Property Trading/Flipping

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From: Debra L


I have a couple of questions for those experienced with property trading of OTP properties.

If someone buys an OTP IP with the view to flipping it prior to settlement, and they have signed the purchase contract as themselves and/or nominee. If they are unable to find a purchaser themselves, can they enlist an Estate Agent to sell it for them (are there any restrictions in listing a property with an agent that they don't legally own as yet)?

If the original contract has a purchase price of $400K and the property has increased to $470K FMV, and a buyer is found who is willing to pay $470K, can they approach the original vendor and pay to get a new contract of sale written up at the higher price, and get a letter (or something binding from the vendor) which agrees to give a cash back for the additional $70K?

If this is not possible, how to traders manage to flip for a higher price than they originally paid, without having to leave the contract value at the original price, and then Invoice the new purchaser for their margin. Obviously if they do this, this will make it more difficult for the purchaser (unless they had a huge cash deposit, which is equal to the margin being charged), as the banks will only loan them x% of the purchase price?

Any feedback would be appreciated.

Thanks

Debra
 
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Reply: 1
From: Asy .


Hi Deb,

Short answer, yes, you can list it with an agent.

A copy of your contract goes into the Section 32 (with your prices blacked out!!) as proof of your equitable interest in the property.

I did this 2 years ago.

Bought a block of land at Hidden Valley (Just out of MEL) for $130k, and prior to settlement, I listed it with an agent and sold it for $155k.

Good luck with it. The only MAJOR caution I would give (As you no doubt already know) is that you need to be prepared to actually settle on the property, just in case!

asy


"Don't forget what happened to the guy who suddenly got everything he ever wanted...
He lived happily ever after.
(Willy Wonka).
 
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Reply: 1.1
From: Empy 555


the above reply......is correct

YES is the answer !!
 
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