Spot on, Milly, I'm glad you can already have some perspective. My Dad always told me that if you've only got problems that money can fix, you should be very grateful. He's very wise, my Dad.

Once again, absolutely! I think that the ability to learn from mistakes, then quickly move on and look forward, which I've deliberately cultivated and am getting better at each year, is one of the most valuable character traits one can have, not only in investing but in life.  

Best wishes to you, Milly. You have a winning attitude and I'm sure it will work out OK.

There certainly can be different valuations, and I have a property on which the "valuation for mortgage security" purposes is significantly below "market value", therefore I've had to keep much more equity in it than I'd like

This link is somewhat helpful to we novices in understanding valuation a little better: http://www.independentvaluers.com.au/content.asp?pid=1746

Way up at the top right of your screen, in the dark blue band…

Sorry that I misunderstood you, James. You hadn't mentioned that there were questionable items in the building and pest inspection. I think that you can't push the line that you had a binding contract with an unspecified timeframe for building and pest – because presumably the copy that you have with no date wasn't signed by the vendors, right? So they hadn't accepted that offer. If the agent added the date prior to the vendor signing, then effectively the insertion of the date constituted a counter-offer by the vendors, which you hadn't accepted (by signing/initialling). Therefore I'm with Jon that you had no binding contract, so you should request for your deposit to be refunded on the basis that there never was a binding contract. Don't take the line that you're terminating; I believe your argument should be that there never was a "meeting of the minds" and therefore never a valid contract.

Then you have to consider whether you want to make a new offer to purchase the property. Bear in mind you'll obviously have to deal with the same vendor and real estate agent, and (I presume) they won't let you make your offer subject to building and pest because you now have that information. It depends whether you think you can still negotiate a worthwhile deal on this property in those circumstances.

And I really don't think that either the agent or vendor intended anything shonky. I think that the agent probably noticed there was no time limit and put one in. I really doubt that he thought you'd have a problem with it. And if you'd had a conveyancing solicitor, they should have made you well aware of this time limit immediately, and the issue could have been sorted out much sooner.

Best wishes, and apologies if I misjudged you.

James, I also feel that you're trying to take advantage of this situation. As Jon has pointed out, it's unethical to try and enter a contract with absolutely no time limit on getting your building and pest, and you seemed to "gloat" a bit about thinking you have gotten away with this elsewhere on the forum.

What's your problem with the date the agent specified? If you already had your building and pest done by then, and were planning to go ahead, then no harm has been done to you. If not, then either negotiate an extension to building and pest, or pull out.

But I'm with Linar, I think you're just trying to get the price down, without good reason. Either it's a good deal and you proceed, or you walk away. But trying to continue and screw the vendor for a lower price because of some possible dubious action by the agent is unethical on your part.

And incidentally, every purchase contract that I've signed (where I was making an offer) was undated. I think agents have told me it has to be dated when the sellers accept the offer. (This has been repeated so many times that I assume that it's true, but I'm happy to be corrected.) So the date of contract – surely a very important date! – has always been filled in after I've signed, and without me counter-signing. Does this mean I've never had a binding contract, or that every purchase I've made has involved "fraud" by the agent?

I'm not Linar but I'm pretty sure that "notice not in the form specified in the contract" (ie in writing by 4pm to the agent or whatever it was) is legally the same as "no notice", and therefore the condition is taken as being fulfilled, and the contract becomes binding. Sorry!

Council rates are paid by the owner, and vary but are usually billed quarterly (ie every 3 months), and a quarterly bill varies from about $400-800, depending on the property's value (amongst other things). You may have a few more fees, such as building and pest inspection, and loan establishment fees, but these only run to a few hundred dollars – you've got the main ones.

I have no idea whether it's a good investment, as it depends on where it is. Is it close to amenities – schools, public transport, shops, etc? Are there people living in the area and is it an area that is likely to continue to be in demand into the future? Is the particular type of property that you're considering desirable to tenants? etc.

As to whether you can get a loan or not, I'd talk to a mortgage broker.

Best wishes, Tracey in Brisbane

Andrew, it's probably OK as an investment, but I'd be very concerned about the way this is set up. You should buy the best property for your circumstances, NOT what their "property consultant" is able to get a commission on selling!

For a start, having vacant land on which you can claim no tax deductions is not a great idea; I think your plan to do something with that should be top of your agenda.

I really hate these kind of property marketing schemes. We were naive enough to get suckered into buying under a similar arrangement about 8 years ago. Thankfully that investment worked out OK, but we paid a ridiculous amount in fees and commissions, and we could have just gone and purchased an IP ourselves and saved all that. And probably found as good or (likely) better an investment. The fees are really just payment for somebody to "hold your hand" through the purchase process. Ask questions here instead, or get a savvy friend to help you. Or join your local property investors group and get somebody there to help you, if you feel you need it. But don't pay these unethical people. I say they're unethical because the commission is absolutely their motive – not finding the best investment for you.

Google SketchUp is free, and is so good that I understand some professional surveyors and building designers are beginning to use it for at least some tasks. You can import items from the virtual warehouse – eg palm trees, or piece of furniture, sinks, toilets, kitchen cabinets, etc. http://www.sketchup.com/index.php?title=2

Welcome, Joseph, to Australia. I hope this is a joyful and successful move for your family.

I don't know areas of Melbourne very well, but regarding the "rent vs buy" decision, you're certainly better off from a purely financial perspective, week-by-week, to rent. Rents run at about 4% yields, ie a $520,000 property would rent for about $400 per week. But the cost of ownership of a property is mortgage interest (say 8%) plus another 2% for council rates, repairs, insurance, etc. So to own the same property would cost about $1,000 per week.

So the difference ($600 per week) comes out to a little over $30,000 per year. The issues are 1) can you afford to pay the $1,000 per week, and 2) will this additional expense be compensated by capital growth? Growth of 6% per year is lower than the long-term average for all areas over the last 100 years in Australia of 7.8%, therefore I'd be fairly confident that the risk isn't too great. And bear in mind that a good proportion of property investors believe that outer Melbourne is set for a boom in 2008: http://www.somersoft.com/forums/showthread.php?t=38746

So, if you're sure about where you want to live (both within Melbourne, and that you want to stay in Australia for at least a year or two), and can afford to do so, then I'd buy a home. It may also help you all feel more settled and established in your new home.

Sincerest best wishes,

Tracey in Brisbane