Lessons I learnt in NOT buying IP No. 1

I was on the verge of signing a contract for my first IP, however, I found out a short while back that the vendor has signed a contract with another buyer, through a different agent, at the same price I was prepared to pay.

The lessons I have learnt (in no particular order) are:


1. Have a solicitor ready to go

I had to appoint a solicitor after my written offer was accepted.

While it still would not have prevented me losing the property, it would have saved some time.



2. Be conscious of things that are happening like, for example, public holidays

Monday was a public holiday in NSW, but not in Qld (where the property is). That, and the fact that I was travelling on the weekend, cost me 24 hours and the property.


2. Be aware of your rights and obligations and how you can use them

While this did not neccesarily cost me the IP, in retrospect I could have signed the contract and then had a solicitor look through it within the (Qld) 5 day cooling off period, rather than having a solicitor look through it before signing it.


4. Holding deposits mean squat

After reaching agreement on the price I offered a $1,000 holding deposit as a measure of good faith. I paid that yesterday. Now I have to get it refunded via cheque.


5. Find out if the property is multi-listed or only listed through one agent

I didn't think to ask "is this property listed with other agents"?

Evidently it was.

This is a lose-lose situation. The agent lost her selling fees and I lost the IP.



Positives to come out of all of this:

1. I learnt all the above

2. I now have a good solicitor

and, most importantly...

3. I can find me a better IP!


MB

Bad luck MB

The joys of a property market that is on heat, people seem to be clamouring over each other at the moment when something decent is listed.

Next time

If you are the cautious type, you may lose out in this market while trying to convince yourself that it is a good buy.

My method, follow your first impressions, providing you have done your research before you start seriously looking.

Hi again

The other method I have used to beat the other buyer is to offer an unconditional 14 day contract with a large holding deposit. If there are 2 people trying to buy a property the vendor will likely lean towards the short contract particularly if it is unconditional.

Of course extreme caution is needed if you do not have the finance or cash ready to go.

Hi MB

You said "2. Be aware of your rights and obligations and how you can use them

While this did not neccesarily cost me the IP, in retrospect I could have signed the contract and then had a solicitor look through it within the (Qld) 5 day cooling off period, rather than having a solicitor look through it before signing it."

In Victoria, your three day cooling off period is void if you have consulted a legal representative. As you are buying interstate from where you live, be aware that having a solicitor / conveyancer check the contract even before you make an offer may void your cooling off period.

Also be aware, that in Tasmania, you sign it, you've bought it. There is no cooling off period in Tassy.

And Janvid, "The other method I have used to beat the other buyer is to offer an unconditional 14 day contract with a large holding deposit. "

Again, check with each State's Sale of Land Act. A large deposit is not a lure to a canny vendor, as they can only claim up to 10% deposit in a forfeit situation.

And as a mortgage broker (ssshhh, don't say that too loudly) let me tell you, some lenders are taking up to six weeks to process applications. If you offer a 14 day settlement, your solicitor / conveyancer will not be pleased and you may not have funds to settle.

As an estate agent (ssshhh) in my experience very few vendors want a quick settlement. Most are still living in their houses, and don't relish the idea of a quick bolt out the door. It would be very difficult to even organise a place to rent in 14 days.

The happy medium is the traditional 60 days, although there will of course be circumstances where other terms of sale will apply.

And, MB, I, too, have sold properties which have already been sold by another agents, and the vendor didn't think it important enough to tell the other agents they had engaged.

Now that you are so well prepared, remember that luck is what happens when hard work meets opportunity!

Cheers

Kristine

Hey Pitt St,

I came in on this one late as a link from another post of yours. Its a bummer thats happened to you on your first IP purchase but it might be a blessing in disguise. Thers always better deals around.

The same thing happened to me a few years ago with my PPOR, i asked my agent 'what what do i have to do to get the property' (my wife wanted it real bad)

He said 'offer more money', so i did and it started a bit of an auction with the other purchaser. (he was as detrmined as i was)

Anyway, we ended up paying 8k over the asking price but got the place and in the long run it didnt matter cause it has almost doubled in price 3 years.


To summarise, if you find a great deal and you know it is and you want it then offer more to get it or just do whatever it takes (short unconditional settlement, big deposit...etc...) cause if you can handle paying the bit extra, in the long run it wont make a big difference.