Hi everyone, My partner and I have signed for an off the plan 1 bedroom unit in Cairns in a nice blue chip area (Redlynch). I am now starting to worry after the club we found the property through sent me the breakdown of what they receive from the sale. The total purchase is 225k and they receive around 13k. I understand that a selling agent should receive commission but I am worried that they have inflated the price to make up for their costs. I am also worried that if I sign a contract – which I have not done yet – that the bank valuation will come back under the selling price and we will have to make up the shortfall, which I’ve been told happens quite frequently. As we are borrowing 95% and don’t have much capital available this would be crippling for us. Has anyone experienced this sort of situation before? Does anyone have any advice?My gut feeling is telling me to get out but I’m worried I’m just being too safe!!! Cheers,Emma
emmajane,
Suggest you check out some of Neil Jenmans advice, for example…….
http://jenman.com.au/news_alert.php?id=82
Hope this helps you make the right decision.
I would be seeking independent advice.
Perhaps commission a valuation now before it is too late to back out. Speak to another agent in the area about the value of this place.
If you do pull out then you could probably buy a similar unit on the open market without using such a club.
Have you checked http://www.realestate.com.au to see what these units normally sell for? If it is a large complex you may even find one or more for sale.
Good luck mate – dont be too scared to cut and run if you don't feel good. The club may try to pressure you but be strong.
Cheers,
Hi Simon,
Yes I have checked out re.com.au and they don't have any one bedrooms for me to compare too! There has been no pressure but I'm worried by the time settlement comes (Jun 08) the rise in interest rates would have a caused a drop in prices. I think I'm just gonna fly up and have a look, rather spend the $500 now than lose 225k in the future!!!
Well you wouldn't lose the whole $225K!
There are 2 bedders for not much more. Outside of inner Sydney I believe 2 bedders are always more attractive than single bedrooms units.
Always best to do your due diligence thoroughly.
Cheers,
Just make sure this is not "buyers remorse" . I bought a block of land and in the first year I was saying tgo myself"I shoul d not have done that, I should not have done that". Three years later…………I now have a good quality asset. It turned out to be a very good decision.
DYOR
hi cyclist, thats what I think it is! maybe after the excitement faeds and the reality sets in it happens to everyone!!
Just get a valuation done. It will cost you a few hundred bucks but could save you thousands. Peace of mind.
I bought in Parramatta Park (Cairns) off the plan without seeing it also. $279k. 2 bed, 2 bath. Settles in Feb 07 and people are reselling on realestate.com.au for $335k.
I paid $11k commission (part of the $279k).
I have no issues with this as the sales team that showed me the place had done losts of groundwork (2 x independant valuations, 2 x independant rental appraisals, city market driver stats, etc). Also hooked me up with a local property management firm (who i flew up to meet after paying my 10%….would do deposit bond next time now i know of them)
End of that day, my strategy is hold for long term capital gain. Who cares about $10k commission in 15 years when the place is worth $750k plus?
EDIT..settles FEB 08, not 07
Emma
Was it our friends at TIC.
If so you might want to commission a proper valuation.
Richard Taylor | Australia's leading private lender
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