Mrs P

Its great to have cash and no debt. However, with today's interest rate cut the banks will drop their term deposit rates with in hours of the reserve cutting the cash rate. My point is Ive had most of my assets in cash, its safe, but after tax and then inflation + paying rent you will be loosing money.  As you said building prices can only go so low. In fact the price of building materials will not go down. Try buying a kitchen sink at the hardware store for less than it was last year.

"Cash is King "  or was King, 3 months ago I go 7% today I might get 4.5% If Im lucky.  As to the talk of house prices falling 10 -20% I think you will be renting for a while till you find a place, there are some Im sure, but they where over prices to start with.

All the best with it.
 
Kind regards

T………………….   

Hi all
Some great comment and insight in all your posts. As to building prices dropping, National Builders (one of,  if not the cheapest in Vic.) just put the price of my house up $12,000 in Jan. Along with several price rises before: March 3k, July 9k, Nov 5k and Jan 12,000 so Ive not met any builder that has dropped the price of their product based on the price of steel and I will not.  I cant find any builders who are chronicly unemployed. The one of the major costs in a house is the labour. Until we see a real slow down in building and higher unemployment that's when we will see a price reduction. If I may where in Melbourne is it in the west as that's my area also.

Its going to punish everybody who has been responsible and saved up by making their dollars worth less.

Mark you make a great point with the above.  Im in a similar situation as you. This govenment  will continue to give out money to those freely and tell them to go out and spend it on anything. Man what kind of PM does that. And now his planning to do it again. I did not get a cent. I paid my tax bill of 5,300 just before the money was given out. I met a guy with 4 kids & he told me he was getting 5k tomorrow from the government. They sent it in about 3 days on shit, DVD players, Ipods and take away food and dope. You tell me thats the way to stimulate the economy.  Lower intrest rates, FHOG boost, Cash hand outs.  All these people who got into debt now expect the Government to help out, the reason or part of it is people have no money to spend because they owe the bank and got in too deep as you said been Irresponsible. 4 bedroom house, 2 cars, flat screen TVs in each room. and they are only 21 years old. Did our mum & dad have it so easy. No way. Now  we pay for it. 

I feel you are taking a risk by building new and selling in a short time, you are punting. If the sh-t hits the fan, who will buy it. After selling cost etc. you may loose. I'm sure you are a smart person but do your sums on this one man.

dank 78

I agree building is most of the time cheaper.  You only pay stamp duty on the land. Big savings. Every thing is new, new, new.

But don't forget the other stuff in you calculations. Drapes, shed, tank, land scaping. et al. People who have over capitalized now put thier place on the market for that it owes then but you can only sell it for what you or I will pay and vendors don't like it when you tell them that you can build the same house new of 5k more and its new. If I may, where in Melbourne is it in the west as that's my area also.

WJ Hooker

Most builders are going broke I wish that was true, I know of one on the news of late now in receivership. Plenty of houses left unfinished. Most builders are working as subies under a company and if they don't get paid thats it game over.  Might be a good sight to owner build. As labour may be cheaper. However I feel we will see more in the future.

bardon

House prices to drop 40% is a very general statement to make.  Some overpriced high end props may do this but it is hard to see how say a $350K starter home will drop to $210K in my view.

I totally agree, anyone who suggest that has no idea. This would lead to a poverty stricken country and we would be better all shifting to a 3rd world country asap. The banks would not sell them up for that. I attend mortgagee sale allot and most of the banks want more that its worth. I think we can safely say this will not happen.

I posted a similar topic in the need help section on the global recession and house prices have a look and tell me what you think.

Kind regards to all

T…………………

Mia
Im sure when your are playing with that sort of money, you took the contract to your solicitor first, I feel you did not, because they would have advised you to go subject to finance.  As the purchase is subject to finance.  The above comment are all good ones. When a brocker tells you to go unconditional on a contract and they have not approved you finance yet, I would be asking why. Valuation my be a concern as mentioned some of the valuations are not comming up the the price paid. 

Any way  you cant undo what you have done, if the finance falls over with that broker, give them a peice of your mind. And start looking for the money fast as you can.   Im sure you will be fine.

Best of luck.

T……………

Spunky

Great Topic & a very importaint one. Never worry that an agent will laugh at you or your offer. Mate, it only takes 6 or so weeks to be an agents rep. So you can compair an agent with a sales person at the local weekend market. No more no less ( Im sure some one will disagree with me and try to tell me its a 4 year Uni Degree ) They have to take all offers to the vendor unless instructed not to.  They love to talk about purchases behind their back, he is a tight ass or he wants it for nothing, here he comes again with a low ball offer. ect. Its your offer not theirs. Remember they dont own the property.  They may laugh at your low offer but will piss themself when you pay 30k more than the vendor wanted. That night you will be the talk of the dinner table and the agent will be telling his colleges of his victory over you. And all the time you think he / she is the nicest person in the world. (when their nice to you this is a sigh your not barganing hard enough)

By the way they do take it personally when you let them know you have a good idear of the true value of the place and you know what your doing, some are insulted by it. Ive talked to young couples who have been scared to ask for a discount or make an offer less than the advertised price. This is why the vendor employs an agent.  Sorry to rant but remember your the boss, you have something they want MONEY.

