How do you actually make an offer in writing on the property.
My partner who actually worked in real estate in Tasmania, said you make an offer in writing by signing the actual contract. Is this correct? If its not correct, whats the right way to go about it? If it is correct, how do you make the price lower than the asking price or isnt that on the contract already?
More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr
It is different in each state.
In that case I suggest that you would just cross out the price and write in the new price and initial it. The vendor would show their agreement by countersigning it.
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
ah I guess that makes sense, so if the other party doesnt sign it because the offer is too low, the contract is void. What if they write a different higher figure on the contract and they sign it… is that then not valid unless I initial their price?
How does it work in the other states? has any one else made offers on Tassie propertie and is it negotiated this way, if you make your offer in writing?
More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr
Also when you make the offer on the contract, make sure you write subject to finance and costs related to the purchase so you have a security blanket to get out if needs be. Also watch that some contracts have a finance clause where the vendor will find you finance, make sure you read the finance clause in the contract.
RegardsProperty Acquisitions for developers and investor from; Kevin
elysean,
I’ve also been warned about the traps involved in the finance clause on a contract. I’ve been told that if the contract is subject to finance the buyer must go to all lengths to find finance ie. If the agent can arrange finance through ‘Bills Backyard Finance’ at 10% you are bound (not sure how accurate this is, any thoughts?).
I recently bought my first property and requested that the finance clause be reworded to say: ‘Finance to the satisfaction of the buyer’. When I requested this the RE agent gave me a strange look but you can’t be to cautious on your first purchase.
Does anyone know about the ramifications of the fiance clause?
Rhys
What you are saying Rhys is correct, that is why you must write the words correctly and if using a lawyer he will most likely cross out the finance clause altogether so ‘Bills Finance’ cannot be used.
I speak only of what can be done in Queensland
KevinProperty Acquisitions for developers and investor from; Kevin
Hi
In Qld when you make an offer you sign a contract and write in the price you want it then goes back and forth until both parties sign against the same price so the contract can get very messy. When it comes to finance you can write in the specific bank or other lender that you want to deal with. The other way around this if you havent specified a particular lender is to wait until 5pm on the last day of finance approval before alerting the otherside that you cant get finance. But remember they can ask for you to prove that you couldnt get it.how would one go about having a solitor read over a contract before I sign it, I wouldnt know the difference between a standard contract and one that might have clauses to the benefit of the vendor. Is a real estate agent likely to send a copy to my solicitor? or would I have to go to the real estate office and have the solicitor go over it with me.
Also anyone know any solicitors in Hobart that are also property investors in their own right, so that our values are aligned. (hopefully win/win not a solicitor who wants to find an angle so they can get it to court)
More stuff on the voigtstr at http://users.bigpond.net.au/voigtstr
Originally posted by Erika:But remember they can ask for you to prove that you couldnt get it.
If you have used a broker he can write you a letter specifying all the lenders he has considered and applied for. I have done this a number of times for clients and never had a problem with them getting out of the contract.
Cheers,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
make sure you write subject to finance and costs related to the purchase so you have a security blanket to get out if needs be.Absolutely, as well as the other 7 or 8 really tricky little ‘get out’ clauses that you’ve picked up at the latest property seminar. Load the offer up with as many ‘get out’ clauses as you can possibly think of. Gotta love those security blankets.
That way, the Vendor, after having a jolly good chuckle, will have no qualms at all in tearing your offer up and throwing it straight in the bin.
Two days later when you find this out – if the Agent even bothers to notify you after your Mickey Mouse offer, you’ve gotta make a choice. Walk away from the property or sit down for another hour or so and do it all again (the Vendor and her Agent will tire of your petty games very quickly)…this time however, actually mean what you say and make a dinkum offer.
IMHO, if you are so scared of the deal and want all these ‘get out’ clauses that the gurus have taught you, don’t make an offer. Saves everyone alot of time. Vendors aren’t dullards, they eventually want as much clean cash as they can get off you put on the table.
voigtstr – walk into any REA in Hobart and ask to view a bog standard O&A form, sit down and have a jolly good read.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Little cynical Dazz?
