[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 27, 2008 - 12:38 am

Blogs
Its all good news for me. Im off to  an Aution tomorrow I feel it will be handed in Do you think I should save my petrol and stay at home? Im not a valture but Ive worked hard and saved & Im not living in a 5 bedroom home, plasmer TV in every room & a 4 weel drive in the drivway,  that I cant afford. As Ive said in the past when the shit hits the fan it sticks to the walls. Intrest rates up, petrol up, food up we dont get a wage rise evey time rates go up so the money is coming from the borrows pocket. Cash is King   Well some people just dont get it. ?????  I made a cash offer unconditional, 30 day. 10 % deposit with in 24 hours, subject to nothing. Of course I offered them 6 k less than their other phantom offer. They said no.  Ive been staking out open houses over the last month and some that Im intrested in dont even get a single person in to have a look.  So people are saying that a 0.9% or .9% only $15.00 per month wont make a diffrence, Im not sure on that, its not much in dollar term per month is it (the price of a pack of cigarettes).  But the reallity is in the average family buget. Just do the numbers of a single family income, actully do it, and you can see $1000 clear per week is no enough to live on and pay the morgage. Check out the local caravan park see how many families are living there and working, some Ive met are renting there house out because they cant afford to live in it or sell it.  Stormy weather ahead indeed my friend.  The future, well we can only guess, but.  Intrest rates must go up to hold back inflation, so there is no cheap money around. The only thing that will drive home sales is Imagration, the supply and demand.  A shortage of houses is what you hear. Its not so, there is a shortage of affordable houseing.  More rental accommodation needed. Yes, but tell me why would I spend 300k or more to build a rental for someone to pay me $280 in rent per week and no real capital gain, if I sell it with in 5 years I would loose money. I can get the same retune on my money in the bank 8.2%, do the sums and think about it.  It is only my opinion but, owning a home is a costly thing there are many expences involved other than the morgage. Young people that have gone in and been given 100% and been told its better to own your own home and that you can never loose on real estate are having their eyes opened for them. Too much money has been lent to those who cant afford it. The home ownership DREAM  has been used as a marketing tool and for most it turning into a nightmare.    

  Steve has said in his emails, cash is kings, no need to rush in and buy cos things are only gunna get worse. Sit back, enjoy a red wine and feast on the carnage that will ensue

I dont want to capitalise on others misfortune but, it would be a diffrent story it the intrest rates had gone down and house prices up. As a cash buyer low intrest rate have not been a friend.  I hope you are right Blogs and steady as she goes, down ,down & down some more. Great post mate.

Cheers to all.

Tony………………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 25, 2008 - 12:05 pm

Mortgagee Autions

Having attended many Mortgagee Autions over the past 3 months, It supprises me how people that just cant afford the place can be in this situation.  Home ownership comes with alot of resposibilities and costs, not just the repayments. Many go in with the false belief that you cant loose on real estate, well when the shit hits the fan it sticks to the walls.  Whats going on when a young couple go in to a morgage broker with $500 bucks in their pocket and $12000 grant and come out with 100% finance or more, sometimes being $250,000 to $350,000. Only my opinion, but the current situation is a sign of peoples "want" exceeding their income and if someone is willing to give them the money they will take it.  Just do the math and you can see what you are commiting to. From an investment point of view Im starting to really reconsider propety as an investment.   Im not a fan of negative gearing to me its what a real estate agent tells you when they know you are going to loose money on a propety.  Buying cheap in a high morgagee sale area, " The place next door was handed in at $200,000 whats that make ours worth, we paid $300,000 3 years ago"  Morgagee sales can reflect badly on the other property prices in the same area.  Consider this when buying in a high stress low socio-economic area.  They days when capital gain was at say 14% and intrest at 6% are well gone. even the bank will give you 8.2% on your money garenteed and no running costs. So why take a punt on property that may stay flat or even drop. The Australian obsession with home ownership needs to be reviewed. I heared on the news that the cost of owning a home in Australia is one of the hightest in the developed world, so much for the lucky country. 

Cheers
Tony…………………………..

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 14, 2008 - 2:26 am

Thanks to all replys.

