I have been discussing assigning contracts and options and foreclosure (repo) deals on an American forum, just wondering what the general opinion on this board is of this kind of dealing which is obviously going to surface in Aussie.
Ethics is something that isn’t fixed.
Something which is frowned upon in one society is perfectly O.K. elsewhere. It even changes from person to person.
If one were to ask ‘Is it illegal’ then we may be talking about something a bit more concrete.
Assigning contracts and options, whilst avoiding stampduty, is illegal (in those cases where it does attract stampduty that is).
Buying a property from someone who is in trouble, well that is something else again.
The way I see foreclosures is that if the bank is not immediately going to put the pressure on then the owner clearly has opportunity and some time to market the property.
If he doesn’t act (or is not succesful in selling the property by private treaty) whose responsibility or fault is that ?
Certainly not the possible buyer who comes along at that time.
After the bank has gone through their particular procedure, and is about to pounce, the inevitable will happen i.e. the bank will take possession of the property and auction it and, not unhappily, they will sell at a firesale price if there aren’t any higher bidders.
If there is going to be a shortfall the borrower will be hounded and quite likely be taken to court and possibly be made bankrupt.
Having a default noted on one’s record is one thing. To be made bankrupt is even a lot worse.
So if someone comes along and ‘saves’ the borrower from that awfull experience is that a good thing or a bad thing ?
If in the process the buyer picks up a good buy some people seem to feel that that is ‘unethical’.
Unless the buyer brings a gun along the transaction is
fair as the buyer does have the right to say no and take his chances with the auction.The fact that we may feel sorry for the vendor does that justify blaming the buyer for the problem which the owner got himself into (be it because of unfortunately circumstances beyond his control or because of his plain stupidity) ?
Kay ?
Anyone else ?Pisces133
Well, you know me, Pisces- it sucks being a “bleeding heart”, but what can I tell you
I tend to think we can justify anything. For example, we can justify jobs going offshore- as Testra is about to do- lose 400 australian jobs because they want to pay poorer wages to Indians. For me, it’s hard to justify profits over people.
Regarding repo RE, Pisces- I can see what you’re saying. I have made decisions not to deal in the pensioner market, nor the wrapping market, nor the “old guy who doesn;t know what his house is worth” market. Nor the “death, divorce, drought” market.
I think if a house was under foreclosure, I wouldn’t be able to feel happy about the purchase. I can’t bear human suffering. [
]I think i would have to give someone who had foreclosed absolute market value for their place. That would be truly “helping” their situation. Firesale prices really only help us- not the person who is down on their luck.
kay henry
I am not sure what exactly you mean by assigning contracts. If you are meaning to sign and/or nominee and then substitute the purchaser for a fee, then I can’t see how there could be any question of ethics!? (BTW, this can’t be done in every state without paying double stamp duty)
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Bleeding heart syndrome eh.
..as Telstra is about to do- lose 400 australian jobs because they want to pay poorer wages to Indians. For me, it’s hard to justify profits over people.<<
One could put up a real good case that us fat cats in the West should be sharing our good fortune with our unfortunate brothers in India.
Damned if you do and damned if you don’t.
The above confirms that not everything is strictly black or white. (No pun intended).
The fact that one has strong feelings about a particular aspect doesn’t automatically mean that one is right or isn’t taking things out of context.
I absolutely just love to play cards but that doesn’t mean that I am a good player.
I always seem to lose []Pisces133
TerryW
Not sure about other states, but in Victoria you can only use the and/or nominee clause to transfer property to a related party (ie your spouse, or a company you’re a director of etc).
The only time you can transfer it to a non related party is if you have an existing agreement (ie JV agreement) in place prior to signing the offer.
Otherwise double stamp duty applies.
Makes flipping prior to settlement a heck of a lot harder.Keep smiling
FelicityFelicity. Yep I have actually done that in victoria using the existing agreement trick.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
From enquiries I have made in NSW I understand that double stampduty is ALWAYS involved unless one has a trust agreement in place beforehand AND the contract states Bill Williams ‘as trustee’.
The moment one states on the contract Bill Williams ‘as trustee for Marty Jones’ it will attract double stampduty.
So the wording of the trust bit appears to be very important.
PLease check ithis for yourself as after all the phone person I spoke to may have got it wrong (not so unusual).
As many people are talking about low priced properties (which attract little or no stampduty) I am now inclined to say ‘Just pay the stampduty’.
There was a time when I didn’t have that outlook.
