Buying a house - Real estate agents

Forums › Home Workshop DIY › Buying a house - Real estate agents

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8

3260 posts

Uber Geek

Subscriber

#1404354 12-Oct-2015 14:09

tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

tdgeek

29746 posts

Uber Geek

Trusted

Lifetime subscriber

#1404433 12-Oct-2015 15:02

sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

SheriffNZ

671 posts

Ultimate Geek

#1404495 12-Oct-2015 16:32

tdgeek:
sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

I think the standard finance clause is all about best endeavours. I doubt you'd be able to get out of a purchase if you say you were hoping to get 1% interest but if you shopped around all the major banks, and all the second tier ones and we declined finance by all of them, then you might be able to cancel the contract on the basis of not finding finance.

allio

885 posts

Ultimate Geek

#1404513 12-Oct-2015 16:59

In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

eracode

Smpl Mnmlst
8854 posts

Uber Geek

ID Verified

Trusted

Subscriber

#1404516 12-Oct-2015 17:05

SheriffNZ:
tdgeek:
sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

I think the standard finance clause is all about best endeavours. I doubt you'd be able to get out of a purchase if you say you were hoping to get 1% interest but if you shopped around all the major banks, and all the second tier ones and we declined finance by all of them, then you might be able to cancel the contract on the basis of not finding finance.

My understanding is that you don't actually have to prove to the vendor that you couldn't get finance, if you want to cancel the conditional contract. Just have to say "sorry, couldn't get finance" - this is why a "subject to finance" clause is so useful - you can use it for any other reason you like.

The finance clause will generally have a closing date attached to it anyway, and if the prospective purchaser does not confirm to the vendor that finance has been arranged, the contract will fall over on that date.

Sometimes I just sit and think. Other times I just sit.

SheriffNZ

671 posts

Ultimate Geek

#1404517 12-Oct-2015 17:05

allio: In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

Sounds more reasonable.

tdgeek

29746 posts

Uber Geek

Trusted

Lifetime subscriber

#1404521 12-Oct-2015 17:11

allio: In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

So you would make an offer, conditional on then applying for a loan? To me as a seller I would not be interested in that. These days you look for a buyer who is genuine (not saying you aren't) and can buy, who will have pre approved finance. Nor would I be interested in conditional upon selling our current home. If the market was slow, not many buyers, I would accept those issues though. But not in a boom or normal market

Sharesies kids

Free kids accounts - trade shares and funds (NZ, US) with Sharesies (affiliate link).

eracode

Smpl Mnmlst
8854 posts

Uber Geek

ID Verified

Trusted

Subscriber

#1404522 12-Oct-2015 17:13

tdgeek:
allio: In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

So you would make an offer, conditional on then applying for a loan? To me as a seller I would not be interested in that. These days you look for a buyer who is genuine (not saying you aren't) and can buy, who will have pre approved finance. Nor would I be interested in conditional upon selling our current home. If the market was slow, not many buyers, I would accept those issues though. But not in a boom or normal market

Offers with a "subject to finance" clause are extremely common - because buyers more often than not need to get confirmation from their bank that the bank is willing to lend against that particular property.

Sometimes I just sit and think. Other times I just sit.

tdgeek

29746 posts

Uber Geek

Trusted

Lifetime subscriber

#1404523 12-Oct-2015 17:14

eracode:
SheriffNZ:
tdgeek:
sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

I think the standard finance clause is all about best endeavours. I doubt you'd be able to get out of a purchase if you say you were hoping to get 1% interest but if you shopped around all the major banks, and all the second tier ones and we declined finance by all of them, then you might be able to cancel the contract on the basis of not finding finance.

My understanding is that you don't actually have to prove to the vendor that you couldn't get finance, if you want to cancel the conditional contract. Just have to say "sorry, couldn't get finance" - this is why a "subject to finance" clause is so useful - you can use it for any other reason you like.

The finance clause will generally have a closing date attached to it anyway, and if the prospective purchaser does not confirm to vendor that finance has been arranged, the contract will fall over on that date.

