I would just like to share my experiences as a first time home buyer. In these past few weeks I have learnt a great deal ranging from account structures to battleaxe properties, granny flats, and floods.
I have a full time job and a salary on 70K, first home buyer. Initially, I had no idea what to do but in the end contacted a mortgage broker off this forum who has been a great help. I wanted to buy a PPOR in which I would convert into an IP after 6 months. I had 180K savings and we were able to organise pre approval for a 340K loan with ANZ’s breakfree package at 80% LVR. I was informed to look for homes around the 440K-450K mark, using a 100K deposit. I could stretch it to the 500’s but that would mean using a large amount of my money as deposit.
Initially I was not too keen on searching for properties. I would email the agents and not really go out of my way to inspect them or organise appointments. It was something I had never done before. However, in the last few days I found that I had increased motivation and made a few appointments to do open homes. The auctions I went to seemed to overvalue the properties.
I contacted my mortgage broker who was more than happy to help me with my property search and I am sure he has probably had enough of all my questions. I then had shortlisted a few properties (let’s call them A,B,C and so on).
Property A, a 4BR fibro house, was listed for 550K, with a large land to boot. The vendor wanted 520K. I made an offer of 505K, which was promptly rejected.
Property B was a 4BR fibro house with 550m of land. The vendor wanted 440K after the auction did not make it past 380K last week.
Property C was 2 houses away from Property B, a much nicer presented home – but only 3BR with 550m of land. It had only been listed for 2 days.
Lastly, Property D. A 2BR Brick house, with near 700m land. It is 2 streets behind property A. I had only found this a day ago and did not read the contract properly. It was to go on auction today.
Fast forward to today:
I visited properties B,C,D. From me and my broker’s calculations, we had worked out that property Band C would be a bargain if we bought it anywhere between 420 to 430K. The both had potential for a granny flat with side access, increasing the yield alot. After the open homes finished, I made unconditional offers to both vendors or 430K for property B and 420K for property C. There was to be 30mins before I went to the auction of property D.
Time had passed and I had registered to bid at my first house auction for property D. It was quite exciting, however I was really quite tired and the agent kept on asking me to increase my offer. In the end, my highest offer was 461K, and the property was sold for 462K. I didn’t feel too bad as it was not my cup of tea (2 bedrooms only, and I wanted at least 3).
I checked my emails and saw an email that indicated property A would sell for 515K. I was inclined to hold out as I was keen on securing either property B or C.
As I get home I got a phone call from the agent of property B letting me know that if I could offer 435K, it would be mine. As this was still undervalued, I agreed and was confused that I had bought a property so quickly! I then realised I had to find a solicitor ASAP, and being 3.00 on a Saturday, there weren’t many around. The agent mentioned that I would need to sign a 0.25% non refundable holding deposit on Monday – my broker thought the non refundable part was unusual.
When I showed my solicitor he was disappointed. As I had plans to build a granny flat under the ’10 day approval process’ he showed me the clause stating that the property was a flood control lot (need to check with council), and it would need DA for any modifications or a granny flat. I now realised why there had been no offers. After such a big day of excitement, I had been shot down. Moreso, I had the opportunity to win the auction for property D which I let slide (and for only 1K!).
So now I had nothing, as both property B and C were prone to floods. All I had was property A, and the result from property D to use as a bargaining chip.
I went home depressed. Over dinner I looked over the contract for Property D. It was also a flood control lot. This made me feel a little better as I was lucky I did not win the auction.
That’s the story of my day. Learnt a few things too – always check the contract, and see a solicitor before anything! Vendors will be willing to drop the price if you wait long enough.
Now I have the embarrassing task of rescinding my offers. And I have a huge headache.
I have a full time job and a salary on 70K, first home buyer. Initially, I had no idea what to do but in the end contacted a mortgage broker off this forum who has been a great help. I wanted to buy a PPOR in which I would convert into an IP after 6 months. I had 180K savings and we were able to organise pre approval for a 340K loan with ANZ’s breakfree package at 80% LVR. I was informed to look for homes around the 440K-450K mark, using a 100K deposit. I could stretch it to the 500’s but that would mean using a large amount of my money as deposit.
Initially I was not too keen on searching for properties. I would email the agents and not really go out of my way to inspect them or organise appointments. It was something I had never done before. However, in the last few days I found that I had increased motivation and made a few appointments to do open homes. The auctions I went to seemed to overvalue the properties.
I contacted my mortgage broker who was more than happy to help me with my property search and I am sure he has probably had enough of all my questions. I then had shortlisted a few properties (let’s call them A,B,C and so on).
Property A, a 4BR fibro house, was listed for 550K, with a large land to boot. The vendor wanted 520K. I made an offer of 505K, which was promptly rejected.
Property B was a 4BR fibro house with 550m of land. The vendor wanted 440K after the auction did not make it past 380K last week.
Property C was 2 houses away from Property B, a much nicer presented home – but only 3BR with 550m of land. It had only been listed for 2 days.
Lastly, Property D. A 2BR Brick house, with near 700m land. It is 2 streets behind property A. I had only found this a day ago and did not read the contract properly. It was to go on auction today.
Fast forward to today:
I visited properties B,C,D. From me and my broker’s calculations, we had worked out that property Band C would be a bargain if we bought it anywhere between 420 to 430K. The both had potential for a granny flat with side access, increasing the yield alot. After the open homes finished, I made unconditional offers to both vendors or 430K for property B and 420K for property C. There was to be 30mins before I went to the auction of property D.
Time had passed and I had registered to bid at my first house auction for property D. It was quite exciting, however I was really quite tired and the agent kept on asking me to increase my offer. In the end, my highest offer was 461K, and the property was sold for 462K. I didn’t feel too bad as it was not my cup of tea (2 bedrooms only, and I wanted at least 3).
I checked my emails and saw an email that indicated property A would sell for 515K. I was inclined to hold out as I was keen on securing either property B or C.
As I get home I got a phone call from the agent of property B letting me know that if I could offer 435K, it would be mine. As this was still undervalued, I agreed and was confused that I had bought a property so quickly! I then realised I had to find a solicitor ASAP, and being 3.00 on a Saturday, there weren’t many around. The agent mentioned that I would need to sign a 0.25% non refundable holding deposit on Monday – my broker thought the non refundable part was unusual.
When I showed my solicitor he was disappointed. As I had plans to build a granny flat under the ’10 day approval process’ he showed me the clause stating that the property was a flood control lot (need to check with council), and it would need DA for any modifications or a granny flat. I now realised why there had been no offers. After such a big day of excitement, I had been shot down. Moreso, I had the opportunity to win the auction for property D which I let slide (and for only 1K!).
So now I had nothing, as both property B and C were prone to floods. All I had was property A, and the result from property D to use as a bargaining chip.
I went home depressed. Over dinner I looked over the contract for Property D. It was also a flood control lot. This made me feel a little better as I was lucky I did not win the auction.
That’s the story of my day. Learnt a few things too – always check the contract, and see a solicitor before anything! Vendors will be willing to drop the price if you wait long enough.
Now I have the embarrassing task of rescinding my offers. And I have a huge headache.