Offer to purchase question

[zerocool2009]

Put in an offer on a house in Lone Hill last week Thursday with a deadline of this week Monday. I've followed up with the agent today and he's unable to contact the seller and the seller still hasn't sent him the signed OTP (despite confirming verbally on Saturday that he's happy with the amount but would have preferred a cash offer).

What should I do?

Work out a cash deal plus fees !

 

[Thor]

Alrighty. So we inspected the place we put the OTP on again today, because we want to start getting our heads around the whole thing. This is the best chance we've had to date to actually get a place. So we check out everything and as we leave the current tenant stop us, wants to have a chat. So, before I continue, let me explain the setup here.

The tenant is a "bed-ridden" woman, who can't move (apparently). I believe she rents from the owner, and then sub-lets to (as I have counted today) 7 other people also on the premises. This is the first time I'm actually seeing it this clearly. She lives in the main bedroom, and in the other two bedrooms are two other people. Outside is a caravan, two tents and two shacks (literal zinc plate shacks). All apparently occupied. The people inside the house share a bathroom, and the people outside share the outside toilet. There's no refuse for that many people, so they literally just dump their **** in the yard. It's as bad as it sounds.

The tenant sits in her bed all day, smoking and watching all the other sub-tenants on a big TV. That's what she does. Literally. All day.

So anyway, as we're walking out, she stops my wife and I. She wants to know if we're buying, and if we're buying, if we want to stay in the house. I said "yes". She says "OK, by when". I say "as soon as registration happens". Then the **** started forming.

She said that the new owner of the house (who is not the owner, the house is in a deceased estate and the executor is the "owner") never told her that she must move, so she didn't receive her notice yet. She also says she wants 2 calendar months notice before she must move, and she will demand it, so according to her she's only leaving the house at the end of January 2021.

So I tell her that I'm sorry, but as I have it her contract expired already, AND the executor gave her notice to move. I also told her my contract stipulated that I get occupation on registration. She then said "thank goodness, still gives me 3 months". So I said "no no, wait, it can go as quickly as 6 weeks because I already have pre-approval, my paperwork is in order and the OTP is already in". Then she started going on about not receiving notice and she has rights. I told her the day the registration goes through, that is the day I rip out all the carpets and floors in the entire house, I break down the walls and tear down both the kitchen and the bathroom. She just kept quiet. So I said she must take it up with the owner, and left.

So, who's bought a house with a stubborn, sub-letting tenant before? I don't mind fighting the seller, but I'm not fighting the tenant for ****. My OTP states that I get occupation on the date of registration, but it doesn't state what rent I'm due if I can't occupy. That was one of the sections that was left blank.

Stipulate in the OTP that you must get a vacant property or the Seller will have to pay you occupational rent.

 

[Thor]

I don't care. I want the place. I raised the problem with her, and I just want the people out by registration.

Also, by the state of the place. COC is going to take forever. There are extension cords running out of the house powering the caravan and shacks, there are wires dangling from EVERYWHERE, etc. I don't care if it takes 6 months - but I'll be damned if the registration takes place and that house isn't empty.

EDIT: Oh yes, and I sent the agent messages stating that she must take it up with the executor NOW and she agreed. So let's see. Even if I don't get the place, that sounds like a BIG problem for whoever buys it.

Out of curiosity, where is the place, why do you want it?looks or price to size ratio or something?

Just asking Because this is ugly and a battle on your plate, but there's good money in deals like this, the current owner is probably desperate and in dispair so I assume you are getting a bargain price?

 

[newby_investor]

So on an unrelated note, I just got told by FNB today that my marriage status means I can only get a 50% bond.

I got married to a foreigner while I was overseas, so since moving back to SA, local law considers our marriage to be COP. So I totally get it that I can't get a bond by myself, it needs to be joint, bla bla. But according to FNB, since she has no ID number, their policy is that the max bond I can get is 50%.

Which makes no sense at all. My credit score and salary are great, if I were single I could easily qualify for the bond by myself, and I'm putting a 20% deposit down so I only need an 80% bond. The wife is a stay-at-home mom at the moment, so I'm not trying to any income from her to reach the level of affordability that I'd need. I don't have 50% cash available! How could FNB think that that's useful in any way?

I've asked the consultant to get his manager involved and see if an exception can be made, so we'll see what happens. Otherwise I am going to have to take my business elsewhere.

 

[zerocool2009]

So on an unrelated note, I just got told by FNB today that my marriage status means I can only get a 50% bond.

I got married to a foreigner while I was overseas, so since moving back to SA, local law considers our marriage to be COP. So I totally get it that I can't get a bond by myself, it needs to be joint, bla bla. But according to FNB, since she has no ID number, their policy is that the max bond I can get is 50%.

Which makes no sense at all. My credit score and salary are great, if I were single I could easily qualify for the bond by myself, and I'm putting a 20% deposit down so I only need an 80% bond. The wife is a stay-at-home mom at the moment, so I'm not trying to any income from her to reach the level of affordability that I'd need. I don't have 50% cash available! How could FNB think that that's useful in any way?

I've asked the consultant to get his manager involved and see if an exception can be made, so we'll see what happens. Otherwise I am going to have to take my business elsewhere.

Fnb see’s it as a risk! Nothing stops her to go back home now!

Eish! Thats a crappy one, but a very valid rule!

Its hard on buyers in your shoes!

 

[Gozado]

Fnb see’s it as a risk! Nothing stops her to go back home now!