Jackie
Please let me know what offer you would have recommended to your vendor (see my original post).  As I previously worked in the small comodeties market I may be playing it a bit hard. The buyers declaration can work doth ways for or against me. It can show if there is another buyer, depending on the wording most say" If there is another offer" the key word is "If"  not that there is currently another offer. So this does not mean that much. A big YES to the why have n't they call me yet. Im unconditional in my potential offer not sudject to finance. If I had the best intrest of the vendor in mind I would call me and say Hey Tony got a contract signed will be taking it to the Vendor Tomorrow,  want to make an offer best do it now. Have not received that call yet. I was told that if they get a cash buyer in over the week end they will not call me?????   Why not, nothing legally stopping them? I will make up my mind over the week end and make an offer Tuesday. I have told them that. So I would expect that unless someone comes in with cash, has done their research and makes an offer that the agent thinks is going to be better than mine it may get sold. There are lot of way at looking at making an offer: What can you afford.   What is it worth.  Whats it worth to you.  How many others may be intrested.  At the end of the day its what you feel you can live with.  To end with a quote by Neil Jennman " you can be too clever in your offer"
Thanks Jakie and others

Regards
Tony….

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 13, 2008 - 12:39 am

Jackie

Yes unfortunety for the ethical agents they cop the stigma for the unethical, just read any book, Neil Jenman in particular, about buying realestate the majority paint the industry in a bad light.  "When I used to work in real estate, if I told a buyer there was another offer, THERE WAS ANOTHER OFFER."   Unfortunetly your not the agent  Im dealing with.  A big YES to the Buyer's Declaration. Ive not been offered one. But will insist on one and get the agent to sign it. If there is no other offer it then can be seen from a legal point of law as deception. Using a phantom buyer to push up the price or influance an other persons offer as a point of law is seen as gaining profit by deception (see trade practices act). With your 8 years of selling realestate what offer would you advise your vendor to take (as asked in my previouse post). Thanks for the input.

Kind Regards

Tony B.

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 12, 2008 - 12:23 am

Scott
 Its been on the market for 3 weeks. I have been reading that some agents use "another buyer is intrested" as standard to get you to give your best price first up. With a sunset clause it puts the pressure on the seller, as I do "Have other properties on my short list"  I guess If I realy want it I pay the asking price. Im sure a seller always puts the asking price higher than the real price. So I should also do the same.  Agents opperate on commishion and as long as it sells they dont care if the price diffrence is a few thousand, they also know Im no subject to finance so I can pay more than most other buyers. So they would be likely to keep me informed. The question is do I realy know there is another buyer on the deal?  If so I have to think what will they pay, they are suject to finance so it may take a few days for them to get it organised. I best get my offer in before then if its rejected, I will know Im too low. But will still have time to make another. I guess its really up to me to make up my mind how much Im willing to pay simple as that.  I get the feeling a lot of buyers buy on emotion and " dont want to miss out" and this deffinety influences their offer.
Thanks Kindly for your info mush appreciated.

Regards
Tony B.

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 11, 2008 - 1:10 pm

Random

Yes , "STOP MUCKING AROUND or you're going to miss out"  must be in the guide for selling real estate for beginers text book. If a person offers too much the lender will not lend, specialy now. So I think this is what you are pointing out.  No sect. 32 yet and already a buyer and a holding deposit ????  Its difficult to  get finance with out a sect 32. so Im told.  I will try to find FREAKONOMICS & check it out.  I must admit I like to play the game a bit also and I dont beleive all that Im told in a transaction like this. Being my first buy its a good opertunity to learn from. And there are still plenty of morgagee sales to attend.
Thanks for the input.
Regards

Tony B.

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 11, 2008 - 8:18 am

Joh
Thanks for your reply and advice, much appeciated.

I think I will ask for such a form or decleration to be signed by the agent re. we have another offer. As it's being comunicated to me loud & clear. If another offer exists thats fine & if they want to pay more than the place is worth thats fine also. However I dont like the over the phone auction system. Im up for the real thing on the day no problem at least you can see the other party (well most of the time) I dont think we have the best offer forms stating there is another buyer  in Vic yet but is a good idea.

"If a deposit of more than 10% of the purchase price is accepted by the seller/agent, the contract becomes a term contract and would not realy be in the interest of the seller."

Jon, can you please tell me a bit more about the term contract as Im new to real estate contracts and would like to know more as you surgest 10% would be better.

"On the issue of an agent telling you what the other offer is – Think about it!!!   I sure many of you would think it ok if he only tells you but not ok if he then tells the other buyer. "

I totally understand where you are coming from with this comment Joh. However just because an agent will not tell me what the other offer is does not mean that he/she will not tell the other buyer what mine is, specialy if its more. I think I will just offer what Im comfortable to pay with no conditions. I would like a soil test do you think this would be a disstraction to the seller, it would be the only condition.
Thanks Joh

Kind Regards
Tony B.