Minster wrote, " Offer anything you feel would be at the bottom end of reasonable in 6 mths from now and then minus some again ."   This is very importaint now. Whats it going to be worth in 12 months, think about it hard. The agent wont get it and the vendor wont get it ether. But in 12 month time they will.  Ive had my last 3 offer knocked back for as less as 5 k, go figure.

Beware of faulse savings, a vendor who drops the price 50k fast new he was never going to get that price anyway and would have sold it to you for 50k less eventually.      A few things to consider:

Not all properties are over priced that much. So you may be pushing it up hill to get them down 20 or 30 %.
Get the Sect 32 & see what they paid, work out there clear profit, is its a fair mark up, would you sell for less?
Money talks & BS walks make your offer in writting & dont let them know any offers before verbally, they may play you off with another buyer.
Yes, the other buyer, the keen cashed up intrested person who is willing to pay listed price. Ive met him at each offer Ive made, Im sure you know him also. Dont ask "have you had any other offers" If you are told of an offer OK ask the price, if they tell you, ask to see the contract. They wont show you it then ask them why not you just told me their price. Will you do the same this mine.

Dont be swayed by other buyers offers. Make up your mind what its worth to you first financially then secondly the other things. No one likes to over pay but for the sake of a few grand get on with it, its small money at the end of the day. Try to let them win, eg. OK you win I can go to my max and pay $1000 more and thats it. Vendors like to think they have got every cent out of you.

Man you can do a Uni Degree in buyer behaviour but all you need to do is your research make up your mind on the price and stick to it. Put your offer in writting & tell them as little as you can and dont forget to be polite.

All the best to you with this and future offers.
Tony B would like to wish all a sucessfull and save new year & thank you for your support in 08.

Regard

Big T………………….

Seriousnovice

Far be it from me to give advice to others but since you asked.  First: Stop watching those reno TV shows. Second:  Stay out of Bunnings on the weekend. Third: Be realisit. re the following;

" i believe there is money to be made if i do it carefully & properly, but i don't know how." 
"i have to pay down a huge superannuation loan before i can buy & hold properties again."
 "i am willing to pay for experienced, good, start-to-finish help."

Mate the enviroment of 6-7 years ago has gone, finished & never to retune. You mentioned flip, buy, fix & sell. What, all in a year. Better you go to Crown Casino with a couple of ladies and blow your money there, that way at least you will get some enjoyment out of it.    Every one wants to be rich or has an idear to get rich.  Mate its over in property, unless you get one given to you & then sell it.  Reno can be fun OK Im with you there as a project with a wife/ Girlfriend a sence of acheivement ect. But to make money not now.

Supers down and falling, bank Intrest low & getting lower, property returns as low as bank intrest in real terms. What time are you heading to the Casino stop by and pick me up will ya. What do we do in these times sit still unless you get a real bargain & only then buy. To quote a friend " you worry you are not making any money, that is so , but at least you are not loosing any"

Sorry I could not paint a better picture but I feel thats the way it is now in Aust.

Have a Great New Year & all the best.
Regards
Tony……..

Chris
Ive had fixed intrest for many years & Ive learnt the hard way, its save but after tax & inflation you loose. Chris you seem like a bright lad think about this; 3 things can happen up, down same.  The chances of them going up like in the past is very slim (good to buy now but poor if you want an assett to go up) Going down, well its happened a bit but not like we all hopped (as buyers) for. Hence the grant. The economy in Aust. would have to go ass up bad for us to buy at 30 % off. Not likly. Stay the same. I think this is the case maybe up a bit down a bit but static. OK so if we buy now we get the new FHG, buy at a time when they are over priced, and our assett does nothing but cost us money rates, maintainance etc if we have to sell in the next 5 years you may not break even, definetly wont make money. So if you can borrow cheap (low rates) seems there on the way down then thats an advantage. You have time on your side you will see over time in the market it will increase, maybe not fast.

Buying now as oppossed to 1 year ago. Now lower intrest, softer house prices not cheap but not going up like crazy & the extra 7 K.  Bepends on your  long term plan. I think you feel its importaint to get your foot in the door but I feel ther is no correct formular to work out when to buy as we cant tell the future.

Food for thourght mate.

Cheers
T………………..