Fair play in contracts

You have found the home you want to buy and live in. You both love it. You sign a contract at a negotiated price. Two days after signing the Contract you phone and ask the agent if a Parent can inspect the property.

What is the problem with this you ask? The problem arises when buyers lose respect for the seller, in one case I had nine relatives inspect a property after a couple had signed a Contract. Legally, you are not entitled to return to the property until the Pest and Building is being conducted. I do not however, see the point in delaying the process, so usually agree to the Parent inspecting. Let me tell you that in my many years of experience the result of this is inevitably a crashed Contract.

If you do not involve your Parents in the process of signing a Contract by asking the Agent for a second inspection prior to signing the Contract, the Parent, or interested party feels slighted and will always find fault with the property – either correctly or incorrectly is of no importance.

My advice to young Buyers is always ask for a second inspection prior to signing a Contract. At that second inspection have all parties whose opinion you respect attend. Sellers get very (understandably) irate when a Contract crashes after 21 days on finance when no pest and building has been ordered and no valuation has been conducted, which would suggest that after the Parent or interested party has inspected you have changed your mind. The writing is already on the wall, so why wait until the 21st day to advise the Seller’s?

Pest and Building inspections are another bone of contention, a number of Buyers are using it as a further negotiating tool on the price. This is not the purpose of a Pest and Building, unless of course there is something that we as Agents and quite often the Owner themselves are not aware of – such as structural problems. You should act reasonably. If you are told a property has a fibro roof, then do not come back and ask for $15,000 off the price to replace the roof.

All Contracts are positioned in favour of the Buyer. You have 14 or 21 days to organise finance and have building and pest inspections. There is also a five working day cooling off period which applies to every Contract. The Seller on the other hand cannot change their mind, which occasionally happens.

Enjoy the experience of looking for your new home, make sure all interested parties are aware that you are thinking of purchasing and ensure they too have seen the property and agree with you on the purchase. Buying a new home should not become a war zone between Seller, Buyer and Agent. Each party must respect the other and a fair price will be paid. The whole experience can and should be very enjoyable.

Moorooka #1 HOTSPOT for 2009.

Before we get down to the serious side of business, try this great recipe for a quick easy snack, morning, noon or night.

SUMMER TURKISH BREAD



12 slices of Turkish bread
3 large roma tomatoes,
quartered and deseeded
4 basil leaves, shredded,
2 tablespoons virgin olive oil
1 small salad onion finely chopped
Freshly milled pepper and salt to tast
Parmesan cheese, grated.

Heat oven to 180 deg and lightly toast bread slices.dice tomatoe's and place in bowl. Add basil, oil, finely chopped onions and salt and pepper, stir to combine. Spoon mixture onto the toasted Turkish bread and sprinkle with parmesan cheese. Bake in oven until golden brown and serve.
ENJOY.

Now down to business...

Key Brisbane Southside suburbs are listed in RP Data's 2009 Property Hotspots Report Predictions, proving the strength of the region's property market.


RP Data's leading property analysts - Tim Lawless and Cameron Kusher - delivered their forecast about 4 weeks ago to present opportunities in 2009 for new buyers and investors. The hotspots selection is based on 'strategic affordability' - homes with reasonable price tag that are well serviced by public transport, arterial roads and the necessary amenities such as shopping, schools and health care facilities - in both the housing an unit markets.

The Southside suburbs expected to be strong performers over the next 12 months include: SALISBURY, MOOROOKA, COOPERS PLAINS, and ROCKLEA in the housing market and ANNERLEY, GREENSLOPES AND STONES CORNER in the Unit market. These suburbs boast the characteristics sought out by buyers, offering also great parks, major shopping centres, restaurant precincts, quality schools, close to SE Freeway plus much more.
As you know we service all these area's and would be happy to have a chat with you if you are a Buyer or a Seller.

MORTGAGE TRAPS TO AVOID

Taking out a mortgage will probably be one of the most significant financial decisions you make in your lifetime. So make sure you understand just what you're getting into.

Fees
When it comes to home loans, fees can quickly add up. It pays to investigate just what upfront and ongoing charges you will be up for. Consider everything for the life of your loan from application costs and mortgage insurance to monthly, redraw and early exit fees. Lenders may charge an application fee of $600 or more, a valuation fee (often more than $300) and a loan settlement fee of $200 or so. Also, many lenders will insist on a mortgage insurance, especially if you are borrowing more than 80 percent of the value of your new home. This can cost as much as one percent of the loan amount.

There may be a fixed monthly fee or other charges relating to using the loan and depending on your contract, the lender may be able to increase these costs at any time. Early exit fees vary between lenders and come in different disguises, such as "deferred establishment fees". These fees become significant should you wish to pay off your loan or refinance with another lender. Always ask your potential lender for specific early-exit fees and cost. Remember, if you can negotiate to reduce any or all of these fees up front, it will help to reduce the size of your loan. If you aren't a good negotiator, you might want to use a morgage broker to help secure a better deal.

Redraw/extra payment limitations
Some loans will restrict you from making extra repayments into your mortgage account. This is significant in that any extra money you put into the loan will help to reduce interest and can have considerable tax advantages. Other loans allow you to make extra repayments but have limitations when it comes to redrawing that money. Check whether you'll be required to apply in writing, how long it might take for approval, and if there are any costs involved.

Honeymooon Loans
Borrowers should always be cautious when it comes to honeymoon loans. They may sound competitive and be so for the first six to 12 months of the loan, but you may end up with a rude shock when they revert to a much high rate that can eclipse the standard vaiable rate.

Interest Rates
Don't accept interest rates at face value - see if you can talk the lender into a lower rate. After all, any reduction can mean huge savings over the life of the loan. Also when it comes to fixing your interest rate, the biggest factor you need to be aware of is the high break costs should you wish to revert to a variable rate. This involves you having to pay for all the "lost" interest to the lender if you had paid the high rate through to the end of the fixed term and can add up to considerable amount of money.

Sign on the dotted line
And lastly, don't sign anything you don't fully understand. If you are in doubt, get independent legal or financial advice. Finding the right mortgage may take some time, but securing the right one for you can save a lot of money and stress in the long term.

Questions and Answers Segment

Question: Can a seller ask buyers who claim their finance was rejected to provide proof?

Answer: Only if it is in the contract.

When a seller is presented with a contract of sale on their property and it is subject to finance, the seller will often ask "If they don't get the finance, can we ask to see the proof from the Bank?".

The answer to this is unfortunately is "no". While all contracts rely to a certain extent on "good faith" there is no obligation on the buyer to produce evidence that they have made an application for finance or what the outcome of that application was. What we can do however is add a special condition to the contract that will at least give you some protection from the buyer who simply "changes his mind" or "find something better" and that clause should read:

Should this contract be subject to finance and such application is declined by the financier or approved on terms not satisfactory to the buyer, further to the terms.

Seller's solicitor the seller shall be under no obligation to refund the deposit monies to the buyer.