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Sadly from what i hear, this is common in new developments. They keep the figures conservative as it makes the selling process a little easier. The first years show that the conservative figures were too conservative and as such the costs need to be increased.
I have not heard of a way to claim against this, I think it might fall into the buyer beware catagory at $700 even $1030 is by my understanding very cheap.
The other thing to be wary of is that the contributions to the sinking fund are adequate or you sell before the building needs renovating or there can be huge shock here.
I am amazed that someone can put a caveat on someone elses house!
I am wondering now why the small business man who is owed funds from the rich man on hill doesnt put a caveat on his home?
A tenant could do this to the home they rent so that the landlord cannot sell and thus they secure a long term rental opportunity..
hmm.. crazy
Does one need a licence or specific qualifications to be able to provide vendor financing of this nature or is it something that anyone can do? I am guessing a good solicitor is beneficial.
Thanks Paul, Can you please tell me a little more about the caveat, how does this work?
I know of a development in the Whitsundays that has Duplex, Triplex and Quadplex allotments available with Preliminery Approvals, cost per dwelling site 85-90k?
Paul, Does this mean that you are the owner of the property until such time as they can get the 'normal' bank loan? Thus if they fail to make payment to you, you are the rightful owner? Do they pay both sets of stamp duty?
I think you are saying you make $68k over the few years (time until they get their 'normal' loan + $153pw). $25 upfront and the balance upon payout?
If we say it takes them 3 years you would earn $23,868K in the over and above morgage amount (the $153pw) + the $68K = $91,868?
No outlay, just the risk if they fail to pay?
Hello again, I am sorry to hijack this tread but can someone please tell me how I start a new thread. I want to introduce myself and ask some questions but I can't seem to find the little button that says 'New Thread"
PCMelbourne….. what is this PAYG Variation = 1% tax?
hee hee. A little curiosity had me look up that financial planning company to see if they are still operating.
It seems they are however that Director/CEO was found negligent by ASIC and has been banned from offering any financial advice until 2012 (or so the news article reads). That said he is still the director of the company and his associates are permitted to offer financial advice so I guess others are yet to share my experiences.
number 8, thats a hell of a website you have there. I'll have to give it some of my time to read thoroughly.
Thanks number 8, I'll look up your location.
When I purchased my first block of land I sought the assistance of a financial planning company. Their service fee was $7,000. This is an enormous amount of money for a first home buyer however I could see the value that good financial advice could offer to my life. I wanted to know all the tricks as to how to best use my money (how much to pay off my loan, when and where etc) I thought that the $7,000 would pay itself off quickly if I had someone to advise me of how not to make the same mistakes the general public make with their money everyday.
So how did it go, well after a few weeks of too-and-fro they advised they were unable to find a lender for my purchase. I went out myself spoke with many lenders and found a suitable loan that suited my needs and which I could afford. I took this information back to my planner. I worked personally with the bank manager to effect the loan.
Within a couple of weeks I received my invoice for $7,000.. pfft! I went in and saw my planner, advising him that there was no chance in me paying the invoice as they had not provided any form of service. He was new to the industry and was being assisted by the company CEO/director. I told the planner what I had learned from my process and what I thought about his company.
He thanked me and resigned that day!
That said, I still believe that good financial advice is worth paying for. But I cant find a good accountant, good finance advisor, nor a good mentor to assist me in how to maximise my money. Granted I don't have a lot, but I know the key to having more is not in what I am earning it's in how I use what I have. And we all have to start somewhere.
Hi Jezza234,
Just be mindful that owner seller means discount to many buyers. The buyers will try to negotiate as they know you are saving on selling cost thus this is generally the first amount they take off what they are willing to pay for your homes (They wont consider the cost of your promotional items). They will also try to test your negotiating skills, typically agents have more experience with this and thus can keep the selling price higher. Also agents generally have a database of potential purchasers which can be handy to access.
I dont doubt you can sell the house yourself and save selling cost, just thinking it may be helpful to you to brush up on negotiating skills, perpare yourself for handling low offers etc. Consider ways in which you can match the exposure an agent can offer.. selling is often a bit of a numbers game.
I too am thinking a little about Olli's comments and the coastal towns. I am new to this so please excuse any ignorance. I can see that it is much easier to find CF+ properties inland within the mining sectors however if you are on an interest only loan plan while you might put $50 a week in your pocket. At the end of the boom you are left with a property worth little and the pricipal loan equal to what you paid? Thus it seems the benefit in these areas is the knowing when to buy and when to sell. This to me seems risky for $50 per week .. example only. Owe the other benefit of course being tax benefits however sadly many of us would be delighted to earn so much money that we should be seeking tax effective investments.
I am perplexed by the whole, debt to debt investment principals. While I understand the fundamentals, I am feeling with my learnings that I am better to stick to the basic principles. I save my pennies. I then invest my pennies in something that will return my pennies and some profit! Too simple? Seems hard to find!Anyway back to the coastal towns. I too am thinking that if I were to purchase in smaller coastal towns, say Airlie Beach or Bowen area, would I not enjoy the benefits of the miners wanting to locate their families in nice areas (only 1 – 2hrs drive from their mine). This way I take less risk as the property is likely to increase in value or at least maintain value in the long term. So it might be hard to find a CF+ property but even if I had to tip in a bit would this not be a better long term investment.
Owe,, is that the answer – long term vs short term investment… hmmm
But If I can buy land 'off the plan' in Airlie Beach area for $135,000.. that could be long or short term investment right?
Pennie for your thoughts..