Eish! Thats a crappy one, but a very valid rule!

Its hard on buyers in your shoes!

What difference would it make to FNB if the foreign wife (who is not earning and therefore also not contributing to the household income upon which the bond affordability is calculated) left and went back home?

 

[zerocool2009]

What difference would it make to FNB if the foreign wife (who is not earning and therefore also not contributing to the household income upon which the bond affordability is calculated) left and went back home?

I had now a chat with the pro’s! Its bloody complicated to say the least!

It all depends on where the couple got married too, as each countries marriage laws differ!

The 50% rule come in when foreign guys go back, they are entitled to 50% of the property value!

Lastly, if you are married to a foreigner, all banks forces it to be in joint names

 

[PotatoGuardian]

Received approval in principal on the loan today, so I guess that means we've bought a house . What interest rates are you guys getting?

We got

FNB 90% at 6.57 %
Standard Bank 100% at prime plus 0.44%

Waiting on the rest

 

[APoc184]

Received approval in principal on the loan today, so I guess that means we've bought a house . What interest rates are you guys getting?

Congrats...

Don't take the first deal. Let the bond originator fight for a better rate if you are using one.

If you are applying yourself... Tell the banks you got a better deal elsewhere and they must make a better offer.

We originally got a mix between prime plus 0.5% and prime plus 1%

After asking for a better deal from our own bank they offered prime.

All 100% bonds.

To try and cover transfer and bond costs, we even asked originator to request a 105% bond from one bank just to see what they would come back with. But they offered prime plus 1.5% because of the higher risk. Not worth it over 20yrs.

 

[McGuywer]

Received approval in principal on the loan today, so I guess that means we've bought a house . What interest rates are you guys getting?

Prime + 0.35% on a 100% Nedbank loan.

We signed at the bond attorneys today.

 

[Toxxyc]

Stipulate in the OTP that you must get a vacant property or the Seller will have to pay you occupational rent.

This is apparently in the OTP already. If I can't occupy on registration, I'm owed occupational rent.

Out of curiosity, where is the place, why do you want it?looks or price to size ratio or something?

Just asking Because this is ugly and a battle on your plate, but there's good money in deals like this, the current owner is probably desperate and in dispair so I assume you are getting a bargain price?

So, the price I'm offering, plus the quoted monies needed to renovate the property to what we want is a very good price for a house this size, on a yard of this size, in this area. It's not a bargain of a lifetime, but it's possibly the only chance I'll get to buy a property that I can renovate to what I want (in other words, choose the entire fit and finish) in my lifetime. Yes, I can renovate other properties as well - but not at this price. I want to buy, renovate, and if all goes well, sell in a few years and buy another place with a bigger deposit, working my way up the real estate market.

The current owner is kinda dead.

 

[Jehosefat]

Received approval in principal on the loan today, so I guess that means we've bought a house . What interest rates are you guys getting?

Prime less 1.25% on a 65% loan. Put the offer in yesterday, hoping to hear back today (deadline is tomorrow).

Sjoe it's a s**tload of money though

 

[Thor]

This is apparently in the OTP already. If I can't occupy on registration, I'm owed occupational rent.



So, the price I'm offering, plus the quoted monies needed to renovate the property to what we want is a very good price for a house this size, on a yard of this size, in this area. It's not a bargain of a lifetime, but it's possibly the only chance I'll get to buy a property that I can renovate to what I want (in other words, choose the entire fit and finish) in my lifetime. Yes, I can renovate other properties as well - but not at this price. I want to buy, renovate, and if all goes well, sell in a few years and buy another place with a bigger deposit, working my way up the real estate market.

The current owner is kinda dead.

I understand

 

[Thor]

Is there a way to get access to properties of dead people (I assume most of the time it will be a bank that is the executioner) just figuring the bank isn't in the business of owning homes so you should be able to negotiate a good price?

 

[Sinbad]

Is there a way to get access to properties of dead people (I assume most of the time it will be a bank that is the executioner) just figuring the bank isn't in the business of owning homes so you should be able to negotiate a good price?

Banks aren't in the habit of executing people though

 

[Toxxyc]

Is there a way to get access to properties of dead people (I assume most of the time it will be a bank that is the executioner) just figuring the bank isn't in the business of owning homes so you should be able to negotiate a good price?

Banks aren't in the business of owning homes, but they also don't sell the place. That's the job of the executor of the estate.

 

[newby_investor]

Is there a way to get access to properties of dead people (I assume most of the time it will be a bank that is the executioner) just figuring the bank isn't in the business of owning homes so you should be able to negotiate a good price?

It's not up to the bank as such though, it's generally the executor of an estate who will handle those sales.

You may be able to find such things going on sale if you regularly read your provincial gazette. Upon the death of someone, they have to print a notice for creditors or something like that. I forget the specifics.

 

[Speedster]

Prime less 1.25% on a 65% loan. Put the offer in yesterday, hoping to hear back today (deadline is tomorrow).

Sjoe it's a s**tload of money though

That is a REALLY decent rate. Which bank is it with?

 

[zerocool2009]

I predict another rate cut next week (the 19th Nov), not big .... but something.

 

[PhireSide]

Received approval in principal on the loan today, so I guess that means we've bought a house . What interest rates are you guys getting?

Great news! Now the fun starts for you

WRT Interest rate, I signed at prime +1.4% because it was at the upper end of my affordability scale but have a staff variation agreement that kicks in and brings it down to prime -2% once the bond is loaded.