Category Archives: Contracts

His only crime? Getting Caught

Thank you Australian Financial Review for this article – 07 July 2016 – A former Aussie Home Loan broker would go to jail for up to a year after admitting he submitted fake home loan applications to Westpac, National Australia Bank and ANZ Banking Group at least 18 times.

Aussie Home Loan mortgage broker Madhvan Nair admitted on Thursday making 18 loan applications totalling $5.6 million between 2012 and 2014 which had false borrower employment documents.

Of the 18 loan applications, 12 were approved by the banks, which resulted in home loans worth $3.7 million.

Mr Nair pocketed $10,000 in commission and cash payments for making the false loan applications.

I have said for a long time that this is an epidemic. A dark undercurrent of lies and deception that is NOT being thoroughly investigated by the lenders despite the fact that they KNOW its an epidemic!

These practices are silently contributing to the severity of the ultimate correction that is now long overdue.

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MARKET INTELLIGENCE – SURVEY

Oh dear.  People DO get excited about buying land to build on, or an existing house to renovate or move straight into.  They engage a law firm or conveyancer to assist them with the settlement process.  Searches are done to make sure its not flood prone, going to have a free-way or railway line built next door, is set for full or partial resumption or major power-lines nearby now or in the future.

When I was actively selling I’d always advise buyers to obtain a boundary survey even if the property was brand new. Not one of the hundreds of buyers I’ve advised over the years has ever spent the $700.00 – $1,200.00 to obtain a brand new, sparkling boundary survey. Continue reading

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MARKET – 09 DECEMBER 2012

A house nearby just sold after being on the market for months, for a loss of more than $100,000.00 after 7 years of “ownership” or really having a putrid relationship with a bank who “allowed” the poor “owners” to occupy the property.  I know a little of this place and its distraught former owners.

Their total out of pocket expenses in bank interest, rates, building (not including contents) insurance and repairs over the 7 years amounted to roughly $215,000.00

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UPSIDE DOWN – THE MARKET – 28 NOVEMBER 2012

You just have to laugh at the Sydney Morning Herald (SMH) this morning with their article headlined Sydney housing most affordable since 2009

It quotes the “Housing Industry Association-Commonwealth Bank housing affordability index” as revealing “…the city’s housing is now more reasonably priced, relative to incomes, than at any time in the past decade.”

Where this report really drops itself in the can is with the following statement…”A year ago it took two average full-time wages to affordably service a mortgage for a median priced Sydney house, but that has dipped to 1.84 average full-time wages.”  What on earth does “affordably service” mean?  After you’ve paid the mortgage you can have an overseas holiday every year, send two kids to private school and go out to posh restaurants twice a week or, its baked beans, no holidays and we can’t afford to have kids?  What a load of rubbish…

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ICARUS

When you aspire to bigger and better things be careful what you wish for. Your state of wealth is subject to the phrase “this too shall pass” meaning I guess…an ability over time to make the happy man sad and the sad man happy.

Be too aspirational and buy what can only be described as a ridiculous house for $7.34 million in early 2007 – pay an estimated $400,000.00 in stamp duty and other costs to find yourself in a SEVEN AND THREE QUARTER MILLION DOLLAR HOLE.

Along comes the Grim Reaper of the late noughties, the GFC and it all goes pear-shaped. No-one wants your ridiculous house and even when it’s sold, the Contract falls over.

Once the receivers, agents and others involved in the eventual DISTRESSED SALE take their cut, you’re left with perhaps $2.8 million.  I’m not privy to the size of the mortgage but I doubt from what I’ve heard that $2.8 million even comes close.

IN 5 YEARS THE SILLY HOUSE HAS LOST YOU SOME $75,000.00 A MONTH!

HOUSE PRICES DO NOT ALWAYS GO UP IN A STRAIGHT LINE…

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ACE #1

ACE (Aspect, Contour and Elevation)…amongst other things!

This post will be broken into 2, 3 or more parts and is a rambling recollection of issues I’ve encountered over the years.

Many of the points I’ll raise are still the cause of much grief as people fail to ask, heed or properly interpret professional advice and rely far too much on advertising, promotional blurb and spin.

Talk to your future neighbours.  Don’t be shy. They know what’s going on.

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