Hi All,
First post, deep breath.
I'm about to place an offer on my first prospective property (PPOR) and have been advised by the agent that a quick settlement is of more concern than the price (to avoid bridging finance – the property got PI'd at auction). At this point I have not enrolled the services of a solicitor/conveyencer nor have pre-approved finance (am debt-free prof, 75K deposit, 100K+ salary, 40K shares) and am wondering if I can offer a sub-30 day settlement. Note that my offer is conditional on a satisfactory building inspection – so this has to be done too. I'm wondering if all this is feasable under 30 days.
It feels a little rushed, but its hard to differentiate seizing an opportunity from ill-prepared pie-in-the-sky panic!
So, is it possible to settle in less than 30 days? Can someone enlighten me to any pros/cons?
Just let it go on auction. The chance it sells is very, very small. And you will get a real value of the house this way.
Don't ever be pressed to buy, it's a real estate agent trick to get a buyer to commit to something that you don't really want to commit to.I'm amazed that people still worry about 'missing out'. This is a BUYER market now. If this property doesn't go to you, then there's 20 other properties, nicer and cheaper for you just around the corner. The fact that you are being pressed into a corner means that the seller wants you to commit. He *knows* he will get less on auction , and there's no other interested than you. Just let it go on auction and offer 100K less.
Trust me, if you don't buy this one, you can buy 1000's of other properties with the same features, and they get cheaper and cheaper every week. 2000 properties are being put up for sale every WEEK.. and none of them sell.
Don't allow the agent to press you, just offer 100K less than you're offering now. Say something like "The bank doesn't allow me to borrow more" or whatever. This way, you put the pressure on the seller instead of on you.
Buying your first PPOR is challenging enough without the pressure. Do not allow anyone to put you under pressure.
IF quick settlement is of more concern than the price, why doesn't the seller LOWER his price ? exactly.
He will lower his price, just offer 100K less
I did 19 days once on a unit from acceptance of offer to being cleaned up and having tenants in. It can be done if you get everybody to pull their fingers out.
thanks for the comments scamp, the property has already been passed in at auction, hence why they're now in a real hurry. I was going to offer 50K off the lower of the range (was advertised $390K+) and 30 days settlement. it's a 565sq meter in the inner west (VIC), ROW, ugly but plenty of potential. I think more than anything, the buyers have them by the balls
Does this sound like a reasonable offer under the current conditions? As people point out, there's plenty more fish in the sea, but it guess you gotta have a crack when there's possibly a deal to be had.
Feel free to tell me I'm a little out of my depth.
Just make sure your mortgage broker is on the ball as many of the major lenders are dragging their heels these days when it comes to both approval and documentation.
Richard Taylor | Australia's leading private lender
finance is the critical path and really you should at least have approval in principle going into an offer like this.
inspections and valuations can be done in days, but lenders can dick you around. Your profile sounds OK so on the surface it should be OK. Any reason to push for 30 days? agent proposal? we usually offer 45 which is better than most people expect and comfortably do-able from every angle.
it depends from state to state.
In QLD if you had pre approved finance (which you dont) it can be done in 14 days. Since you dont have finance you need 14 days from finance approval until settlement. NB. it can be done quicker but they dont like to.
usually it takes 14 days from start to finish for obtaining finance or it may take longer depending on the docs needed but your case seems pretty straight forward so should only need 14 days at most.Taking all that into account you really need at least 28 days for your situation.
However thats QLD and I know your in VIC so this may help or not.
I attempted to have a 14 day settlement on one, in the end it ended up being 16 working days and I had to move the documents from one desk to another myself. Fortunately, all parties involved were located in the same area (Newcastle). I did end up haveing to pay a small amount of interest to the vendor but managed to have that split between the lender and the solicitor as I argued I had not held up anything. I think having the ignorance of first buy I did not really know this was not the norm, so didnt see why it was not possible. Just be aware if it goes over, what is the interest rate set at and how long will they give you before a notice to complete.
Mick
My mob paid deposit on Tuesday 3/5 (after substantial negotiation period). Settlement is tomorrow. Dumb ar$3 solicitor on the purchaser's side did not put an express clearance on solicitor's trust fund cheque GRRRRR!!!! Worked my magic, settles tomorrow.
thanks for the comments fellas, good stuff to keep in mind. As mentioned, the rush was because it was passed in at auction and they had purchased a new property that was settling soon.
I pulled the pin on the offer and took it as a 'lesson learnt' – I'm getting a conveyencer and approval-in-principle for next time.
