Kiwi

I am a bit confused. I have sold a few options over property, but never assigned an option or onsold a property this way.

Lets try to spell it out in simple terms.

You find a property, and instead of signing a contract or sale, you buy an option over the property. ie sign an option contract. This contract probably allows you to assign the option. Is this correct?

You then go and find someone who wants to buy the property. You then get them to sign a constract of sale with the original vendor. They don’t see your price as you have not signed this contract. Your option contract would have the price at which you could buy the property for. Since your option contract allows reassignment, you tell the orignal vendor you have assigned the option to Mr X, and Mr X will be the one signing the contract of sale.

Sounds good so far. I beleive that as you have an option over the property, then you have a legal interest in it, and would therefore not need any licencing (RE Licence etc) to sell this property.

Is that how it works Richard?

ps Kiwi, are you talking about Australia here or NZ. If Aust, which state?

pss. Hope you don’t mind all these detailed questions. I am not trying to be smart, just trying to figure out something I have never done before.

Terryw
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Hi Westan

Yes, there is a bit of a downturn, but more people are refinancing these days. Business is still good.

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Are these people mortgage brokers? If that is what your husband is going to do, bear in mind it takes ages to get paid for loans, so he may be without an income for about 3 months. It could also take a long time for him to build up a decent income in the industry.

However, it may be worth a try. If it doesn’t work out, he can always go back and do a similar job to what he is doig now.

It may also be possible for him to keep his current job and start off in the broking part time and gradually ease into it.

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If you want to claim the stamp duty concession, then I beleive there is a requirment that you live in the house within the first 12 months. Once you have moved in you would meet these requirements, and so could move out again and rent it.

Terryw
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Kiwi

So your saying you sign an option, ie buy an option, then negotiate with the new on-purchaser, but they do not see your purchase contract or realise what you paid for it. Do you then re-assign your option? Wouldn’t they other party see your purchase price on the option?

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You don’t have to limit yourself to uni students. These days there are many students from overseas studying at English colleges, these don’t run to the same timetable as the unis.

And then there are the working holiday makers.

Terryw
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Why sell, very costly. Option 2 sounds good as you get to keep it, can access the equity, still claim it as your PPOR (even tho renting it) and will get some tax deductions too.

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That’s a good name, ‘miser’! I beleive that is a 100% offset account, but cannot be attached to a Viridian. You may have to settle for the Standard variable. If your loan is large enough, also look at the professional package, MAV.

Good luck with the ATO. If you do get an answer, trying ring back again and asking the same thing – you are likely to get a different answer.

Terryw
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Depends what the bank tells the valuer. Often they will forward the contract of sale with the price. Maybe you could put a higher price on the COS and then say you negotiated it down from the valuation came back in.

If under 80% LVR, you can apply for an increase easily as there are no mortgage insurers invloved usually – unless a low doc. If they won’t, you can always refinance with a different bank.

Terryw
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