Buying the neighbour's house

Hi All,

My boyfriend bought his house in early December and since we moved in, we have discovered that our neighbours are the NEIGHBOURS FROM HELL! They have 8 kids and loud music, abusive fights on our front lawn, swearing, police visits etc etc at all hours of the day has become a part of our lives :mad:

The neighbour just approached us this afternoon and said he would be putting his house on the market ASAP due to them not meeting their repayments for some time (no jobs!) and he said he was desperate to get out before he loses everything to the bank. He said he doesn't want to use an agent as he hates them and doesn't want to pay one. Coincidentally, i am looking to buy my first property in the area and i mentioned that i would be willing to make an offer. I have arranged to have a look at their house tomorrow when they have cleaned it up a bit.

Question-If there is no agent involved, do i need to use a solicitor or can i still just use a conveyancer? I would presume a solicitor is more expensive. What is the process when there is no agent involved?
 
personally i think a conveyancer (a good one) is worth their weight in gold. they are cheaper because they don't have to do so much training for all the other bits, and don't have the overheads that solicitors do, ie, keeping wills etc.

i would suggest that you talk to a good conveyancer and i cannot recommend mine highly enough, he is a gem - garry masters 02 65 537888 - and tell him liz sent you. he'll let you know everything you need to know, what you need to get and the process you will be going thru in layman detail.

don't be put off because he is based at old bar. i have never met him in my 6 years of dealing, we do everything by phone, email and fax but he has been sensational. he will also not charge you for any advice - he only costs when a purchase goes thru, and even then the prices are low.
 
Thanks, Lizzie.

If you don't mind, how much do you normally pay for conveyancing services? My boyfriend just paid $1,200 for his and i am told that this is the average costs of conveyancing?

Hypothetically, if the neighbour was to accept my offer, what next? Obviously he would have to engage a solicitor or conveyancer to do the contract, so would it proceed the same as a normal purchase only there is no agent involved?
 
In SA you can just employ a conveyancer but in Queensland you have to have a property solicitor but it is a set price and I only paid $860 last year, (oops 2004), and they didn't charge me extra if I rang up or emailed questions. My girlfriend in ACT paid a small fortune in advice on top of the conveyancer fee with a solicitor in Dec 05. Also you can get a DIY kit but not recommended as there is no insurance if you make a mistake.

I don't know about NSW but if you can just use a conveyancer then recommended one is best (Lizzie's sounds good). Whatever you decide, get a set price from them beforehand. Your neighbour will have to have his own too and he would draw up the contract which your good converyancer will go over carefully. (be very afraid if neighbour uses a DIY kit!!)

I know you are trying to save money but I would insist on a building inspection, goodness knows what they've done to the house which you won't be able to see behind the clutter of 10 people! Of course neighbour might want his cake and eat it too, sounds like he's a tough character, but if you can get it for a good price.... :)

goodluck
 
in nsw you don't need a solicitor - conveyancer is fine. yes, the other part will also need to contract their own solicitor/conveyancer and they are the ones that facilitate the transfer of ownership and monies.

totally agree - have vacant possession written into the contract. this means settlement will not take place until the house is vacant and gives you a fallback if the current owner doesn't move out in time.

costs for my last purchase were:

basic fee $685.00
searches, enquries, final search and agent fees $297.00
survey report (optional and survey made on my request) $400.40
old system search (may not be required) $229.90
settlement agent fee $66.00
bank chq fees $16.00

total $1694.30 but could have been $1064.00 if i didn't get surveyed and was not on old system.
 
Thanks, Lizzie :)

and don't worry Arriety, my parents would shoot me if i didn't do a pest & building inspection. Only $500 and it it picks up any major problems, $500 well spent!
 
MishMash,
if it's not too late I feel that it might be wise if the present tenants don't find out you may be, or are buying, the property :)
 
Mishmash

I'll go against the trend and recommend a solicitor rather than a conveyancer.

