Frankston

Thanks for the advice Trev. Makes sense

Emmy

I also don't think I explained it properly. We would put in three seperate offers one by one.

So if they said no to offer number one and asked for more money we would then come back with offer number two. If they came back and asked for more money again, we would give them offer number three. That's why it goes up 5k each time. I think I have written it a bit confusingly.

The only thing that makes me a bit nervous is giving them an unconditional 30 day offer. I have been told in the past to always include a subject to finance clause in the offer even if we have pre approval which we do. But you don't have anything like that when buying at auction and non conditional offers are so much better to negotiate with. They seem to give you more power. We are borrowing 65% from the bank and have more in the bank for renos but do you think it would be risky to give an offer for 30 days settlement and not condition to finance. just wondering on your thoughts here.

Also, I thought that a 10% deposit was payable when the contract is signed by both parties and the rest was payable upon settlement. Or have I got that bit wrong?

Cheers,
Emmy

Thanks  so much for your valuable advice Michael…

I will give them until the close of business day from signing the contract of offer. I just had no idea on what a normal sunset clause was but if it's not too out of line to put such a tight one in there then I will.

So if we want to make an offer do we tell them our first offer over the phone or put it all in an email with the terms and then sign a contract of offer once we know that the Vendor has verbally accepted it? Just unsure of the correct processes here. In the past we have signed a contract of offer for our first offer (it was beaten by somebody else) but this time we are willing to negotiate so have come up with three offers to be put to them one by one until they (hopefully) accept. Do we have to sign a contract of offer every time we change it?

eg…

offer number one –
600k and 60 day settlement
– not subject to finance (we were thinking that on the off chance if anything went horribly wrong with the finance then a 60 day settlement would give us enough time to find finance elsewhere, but both us and our mortgage broker are confident this won't be the case).
– We would also allow an early release of the deposit once the conveyencer has checked there are no debts or mortgages upon both parties signing the contract.

offer two –
605k and 30 day settlement
– subject to finance
– early access for quotes, measurements and maintence of a non-structural nature
– release of the depoist upon the contract becomming unconditional
or
a 60 day settlement not subject to finance

– Should I give them the options here? Or should it be one or the other? If so, which one do you think? 30 day subject to finance or 60 day not subject to finance?

offer three –
610k and 30 day settlement
– subject to finance
– early access for quotes, measurements and maintence of a non-structural nature
– release of the depoist upon the contract becomming unconditional
or
a 60 day settlement not subject to finance
(whichever settlement terms they picked in offer number two will be put forward in offer number three).

Does that make sense?

Any advice or opinions would again be greatly appreciated.

Cheers,
Emmy

Thanks guys,

Excellent info as always.

It makes sense that a hotspot is not so important if I am selling it 6 – 12 months later. But there is always the option of renting it out for 12 months after some basic renos and then selling it to get more captial growth? Or am I confusing things by giving myself too many options early on?

I guess when I say hotspot, I mean an area that will have steady capital growth.

Cheers,
Emmy

Hi DWolfe,

Thanks so much for your helpful info.. The costs were quite a bit higher than I thought they would be but I am still considering the property as it seems to tick a lot of boxes.

I am a bit nervous as this is my first and I have only just started to look in Frankston (previously I was looking in Geelong but that is just as, if not more expensive than Frankston). But as you said, "it is better to do something and make a couple of small mistakes than to do nothing because your afraid of making a mistake."

I have rung the council who tell me that there wouldn't be problem with subdivision.

If I didn't want to go ahead with the construction, would I be able to sell the land without the permits, just as a block of land or is it much better to sell it with the plans – even if they do cost 30 – 40K.

Cheers,
Emmy

Thanks for your suggestion.

I do have a good accountant but he is currently away.

I am engaged (defacto). We currently rent so we could register it as our primary residence and kind of move in while also keeping our rental. But we would only want to have it as our primary residence for the minimum amount of time – I think it was 6 months? If that is not possible, then how much CGT would we be asked to pay?

Thanks,
Emmy