complete noob, FHB, help please

[alexlee]

That's why I used the wording 'I think'..b/c I'm not sure either, but was hoping everyone here with more experience than I could say if that was correct or not.

That's why I actually quoted you correctly. I also thought auction contracts can't be amended, but I wasn't 100% sure, so I asked it as a question.

I just thought it helpful to put it out there so I could learn too...some people on here are really negative in their feedback & being a sensitive lil soul, I could easily get crushed...sure, tell it like it is, but a sprinkle of sugar does help the medicine go down...just trying to be a bit positive.

I'm treating you like an adult. If I shouldn't, let me know. Look, there are sharks out there in the market. If you're the type to get 'crushed' easily, how are you going to be able to deal with agents, tenants, lawyers? Being positive doesn't let you defy gravity. Dream big, but you still have to plan.

 

[mary&mat]

(Sorry Lancer24, didn't mean to hijack your thread!)

 

[lancer24]

For example, the fact that auction contracts usually can't be amended. Other things include the cooling off period. Is this waived for an auction contract? Will you have to sign the s66w certificate? Do you know what this means, and is that acceptable to you?

Have asked, there is no cooling off period for the auction contract not sure abt the s66w certificate. looking it up now.

What is your backup plan if, for whatever reason, you can't get finance? Admittedly in your case this isn't too big a risk assuming your credit is clean, but speak to your mortgage broker first.

currently no backup plan, if finance doesn't come through, but like u said, this is not really a concern. I have already spoken with a few banks, and they all say it should not be a problem.

What type of loan do you want, with what features? Interest only with offset gives you a lot of flexbility, but do you understand how it can be used?

I have had a look at the various products out in the market for a few months. interest only with offset and may be a LOC facility to go long with it. I may opt for a professional package as we are looking at this for the longterm and I am definitely looking for future investment options.

I'll throw this out there as well. Are you only interested in learning about how to buy this property as a PPOR? Would you also, for example, be interested in buying investment property?

currently only for a PPOR for personal reasons. though in the future we may go for an investment property.

Incidentally, a 3 bed unit is an interesting choice. May I ask why? My own experience is that people who want 3 bedrooms tend to go for houses instead, unless they want inner city, and at 400k I'm guessing it's not.

my mom stays with us. so need 2nd bedroom. also we plan to have a family in 2 -3 years time, so why not buy a unit with a 3rd bedroom now.

(Sorry Lancer24, didn't mean to hijack your thread!)

no probs

 

[Jacque]

Hi Lancer

Penning this as I'm about to head off to an auction myself today.... and conduct a few inspections with clients, I may be able to assist here with a few tips:

Auctions in Sydney right now are not for the faint-hearted. Lots of disappointed would-be buyers, hardened and seasoned (and dare I say bitter!) buyers getting disillusioned with the process and the fluffy price guides being touted (which can often be as much as 20% under the eventual sale price) results in emotive environments where some buyers end up overpaying for their "dream property" sometimes due to sheer frustration with the entire process.

My thoughts on auctions right now: Make an offer early in the campaign, putting a time limit to the sellers, and letting them clearly know that should you not reach agreement on price, you will be walking and more than likely not bidding at auction. After all, there are other properties to consider coming up for sale every day. Make your offer solid, one that you're happy with and ensure you're able to exchange unconditionally (this requires a 66sW form signed by your solicitor waiving any cooling off rights so you will need to have your finances in order and approved as well as any searches done) on this offer if it's accepted. Nothing less will be accepted prior to auction here in Sydney right now, given the current sellers market. Unlike non-auction properties, vendors won't accept an offer under a cool off as it effectively takes the property off the market. Far better to conduct your searches, reviews, finances etc as quickly as you can and come prepared to sign a contract this way.

Be 100% up to date on recent sales (in other words ignore the price guide) and conduct your own research. Ring other agents that have sold in the same building or area, find out sold prices, buy reports etc. Whatever it takes to grasp the current reality on value.

If you do proceed to auction be prepared to lose. Yes, this may cost you money (unless the vendor has been kind enough to provide a strata report to all interested buyers) but that's life. For the cost of a contract review (usually c$200) a little due diligence and experience, it will be worth it. There will be another property. Best of luck.

 

[Rolf Latham]

fluffy price guides being touted (which can often be as much as 20% under the eventual sale price

Fluffy.............

I think u are being very kind.

Underquoting would have to be my pet hate of the RE industry.

The challenge I have with underquoting isnt that the agent hasnt done their job, its in most cases a "straight faced" and outright lie. A lie that many potential buyers hang their hat on, and often ACT IN RELIANCE of to have contracts reviewed, vals done, pests and builds done etc. All the while, the second bid was always going to be over what the agent range was.

The agent has done a CMA with a marketing plan and a price estimate to fish the seller................so to state a "fluffy" expected often 10 to 20 % below actual is misleading conduct I would have thought ? But then Im not a legal beagle and the practice seems so common it cant possibly even be on the grey side of wrong ?

ta
rolf

 

[WinstonWolfe]

I think a lot of REAs don't consider the consequences of outright lies.

We made an offer on a new PPR several months ago, and there was a lot of to-ing and fro-ing. The REA wanted to flick the negotiations to one of his staff. I said 'have you got anyone else.....I don't want to deal with him...." He asked why, and I conveyed a story of how the guy straight faced lied to me about 6 years ago.

