,

Love hearing stories like this..very inspiring

If Carole on the forum, is not, why not invite her?

Cheers,
Robbie

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 12:10 pm

Thanks Terry, please do let me know when you do start taking clients as you do seem like someone i could work with

Thanks for all the advice/

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 11:47 am

Thanks Terry, you are a star!

Any recommendations for a solicitor based in Sydney?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 10:31 am

<BTW you can only withdraw an offer until it is accepted. Once it is accepted you have a contract.>

This is why its so important to have special condtions in your offer whichwill allow you to get out the deal once both parties have signed the contract, Some which spring to mind are:

1: This contract is subject to the purchaser ontaining suitable finance within 15 working days of both parties signing – This will allow you to get out the deal at any stage. i.e if you dont get finance within 15 days, the deal is off or if you not happy with the rate offered by the bank, the deal is off.

2: This contract is subject to the purchaser obtaining a suitable inspection report, within 15 working days, which satifies the purchaser – If you want the deal off, go to the property, find something wrong with the property, pull out of the deal.

I have the correct wording on these clauses somewhere at home, but i just wanted to give you idea of escape clauses used to get out of deals.

Hope this will work in Aus too

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 9:40 am

On the same note..

Are you able to make ammendements to a signed Offer to Purchase document?

In South Africa we were able to get the seller and buyer to sign an Offer to Purchase, which would be presented to the attorney handling the transfer.

After the OTP was signed by the seller and buyer, there might be a reason to make amendments to that document. For example, the agents commission might be changed or perhaps the buyer and seller decided to add or remove items specified, such a adding or removing maintenance work.

Is this possible?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 9:34 am

Thanks Terry, much appreciated.

Who would be a good person to speak to to get an Offer to Purchase template or Option document drawn up?

Are there any legal guys on the forum who can assit me?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 26, 2011 - 4:38 am

PropertyBee.. did you manage to get out of the deal?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 25, 2011 - 10:11 pm

Another question..

What is the mortgage term you can take out with the banks?

In South Africa we were able to get 30 year mortgages.

Whats the maximum mortgage loan term in Austrlia?

[RobbiePMember@robbiepJoin Date: 2010Post Count: 108]

April 25, 2011 - 10:02 pm

Hi Kong,

Whats the longest term mortgage you could get for a variable IR?

Regards,
Robbie