Forum Replies Created
Hi Sammi
At the risk of offending Scott No Mates (although no offence intented) DON'T set up a trust yourself. It is too complicated a document with too many potential ramifications to risk getting it wrong. I had my trusts set up when I was a practising lawyer and I still got someone else to set it up.
I paid about $1000 and then about $1000 per year for tax returns.
Cheers
K
I agree with Cattleya (stretching my mind years back to Family Law).
Even though financial arrangements are kept separate, as per Millie and Yellina's comments, a court may still find that a de-facto relationship exists if there is other evidence to suggest that they were more then "just friends". One of the things a court will look at is whether friends and family consider your son and his girlfriend to be in a relationship or whether they were just flatmates.
If the relationship falls to pieces she wouldn't automatically be entitled to 50% of the property. As Cattleya said, the court looks at several things such as what "extra care" the most disadvantaged person (in this case the girlfriend who would be left without a house) would need. If they split up in say three years, she may be entitled to a percentage of the capital gain on the house.
This is not intended to be legal advice but rather just some guidelines on the sorts of things that need to be thought out. Family Law is VERY complicated and there is no legislation that says "if … happens then this person is entitled to ..%". It is all worked out on an individual basis.
If your son wants to protect his assets then he should go and see a solicitor. It may be expensive to start out with but it could save him a lot of money later down the track. Consider it insurance.
Cheers
K
Hi Geoff
I'm afraid I'm with the others. The only reason I would buy in a small town (and I would never buy in a town of less than 10,000) is if the property is positively geared with AT LEAST a 10% return.
Your property is about a 4.5% return. As the others have said, we can get better in a capital city with a much greater chance of guaranteed rental. Especially in a small town a periodic rent would make me nervous. What if your tenant leaves? How easy would it be to get another tenant?
The fact that you have had to offer a car or other financial incentives and still can't sell it in this seller's market suggests that it is VERY overpriced.
Just my opinions.
Cheers
K
If the vendor has already accepted an offer then there is a valid contract in place with a special condition that the contract will become unconditional once the buyer has sold his place. The vendor cannot accept another offer until the contract on the first offer has fallen through. That is, there cannot be two valid offers on the one property at the same time.
The vendor cannot put a clause in your contract saying that buyer 1 has a set timeframe to make the offer unconditional. A contract can only bind the parties to it. The clause you are suggesting would bind buyer 1 (force him to make his contract unconditional) and he is not a party to your contract.
The only way you would be able to have a valid contract on this property is wait until the contract with buyer 1 falls through. I expect that the contract with buyer 1 would have a clause that buyer 1 has to sell his/her property within a certain timeframe or else the contract falls through. As trakka has correctly pointed out, at this stage all you can do is present the agent with a back up offer.
Again, as trakka has said, the best thing for you to do is to make a back up offer that is the best you can do to make the offer more attractive. If the vendor is desperate to sell then he/she may be willing to take less money. If they are not in a hurry and the offer from buyer 1 is a really good one then the vendor may just want to continue with the contract with buyer 1 and give buyer 1 more time to sell.
If I were you I would try to weasel out from the RE Agent:
1. How much the current contract is for
2. How long buyer 1 has to sell the property
3. How keen the vendor is to sell
4. Whether the vendor would rather have more money or a quick, guaranteed sale.You never know your luck – the agent may just tell you these things. I expect that I am going to get hounded by this comment on the forum with reminders that agents act for the vendors but in my experience, if you ask the right questions, you can find out anything you want from agents.
Let us know how you go.
Cheers
K
I also do all my development work in a company and buy and holds in a Trust.
Have a think about what you are planning to do long term. If you want to buy and hold several properties, then I think it is worth setting up a trust, not only for asset protection, but also for income splitting benefits.
If you are only ever going to buy one or two properties, then it is probably not worth the cost of having a trust ($1000 to set up then about $1000 pa to do the tax return).
But it is really a matter of what suits you individually. You should seek your own independent advice.
Cheers
K
C
Oh yes I forgot, make sure that you rescind the contract IN WRITING. Even though the RE Agent assures that the vendors cannot enforce the contract you have signed, if the deal falls through with this other guy, the vendors can then sign your contract including the shortened timeframes and can charge you default interest if you fail to settle on time. I have seen this happen. If it were to go to court a judge would certainly find that default interest would not be payable given the vendor's conduct, could you really be bothered going to all that time and effort?
Rescind as a matter of urgency.
Cheers
K
Hi Carlin
Yes it is very unfortunate. You should, at the very least, have been given the opportunity to counter-offer. You could always find out the name of the vendor through the Land Title's Office, or even knock on their door, and tell them that you weren't given the chance to counter offer. If you do it quickly enough, if the new purchaser has a problem with finance, the vendors can rescind the contract IMMEDIATELY after the finance clause has not been satisfied.
In some states gazumping is illegal. You should call the relevant Real Estate Institute to find out whether that is the case in your state.
Good luck
K
Hi Qlds007
My understanding was that purchasers are unable to charge default interest if the vendor delays settlement. At least that's the case in SA and the NT. Blaze, you would have to look at the specific contract, or, as others have pointed out, get your conveyancer to look at the contract.
Certainly in SA and the NT, the only remedy a purchaser has is to terminate the contract for lack of specific performance, under which circumstances you would be entitled to get your deposit back. There is no entitlement to compensation for late settlement. The only way you could seek compensation is to take the vendor to court for breach of contract, which would be an expensive and time consuming process and not worth it, in my experience.
Incidentally, while you are entitled to vacanc possession of the property, that is, all the vendor's belongings have to be removed, there is no requirement for her to clean the property (apart from maintaining it in the same condition as when you signed the contract) unless specifically stated in the contract.