Recently, we inspected a house up for auction in Wilston in Bris. The REA said she thought fair value would be around 1.7. I nearly fell over as I thought it was worth well over 2. And a few weeks later it got that. I have a long memory when it comes to being lied to and treated disrespectfully. Since September last year, at least 5 acquaintances have listed property for sale....they didn't list them with the rea's I couldn't recommend.

 

[alexlee]

Have asked, there is no cooling off period for the auction contract not sure abt the s66w certificate. looking it up now.

Are you concerned about having no cooling off period?

I have had a look at the various products out in the market for a few months. interest only with offset and may be a LOC facility to go long with it. I may opt for a professional package as we are looking at this for the longterm and I am definitely looking for future investment options.

IO means you don't repay principle on the loan itself. Offset is to 'hold' extra money which results in less interest. LOC is used to 'withdraw' principle you've paid off. If you use IO and have an offset, you usually don't pay principle so LOC is useless.

A professional package may be good but it has nothing to do with long term. It has to do with interest discounts and lower fees on other products. Long term, if you invest, you're likely to refinance anyway.

currently only for a PPOR for personal reasons. though in the future we may go for an investment property.

my mom stays with us. so need 2nd bedroom. also we plan to have a family in 2 -3 years time, so why not buy a unit with a 3rd bedroom now.

Because you might want to live somewhere else when you have a family, and if you buy say a cheaper 2 bedder now, you might free up enough to buy an investment property sooner. And if you invest for a while, you may end up being able to buy a much better PPOR than you can now. The other question is, for that sort of price and if you want 3 bedrooms, a house would have more land content?

Each to his/her own, of course, but have a think about the possibilities. You're on this forum and people tend to be or at least think like investors. Your strategy is a very 'normal' let's-buy-our-own-home-first and maybe-invest-later sort of strategy. Problem is, you might be 50+ before you start thinking about the 'investing' part.

Nothing wrong with that, necessarily, but if you are willing to make some sacrifices now, you might be able to do better if you started investing earlier. I'm assuming you're fairly young (maybe 24?). Assuming your deposit is from savings, you have a savings habit. With time on your side, buying your own home first may not be the best strategy.

 

[jezza]

Lancer24

Firstly good luck with your first purchase. I too prefer private sales, I think they give you more control ( and have a cooling off period) as oppose to auctions. I have to say as stong willed as you say I have seen people who I thought were a rock, crumble and pay over 10% more than what the bank was offering them to borrow. Because there is no cooling off period numerous people get building and pest inspections done which I think makes them feel like they must have it as they have already injected some cash. If you go to a auction have a plan and a maximum figure, as soon as it reaches it, don't wait around to see what it goes for as I am sure you would have done some research to get to your figure and get in your car and drive away.

Jezza

 

[lancer24]

auction plan cancelled

Hi Lancer

.
Be 100% up to date on recent sales (in other words ignore the price guide) and conduct your own research. Ring other agents that have sold in the same building or area, find out sold prices, buy reports etc. Whatever it takes to grasp the current reality on value.
Best of luck.

Each to his/her own, of course, but have a think about the possibilities. You're on this forum and people tend to be or at least think like investors. Your strategy is a very 'normal' let's-buy-our-own-home-first and maybe-invest-later sort of strategy. Problem is, you might be 50+ before you start thinking about the 'investing' part.

Nothing wrong with that, necessarily, but if you are willing to make some sacrifices now, you might be able to do better if you started investing earlier. I'm assuming you're fairly young (maybe 24?). Assuming your deposit is from savings, you have a savings habit. With time on your side, buying your own home first may not be the best strategy.

Lancer24

Firstly good luck with your first purchase. I too prefer private sales, I think they give you more control ( and have a cooling off period) as oppose to auctions. I have to say as stong willed as you say I have seen people who I thought were a rock, crumble and pay over 10% more than what the bank was offering them to borrow. Because there is no cooling off period numerous people get building and pest inspections done which I think makes them feel like they must have it as they have already injected some cash. If you go to a auction have a plan and a maximum figure, as soon as it reaches it, don't wait around to see what it goes for as I am sure you would have done some research to get to your figure and get in your car and drive away.

Jezza

Thanks Jacque / Alexlee & Jezza

just as an update, have shelved the plan to bid for the auction. 2 main reasons, were that, both me and my wife felt that from our research the true value of the prop was around 410K, but we were sure that at the auction the bids would be much higher.

also we saw another prop come up on them market for sale. we saw that over the weekend and are more keen on this one. advertised price was 439, vendor is ready to sell at 428K after 1 meeting. we think the prop is worth abt 415-420K. the price is ok from the residex reports that i bought for the suburb (westmead,nsw) . as said its a sellers market right now, so can't really be choosers.


but we still plan to go to the auction, for the experience.

BTW Jacque, we were planning to hire your firm as buyers agent, but we have now done alot of research ourselves, walking from the prop to the stations, driving around, residex reports etc, lots of inspections. Its a hard job !

Alexlee, 4 years older than ur estimate. we have been saving for the stock market, but i have stayed away from it since feb 2007 and pretty happy with the decision it took me a while to get sorted, but debt free and with a savings kitty that grows by a couple of grand every month.

i have thought about waiting for longer as its a sellers market and hoping that with the interest rates rising and the amount of construction activity in our neighbourhood (parramatta,nsw) , the prices may drop in the future. but they keep going up and up.

currently my better half wants a ppor not an investment prop. and i don't really see that decision changing. currently emotions are overruling logic

so a ppor it is