It's potentially a complex situation. They are not paying their repayments- they may also owe other people money. Given their history, they may have trouble renting elsewhere, and may want to change their minds. Perhaps they don't really own the property?

For the sake of a few hundred dollars extra for a property worth- $200K+++? (I don't know where) I feel it's well worth the extra investment.

Also pay for a valuer. Many owners who try to sell their own property do so because they feel the agent has vastly underevaluated the value of their own hose.

(But then again, many do undervalue their own house; and you have the possibilkity of perhaps splitting two blocks into three dwellings - perhaps- down the track).
 
As a possible negotiation tool, remember that without an agent your neighbour will be 'saving' a lot of money in fees. Remind him of this if he thinnks your offer is too low.

Also ask what it is that he will take - let the other party make the first offer. You never know - he may not want that much for it...

Good luck, distressed (or distressing in your case) sellers often provide good bargains for prepared buyers.

TB
 
Hi MishMash

Whatever you were thinking of offering, it may be worth a few more grand just to get rid of those neighbours :)

Regards
Marty
 
Thanks for all of the input :)

geoffw said:
It's potentially a complex situation. They are not paying their repayments- they may also owe other people money. Given their history, they may have trouble renting elsewhere, and may want to change their minds. Perhaps they don't really own the property?

For the sake of a few hundred dollars extra for a property worth- $200K+++? (I don't know where) I feel it's well worth the extra investment.

Also pay for a valuer. Many owners who try to sell their own property do so because they feel the agent has vastly underevaluated the value of their own hose.

I know that they definitely do own the house. I work for the local govt authority and have checked! I may pay for a valuer because i think this would make my offer look favourable. I know that what my boyfriend paid for his property 6 weeks ago is less that what they paid for their property 3 years ago.

TheBacon said:
As a possible negotiation tool, remember that without an agent your neighbour will be 'saving' a lot of money in fees. Remind him of this if he thinnks your offer is too low.

I know ;) i emphasised this yesterday. He hates agents, he had his property on the market 6 months ago but toook it off because couldn't find any buyers. This makes me think he may want an unreasonable price.

kissfan said:
Whatever you were thinking of offering, it may be worth a few more grand just to get rid of those neighbours

I agree. What value can i put on having my former sleeping patterns restored, no late night police visits, no repetitive 'i don't give a f**k' music playing high volume 24/7, no more listening the the parents abusing each other..sounds like heaven! I will even help them pack their bloody bags!
 
MishMASH,
IMHO,I would only use a solicitor for this deal,but you can always look at the different angle,if the family have 8 kids and all on welfare and not making
the loan repayments then its only a matter of time and wait till the bank
takes the property off them,my guess is this property will be run down
in a big way,then just wait till the Bank auctions the property and if the
price is in line with your attitude try to buy the property then in its run down state...........
good luck
willair..
 
Also, don't forget the added benefit of you owning the house next door to your boyfriend. At some time in the distant future, the combined properties could be worth a lot more due to the increased land size being attractive as a development site for villas/townhouses. As to the mechanics of settling the purchase of the property, it would help if you knew how much the neighbours owed on the property. If the sale price is more than what they owe, then the mortgagee (lender) must hand over the discharge of mortgage on settlement. However, if the mortgagee doesn't get their full debt repaid on settlement, they will withhold the discharge of mortgage and you won't be able to settle. (And be careful because you don't know how many loans these people have). In this case, I think I would put it in the hands of a solicitor due to the possible problem of the mortgagee not releasing the discharge of mortgage. However, I think this whole deal is definitely worth pursuing and I wouldn't be put off by the problems. Just give it to a solicitor and let him deal with it all.
 
My 2c worth.

It seems though the bank is going to close in in them anyway if they can't meet mortgage payments.
Sit down and talk to them to find out more. ie there may be a massive opportunity here.
Just pay out 1st mortgagee is all you may need to offer, if it's too highly leveraged then make an offer to them to pay 1st mortgagee, they may just accept it to give them peace of mind ie win-win.
No-one wants a mortgagee after them.

