DP and I have decided to buy our first home. We have talked to the bank and have being pre-approved for a loan.
We have found a house that we are interested in. However, it is currently being rented (for 6 months).
If we decide that we want to buy the house can we move in straight away or seen as though the tenants have a tenancy agreement do we have to wait for it to expire?
If we have to wait for the tenancy agreement to expire:
1. Can we still consider buying the house or will that be considered an investment property? (Therefore, meaning no first home owners grant?)
2. If we can still buy can we ask that the tenants pay us the rent rather than the real estate for the remainder of the agreement?
Also, when making an offer... how much money below asking price do you usually start negotiations?
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16-11-2006 19:30 #1
Buying a house that is being rented...
16-11-2006 19:36 #2
The tenants would have been informed that the house was up for sale. It is really up to you if you want them to stay or move. If you want them to stay, then of course you can have them pay you the money.
As for price nego, offer what you think and see if they take it, if it the house you really want then up the offer a little, but don't act like you're gonna give in too easily, they'll pick up on it and make you go higher.
Hope this helps.
16-11-2006 19:42 #3
We were in the same situation only we were the renting tenants.....they actually have the right to stay in the house until their tenancy agreement expires, it is up to them whether they want to wait it out, or move when you buy......If you want them to move straight away, some people request that their moving expenses be covered etc......
As for the rest, Im not exactly sure.....but I know for sure in QLD the tenants have the right to stay until the lease expires.....as we did.......
16-11-2006 19:42 #4
Disclaimer: I am not a solicitor so this is just my opinion/thoughts!
2. You don't have to have an agent act for you so yes you can tell the current agent that you won't be using their services and arrange payments directly with the tenants if that is what you wish. I strongly suggest reading about rights / responsibilities etc etc at the RTA site.
HTH in some small way
16-11-2006 19:43 #5
If the property is under a tenancy agreement - the tenants have the right to remain in the property until the lease expires - you can't make them move out.
If you move into the property within 12 months (correct me if I'm wrong...legal brain hasn't had to work in a looooong time), then you can get the first home owners grant as you need to move in and have the property as your principal place of residence. The first home owners grant is applied for through your bank and can be advanced to you at settlement to go towards paying for the house (your solicitor will be able to fill you in on this).
We bought a place which had tenants in under a tenancy agreement...however, we got them out early by paying them $1000 - we were deperate to get in the house and start renovating as we were living with the in-laws and just couldn't stand it anymore.
As an example, our place was "offers over $282"...we offered $284 and then just negotiated up to $292....
Sorry, I'm in a rush...have dinner cooking...well almost burning lol...
16-11-2006 20:09 #6
Hi... thanks heaps for your fast replies!
We actually dont mind if they stay for the remainder of the tenancy agreement, our main concern was weather or not we would still be able to purchase a property under the first home owners grant or weather it would be classed as an investment... but thanks for clearing that up, you all helped
Susan - Love the way your dad works out his negotiations lol.... will give that a go when we have a look and see what I come up with (DP says I'm picky so this should be interesting )
BubbaGanoush - "Sorry, I'm in a rush...have dinner cooking...well almost burning lol..."
Hope ya didnt burn your dinner too much.... just blame bubhub... too addictive! lol
16-11-2006 20:23 #7
As others have said, the tenants can legally stay until their lease agreement expires.
As for the house being PPR (Principle place of residence) rather than an investment property, yes it can. When you pay your stamp duty, you only need pay that of a PPR, then you need to sign another form which indicates your position and that you intend to formally reside in the premises within 12 months. Provided you make that move within the 12 month period, you are fine. If you don't, you may be slugged with the difference of stamps up to investment property level.
You can speak to the property manager and transfer the rental agreement to yourselves if you choose. Do ensure that the agent completes a 'Transfer of bond' form for you though. You will need to sign and send through to the RTA.
As for negotiation on price, we always look at what we think a property is worth, then start 10% lower. We've nabbed a couple this way. Otherwise as least you know where the vendor will start negotiating to. It's all a game - it's just how you play it.
Best of luck!
16-11-2006 20:58 #8
Hey, i don't have anything to add cause everyone has it pretty covered- just wanted to say a big CONGRATULATIONS!!!!!!! Welcome to the world of mortgages- and never having to pay rent again
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