All Topics / Help Needed! / Putting down a Deposit / Making an offer questions

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  • Profile photo of dezabilitydezability
    Participant
    @dezability
    Join Date: 2014
    Post Count: 16

    Hi Investors,

    I inspected a couple of properties this week and I have my eye on a couple which I will be making an offer on. I have a couple of questions:

    1) What are the standard deposit amounts/procedure? Ie. I've heard 0.025% straight away after offer is accepted, 10% (or 20% since I'm avoiding LMI) after cooling off period and then full amount upon settlement? Is that right?

    2) Since I will be emailing my offer, does anyone have any tips? Like putting in my terms and conditions.

    My broker is currently sorting out my lending application, 2 lenders are happy to lend to me. I'm getting itchy feet and want to make an offer ASAP but since I don't have approval just yet, I'm thinking should I just wait or stipulate something in my email?

    Thank you

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    1) Yep thats right. You can try for a 5% depoist at cooling off just so you can have more money in your account

    2) I would personally call them and than send an email to confirm your offer, I find its easier to haggle over the phone. Make sure you mention negative aspects about the property before you put the offer in. Good luck :)

    You can ask for subject to finance if you think it will sell soon

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me | Phone Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of dezabilitydezability
    Participant
    @dezability
    Join Date: 2014
    Post Count: 16
    The Dark Knight wrote:
    1) Yep thats right. You can try for a 5% depoist at cooling off just so you can have more money in your account

    2) I would personally call them and than send an email to confirm your offer, I find its easier to haggle over the phone. Make sure you mention negative aspects about the property before you put the offer in. Good luck :)

    You can ask for subject to finance if you think it will sell soon

    Ok thanks!

    oh, so if I gave only 5% after cooling off, wouldn't that incur LMI? Or have I got that wrong and that's only on settlement (20/80) ?

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hiya

    You won't get "formal" finance approval until you've had an offer accepted on the property and your broker arranges a loan for the particular property you're purchasing. 

    Like DK said – you'll need to make your offer subject to finance and your broker will then arrange your loan after your offer has been accepted.

    LMI is triggered when you borrow more than 80% of the purchase price. It doesn't matter how much you pay as an initial deposit – it matters how much you borrow at settlement.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of ChristineNurseChristineNurse
    Participant
    @christinenurse
    Join Date: 2013
    Post Count: 17

    Hi,

    Just my 2 cents, for my properties, I wrote, 'Subject to xyz finance and satisfactory report of property & pest inspection…this offer expires on dd/mm/yy, time'. I'm sure others may have more ideas. Good luck.

    Cheers

    Christine

    Profile photo of mattstamattsta
    Participant
    @mattsta
    Join Date: 2011
    Post Count: 604

    I also make my my offers subject to finance and subject to inspection results that are satisfactory. I'd also put an expiry date on the offer, perhaps 7 days after your offer, so that it gives them a sense of urgency

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    mattsta wrote:
    7 days after your offer, so that it gives them a sense of urgency

    I'd shorten that by heaps – probably keep it valid for 48 hours so it really provides a sense of urgency.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,018

    We submit for our clients a full offer including purchase price, deposit, settlement date and all terms and conditions etc.

    Never leave your offer on the table too long.

    Also why do you want to avoid LMI ?

    It is an opportunity cost and gives you flexibility for the next IP.

    Your Broker should be advising you on these matters.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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