Don't forget your cheque book

Hi,

I learnt a valuable lesson today. I attended two auctions, burnt out properties. The first one at ten o'clock had a good turn out and much interest. It sold at $170k, bit rich for me. Sounded like the purchaser was going to fix it up, but it did have a fair bit of damage.

I headed off for the next auction. When I arrived there was a few people and four had registered. I decided this was an opportunity not to be missed and went up to register. Unfortunately my good wife who is with me at every auction was off taking my daughter to an interview in the city. You guessed it she had the cheque book.

The auctioneer wouldn't accept the keys to the car and without a deposit I was sunk. The house ended up selling for $132k.

Here's some advice learnt the hard way. If your ready to buy, and are even only slightly interested in a property be prepared to bid if the price is right. :(
 
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But don't you have to do all your pest/building inspections prior to the Auction?
I would be reluctant to buy if I hadn't done them and I wouldn't do them unless I had everything there needed to buy it.

I don't know if I'd trust myself walking around with a chequebook in the hip pocket without prior intention and decision, maybe I need to learn that with experience.
 
Hi dantheman,

No need for pest or building, it was a knock down. $132k for a block of land over 600sqm outer Sydney plus removal costs, a bargain.

However you do have point. Our reality has been that the only times we've done building and pests for auctions, we've not been the winning bidder. When buying private treaty we always get them after we've secured the purchase (refundable deposit subject to acceptable building, pest, finance).

We have bought several houses at auction and these days I will crawl under the house and through the roof myself as I now know what to look for (we learnt the hard way). The house we are currently fixing had termite damage noted in building inspection, it wasn't until we started removing gyprock that the extent of the damage was known. Again though, the buy was a bargain at $153k and once fixed we will get a good return.

The main thing is that we know the area and we know a bargain. If we do not secure a property for the right price, we don't buy.
 
You don't HAVE to give them a cheque there and then... You can present it the next business day. NExt time, don't admit to not having the cheque book, bid away, and at the end, when you win, just say... Oooh, you want a cheque NOW? Well, you have a choice, we all sit here while I get in touch with my wife and have her bring the cheque book, OR I can bring a cheque to your office by 10am MOnday, Which would YOU prefer...

asy :D
 
i know the feeling with the cheque book.

in new zealand the agent only expects a 5% deposit, i kept offering 20% deposits. i had to pay that amount for a loan anyway so it didnt really matter who got it.
i did find that the agents eyes did bulge when i offered a 20% deposit for a property but then i asked for a discount on the price of the house.
didnt work too well (i didnt buy anything) however the agents did become more helpful by showing me more properties and what the vendors are willing to accept. day one of the kiwi adventure with dave bradley this worked well. found a 14% yeilding property in 10 minutes.
but yes i always have my cheque book on me, theres no other feeling like whipping it out and putting an offer on the table with a cheque
cheers all
shaun
 
i know what you mean. i had lunch with an agent and found out how they work. (its always good to know thy enemy) they get a 4% flat fee for selling.
2% goes to the selling agent and 2% goes to the company. they dont have advertising costs although they are pushing for it.
after finding this out, i always put a 20% deposit. my business partner (a nz local) is always trying to put down 2% deposits, dont the agents scream in pain when she tries this!!! :eek:

cheers
shaun
 
I took possession of a place in NZ last friday.

When I was negotiating to buy the agent never requested a deposit.

I can't say it would have made any difference had the REA asked for a deposit because I would have told them to jam it (politely, of course).

Mark
 
How about just giving 'em just $50 deposit rather than the usual 5-10% they ask for. With rest of deposit being paid at settlement.

See the agents squirm but worked every time for us. Even had 1 agent saything no way but after I asked what the owners response was they went away and found to their astonishment that owners were quite happy to get sale!

Just meant that agents had to wait for their commission!

Ian
 
IanF said:
How about just giving 'em just $50 deposit rather than the usual 5-10% they ask for. With rest of deposit being paid at settlement.

See the agents squirm but worked every time for us. Even had 1 agent saything no way but after I asked what the owners response was they went away and found to their astonishment that owners were quite happy to get sale!

Just meant that agents had to wait for their commission!

Ian

The agent doesn't get their commission until settlement anyway.*

Where do some people get their information?

asy :mad:

* unless you are in Victoria and the vendor has applied for an early release of the deposit, in which case the agent gets paid at the same time the vendor gets their deposit, but since Ian is in QLD, I have applied QLD law, which is that the agent gets paid at settlement.
 
Of course I meant get commission in their trust account rather than their pockets.

Agents would like to maximise deposit, whereas my point was that its very possible to purchase IPs WITHOUT having to give 10% deposit.

On a 300k Ip, I'd rather the $30k 10% deposit sits in my bank account for the 30/60/90 day settlement!

Ian
 
IanF said:
Of course I meant get commission in their trust account rather than their pockets.

Agents would like to maximise deposit, whereas my point was that its very possible to purchase IPs WITHOUT having to give 10% deposit.

On a 300k Ip, I'd rather the $30k 10% deposit sits in my bank account for the 30/60/90 day settlement!

Ian
Ian, you are correct that you can, indeed, buy with little/no deposit, but you are forgetting that Bargain Hunter was buying at auction. In which case you do have to give a 10% deposit unless you have prearranged with the vendor to accept something different.
 
* unless you are in Victoria and the vendor has applied for an early release of the deposit, in which case the agent gets paid at the same time the vendor gets their deposit, but since Ian is in QLD, I have applied QLD law, which is that the agent gets paid at settlement.[/QUOTE]

Hi Asy,
How does a vendor go about aplying for the release of the deposit in Victoria?
Is it straight forward process?
 
beech said:
Hi Asy,
How does a vendor go about aplying for the release of the deposit in Victoria?
Is it straight forward process?

Beech,

Go to your conveyancer and ask them to give you the form, They'll have it. Sign it and give it to the agent, or ask your conveyancer to organise it, someone needs to send it on to the Purchaser. ONce they have gone unconditional, they usually sign it with no problems. Even if they are being painful and say no, you give them notice, and after 28 days, you can release it. The agent gets their commission out of the deposit, and you get the balance.

Ian,

You do realise that the agent makes no interest whatsoever, in fact it COSTS them to run the trust account, don't you?

The reason agent's, on the whole, don't like to take a very small deposit is that it doesn't protect the VENDOR (who, by the way, is the agent's client, not you). Especially in Vic, where, if the agent takes a tiny deposit, and doesn't advise the vendor properly (some go as far as to get the vendor's agreement in writing, coz otherwise they conveniently 'forget' agreeing) of the implications, the vendor can sue the agent for the difference. What implications, I hear you ask, Well, If the contract falls over and the vendor is entitled to keep 10%, and the agent hasn't GOT 10%, and hasn't advised the vendor that this is a potential problem, then the agent *could* be in trouble.
Even in other states, where there is the potential for the Vendor to be able to claim monies from the Purchaser, the agent is obliged to at least get enough deposit to cover this possibility.

See?

I have written about all this before... :eek:

asy :D
 
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