Buying my first house

joker08 said:
I only reached post-105 of this thread.
Please tell me who pays the agent commission and how it is calculated?
If I make an offer and the bank rejects my loan do I still have to pay the commission?
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I hear alot of stories when people sign, and the buyer backs out! (Then the agent still wants his cut). So, before you put pen on paper... think clearly and be rather positive then negative.

And when you buy, dont put your girlfriend’s name also on the house (pretty please).
 
zerocool2009 said:
I hear alot of stories when people sign, and the buyer backs out! (Then the agent still wants his cut). So, before you put pen on paper... think clearly and be rather positive then negative.

And when you buy, dont put your girlfriend’s name also on the house (pretty please).
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Yes the otp often has a clause where if the deal falls through due to the buyer pulling amount the he is still liable for the agents commission. I had a lawyer look through my otp and that was the one really worrying thing he picked up.

Agents are saying it's currently a buyers market but then again they say many things.
Does make sense considering the current economic climate though.
So bargain hard and don't be afraid to make a "silly" offer.

You can check on property 24 the last paid houses in the area to give you an idea.
 
Its for sure a buyers market. Lowest interest rate in 50 years.

Be careful to buy something, and if rates go up by 5%, fix it rather or work out if you can still afford it.

Fixing it has one bad point, you lose your flexi bond power
 
In a recent purchase, there were clauses about the buyer being liable for commission in certain scenarios. I removed all of them when I made my offer, the agent had to run it by the principal agent (or whatever they are called) and it got the ok.

With exchange rates this low, does that not being an influx of buyers and therefore swing it to a sellers market?
There are many other complex market conditions at play that makes less simple but surely if it was only up to exchange rates the seller would be the one with the options.
 
droidx said:
In a recent purchase, there were clauses about the buyer being liable for commission in certain scenarios. I removed all of them when I made my offer, the agent had to run it by the principal agent (or whatever they are called) and it got the ok.

With exchange rates this low, does that not being an influx of buyers and therefore swing it to a sellers market?
There are many other complex market conditions at play that makes less simple but surely if it was only up to exchange rates the seller would be the one with the options.
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You mean interest rates...
 
droidx said:
In a recent purchase, there were clauses about the buyer being liable for commission in certain scenarios. I removed all of them when I made my offer, the agent had to run it by the principal agent (or whatever they are called) and it got the ok.

With exchange rates this low, does that not being an influx of buyers and therefore swing it to a sellers market?
There are many other complex market conditions at play that makes less simple but surely if it was only up to exchange rates the seller would be the one with the options.
Click to expand...
Problem is, the interest rates are this low because there are no buyers left (people have no money to spend) and the guys buying now, I'd say most are opertunists and rightfully so, property is a good move (better than buying a fancy car), but what I think most don't fully get yet (especially if you buying now at the limit of your repayments) is that interest rates will go up again, probably next year and you will lose that house if you can't make the payments anymore.

Low interest rates does not mean go buy a house. Chances are if you could not really afford it before, you still technically can't.
 
Scooby_Doo said:
I wouldn't pay any extra disposable cash into a bond. You sre will be better off investing that extra. Property price growth is ****.
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Where are you going to put that money for it to grow more than 10%?

Always pay of debt first.
 
droidx said:
In a recent purchase, there were clauses about the buyer being liable for commission in certain scenarios. I removed all of them when I made my offer, the agent had to run it by the principal agent (or whatever they are called) and it got the ok.

With exchange rates this low, does that not being an influx of buyers and therefore swing it to a sellers market?
There are many other complex market conditions at play that makes less simple but surely if it was only up to exchange rates the seller would be the one with the options.
Click to expand...
I will certainly keep an eye for this, thanks
 
Thor said:
Problem is, the interest rates are this low because there are no buyers left (people have no money to spend) and the guys buying now, I'd say most are opertunists and rightfully so, property is a good move (better than buying a fancy car), but what I think most don't fully get yet (especially if you buying now at the limit of your repayments) is that interest rates will go up again, probably next year and you will lose that house if you can't make the payments anymore.