Pisces133
Originally posted by kay henry:Well, you know me, Pisces- it sucks being a “bleeding heart”, but what can I tell you
I tend to think we can justify anything. For example, we can justify jobs going offshore- as Testra is about to do- lose 400 australian jobs because they want to pay poorer wages to Indians. For me, it’s hard to justify profits over people.
Regarding repo RE, Pisces- I can see what you’re saying. I have made decisions not to deal in the pensioner market, nor the wrapping market, nor the “old guy who doesn;t know what his house is worth” market. Nor the “death, divorce, drought” market.
I think if a house was under foreclosure, I wouldn’t be able to feel happy about the purchase. I can’t bear human suffering. [
]I think i would have to give someone who had foreclosed absolute market value for their place. That would be truly “helping” their situation. Firesale prices really only help us- not the person who is down on their luck.
kay henry
Thanks for all the replies, interesting in that there are differences to how they do it in USA.
I got into some very drawn out and heated debates as I took Kays path as quoted above and “let `em have it with both barrels”. [^]
I do feel these kind of deals are taking advantage in the majority of occasions and what price is your self respect worth?.
Of course this is not to say it is ALWAYS unethical, but the majority I spoke to seemed to support the “taking the maximum possible out of the deal” type attitude[V].Markpatric- good for you :o))
I always find it amazing how people call doing foreclosure deals and wrapping as “helping” people. I always thought “helping” was doing something selflessly. If we wanna “help” people with RE- we should pay them fair value for a foreclosure, and not up the price and interest rate for a wrap. That’s “helping”.
Anything else is just really about your own profit-making. I just wish people would say they are about profit- which i could find more palatable- than discussing how charitable they are.
It’s funny too how all this “helping” involves the disadvantaged. I’d prefer an equal bargaining position personally.
kay henry
Kay there are not many with that good attitude in R/E I`m afraid.
One particular foreclosure “flipper” I talked to used an example which started with, “there is a seller who`s sick old mother had moved out of the house into a nursing home”, I laughed out loud at that one…say no more.
He was to buy the home for 20K max, in a rundown condition of course but the property was estimated to be market value $40k as is, he said this was truly win win.
He failed to realise the owner cannot win, they had already lost the game and he was simply out of the generosity of his heart, “handing them the booby prize”, and taking off like a thief in the night with his bag full of money.[V]Markpatric,
Yeah, the RE game can often make me feel very discouraged. You get seen as a “fool” if you wish to pay fair market value for a property, whereas I just see that as being honest and decent.
Given that CF+ houses are considered the only way to go, but seeing that we have had a RE boom, the only way to really get CG+ is to buy houses “undervalued”. I wonder what tricks people are using to get these prices.
“lowballing” “bloodletting” etc- these are all considered de rigeur practices. As for me, I wince when I see that written down. I’ve read about “vulture financing” elsewhere- basically, amongst other things, it means waiting until the OTP market caves in, and then buying their properties for tens of thousands less than the purchaser paid for them. Making money out of other people’s losses seems like a world gone crazy.
I would rather be a pensionaire than a millionaire if the latter meant having a career of ripping people off (even if doing so IS legal). I guess it’s a matter of doing unto others…
kay henry
>>I guess it’s a matter of doing unto others…<<
Give us some examples, Kay, where you have done a good deed as otherwise we may jump to the conclusion you are all talk and fluff rather than substance.
For example, some years ago I bought a small development site and agreed to sell the vendor one of the villas on completion at a discount to the market price (whatever the market value may be at the time).
The time of completion arrived but by that time, God being on the side of the Righteous, prices had exploded and the vendor was no longer in a position to be able to purchase a property from me.
I gave her, in today’s terms, the equivalent of some
$ 80 K discount so she was able to remain in the area and still have some money left for the cruise she had been planning to go on.So what good deeds have you done Kay or are you all talk and no substance ?
Pisces (this is my last word on the subject as it makes me sick hearing the drivel you both so self righteously carry on with).
wow Pisces- so angry!
I don’t have to “prove” myself to anyone, and you may think of me as “fluff and no substance”- that, my friend, is up to you.
If the discussion of ethics is seen by you as “drivel” then I can’t help that.
You may now dismiss me as “talk and no substance”, Pisces. But I ask noone to “prove” themselves. You think i say things on here and then go and rip people off when I live my daily life? That would be a severe case of cognitive dissonance, whereas I kind of like to live authentically.
Given that you did ask my opinion in your first post for this topic, it would be seen that you indeed wanted to hear it. Now that the discussion has moved further, you see the perspectives as “drivel”. That isn’t reasonable, Jack.
Argue the perspectives- please don’t denigrate the individual who holds them.