I'd be using a solicitor, as you never know, it may get ugly later....

Also, if your buying & Plan to Manage the Property yourself, I'd be thinking about putting a independant PM on instead.
The last thing you need is tennant problems who can call in day or night.

Juzz
 
:eek: I went into the house today and had a look, very poor condition as i imagined and same for the back yard. He wants $260,000 :eek: :eek: :eek:

Knowing that my boyfriend paid $211,950 for his rundown 3br house on 550sqm block next door, and there are two houses in similar condition up the street asking around the $239,000 mark, WHY does he think i will pay $260,000 for his 3br house on a 550sqm block...It is not in rentable condition right now and would take some significant work to bring it up to a minimum standard. I plan to live in whatever house i buy for 6 months, and then rent it out.

I know that they paid $215,000 for it in 2002. They have basically trashed the place. His sons have punched holes in the walls of the house and one of his sons who lives in the garage has pulled down all of the fibro off the walls of the garage :eek: Their elderly neighbour on the other side said the house was in good condition prior to them purchasing the house and moving in.

The house basically isn't worth anything, it's just the land i am interested in. A 550sqm block across the road is currently going for $199,000.
 
Oh dear, I had a feeling he was going to ask for more than it is worth. He sounds like trouble. You better play it by ear. Give him an offer for land value only but say you're not desperate. Then sit back and wait. I suspect the bank will take it off him before he sells because no one is going to pay his price. The trick will then be for the bank to get him off the property! Social services don't like to evict little children. Ugh!
 
Not to sound heartless or anything, but how long does it take for the bank to act when someone isn't paying their repayments? From what he has said, they have missed about 3-4 months worth now...

Haha well i have a feeling social services won't give a toss, because they didn't care when:
a. 4 of the youngest children play on the road, constantly run with no shoes/clothes etc and step on glass etc in their front yard
b. two of the children were beaten by the father
c. the school age children don't go to school
d. the parents partake in drugs on a regular basis and both have alcohol problems (their own admissions)
e. the parents physically abuse each other
f. the 2 year old child was wandering our yard unsupervised by his parents between the hours of 11pm and 1am

Shall i go on....if social services didn't care when the above was reported, don't think they'll mind tossing them out on their arse!

I feel sorry for the kids, ranging in age from 3 months to 31 yrs old (kids at home are 3 months, 2yo, 8yo, 10yo, 14yo, 16yo, 18yo + the 18yo's daughter temporarily + the 31 yr olds son) because they live in bloody squalor and the parents are useless. The 18yo's daughter is 3 and she is a beautiful child, very well spoken 3yo and she appears to be the brains of the bunch! (she was raised by her mother and not this family) Maybe i will ask that they throw her in with the house :D

Anyway- $260,000. He is dreaming!
 
do you know which bank? can you approach the bank and let your interest be known? you are not asking the bank for any info, so they are not breaking any rules, and perhaps can tell them the info you know from the owner, so the bank knows you are in the picture.

it might make them think if time is expiring.
 
I'm with lizzie

If you can find out which bank it is, see if you can speak to the person dealing with it and let them know you are interested. I think this is important because I have seen a bank give a property to an agent to sell by mortgagee sale and it never got onto the market because the agent bought it himself. (And for those people who say it can't happen I am here to tell you I have seen it happen). But if you let the bank know you are interested, they will have to appear to be fair in selling it. As for how long it takes to get to the mortgagee sale stage, it is a very long and drawn out process - especially when the owners are living in the property. It is much better if it can be agreed to by all the parties involved. This is better for your neighbour as every day that goes by sees his debt increasing because he has to pay the bank's legal fees as well as the loan and the more legal work that is done - the higher the legal fees bill that he will have to pay.
 
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