Low interest rates does not mean go buy a house. Chances are if you could not really afford it before, you still technically can't.
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You got me scared now. Although I am choosing a property whose repayments will be less than 15% of my total household income so that I am able to pay it off faster.
what is the average rate of interest everyone has been paying for all these years ?
if the interest rate does increase will they increase the monthly payments or the duration of the contract ?
 
joker08 said:
You got me scared now. Although I am choosing a property whose repayments will be less than 15% of my total household income so that I am able to pay it off faster.
what is the average rate of interest everyone has been paying for all these years ?
if the interest rate does increase will they increase the monthly payments or the duration of the contract ?
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Increases the monthly payments.

Our normal interest rate will probably be back to 10% and then go up from there.

This is a third world country (very high risk) so the cost of capital is expensive.

Edit:
Our interest rate has been averaging 10.500 % pa from Jan 2000 to Aug 2020
 
Thor said:
Increases the monthly payments.

Our normal interest rate will probably be back to 10% and then go up from there.

This is a third world country (very high risk) so the cost of capital is expensive.

Edit:
Our interest rate has been averaging 10.500 % pa from Jan 2000 to Aug 2020
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Would it be a good idea to fix the interest rate now?
 
Thor said:
Increases the monthly payments.

Our normal interest rate will probably be back to 10% and then go up from there.

This is a third world country (very high risk) so the cost of capital is expensive.

Edit:
Our interest rate has been averaging 10.500 % pa from Jan 2000 to Aug 2020
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That edit is an interesting stat.

This year's repo rate reductions have been unprecedented, though. I think rates will go down before they go up again.

Agree that you still shouldn't be buying a house you couldn't afford a few months ago, just because rates have been slashed due to covid,though.
 
Sinbad said:
You mean interest rates...
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Correct thanks!
Thor said:
Problem is, the interest rates are this low because there are no buyers left (people have no money to spend) and the guys buying now, I'd say most are opertunists and rightfully so, property is a good move (better than buying a fancy car), but what I think most don't fully get yet (especially if you buying now at the limit of your repayments) is that interest rates will go up again, probably next year and you will lose that house if you can't make the payments anymore.

Low interest rates does not mean go buy a house. Chances are if you could not really afford it before, you still technically can't.
Click to expand...
I don't disagree with you, just stating that low interest rates in isolation should mean more buyers. Though there are many other factors that means this is not the case.

If you are buying property now, I think you should base your affordablity on 10%-12% rates. Banks will base it on 7% but if you don't build some fat in you could struggle later on.
 
hj2k_x said:
That edit is an interesting stat.

This year's repo rate reductions have been unprecedented, though. I think rates will go down before they go up again.

Agree that you still shouldn't be buying a house you couldn't afford a few months ago, just because rates have been slashed due to covid,though.
Click to expand...
droidx said:
Correct thanks! I don't disagree with you, just stating that low interest rates in isolation should mean more buyers. Though there are many other factors that means this is not the case.

If you are buying property now, I think you should base your affordablity on 10%-12% rates. Banks will base it on 7% but if you don't build some fat in you could struggle later on.
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This, there's great opertunity created by this, but will require some advance finance maneuver to get right, the average person entering now might get fcked by the game.

I'm buying in this environment, but my approach for others would be use this to get rid of your debt, go re negotiate your insurance, credit cards, any debt, use this reduction to get back to positive cash flow.

Get lower interest debt to pay off your expensive debt if you have and then consolidate and pay that off faster with this cut for example.

Buying now means you'll be pushed deeper in red if you are on the edge (rates, Levies, insurance etc all extra over and top of the bond itself) so one must be very certain about the full monthly bill which will be due when buying.

For the average person pushing more into existing debt would probably be the better focus.
 
I’m keeping repayment in my properties as if my rate is 10%. So reduced the terms over the last period and my cash flow is protected from the next few years worth of interest hikes.
 
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