All Topics / General Property / Don’t know what to do!

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  • Profile photo of dpeka3753dpeka3753
    Member
    @dpeka3753
    Join Date: 2002
    Post Count: 5

    Hi. I’m quite new to this forum, I was just wondering if anyone has any thoughts on my predicament.
    I’ve just purchased a property in a riverside suburb of Perth (been in it for 2 weeks). House is in reasonable original condition – built in 1920…it has loads of character. I intended on renovating it and staying for awhile and then selling for a profit later on.I didn’t have a figure as to how much profit as this was going to be my place of residence for me and my family etc. Anyway I bought it for 270k (asking price $280), renovated houses in the area go for 340 and up.
    Yesterday a local realestate agent dropped by and asked if we wanted to sell the house and would we accept $350k. I am still a bit shocked really, I mean 80k in 2 weeks. I feel a little paranoid or suspicious..like does the buyer know something that I don’t or did I just happen to buy something really undervalued etc. I know there’s only two choices, sell (take the money and run) or stay, what would you people do?

    Cheers Dean

    Profile photo of redwingredwing
    Participant
    @redwing
    Join Date: 2003
    Post Count: 2,733

    Dean, i believe you’d have to have lived there 6months at least ( anyone ?) to prove PPOR status, if this is the case i presume you could delay settlement.

    If you sell…what would you then do ?

    Also, work out your exit costs from your loan , buying and selling costs etc to work out the ‘true’ end figure.

    If you bought the place as an investment to make money, then i’d say it’s achieved that goal, as for your paranoa, why not speak to some local real estate agents and see what’s happening in your suburb..

    REDWING

    “Money is a currency, like electricity and it requires momentum to make it Effective”

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Does he have a serious buyer or is he just trawling for a listing?

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of aluminatialuminati
    Participant
    @aluminati
    Join Date: 2004
    Post Count: 40

    Stick to what you planned initially.
    You had a plan in place and it was a good one dont let the ral estate agents poison your mind.
    I would be very supprised if you could not get the same or more for that property after you finish what you wanted to do. You will also be better off for the experience.
    aluminati

    Profile photo of Tasman PropertyTasman Property
    Member
    @tasman-property
    Join Date: 2003
    Post Count: 126

    Dean, I agree with Redwing and MortgageHunter. There seems there’s one of two things happening here:

    1. You are in the lucky situation of someone being interested in your property and can make a quick $80K. Don’t kid yourself – if this is the case, take the money! I dont know how much you earn, but probably you could take a year off and still be in front with this deal (and find another place to call home). Occasionally, while rare, these opportunities do come along for various reasons. That’s why we are ‘investors’ – our aim is to make a profit, so take the money if you can.

    2. The agent may be playing games trying to get a listing. They do wierd things sometimes. Just go back to him and tell him that you will list it with him if he has a buyer at that price. Ask him if he has a buyer. Ask him what terms the buyer wants in the contract (eg finance, due diligence) – try and find out how serious it is. The one with the most info wins. Probably he does know something you dont, thats why he is offering $80K more than you just paid. Be thankful!

    What a predicament to be in.

    John.

    (I believe that later this year there will be no +CF deals left in NZ, so I’ve moved here to invest full time. I can find +CF deals for your NZ portfolio for a fee, just email me.)

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544

    Hi Dean,

    Whether or not you start negotiations will largely depend on how this property fits into the grand scheme of things.

    I tend to think that being a riverside property that this may end up being your family’s preferred ‘home’ and as such you bought with a long term occupancy in mind.

    Bear in mind riverside land in Perth isn’t being made anymore so in many respects above average growth is ‘guaranteed’

    Sure selling now (if the REA is genuine) will realise $80K (less costs) but what are replacement homes worth in the area you will move into if you sell up. My take on profit on your PPOR is that in most cases it is a question of relativities – what cost to buy something else?

    Is it possible the local council, state government etc have big plans for the area that have slipped under your radar? A phone call to the local council planning department would be advisable to see if subdivision plans are underway.

    Derek

    [email protected]

    Read my comments? Think I can help you? PM or email me.

    Profile photo of jancrowsjancrows
    Member
    @jancrows
    Join Date: 2003
    Post Count: 122

    Dean
    Sorry Im a Suspicious character ! I just adore Real Estate folk.
    Did the agent actually appraise the inside of your home ??
    Maybe he thinks its already renovated and hence matching the status of other homes in area to come up with a $350k price tag.
    Some professional appraisal from the front porch or letter box !![blink] ??
    If he does have a genuine buyer in the wind and is seeking a home then good ring him and ask him for the written offer/contract (not sure of WA procedures) for you to consider. !!
    Plus what Commission would he charge considering its a stitched up deal – little effort on marketing your home ????

    In addition contact the agent who sold you the house and get his thoughts.

    Check with your local development consent authority as to plans in the area. Ask neighbours etc. (should have done pre purchase) But cant see alot happening in a few short weeks !! Who knows !! I could be wrong…[blush2]
    Maybe youve landed a windfall. I’d like to see the agent do a runner with his excuse book and not a listing form for you to sign with a buyer in tow. can U send me the video !![biggrin]

    For me …I wouldnt sell… totally agree with aluminati’s comments. Build up your equity.

    Keep us posted.

    Regards

    “Do not follow where the path may lead. Go instead where there is no path and leave a trail” Ralph Waldo Emerson

    Profile photo of kay henrykay henry
    Member
    @kay-henry
    Join Date: 2003
    Post Count: 2,737

    dpeka,

    If he’s offering you $350k for an unrenovated place- TAKE IT!!!!!!!!!! hehe.

    There are lots of stories of people waiting for CG that never arrives. They get an amazing offer and refuse it waiting for something better, and then the market flattens out and they’re stuck. You said that places can be $340 reno’ed. Save yourself the money and sell it.

    Of course, having said that, it propbably is the RE just trawling you for business, but if it’s a genuine offer, then it’s a flip- and why wouldn’t you?

    Don’t forget, you’ll pay 100% CGT, which might lose you half the profit immediately. And would you have to pay the RE to sell it for you even though he’s approached you? Probably. Add in solicitor’s fees and mortgage related fees, and you may be looking at 20k profit (which is better than nothing depending on your plans). Make sure you do the sums :)

    kay henry

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    I am pretty sure that the CGT exemption applies to your home.

    Check it out at the ATO.

    Cheers,

    Simon Macks
    Mortgage Broker
    http://www.mortgagehunter.com.au
    0425 228 985

    Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.

    Profile photo of aluminatialuminati
    Participant
    @aluminati
    Join Date: 2004
    Post Count: 40

    The decision is yours.

    But it’s not as easy as just taking the 80gs.

    If you do decide to sell and you sign an authority to act with the agent, you have three days to cool off on any contract, so tell the joker he has 3 days to come to you with a contract note.
    aluminati

    Profile photo of dpeka3753dpeka3753
    Member
    @dpeka3753
    Join Date: 2002
    Post Count: 5

    Firstly, thanks for all your comments, they’re greatly appreciated . I have been thinking about this deal all day and still haven’t decided. I’m a bit of a hoarder though when it comes to property. 80k is quite good a good sum but like many of you have said it will be eaten up by costs and I suppose once it sold thats the end of it. If we keep it and this is a 10% suburb, then in possibly 10 years time it would have doubled in price and more the longer we keep it.
    I apologise for not telling you all (an oversight) but the agent I mentioned was the one who sold it to us in the first place.I will check the legitimacy of the offer. Will keep you posted.

    Cheers Dean

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