So, you would want control, to buy or not buy and in the meantime look at other properties and make other offers? To a sleep thats just wasting time, and putting other buyers aside. I dunno if you can have a contract that states, subject to the other buyer going unconditional? Sounds fair.

tdgeek

29746 posts

Uber Geek

Trusted

Lifetime subscriber

#1404527 12-Oct-2015 17:19

eracode:
tdgeek:
allio: In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

So you would make an offer, conditional on then applying for a loan? To me as a seller I would not be interested in that. These days you look for a buyer who is genuine (not saying you aren't) and can buy, who will have pre approved finance. Nor would I be interested in conditional upon selling our current home. If the market was slow, not many buyers, I would accept those issues though. But not in a boom or normal market

Offers with a "subject to finance" clause are extremely common - because buyers more often than not need to get confirmation from their bank that the bank is willing to lend against that particular property.

As common now as it used to be? Pre approved seems the common stance these days. Why wander around homes every weekend if you don't know your a genuine buyer, even though you want to be? How long does a loan approval take? I assume they look at your banking history, evidence of income, and run a feasibility over income, standard expenses, debts, intended mortgage payments. I did that once, have no idea how long it took, but it wasn't an ongoing saga. Its just math vs how flush the banks are. A-b-c-d-e=yes or no

SheriffNZ

671 posts

Ultimate Geek

#1404529 12-Oct-2015 17:20

eracode:
SheriffNZ:
tdgeek:
sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

I think the standard finance clause is all about best endeavours. I doubt you'd be able to get out of a purchase if you say you were hoping to get 1% interest but if you shopped around all the major banks, and all the second tier ones and we declined finance by all of them, then you might be able to cancel the contract on the basis of not finding finance.

My understanding is that you don't actually have to prove to the vendor that you couldn't get finance, if you want to cancel the conditional contract. Just have to say "sorry, couldn't get finance" - this is why a "subject to finance" clause is so useful - you can use it for any other reason you like.

The finance clause will generally have a closing date attached to it anyway, and if the prospective purchaser does not confirm to the vendor that finance has been arranged, the contract will fall over on that date.

You'll have to prove it if you're questioned.

eracode

Smpl Mnmlst
8854 posts

Uber Geek

ID Verified

Trusted

Subscriber

#1404532 12-Oct-2015 17:22

SheriffNZ:
eracode:
SheriffNZ:
tdgeek:
sir1963:
tdgeek:
sir1963:
tdgeek: I dont get the anti auction comments. If I wanted buy X house at up to 500k, and it was sign priced at 500k I guess I'd buy it. If it was at acuction and went for 550k I won't buy it, if it went for 485k I would buy it. Being open to any avenue widens the choice. The key factory is the house, not the means of buying it

So, I assume you dont get a LIMS or builders report.

Some banks can ask for these as part of the lending requirements

So, if you DO get both, it can easily set you back $2000+

So, unless you get these, you dont get a loan, so even if your $500,000 house goes for $400,000 you can not bid.

If you do pay out $2000 for them and the place goes for 550K, you dont get the house and you are still out 2K

There can also be limited time to get a builders etc report, so these can cost more to do in a rush.

I would never buy a house without these being done, I have see it go wrong for others too many times. And realestate agents deliberately avoid
asking questions, once they know they have to disclose , i.e. if the house down the road has been set up as a 1/2 way house for criminals, house next door sold to a Kindy, etc etc etc.

How does an auction make a difference for the above? I could buy a house off a mate, off a deadline treaty (I hate them) off an agent with an asking price that the seller accepts, or by auction. All of those allow you to carry out due diligence. If it was a standard agent sale, you would need LIM etc, or you could be conditional on the LIM etc, either way you still have to pay for it. In our case, we sold one of our two houses at auction last Thursday, we provided the LIM report. I'd say thats standard, you cant have 28 people paying for one house's LIM report, nor could you have one person like you or me, going to auction with our eyes on 5 places, and have to buy 5 LIM reports. What if you were looking at 5 houses by non auction?

Simple.
Auction I have to get the reports done BEFORE I know my bid is successful.
If I am unsuccessful I am out the cost of the reports i.e. maybe $2000
So for 5 houses you can be out of pocket by $10,000, or run the risk.

Normal purchase I get the reports done AFTER I am successful
If I am unsuccessful I dont bother with the reports, so my costs are $0.
so for 5 houses you would be out of pocket $0.

I have put in offers on multiple houses based on acceptable LIMS, Builders, Acceptable finance.
Who cares if I get multiple acceptances, I can opt to only do the reports on one house and back out of the others based on "acceptable finance"

Always put "acceptable finance" if you dont and your offer gets accepted the vendor can loan you the money at 20% pa and you can be forced to accept it. With "acceptable" there you can say you hoped to get finance at 1% for the life of the loan, unrealistic yes but a legal "out"

LOL. Are you sure Acceptable Finance is legit? Otherwise everyone would buy a house or houses, over a week or three, then sit down and work out what ones to ditch?