Scott No Mates – interested in what things you negotiated, are you able to elaborate on this?
Never pull the pin. Just make a 'cheeky offer', let's say for a house asking price of 390.000, you offer 270.000.
Remember : House prices have gone up more than 2/3 in the last few years, it's only normal they come down 2/3 again to nominal values. At the moment, prices are expected to drop by 50%. If you want to invest into anything, you need to make sure you take this 50% drop in your offer. Doing a 270.000 offer actually is a pretty reasonable offer, being only 120.000 lower , instead of the 200.000 predicted drop in prices.
Don't go for smalltime 50K drops, just go cheeky and go 120.000 lower. The people that bought the house for 160.000 a few years ago will still make a nice 10.000 profit on the house.
The longer the seller waits, the less his property is worth. That, plus the stress involved.
Never pull the pin, always make a cheeky offer. If they laugh at you for being cheeky, just laugh back and think to yourself that houseprices are about to drop 50% in the near future and you'll be able to buy much more for your dollars later on in the crash.it pays to have your ' team ' in place.so you can jump on a bargain
i also have learned it is best if they are located fairly close so you can move documents ,sign stuff ( cheques usually.. )at the last second etc
there is always a last minute panic over some scrap of paper (so get a fax machine )
and …while getting the finance right isnt as sexy and exciting as screwing some poor real estate agent
one badly financed place will stuff your next purchase and you will end up doing it over and paying break costs etcthere was a sign above a collegues desk that we can all learn from
" lack of planning on your part ……does not constitute an emergency on my part "
while you may feel you are getting a bargain ,you are doing a lot of pushing and shoving to get things done and putting your ass on the line if it falls over …to make some complete strangers happy
so be sure it is you who is doing the manipulatingthinking out of the box …could you make an offer plus $xxx as an allowance for bridging finance( for one month ),or if you are really certain you will get finance make a large unconditional deposit
last house we sold still hasnt settled but as the deposit was unconditional it was released to me and the replacement house has already been purchased ( using said funds )before you chime in scamp we made a profit and should do so on this next one ,so your nation wide blanket statement/opinion/ argument is
a, getting boring and b , not an accurate depiction in my experiencecheers and good luck
thanks suavemechanic, hopefully next time I will have completed all the due diligence stuff to make an unconditional deposit – could have been the clincher in with the deposit I had. Apparently there were two other offers that were unconditional at the time (one had completed a building inspection – dunno about pest – it was an old weatherboard so I didn't want to assume it had been done) so I was not in a good position to compete.
I get the feeling there will be people who've spent serious coin on newer flash properties only to see their property on the market fall flat…
I purchased a property with a 30 day settlement .
Make sure you get Land Lords insurance as this held up my 30 day settlement and I only got the certificate of insurance 1 day before settlement and experienced some stress from this as the bank won't release the funds until this occurs.
My trouble started with my normal insurance company stating the house had to be occupied to get insurance. So I eventually changed my insurance company and use CGU now.Conditions of this sale are unfortunately commercial in confidence. Lest to say it involved having the vendor register a major subdivision, removal of an easement and other unfavourable conditions.
Hello duckster
Can you please verify that you meant landlords insurance and not in fact building and content insurance.
If that's so, I'm surprised. Is this something new?Thanks
ElkaGet a very good finance broker and make sure you have pre-approved finance. Meaning … everything as submitted without and surprises … finance will go thru fine. An independant valuation ASAP would be advised to make sure there are no hidden traps there. You broker should be able to go thru these and any other concerns or considerations with you.
Quickest purchase I've ever done is 2.5 days …. not easy though and not possible all the time …. takes a lot of negotiating, relationship building and ducks lining up in a row! eg everyone doing their part of the job on time and as promised, dotting the I's and crossing the T's. Good idea to have a subject to building inspection clause …. you may also like to try to add a subject to satisfactory valuation clause. The real estate agent may get nervous with this request, it's because the definition of this is to 'your' satisfaction. That's why a seasoned real estate agent will not like this word added. I can choose to be unsatisfied for any reason I like!
If the real estate agent reacts … change it to subject to the valuation being no less than the purchase price. This way you ensure the property is worth no less than you are prepared to pay …. and have no problems with the valuation causing you to have to put in a large deposit that you might no have in relation to your finance approval Loan to Value Ratio.
Finance may be approved, but you still need to come up with the required deposit. Not the R E Agents problem if you dont have it and without this clause the finance clause wont get you out of the purchase. A good broker will also be able to guide you trhu this.
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