Forum Replies Created
Thanks Terry,
So the total costs to purchase a $200k property shouldn't be more than $10k? Would this be the same sort of costs if buying in a trust?
Lastly, can these costs be included when applying for finance?
Example: when you put in an offer for the property, you offer $210k ($10k more) BUT the seller agrees to pay for all the costs associated with purchasing the property (which you mentioned above).
Hi Terry,
What do you mean "if you buy it for $300k is it really worth $400k?"
I have been specializing in sourcing below market value property for quite some time. There are many reasons why you could purchase a $400k property for $300k, but i wont get into that now.
But lets just says this property IS worth $400k, which can be confirmed by online valuations AND the banks valuation. With this in mind, could u provide insight to the banks logic in my previous post?
An OTP stands for Offer to Purchase, what is your offer document called in Australia?
An addendum would mean changes made to the Offer to purchase
Thanks Terry,
So on a purchase of a $200k, would you be able to give me a rough breakdown of the actual costs involved?
Thanks guys,.
So by the looks of it, it is not very easy to get your estate agents licence.
Please tell me if this idea would work…
I plan to source property all over Australia, therefore I would need to get a Estate Agents Licence for each state, which is going to extremely time consuming and costly.
Therefore, what I would need to do is the following:
1: Approach Real Estate Agencies in all the states of Australia and ask if I can work under them to get my agent's representative certificatecertificate
2: In return for their favour, I would give them a share of all the commission / refferal fees i make from sourcing my own property and selling to my own clients.
In my eye, this would be a win win situation as I would be allowed to deal in proeprty and the estate agency would be getting a small percentage of the money I make from commission.
What this work? Are there any estate agents on this forum?
Regards,
RobbieThis really doesnt seem logical by the banks..
Scenario 1
If you take my example of the $400k property. If I bought it $300k, the banks would only be prepared to give me $285k to buy the properpy.Scenario 2
Now lets say I wanted buy that same property BUT i bought it at market value ($400k), then the banks would be willing to give me $380k.In the above two scenarios, there is ALOT less risk from the point of view of the purchaser and bank to buy a $400k property for $300k. So they why would the bank be prepared to loan more money for the riskier scenario (2)? The bank is prepared to lend the purchaser almost $100k MORE just beceause they are buying a property at market value. It doesnt make sense.
Also, do you get OTP addendums is Australia?
Hi Terry,
Thanks for the reply.
Do you know if banks based their loan on the property value (LTV) or on the purchase price of the property?
My guess is that the loan is based on the value of the property. Therefore if banks are willing to lend 95% to the value of the property, take the below example:
If I wanted to buy a property worth $400k and I managed to get it at a real discount for $300k, the banks would be prepared to lend me 95% of $400k (the value), which is $380k. As I agreed to buy this property from the seller for $300k, does this mean that the banks would give me a $380k loan? which is a 126% loan based on the purchase price.
Interested to see what you guys have to say.
Cheers,
RobbieThanks for the reply Charles.
Depending on your investment strategy and you goals, from my personal experience its good to do a combination capital and cash flow deals. It would be silly just to limit yourself to ONLY capital deals of ONLY cash flow deals.
Although I am living in South Africa, I actually got my permanent residency for Australia last year. I'm planning on moving to Australia at the end of the year on a long term basis. With this in mind, does permanent residency allow my to buy any type of property in Australia?
With regards to my other questions, I'll create separate topics.
Regards,
Robbie
