5% or 10%

Hi trisha,

Get Steves book – he put $100 on a house once when they were asking for $10K.

No law to give an amount apparrently, just std practise for REA’s to put 10$ figures on contracts.

Rgds, DAmien

Trisha, I cant afford to buy them, so I guess I’ll
never know []

BC

howdy ma’am,

done it with props valued from 56k to 250k… it’s just a holding thing.

the 10% deposit goes to the bank before settlement.

cheers
r

I set a figure between 4 and 5 percent, and – as I do when making an offer -I deliberately don’t make it a rounded thousand.

it was my lawyer’s idea – hehe – so that I would appear to be this sophisticated property investor who has arrived at her figure after performing some extremely professional and tricky calculations – really, to appear as someone harder to force up in price! (Put it this way, I needed all the help i could get, cause I sooo wasn’t a soph. prop. inv…

Three houses now on between 4-5 percent deposit and never been questioned once. Oh, no, I lie, the third one I forgot completely and wrote in a 10 percent deposit (but by then they already knew I was a soph.prop.inv. hehe!! -Also wasn’t paying interest at the time, and besides 10 percent was only $1900 – wa-hey!)

Lawyer said ‘ as long as the deposit is enough for RE agents to get their commission out, they don’t care.

Banks might though so you may have to end up putting 10 or 20 percent in the property anyway but i think the idea is to pay it at settlement thus minimising borrowing costs. So therefore your deposit is due when the contract goes unconditional (ten days after the offer in my cases, as I like ten days to do my due diligence) and then you pay the rest less what the bank gives you on settlement.

cheers-
Mini

http://www.vocalbureau.com

Hi Mini,

Interesting statement you make saying you present your offer THEN do you due diligence. How do you structure your special condidtions to give you an out if you DD doesn’t come up to scratch and you want out?

have a great day
Robert

Veni, Vidi, Vici

Hi Mini,

Can you please recommend to me a good lawyer to use for PI in NZ. Should I be using the services of an accountant etc. in NZ or AUST? Also are your loans / bank accounts situated in NZ or AUST? Thanks I’m just about to buy my first IP but need to find the right people to deal with.

Cheers

Christian

quote:

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Hi all,

>If I read you right, you’ll give them a 4-5% deposit when >contracts are exchanged after doing your due dilligence, you >may borrow the 80% from a lender and you may have the >other 15% cash or invested ready to pay at settlement.
>Is that a plausible senario

Hi there, the actual time-frame is 1) contracts are exchanged and signed for the negotiated price subject to due diligence
2) due diligence, for which I allow ten days. I did it five for my first property, and was stressing when I didn’t have the builder’s report back at 7pm the night before it went unconditional….I got it by 8pm, however i learned that it’s better to have twice that time!! 3) i decide if i want to pull out or go ahead, and contract goes unconditional on the 10th day, which is when the 4-5 percent deposit is due.
4) settlement where the other 95 percent is due. Either the banks will lend you the rest , or you have to put some cash or equity loan in, or get vendor finance

>Interesting statement you make saying you present your offer >THEN do you due diligence. How do you structure your >special condidtions to give you an out if you DD doesn’t come >up to scratch and you want out?

Under ‘conditions’ I have 1) subject to satisfactory LIM report (name in NZ for local council dossier info on land, i.e. claims, caveats, does it have mines? Is it earmarked for road widening? was there a building permit for that garage? that alteration? was there a permit for the free standing multi-fuel burner and is it code-compliant? (otherwise insurance won’t pay out if there’s fire cause by the illegal fireplace!! doh!! and you have to make it code-compliant after the fact, or rip it out!)

2) subject to satisfactory builder’s report (costs 300-400 bucks and you really know what you’re up for then!! Right down to age of hot water cylinder, and which taps are dripping, how many years roof will last…) especially especially important to me as I have been buying in another country – and haven’t seen the properties in person, apart from that the agent has sent me a bunch of pictures of every room inside and out. On that note once upon a time I looked in person at a zillion houses, and found one, had a builder’s report, and it came up a lemon. that’s when I realised i don’t need to look in person as I can’t tell anyway – and all that happened when I looked in person was got emotionally attached and ‘i really want this house!!!” and my negotiation skills went out the window. I feel a lot stronger negotiating on the phone at a distance – and then the RE agents don’t get to see that I look like bob marley’s white hippie cousin- cause I don’t LOOK like someone a RE agent would take seriously -but I sure can turn on Ms Serious and Professional Adding-this-to-her-portfolio Mature and Experience Investor Mogul voice. That’s just my little reasons as to why, and stuff.

3) subject to solicitor’s satisfaction with all terms and conditions (blah blah some legal thing that the lawyer puts in)

4) more clauses if there is an existing tenant (we want to get all the rental docs, etc etc etc evidence of bond lodgement, credit check,)

5) a clause if the land is leasehold, subject to solicitor viewing the land lease to his satisfaction

Never bought leasehold land yet, but have looked at it.

so I get many chances to pull out.
BTW the exact wording of the clauses is very important so don’t write your own, get your lawyer to do it.

I have heard of people doing due diligence before they sign the contract, but I can’t imagine them getting a very good deal then – the vendor knows you want it!! I haggle the price first, sign, then do the due diligence. “I prefer to buy something with an existing tenant cause then you know it’s liveable, even before the builder’s report”. That was me six months ago, but that rule has been tossed out since, as funnily enough the two I bought empty were more liveable than the one with the tenant (who left the day after settlement anyway -doh!!) it was a dump! but I knew that though (throught the BR) which is why i got it for 16. And it’s come up amaaazing after the reno.
One more thing is that I find it much easier to not get emotionally attached if I haven’t seen the property. ‘fall in love with the numbers, not the house’ Kiyosaki says, and that’s been working for me. Also if i had to physically find time to look, I just couldn’t have bought three this year, as I also have a full-time life.!

If the maintenance/fixing up costs are going to be high after you get your builder’s report you can then say ‘ill go unconditional on this if you drop the price 5K, as you can see from the builder’s report it’s gonna cost me ten to make it liveable’…..

Sometimes it works and sometimes it doesn’t, but you get to decide if you want to buy that property at that price in that condition, and if you don’t you can pull out (all without any deposit being paid.

cheers-
Mini

http://www.vocalbureau.com

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Hi Mini

I can be reached at [email protected]

Cheers

Hi Mini,

Thanks for the “full disclosure” to my question. If we tried full DD before signing a conditional contract in Oz at the moment, we wouldn’t even get the paperwork out of the file before someone else had a contract on it I think I’ll go into business printing those little “Under Contract” sticker…I’ll be a rich man[]

Have a great day

Robert

Veni, Vidi, Vici