I know it is frustrating but there's not a great deal you can do about it. I have been in this situation several times before, both as a vendor and as a purchaser. My bank is not very good at settlement when it comes to be selling properties. All I have been able to do in that situation is to apologise to the purchaser and explain the delay.
Cheers
K
In my opinion, DHA properties are a relatively good, safe investment. If you want a hands off property with minimal worries then DHA is not bad.
BUT if you are prepared to be a bit more aggressive, then In my opinion, there are far better ways to make money, such as that suggested by hgwells, buying privately near a military base. There is always a shortage of DHA properties and defence members can then look to private rentals.
The inability to sell the property would concern me greatly.
Cheers
K
I would get a builder in to inspect them and ask the questions of the builder.
I wouldn't ask the agent anything at all. They often don't know council regulations. When I have done this in the past I have given the builder strict instructions not to disclose to the agent that I am looking at subdividing. I have found that if the agent knows they can be subdivided then the price of the property will reflect this.
The bargains are to be had when neither the vendor nor the agent know the true value of the property.
Good luck
K
It depends on the state. I am currently in the process of putting a wall in a property in the NT. I don't need council approval because it is not affecting the structural integrity of the property.
But I agree with the other posters – just call the local council.
Cheers
K
Hi Tammy
The reason we are getting the mortgage now is because we have a serious cashflow shortage! We need the money to continue the subdivision.
Terry, the valuation didn't say that the approval made it more valuable, but what the bank has agreed to do is to lend me 80% of the current value and once it the three titles have been issued the bank will increase the loan to 80% of the subdivided amount.
I've got to hand it to Commonwealth Bank. They have been excellent with me on this deal.
Cheers
K
If the bank valuation is low and you still want the deal, why not approach the vendor and see if he/she will give you an extension on settlement to enable you to source finance through another bank.
A low bank valuation would be enough for me to grant an extension if I were the vendor.
Cheers
K
I am currently in the process of trying to get a development loan. My mortgage broker is fantastic and has always come through for me in the past.
But none of the lenders want to touch me. I am a full time property developer with my company making well over $100,000 in its second year of operation. My husband and I have about 1.5 mill in equity and we live off the company's LOC which pays our salary. Our LOC is maxed out due to buying properties outright and paying some very hefty deposits.
I am building three houses on a community titled block of land that the company has bought outright. I can't even get a bank to lend me money against the land, let alone a development on it.
At this stage I am having to LO Doc the mortgage on the land and then either get presales on the houses or go to a private lender.
I am having nothing but trouble getting money. The banks never have any problems with assets – they continually talk about my "lack of servicability".
Just my experiences.
Cheers
K
If the tenant has a pet in the property in breach of their lease then the lease can be terminated. Yes, if the tenant is difficult and wants to take you to the tribunal then it may be a long and drawn out process. But if the tenant is keen to stay then it would be fairly easy for your PM to let them know that you want the old lease terminated and a new one including a pet clause signed.
Get your PM to breach the tenant and then renegotiate a new lease. You pay the PM enough money – make them earn it.
Cheers
K
If there is a clause in the contract to the effect that the building must be in substantially the same condition as the day you signed the contract, then you have a way out of the contract.
In most states in Australia, the risk lies with the purchaser once the contracts have been signed. As soon as I sign a contract to buy a place I ALWAYS get insurance on it for exactly the reason you described above.
Good luck
K
You could put a clause in the contract to that effect but I doubt that anyone would sign it. What if the purchaser has a bona fide reason that they need to sell it?
The REA has a duty to you, as vendor, to get you the best price possible. If the agent purchases it undervalued (and the price is based on the price he has recommended) and he then immediately sells it for a higher price, he has breached his duties and you could report him to the institute that governs REA in Queensland.
The best way to avoid getting ripped off is to get the place valued by an independent valuer. It will cost you about $500 but will save you thousands.
Good luck
K
One of the most insightful comments I have heard with regard to property investing was to the effect of "no matter how much you pay for a property now, in 10 years time you will think that it was a bargain because it will then be worth twice as much".
I think that now is the right time to buy. Prices WILL go up in the long term. Who knows what they will do in the short term, but if you are ready to buy now then buy now. Strike while the iron (you) is hot.
If you want to make sure you aren't paying too much for a property, get it independently valued. It will cost you about $500 and is worth every cent.
Cheers
K
You'd think they would …
With the delayed settlement when we had the money already committed elsewhere, the bank (actually it was a subsidiary of one of the big banks) delayed for about two weeks. I eventually went into the big bank to complain. They couldn't work out why the subsidiary was not able to settle so the bank manager of the big bank gave me the proceeds of the sale in cash and told me that they would work it all out when settlement occurred. So I walked out of the bank that day with about $45000 in cash!
To this day I still deal with that bank because of their service
Cheers
K
I have been in this situation in the NT as a vendor. My bank wasn't able to settle until about 10 days after the agreed settlement date. It was extremely frustrating for me because I already had the money committed somewhere else. So as slack as the vendor may seem to you, they may be just as frustrated as you are. Some banks have a lot of difficulty getting figures together in time for vendors.
In the NT at least, the purchaser has no remedy other than to terminate due to breach. If that is the case in your state (and I don't know whether it is), you would have to give the vendor notice that they have breached and then give them a timeframe to remedy the breach. By the time that is done, the bank will probably be ready to settle so it would be a fruitless exercise.
As far as I am aware you are not entitled to any compensation or "interest". You could certainly ask for early access to paint and reno if you want. If I was the vendor I would allow that.
We just bought our house a few months ago and the vendor's bank wasn't able to settle on time. The vendors gave us a "licence to occupy" which meant that we had a legal entitlement to live in the place even though we didn't own it.
Cheers
K