I think that certainly the case during the boom when you were competing with other buyers. I think in today’s market vendors would be keen to see any offers.
But your point is well made that an equal offer that is unconditional, or less conditional will look far more attractive to a vendor.
Cheers
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Fair enough Simon – perhaps it was a little melodramatic but you get my drift.
In terms of ‘boom’ vs ‘today’s’ market…what’s the difference ?? Depends where you are sitting surely ??
Over in Perth it’s steady steady as she goes. We didn’t enjoy the dizzy heights and party time that you chaps had in ’02 and ’03, but then we aren’t suffering from a hangover either that y’all are enduring now in ’04 and ’05.
I don’t have access to all of the fancy curves and data (where’s Foundation when you need him ??) but I suspect the eastern seaboard is still ahead of our growth, despite your recent dip.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Do you reckon that it may be the lag effect? Perth boomed some time after us here over east, perhaps there will be a reflection of our current market there soon?
I am aware of a lot of British and South African immigrants flocking to Perth as well as from over this way. Certainly population growth is a major factor for a strong market.
For those from here who may not know, Perth dwellers are a parochial mob. They believe Australia is divided in two with WA being much better than “Over East” which encompasses FNQ to Tasmania and all in between.
It is interesting, and I believe it correct, that WA was seperately invited to join federation and adopt the constitution with no other state being given a choice. There are apparently some significant differences in how WA is treated in the constitution – apparently WA has the ability to secede if they so desire. It is always something that pops up every now and then over there and certainly with the vast mineral wealth I reckon WA would probably be the better for it!
I am a Western Australian myself having grown up in the Hills until leaving home for adventure at the ripe old age of 17!
I guess it is the early hour of the morning that sees me rambling on here…..goodnight all,
Simon Macks
Residential and Commercial Finance Broker[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
While a little off-topic ([cap]), the Perth residential market has some interesting points.
Perth’s annual growth is currently just under 10%, but slowing. The growth of median established house price has been roughly:
2000 – 155k – +3%
2001 – 160k – +3%
2002 – 182k – +14%
2003 – 208k – +14%
2004 – 249k – +20%
2005 – 275k – +10%
Perth’s boom began later than Sydney & Melbourne’s. Part of the continuing support there must surely come from the fact that a house there looks cheap when compared to other cities.
Perth’s rental yield has increased by 15% over the last 12 months to an average of $185pw for an ‘average’ house. Vacancy rates have fallen slightly to just over 2.5%. This indicates that population growth and/or increasing incomes are contributing to the growth.
However, the average yield on a house in Perth & suburbs stands at around 3.4%. This can only mean that current investors (excluding PPOR buyers) are buying on the expectation of further capital gains.
Also of note, the latest RBA statement on monetary policy records that the ratio of median house price to annual average wage for WA has increased from 4x from 1995-2002 to around 5.3 currently. This contradicts the notion that ‘fundamental support’ / population pressure is wholly responsible for recent growth, but leaves WA cheaper than all other states except for perhaps TAS.
In balance, while Perth’s growth appears to have been somewhat more rational and supported by economic fundamentals such as population growth and the commodities boom, prices have overshot, and are likely to (in my opinion) correct at some point either by falling or stagnating while wages and rental yields catch up.Cheers, F[cowboy2]
Hell of a deal F. Well done.
Any time you want one of those high paying full time research jobs (up to 4 K p.a.) givvus a hoy.[biggrin]
Now how does that Perth list compare with Sydney and Melb….are you guys still ahead ??
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
… It would seem that Perth’s 10-year index has caught up with the other capitals – all are between 240 to 250% of 1995 median price. Rental yield is higher than Sydney & Melbourne. Some detail, a bit of analysis and some graphs are available from the RBA’s statement of monetary policy pages 35-40. This will probably be the best source of accurate real estate data going forward.
Cheers, F.
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