Possible Property Purchase

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MattyZN

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hi guys so my story goes like this.

recently the wife and decided to purchase a property. we have been looking for one for quite some time, and basically everything we find is out of our budget and then still requires TLC in order to get it to a point we want. that being said, we decided to change our focus and rather look at properties that have good flat land however house may need a total redo.
we eventually found something that is way within our budget and we are happy at the current state it is in. our plan literally is to do a full renovation, so the said current structure is not that important to us.

so we do all the nitty gritty work and get bond approval and seller agreeing to a price we offer. however there is now a snag....the bank has requested that we do a engineer structural report on the property and provide a structural clearance certificate for the said building. we obliged and had this done. the report has come back and the repairs suggested include, replacing of the main building roof and also flooring within the main house. i was aware of these items to be seen to, however is didnt think it would matter much, as these items were going to be replaced with the renovations i have in mind.

problem for me now, is that the bank will not grant the bond for this property until these items mentioned have been seen to by the seller. the seller has told me that he would not be fixing these items, as he was already selling the property at a loss, so there was no use in doing repairs. i do agree with him on that point, as i will be just replacing whatever repairs he does do.

the seller has no informed me that he does not have the means to do the repairs as suggested by structural report, and would rather cancel any sale agreement. i have thought of offering to get the repairs done on the building then the costs of it deducted off the sale amount.

would this be a legal or even a good idea on my part? any advise on this would be greatly appreciated.

Mathew
 
You might need to amend the offer to purchase and sign a new OTP with these conditions included. I think.

Also, there would have to be some sort of agreement and contract in place with the seller to ensure he doesn't cancel the sale after repairs are completed. I see so many risks here.

Just my opinion on the matter though.

Best you ask your legal counsel
 
You may actually have a bigger issue on hand, the bank is providing the mortgage on the building and land. If you start messing around with the building to the degree you want to you will have to inform them and they may outright refuse to let you do it. Just something you need to bear in mind. I would highly recommend you phone the home loan department of any bank and tell them you situation and ask what you should do for your specific situation.

ALso way to many risks with what you suggested.

If you bought this outright no issue.

ALso maybe look into the costs of renovations might not be worth doing what you want to do at all.
 
Inform the bank that the price is already discounted for the defects and that you will be responsible for it not the seller. You acknowledge the defects and would still like to buy the house. Add that in the OTP. If the price is right, within reasonable value the bank shouldn't have a problem. Approach other banks aswell.
 
thanks guys for all the feedback, its much appreciated. also big thanks to the guys that took the time to DM me, your advice is really appreciated.

regards,
Mathew
 
I have bought a few properties that needed major renovation, and I can comment on a few issues:

1. Where will the seller live, if you were to replace the roof & floor prior to the sale?
2. Do you have any experience with construction and or renovations in the past?

Builders are like 2nd hand car salesmen, if you dont know what you are doing, and you have no prior experience this is a HUGE risk. It will most probably take longer than anticipated and will cost more than what you initially budget.

You have the right idea, but if i were you I would rather look at getting a bond with no conditions and then take on a project of this size. You are overcomplicating an already complex situation.
 
Do you have the cash to fund the repairs? How will you pay for them when you can't afford the property itself? Alternatively, buy the property cash and get a building loan to build the house.
 
What are the possible implications of a possible job changed with more money after having signed OTP, paid deposit transfer costs etc and now just waiting on signing bond and registration of property
 
Broes Wyn said:
What are the possible implications of a possible job changed with more money after having signed OTP, paid deposit transfer costs etc and now just waiting on signing bond and registration of property
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The possible implications of a possible job change on your possible property purchase will possibly be a complication for your bond application. You should possibly notify the bank(s) that you applied to for a possible bond.

If your salary is possibly going up, this could possibly be in your favour.
 
3WA said:
The possible implications of a possible job change on your possible property purchase will possibly be a complication for your bond application. You should possibly notify the bank(s) that you applied to for a possible bond.

If your salary is possibly going up, this could possibly be in your favour.
Click to expand...
Unlikely that it will do anything just yet maybe in a few years time otherwise just dump everything extra into a flexi bond
 
3WA said:
The possible implications of a possible job change on your possible property purchase will possibly be a complication for your bond application. You should possibly notify the bank(s) that you applied to for a possible bond.

If your salary is possibly going up, this could possibly be in your favour.
Click to expand...
I see what you did there;)

Is it not better to wait until registration before signing new job offer?

Could bank loan also be denied?
 
Broes Wyn said:
Is it not better to wait until registration before signing new job offer?
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Are you able to do that? Registration can take a long time.

More money is a good thing. Are there other factors for the bank to consider? Will you have less security of tenure? I.e. will you have a probation period or something? Best to discuss with the home loan department. It might be a non-issue.
 
3WA said:
Are you able to do that? Registration can take a long time.

More money is a good thing. Are there other factors for the bank to consider? Will you have less security of tenure? I.e. will you have a probation period or something? Best to discuss with the home loan department. It might be a non-issue.
Click to expand...
Okay thanks, will definitely do. The possibility of probabation period might be a certainty which could be seen as a negative

I've recently updated my CV and recruiters are busy hunting so before I sit down for any interviews I just wanted to do some homework before accepting anything should any offer come my way
 
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