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I’ve wondered about this same topic myself. I understand that by paying IO then the repayments will be a lot lower which is great but the down side is then going to be the fact that you will never therefore own the property.
What happens when you finally make the last repayment of the IO loan? Does the bank own the property?
As mentioned above though the seller is usually the one who has the unrealistic expectations. I’ve seen it quite a few times where we have sat down to list a property and presented a realistic figure to the seller and then another agent says they can get 20, 50 or 100 thousand more and we simply don’t get the business. Next thing you know the property comes on at the higher figure only to be reduced several times and sell for the figure we have advised.
If you want to find out recent comparable sales in the area then why not just ask the agent?? He can quite easily print out a list of all the sales within a radius of the property. Most agencys in the country have access to http://www.rpdata.net.au which gives all the prices in a certain postcode or area.
One thing I would advise against is just low-balling every property as you’ll get a reputation as a time waster.
Okay, I find what you have both said pretty disturbing.
There is two reasons why we will ask for the 10% deposit.
1) By putting a 10% deposit on the table the buyer is commiting themselves to the deal and therefore there is a lot less chance that they will pull out.
2) The seller can see that the buyer has commited and therefore will realise that the buyer genuinely wants to buy the property.
If the buyer pulls out after submitting a deposit the agent will not be paid but the seller will retain 0.25% of the purchase price as a rescission fee. This will then actually go to pay the solicitor for time wasted doing all the paperwork.
I can quite honestly say that in our office in NSW this is what happens. If you are in SA then different rules may apply so seek legal advice as I have stated in my above post.
Mark
I’ve just started in the real estate industry as an agent and in our office we only get paid after settlement. I’m not sure what happened to you in the past but I believe you should only pay when you have accepted an offer and settled.
I’m writing this from Sydney so maybe in different states there are different rules. I’d suggest you ask your solicitor as that’s what he’s being paid for. Goodluck.
