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What I’m concerned about is this.
– The bank will want to inspect the place at some point to decide whether or not to loan you the cash to buy the place.
– The bank might say no.
– The contract goes unconditional two weeks after exchange.
– If the bank says no, and the time it says no is not within the two weeks, then clearly this would be a fairly major problem. You’ve signed your name to a legally binding contract to buy a house, and you have no immediate finance to do so.
This is why I asked if the bank inspects within the two week period.
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Thank you!
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Thank you, Qlds007. So you can apply to subdivide a property during the settlement period then, I take it.
How long does it take to get approval to subdivide, usually?
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Also, is the “inspection date” agreed on the contract at the end of the two week period, or is it at a later time?
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Thank you for your help.
I gather that the bank will want to inspect the property at some stage, to get a rough value of it and thereby ensure that it’s not lending you money on a lemon. Does this normally also happen within the two week period after exchange of contracts?
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Hi Judi.
I found your earlier post to PenguinJr to be very helpful and informative. I have some further questions, however.
Originally posted by judi:
Talk to a mortgage broker. Find out how much you can borrow.Is this what is called arranging provisional finance? I take it that this is the step at which it’s a good idea to get written confirmation from your bank about how much you can borrow, correct?
Find a property in your price range. Inspect it yourself.
Yup.
Make an offer (in person to the real estate agent.
Right. I have a few questions about this bit.
1. First up, the penguin home buyers guide says that after you have found an appropriate house, you should obtain the contract of sale. Is this the document that commonly used to make an offer? If not, what?
2. Many escape clauses have been mentioned elsewhere in this forum. Is whatever document the offer is made with the document on which these are listed? Or is there more than one document on which the relevant clauses are listed?
3. Is there an offer document that a real estate agent will try and get you to sign that should commonly be avoided? I’ve been reading about contract notes, for example, and they seem dead dodgy, as in the website posted below:.
http://www.mericka.com.au/conveyancing/contractnote.shtml4. As a general rule, would you say it’s a good idea to run through any offer document I sign to my real estate lawyer first?
5. In Queensland, are RE agents required to submit any offer I may make to the vendor?
Agree on a price.
As a general thing, is this usually done by the real estate agent physically taking the offer document to show and discuss with the seller, or is this commonly done over the phone? I’m just curious as to the usual timeframe of the offer process.
Look at the sale contract with a solicitor or an experienced investor that you trust. Make sure there is a condition on the contract about finance. It is usually 2 weeks to arrange finance and if you can’t, you can get out of the contract without a penalty. The same goes for building and pest inspections. The contract also states the date of “settlement” that’s when you become the owner.
Right. So these escape clauses (subject to building inspection satisfactory to the purchaser etc) go on the actual contract, then, and they’re only valid for two weeks. They are not valid up until the date of settlement. Is this correct?
So what happens if you have arranged your pest, building and any other relevant inspections, you successfully organise finance, all is well, and the two weeks expires. Whoever’s living in the house then trashes it, between the end of the two week period and settlement. Or maybe the vendor rips out all of the lights and sprinkler systems for the new house he’s building. So, effectively, you’re not getting what you’re obliged on the contract to pay for. What happens then?
So, after signing the contract,…
Probably a silly question, but this IS the same contract as referred to above as “contract of sale”, yes?
…call your mortgage broker with the details and he/she will look after you from there regarding finance. Call a professional builder who has insurance to do a building inspection and give you a written report. Same for pest inspection. These things should all be finalised by the “inspection date” that you agreed to on the contract.
The Penguin Home Buyer’s Guide also mentions getting a survey done. Is this normally required, or is it unusual?
If it’s all satisfactory, the contract becomes “unconditional” and you can’t get out of it without paying some penalty.
What kind of penalty is usually applied? Are we talking loss of deposit, or other? Generally, how does it work?
You should also have a conveyancing solicitor. Give their name to the agent at the start and they will take care of all the details (including building and pest insp sometimes).
Does all of the conveyancing take place during the two week period?
Another sourse of free info are legal secretaries. Go into a conv. solicitors office and talk to the person at the front desk.
Great source! Thanks!
You will have a solicitor, a lender and a RE agent all working to make sure everything goes ahead according to plan.
Judi
Thank you.
Originalsin.
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.Originally posted by JohnO:We have recently purchased a house and land package at Mawson Lakes (SA) and completion of building is Feb 2004, the total cost is $210,000.00. We have put in $30,000.00 and the average rent for this type of property in this area is $230 – $250 / week. This way negatively geared using the formula from Steve McKnight.
Has anybody got any creative ideas to turn this into positive gearing?
I would love to do a wrap (current valuation $240K – $260K) but it seems this is not allowed in South Australia.You might be able to increase the value of your property, and thereby increase your rental return. I would recommend a book by Dolf de Roos called something like “101 Ways to Massively Increase the Value of Your Real Estate without Spending Much Money”.
I don’t suppose you could subdivide the land and put a kithome on the other half? Or just sell off the excess land and put the cash into your mortgage?
Tenants probably won’t whine if they have less lawn to mow.Also, I take it that your home is mortgaged over 30 years, rather than a shorter period?
Originalsin.
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.I, too, am interested in regional investment.
My main concern is that a house in a small town might have a high vacancy rate. That would obviously be a real cashflow killer.
Does anyone know if there a method to determine the likely vacancy rate for a particular town?
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.I would have laughed very loudly at him, asked why he didn’t buy it himself if it was such a great buy, asked if he was incompetent to judge a price since he sold it so cheap, asked if he could spell “leech,” then hung up on him.
The word “leech” certainly would seem to fit that man. I certainly would not want to do business with him. From the information in your post, you did nothing whatsoever unethical.
Not dead yet.
Lo there do I see my father.
Lo there do I see my mother and my sisters and my brothers.
Lo there do I see the line of my people back to the beginning.
Lo they do call to me, they bid me take my place among them.
In the halls of Valhalla.
Where the brave may live forever.
