How to Buy House?? - Need Agents' Advice

[Ms Jade]

Well we have finally done exactly we know NEVER to do in property – fall in love with a house. First open was last Saturday – quite a lot of people through. We really liked it but have not been seriously looking for a PPOR. All weekend we to’d and fro’d as to whether we could do it, how to make it work... Then I had a brain wave that we could rent it out for 1-2 yrs and then move in (for various reasons it would be more affordable then).
On Monday I called a couple of PMs to estimate rental – all came back OK. I expected (idiot!) to get a call from the agent Monday/Tuesday for feedback. As this didn’t happen, I called with a casual question (not wanting to appear TOO keen) on Tuesday. She says that the house is already under contract as they got an offer straight away on Saturday evening. AAARRGH!! Of course, now that we have missed out on it we’re incredibly disappointed and can’t stop thinking it was supposed to be our “dream house.” This property is in Melbourne, BTW.

Here’s the situation. House was advertised with a price range. Agent says the offer is at the top of the range, thus why vendor was happy to take offer so early (may or may not be true but makes sense). Offer is subject to pest, building & finance clauses (assume standard ones but who knows) for 2 weeks. Agent said if buyer can’t get finance she will ring the other people on the list (assuming from the 1st inspection but may have more interest since then). Have heard from another agent in the area that some buyers are taking up to 6 weeks to get finance approved, thus asking for 2 week extensions at a time on their offers (due to bank backlog). This is hard on vendors, as house off the market & not really “sold” yet.

My question: On the off-chance that finance or something falls through, how to position ourselves in the front seat to buy the property. I am considering calling agent early next week & saying if the contract cannot go unconditional in the timeframe, rather than give the buyer an extension to get finance, why not give the vendor option of an alternative offer? I’m thinking that this offer would need to be VERY good to have a chance of this working. Maybe quite a few thousand over the quoted range. Also, doubt whether we would have any chance if we also wanted a finance clause. I am thinking “building inspection acceptable to purchaser” and that’s it. Settlement negotiable. I think the quoted price range was v. reasonable & yet I’m aware how stupid it seems to buy a property in this climate for top dollar. We would plan on being there 10yrs+.
Any thoughts on what we should or shouldn’t do? How do we give ourselves every chance to get this house? HELP!! (Sorry for rambling on so long).

 

[Alabex]

I would put an offer in writting to the agent I am pretty sure that in Melbourne it is the same as NSW and the agent would be obliged to take it to the Vendor. Basically though you would probably end up in a race to unconditionally exchange first, so be prepared to get things happening quickly.

 

[Collector]

I would put an offer in writting to the agent I am pretty sure that in Melbourne it is the same as NSW and the agent would be obliged to take it to the Vendor. Basically though you would probably end up in a race to unconditionally exchange first, so be prepared to get things happening quickly.

Agent only has to submit (all) offers up to exchange - this property has exchanged subject to P&B and finance. (cooling off)


In regards to purchasing this property you will need a miricle - the vendors seem to have as close to the asking, the property went U/C same day as first inspection, vendor happy, purchaser happy, agent happy.


All i can say is to be prepared - have your finance ready so that if by chance the sale falls over you are able to exchange unconditionally.


If Me - i would move on to find the next one, i would learn from the expirence and i would act quicker next time

 

[Alabex]

Agent only has to submit (all) offers up to exchange - this property has exchanged subject to P&B and finance. (cooling off)


In regards to purchasing this property you will need a miricle - the vendors seem to have as close to the asking, the property went U/C same day as first inspection, vendor happy, purchaser happy, agent happy.


All i can say is to be prepared - have your finance ready so that if by chance the sale falls over you are able to exchange unconditionally.


If Me - i would move on to find the next one, i would learn from the expirence and i would act quicker next time

Sorry i didn't get from the first post that it had exchanged, i thought an offer had been accepted subject to P& B and finance but didn't realise it had actually exchanged. On second reading i can see that was not correct... so sorry about that i stand corrected.

 

[csc]

Sorry i didn't get from the first post that it had exchanged, i thought an offer had been accepted subject to P& B and finance but didn't realise it had actually exchanged. On second reading i can see that was not correct... so sorry about that i stand corrected.

not sure about other states but in qld an agent does not have to submit offers if the vendor has already nominated a bottom price to the agent.

if they play games with you and throw out this line all you have to do is call the owner personally to discuss if your sus with the agent and the story

 

[Alabex]

If the vendor has instructing in writting to only present them with offers above a certain amount then you dont have to pass offers below this amount on.

 

[Ms Jade]

Sorry i didn't get from the first post that it had exchanged, i thought an offer had been accepted subject to P& B and finance but didn't realise it had actually exchanged. On second reading i can see that was not correct... so sorry about that i stand corrected.

"Exchanged" is not a term I've come across in Vic so I'm guessing the process works a little differently in NSW. In Vic, the buyer makes a written offer on a standard form, on which there may be conditions (such as in this case). There is no binding contract, AFAIK, until the offer becomes unconditional. At the moment this is not the case. Back to the other agent who was speaking with me about current issues with finance: When a buyer who has put in an offer subject to finance fails to get finance within the stated time, they may ask for an extension but the vendor does not have to grant one. For this reason, where the 2 weeks has expired, vendors are apparently directing the agents to hold OFIs so that the house is not taken off the market.

 

[Ms Jade]

not sure about other states but in qld an agent does not have to submit offers if the vendor has already nominated a bottom price to the agent.

This is also the case in Victoria

 

[Ms Jade]

In regards to purchasing this property you will need a miricle - the vendors seem to have as close to the asking, the property went U/C same day as first inspection, vendor happy, purchaser happy, agent happy.

Right now I am perhaps kidding myself (for a while at least) that miracles do happen. I agree with you. The only chance we have is if either satisfactory B&P or finance cannot be attained by the purchaser within the 2 weeks. Then the purchaser can always just take the risk of going unconditional without finance in place, too, depending how optimistic they are.

 

[GIDDO]

Just make certain that the agent KNOWS you will easily get your finance approved. If it falls over, you will be then next on the list.
In this climate, agents really value a solid purchaser who isn't depending on conservative valuations by banks to fall over the line. A lot of 90% lends are not happening because of low vals.

 

[Ms Jade]

Just make certain that the agent KNOWS you will easily get your finance approved. If it falls over, you will be then next on the list.
In this climate, agents really value a solid purchaser who isn't depending on conservative valuations by banks to fall over the line. A lot of 90% lends are not happening because of low vals.

Thanks, GIDDO. I was thinking of telling the agent, "We are prepared to offer $x and we have finance approved." We'd only be going for an 80% lend & my only concern is some of the horror stories I've heard with vals coming in below sales price. Do you think it's too off-putting to the agent/vendor if we added a clause, "Subject to ANZ bank valuation not below purchase price?" I know the less conditions the better but I would imagine that they'd think this was unlikely to happen. It would certainly protect us, though.

 

[David E-Noosa]

In Qld its quite ok to enter into a backup contract with suitable special conditions to it becoming active at the failure of the previous contract.

Is this the same there ?

Along the lines of this, this is one variation of it and the shorter of.

31.The parties acknowledge and accept that this Contract is subject to and conditional upon an existing Contract entered into by the Seller {names] with [ names] as Buyer dated the day of 2009 ("the Preceding Contract) being terminated on or before the day of 2009. (can say on or before 3 days of the date hereof) Upon termination of the Preceding Contract, the parties herein acknowledge and accept that this Contract shall immediately become an enforceable contract of sale.