Offer to purchase question

PotatoGuardian said:
I'm the seller. I asked in this thread because I assumed someone came across them. I prefer to have information than just go with the flow on a legal transaction
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Are you buying somewhere else as well?

Often conveyancing attorneys will offer a discount if you do multiple things with them, such as registering the buyer’s bond, or your next property, or whatever. If you can, you can save by combining things.
 
newby_investor said:
Are you buying somewhere else as well?

Often conveyancing attorneys will offer a discount if you do multiple things with them, such as registering the buyer’s bond, or your next property, or whatever. If you can, you can save by combining things.
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No not buying again. Buyer requested these attorneys and I just wanted to know more about them before saying yes. Clearly I didn't know about them being the biggest lawfirm just because their website said so
 
Hi there everyone, I'm completing an OTP now and I need wording for a recommended finance clause. I've seen a basic one online as follows: "This offer to purchase is subject to and conditional upon the purchaser arranging financing suitable to itself."

I'm worried that that isn't specific enough, however, because "suitable to itself" is open to definition. Other people recommend being more specific by saying "Subject to 100% bond being approved at prime minus x %". Do you have a clause I can use as a template for this?
 
Foxhound5366 said:
Hi there everyone, I'm completing an OTP now and I need wording for a recommended finance clause. I've seen a basic one online as follows: "This offer to purchase is subject to and conditional upon the purchaser arranging financing suitable to itself."

I'm worried that that isn't specific enough, however, because "suitable to itself" is open to definition. Other people recommend being more specific by saying "Subject to 100% bond being approved at prime minus x %". Do you have a clause I can use as a template for this?
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"This offer to purchase is subject to and conditional upon the purchaser arranging financing suitable to itself." - this is way too open ended.

Go with the second option you mentioned - subject to 100% bond at prime minus x% interest rate. Alot of agents will argue with you for putting in an exact interest rate. You could also specify a range that you would be willing to accept.
 
Aeryn23 said:
Go with the second option you mentioned - subject to 100% bond at prime minus x% interest rate. Alot of agents will argue with you for putting in an exact interest rate. You could also specify a range that you would be willing to accept.
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And that puts you at a disadvantage with the banks because you have revealed your hand prematurely.

Rather use "...subject to and conditional upon the purchaser arranging financing at a reasonable rate of interest."
 
RonSwanson said:
And that puts you at a disadvantage with the banks because you have revealed your hand prematurely.

Rather use "...subject to and conditional upon the purchaser arranging financing at a reasonable rate of interest."
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And if you feel it isn't reasonable? Can you then just call off the OTP by saying "Sorry, don't find X reasonable."? Seems a bit iffy doesn't it?
 
Foxhound5366 said:
And if you feel it isn't reasonable? Can you then just call off the OTP by saying "Sorry, don't find X reasonable."? Seems a bit iffy doesn't it?
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The reasonable person test is a standard in law, so no, not iffy.
 
RonSwanson said:
The reasonable person test is a standard in law, so no, not iffy.
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I know, but does that extend to what I personally feel is reasonable? I mean we can all agree that a reasonable person might feel that murder is not good, but one reasonable person might feel that an interest rate of prime is reasonable ... while another feels that only prime minus one will be reasonable. All I'm worried about is the legal acceptability of the wording.
 
Foxhound5366 said:
I know, but does that extend to what I personally feel is reasonable? I mean we can all agree that a reasonable person might feel that murder is not good, but one reasonable person might feel that an interest rate of prime is reasonable ... while another feels that only prime minus one will be reasonable. All I'm worried about is the legal acceptability of the wording.
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If you buy direct, have a chat with the seller also

If an agent involved, they will push for their commission.

And lastly, banks dont give easily prime less now a days.
 
Foxhound5366 said:
I know, but does that extend to what I personally feel is reasonable? I mean we can all agree that a reasonable person might feel that murder is not good, but one reasonable person might feel that an interest rate of prime is reasonable ... while another feels that only prime minus one will be reasonable. All I'm worried about is the legal acceptability of the wording.
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Reasonable means that the banks cannot quote you a rate of, say, prime plus 25 without having good reason to do so. It's what the man on the street would consider to be reasonable, all things considered. Remember the clause has context, most OTPs state that if you fail to apply for a loan, then the seller can apply for one on your behalf. You need something to protect yourself in that eventuality.
 
RonSwanson said:
Reasonable means that the banks cannot quote you a rate of, say, prime plus 25 without having good reason to do so. It's what the man on the street would consider to be reasonable, all things considered. Remember the clause has context, most OTPs state that if you fail to apply for a loan, then the seller can apply for one on your behalf. You need something to protect yourself in that eventuality.
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Applying for a homeloan on my behalf? That's hectic. Just checked my OTP doc and that's not in there at least. My concern, Ron, is that by stating "reasonable" it's too broad to not be of sufficient protection to me. I know that every single percentage point counts here, and I'm not aiming to have even a 5% range. That's where I'd rather 'show my hand' and the banks can still compete on rates to get my loan (which is the whole point of going through BetterBond), and at least have something definitive to show to the sellers in the event I don't get exactly what I want or better. This is all just theory for me ... I was hoping someone here would have practical advice :)
 
Foxhound5366 said:
Applying for a homeloan on my behalf? That's hectic. Just checked my OTP doc and that's not in there at least. My concern, Ron, is that by stating "reasonable" it's too broad to not be of sufficient protection to me. I know that every single percentage point counts here, and I'm not aiming to have even a 5% range. That's where I'd rather 'show my hand' and the banks can still compete on rates to get my loan (which is the whole point of going through BetterBond), and at least have something definitive to show to the sellers in the event I don't get exactly what I want or better. This is all just theory for me ... I was hoping someone here would have practical advice :)
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Go direct (as in apply yourself, not using a MO)! Lesson nr 1

I have done what you described a few times already.
 
zerocool2009 said:
Go direct (as in apply yourself, not using a MO)! Lesson nr 1

I have done what you described a few times already.
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You know Zero, if I hadn't read the great feedback from clients of bond originators, I'd be more willing to take your advice. Also you might be a little bit biased, considering your situation ;) I just don't get why you hate mortgage originators that much. It makes sense that banks will know they need to offer their best rate when approached by a mortgage originator because there WILL be other banks bidding on the same loan, while there's no such incentive when you approach the bank directly surely?
 
Foxhound5366 said:
You know Zero, if I hadn't read the great feedback from clients of bond originators, I'd be more willing to take your advice. Also you might be a little bit biased, considering your situation ;) I just don't get why you hate mortgage originators that much. It makes sense that banks will know they need to offer their best rate when approached by a mortgage originator because there WILL be other banks bidding on the same loan, while there's no such incentive when you approach the bank directly surely?
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Banks factor their cost that they pay towards MO into your rate. I am trying to get you a lower rate by going direct.

But saying that, its not always the case. Alot of factors to consider. If your banking record is A+ (its a good start). Then do you have current debt? (as in affordability comes into play)

The crap in your case going with a MO, one bank might surprise you, and then you are forced to say “ok”.

Factor an interest rate of 4% on what we have now. (Can you still afford it)?

Lastly: my motto in buying property, if you doubt 1%... walk away!
 
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