- somewhereoverthereMember@somewhereoverthereJoin Date: 2006Post Count: 16
We put an offer in on a 22 acre parcel of land in an estate in Wongawallan QLD after obtaining a bank pre-approval. The offer was accepted however the bank has since knocked back the application. We have since approached 2 banks and a mortgage broker about finance and are unable to obtain any. Regretfully, we now need to cancel the contract (we have a finance clause). We were hoping to build our dream house but it's not to be.
However, I was interested in the idea of flipping the property as it is ridiculously cheap – similar sized properties (eg 10 acres) are selling for as much as $880,000 and there is a house and land package over the road for $1.2 million (500 sq m house on 8 acres). The land is not yet registered (although one builder has already started building on another block) and we have 3 weeks for finance approval from registration + 60 day settlement.
What are my options and is it worth the risk? Should we just cancel the contract or should I try to onsell the contract? I am aware that the market is kind of slow and acreage blocks are particularly hard to offload. Any advice would be hugely appreciated!!
-HelenRichard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024
Remember even if you try and flip the property you will have to pay the Stamp Duty on the contract 30 days after you go unconditional so this will before the Settlement.
Flipping is not that easier as unless you have a call option in the Contract you wont be able to flip it merely onsell it with a new Purchase Contract or a Transfer by Direction.
In realty you will need to settle on the property first and then even same day onsell the property to your buyer.
Of course in both cases you would need to make sure that for whatever reason your buyer did not settle you have cash to settle with the original vendor to ensure you are not in breach of contract.
Why could you not get funding for the property ?
Yours in Finance