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 11, 2008 - 7:55 am

Kris
Correct on the Sect 32, property in Vic. can not be sold as it must be viewed by the buyer & be part of the contract.  This is what Im concerned about one of the agents told me the property was sold because he want the commishion from the prospective buyer that came to him and took a holding deposit from them.  Sect 32 will be ready next week, I will not make any offer before I see it. The other party is uninformed because its not wise to make such an offer before you look at what you are buying. Having said that theit offer is not enforcable by law as no section 32 was supplied at the time they made their offer. As for the holding deposit well Ive learnt its all a part of the show. It makes me think that the other party may not even exist. I would like to see the other offer in writting as you  said.  The 20% was only an idea to show the vendor Im a genuine buyer. The differance of oppertunity cost of the 20% & 10% after tax is to small to mention on a 30 day settlement. But I may offer the 10% after reading the last reply.  I feel the agent knows Im intrested and just like the used car sales person " there is always another buyer intrested so you best act now and grab it". I will have to wait till I get the section 32 check it out, then make the offer. It seems buying real estate is no different than any other business transaction you choose a stratagy then see how it plays out. 
Thanks for the reply and help Kris
Kind Regards
Tony B.

[Tony BMember@tony-bJoin Date: 2008Post Count: 130]

March 10, 2008 - 4:11 am

Scott
Thank you kindly for your relpy. A big yes to" what a property is worth & what someone is willing to pay". If I go in to the agent and say Im willing to pay 5K more that the current offer Im sure they will forward my offer.  The "sun set clause" presents a hard line and for an extra 1k they may not bother. Although I would like to think they are acting for the vendor and If I was the vendor I would like to hear all offers even if its  $100 more.  I feel this holding deposit is a bit wet as there is no contracts signed and non prepared as yet no section 32 also. It just takes the propety of the market and people like me have to wait and maybe miss out. Ether you are in the market or not. There is a thing called pre approval for finance . I always say money speaks loader than words so "show me the money". I will contact the agent & Request a sect. 32 & contract.   discuss the matter. This is my first ever offer on a property, so the learning begins.  I will ask a different agent in the same office. Find out what is the real current offer, let them know Im a cash customer with other properties in mind and have a short time fraim for them to act. I will offfer what the other has offered but not subject to finance inform them I can come in today with a bank cheque for 10 to 20% deposit.  But for today only or maybe 48 hours. If I get a sect. 32 & contract I will know the owners name & address. I dont want to be a real hard ass but I could contact them direct after I do it with the agent, then see if my offer has been forwared to them. Also a friend surgested registed mail to confirm it. I have worked in imports from Asia so I have learnt there are no rule in business as long as you can sleep at night. I myself would take the cash on the day insted of waiting 2 weeks for someone to find the money. The agent told me its a buyer market now????? He also told me they get their holding deposit back if they cant get finance. Thanks again for the good advice, any more comments are most welcome.
Kind Regards
Tony B.

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March 10, 2008 - 2:06 am

Steve
Thank you kindly for the reply & great info.  I will definety get legal info. tomorrow. I feel I have an emotional attachment to this block as I may build on it to live in one day. I dont want to get into the price war as when the agent knows Im really intrested ( desprate & tired of looking) they may play me off.  I feel the same as you re. holding deposits & being suject to finance & no section 32 & no contract seems to me If I want to offer 1k more with a 20% Deposit, 30 day settlement not suject to finance makes me a genuine buyer.
A few more questions if I may:

What is the best way for me to put my offer to the agent and know they will pass it on to the vendor (as they feel its sold, their commision is in the bag already). They may not even bother giving my offer to the vendor if its only 1k more?
 
Im in a cash position & dont need finance, is offering 20% deposit too much? Whats the worse thing that can happen offering this much as opposed to 10%.
Whats the diffrence between a holding Deposit & the 10% deposit?
If its only a show of good faith while the buyers go and chase finance why can't a cash buyer whos at the door today buy it now?
Ive only one reservation ( remember Im new to property investment & have lossed large amount before so Im being very careful)
the other party has offered a bit more that its worth 5k more than what my research shows. If the other party cant get finance I have a better chance with a lower offer. If I really want the property I have to bite the bullet & offer more than them, (based on what the agent told me they offered and lets face it who knows what they really offered !!!!!  Welcome to the real estate game.
Steve thanks again, I will get legal advice for sure if you have any more comments please feel free.
Kind Regards
Tony B.