No, you dont need to buy LIMs for every house you bid on. One of the purpose of an auction is that its unconditional, win the auction, pay 10% there and then, no conditions. So when we sold house 1 the other day we paid for the LIM, so that gave the buyer that piece of didlgence. If they want a builders report they can bring a builder around, There is no rush, auctions live for a standard 3.5 weeks. I dunno why 3.5 is the stadard, but it is

But get back to me on Acceptable Finance

I think the standard finance clause is all about best endeavours. I doubt you'd be able to get out of a purchase if you say you were hoping to get 1% interest but if you shopped around all the major banks, and all the second tier ones and we declined finance by all of them, then you might be able to cancel the contract on the basis of not finding finance.

My understanding is that you don't actually have to prove to the vendor that you couldn't get finance, if you want to cancel the conditional contract. Just have to say "sorry, couldn't get finance" - this is why a "subject to finance" clause is so useful - you can use it for any other reason you like.

The finance clause will generally have a closing date attached to it anyway, and if the prospective purchaser does not confirm to the vendor that finance has been arranged, the contract will fall over on that date.

You'll have to prove it if you're questioned.

So what would happen if a prospective purchaser just did nothing - i.e. Did not apply for finance anywhere - and waited for the finance date to come around. How is the vendor going to compel the purchaser to go ahead with the transaction? My understanding is that the finance clause is solely for the benefit of the purchaser and the vendor cannot enforce anything.

Sometimes I just sit and think. Other times I just sit.

tdgeek

29746 posts

Uber Geek

Trusted

Lifetime subscriber

#1404535 12-Oct-2015 17:33

eracode:

So what would happen if a prospective purchaser just did nothing - i.e. Did not apply for finance anywhere - and waited for the finance date to come around. How is the vendor going to compel the purchaser to go ahead with the transaction? My understanding is that the finance clause is solely for the benefit of the purchaser and the vendor cannot enforce anything.

In that case it may as well just be called a "30 Day Buyers Offer" and have no meaning at all. IANAL but I am sure there would be something in the contract to cover that. I will try and find out, unless there is a lawyer or agent here?

eracode

Smpl Mnmlst
8854 posts

Uber Geek

ID Verified

Trusted

Subscriber

#1404539 12-Oct-2015 17:36

tdgeek:
eracode:
tdgeek:
allio: In making offers I have used the qualification that finance is to be provided by a named bank or just "the purchaser's preferred lender". That way the vendor can't insist you shop around increasingly dodgy lenders to meet the terms of the agreement.

I doubt a vendor would agree to a term as broad as "acceptable finance". That is so subjective it is essentially a get-out-of-jail free card for the purchaser. The vendor's solicitor would instruct their client not to sign an agreement containing it.

So you would make an offer, conditional on then applying for a loan? To me as a seller I would not be interested in that. These days you look for a buyer who is genuine (not saying you aren't) and can buy, who will have pre approved finance. Nor would I be interested in conditional upon selling our current home. If the market was slow, not many buyers, I would accept those issues though. But not in a boom or normal market

Offers with a "subject to finance" clause are extremely common - because buyers more often than not need to get confirmation from their bank that the bank is willing to lend against that particular property.

As common now as it used to be? Pre approved seems the common stance these days. Why wander around homes every weekend if you don't know your a genuine buyer, even though you want to be? How long does a loan approval take? I assume they look at your banking history, evidence of income, and run a feasibility over income, standard expenses, debts, intended mortgage payments. I did that once, have no idea how long it took, but it wasn't an ongoing saga. Its just math vs how flush the banks are. A-b-c-d-e=yes or no

Yes - pre-approval by a bank that they will lend to you is very common - but they will still want to approve the specific property that you are looking at - because there could be a problem with the property.

Sometimes I just sit and think. Other times I just sit.

Jaxson

8042 posts

Uber Geek

Trusted

#1404540 12-Oct-2015 17:40

The solution to this by the way is to specify finance that is 'acceptable' to you.
That wording gives you a way out if required.
You can pretty much always get finance from a dodgy back alleyway dealer, so it's not strong enough to save you if pressed for proof.

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8