As you can see Markpatric- the kinds of perspectives that are about not hurting anyone… often target the author.
kay henry
Angry ? Certainly not. Just frustrated that whatever I said in favour of buying from an anxious vendor is being totally ignored rather than addressed.
That is not the way a debate should be conducted.
Let me just say that I like you better, Kay, when you post about Brisbane etc.
You can have any believe system you choose Kay, just don’t label people as rippoffs merely because they want to buy a property at the lowest possible price.
Pisces133
Pisces,
I’ll make a quick reply to this, because I think you’re not understanding what I’m about.
I enjoy this board, because it helps me to think through the way i wish to conduct RE transactions, and the way I want to live my life. I have no need to be popular- I have never sought that. Respect is more important to me than being a popularist. But respect from others is not vital to me either- only self-respect.
I will continue to discuss ideas on this forum- as everyone does- and I will continue to debate the issues- and not attack the person. I would prefer it if you did the same.
If you have any further issues with me, that you wish to discuss privately, please do so. I am sure the forum doesn’t wish to see 2 members being critical of one another. I felt this topic was a fairly simple one. I certainly didn’t imagine that you would take anything I said so personally. I thought all who replied were just answering as they saw fit.
kay henry
Stating one’s point of view isn’t identical to having a discussion about the merits of the respective arguments.
I have provided my reasons stating that it may pay for someone, who is about to be sold up, to consider an offer as the alternative may be a lot worse.
From what I can see, you have merely provided your outlook which is tied in with some emotional aspect of feeling sorry for someone.
I too feel sorry for someone who for whatever reason finds him/her self in trouble.
(I have been there myself so I, more than most people, know what it is like).
Often (not always) the problem lies inside the person so even throwing handfulls of moneys at that person will not lift him/her out of that state of mind (and will therefore not solve their problem longterm wise).
Again, I know. I have given property away (which was producing income nearly equal to average wages) thinking that that would solve that person’s problems.
–
It didn’t.So feeling sorry is one thing, leaving one’s senses at home when involved in a business transaction is something else.
BTW, I can assure you that my response to you has been very mild. (as has been yours so I notice [:X]
Pisces133
Originally posted by Pisces133:>>I guess it’s a matter of doing unto others…<<
Give us some examples, Kay, where you have done a good deed as otherwise we may jump to the conclusion you are all talk and fluff rather than substance.
For example, some years ago I bought a small development site and agreed to sell the vendor one of the villas on completion at a discount to the market price (whatever the market value may be at the time).
The time of completion arrived but by that time, God being on the side of the Righteous, prices had exploded and the vendor was no longer in a position to be able to purchase a property from me.
I gave her, in today’s terms, the equivalent of some
$ 80 K discount so she was able to remain in the area and still have some money left for the cruise she had been planning to go on.So what good deeds have you done Kay or are you all talk and no substance ?
Pisces (this is my last word on the subject as it makes me sick hearing the drivel you both so self righteously carry on with).
HAHAHA, here we go again!.
Pisces I don`t need to prove my goodwill, if I am the dribbler you think I am are you really going to believe my stories.
It is simply another case of someone undoubtedly feel guilty, otherwise why would you take that tone?.
I treat people as I would expected to be treated and definately have come to learn what goes around comes around, and it`s often a double whammy!.
Let me assume you meant in your story that you sold the villa as promised, with a big discount from the current market, that`s great.
Good on you for doing it![^], but do you really think it`s something that`s along the same lines?.
I never said I would give money or property away, not a chance I am in no position to do that, I work too hard and long for what I have, but good on ya for doing it, I think I might do it if I was in a position to.
You sound very contradictory though, like it doesn`t add up, on the one hand you are giving handouts then rubbishing others for simply being fairminded, what`s up?.Would it be that you are now giving back some with guilt as you got to where you are by means you are not too proud?. Sounds like you give away because it makes you feel better about yourself. No malice intended, just sounds that way!.
It`s still a good thing, a very good thing [^]but not what the discussion was intended to focus on.haha poor kay u always land urself in trouble with ur beliefs and ethics… and i personally see as good. I feel sorry for u becuase i have already learnt that this is not the place to show your beliefs, as people are quick to comment on them.
My 2 cents
Cheers Matt
“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Thanks Matts, but please don’t feel sorry for me :o) I quite like the way I think. I guess I could get [
] (paranoid) which I don’t. Or i could go [8] (crazy). I could feel [] (sad)- but i don’t feel that either. Or i could just feel [!] (angry) or [:0] (anxious). But as long as someone doesn’t [] (punch me in the head), it’s all good []kay henry
]
] (punch me in the head), it’s all good [
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