Hi Guys, I am looking at buying a block of land in an estate and subsequently get a house built from one of our leading developers. I am currently waiting for the next land release that shall happen in the next few days. I have decided on the block that i would really like to buy. When the land becomes available the developers will quote me a price and i have to put in my deposit. My questions are:
1. Can i put in an offer for the land that is lower then what the developers are asking?
2. If i do put an offer and it is rejected then i might loose the particular block that i am after, does that mean that i shall simple sign on the dotted line with what the developer is asking me?
Apologies for the long post, but am trying to explore my options here.Hi S.M.T M,
don’t apologise for the long post – you should see some of mine! I’m the king of waffle.Is this block for a PPoR or an I.P? This difference has a huge influence on your mentality for the deal.
If it’s for an I.P then let’s get one thing straight right now – you are an INVESTOR. You are buying with your head and your wallet – not your heart.
Therefore you offer what you think the property is
a) worth (if you know local land values)
b) whatever you can get it for under asking price(within reason). Starting at 20% below asking is not unreasonable or uncommon. It may not be accepted, but it may be.Don’t get emotional about it – there will be another ‘deal of the century’ tomorrow. You must be prepared to walk away from any deal if it doesn’t suit you.
To answer the question though; you can offer whatever price you like and at what terms you like. He may not accept your offer, but don’t think you are locked into what he wants you to pay. For example, we bought a block of land on a 2 year settlement with a 15% discount on asking price (settling on return to Aus).
Is the land actually worth what he is asking anyway? Do some research on recent sales of land in the area (don’t ask the agent who is selling the blocks).
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Thanka LA Aussie! Well this block of land is to build PPOR. As you pointed out, i am a bit emotional as i really want to have my own house built and stay there rather then pay rent (and subsequently someone else’s mortgage). My concerns are:
1. If i place a low offer and someone beats the offer then i will have to wait for the next land release.
2. If i sign the contract with what the developers are asking me, what if the bank evaluates the price of the property to be lower then what i agreed with the developer?The settlement of the land would be in 4-5 months and i might not have my 20% if the property is evaluated low.
Hi you can always and most do the land subject to finance. There is much more to a home constrcution loan though contact me if I can help you any further
Wayne
Mortgage Adviser
Email [email protected]
http://www.alphamortgagesolutions.com.au
First home buyers, investors, refinace, loan consolidation, equity loans, free service we come to you!
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