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IOS REPORT: OCTOBER  2008

Mortgagee sales

Mortgagee home sales, foreclosure home sales, home repossessions can often result in bargain home buys for those who take the time and care in locating such property. Such actions related to distressed property, repossessed property, and bailiff or sheriff repossessions, have not been common in Australia until recently. 

The Level of distressed property resulting in mortgagee sales have usually been restricted to personal bankruptcies, due to gambling or failed business ventures.

However recently with a substantial upturn in stressed mortgages currently estimated at some 900,000 Australian households, the likelihood of a larger number of distressed homes being placed on the market in forced sales, distressed sale or mortgagee sale home repossessions condition, is a daily reality and providing unprecedented bargain home buying opportunities.

Bargain home properties

As mortgagee sale recoveries and distressed real estate accumulates causing the Banks and non bank lenders to repossess properties, many home owners will face hardship, but others will find home bargains for the picking. Losses for some, will mean substantial gains for buyers who are cashed up or able to obtain mortgage finance. Cash buyers and cashed up investors will be the winners in the home bargain repossessions hunt.

IOS can assist you in securing the right priced property

Recession home buying

Recession home buying is not new in Australia there have been past examples of foreclosure periods or substantial slowdowns in the economy or the supply of money.

Home repossessions

Sub prime home repossessions and mortgagee sales will become more frequent in the immediate future as those in permanent and part time employment are retrenched and family income earners find rising costs becoming unaffordable. The general increasing cost of supplying goods and services are passed back to the consumer and the country will start to experience small business bankruptcies and more home repossessions. The rising flood of distressed or mortgagee sale property on the market competing for buyers, who find that the reducing amount of market mortgage funding results in them being unable to achieve home loan funding without a substantial deposit, will ultimately force the price of such real estate down to repossession and mortgagee sale affordable levels.

Ask IOS about their 97.5% home funding packages including mortgage insurance and full property price negotiation service 

Vendor Finance

Due to the rising numbers of property for sale and shortage of mortgage funds to purchasers and lower LVR (loan to value) offerings, the age of vendor finance will return. Vendors will need to consider a motivation requirement for the buyer, in leaving in some of the settlement price for the buyer over two or three years, who otherwise will not be able to settle the property due to loan to value LVR restrictions. Vendor finance will become an essential ingredient to sell and vendor financed home sales will be essential if mortgagee sales are to be avoided.

Vendor finance is probably the most effective sales tool any seller/buyer can have.   

Superannuation

The Australian Government allows the draw down of a portion of super funds to invest as deposits in the purchase of a home to live in. Check with your financial advisor.

First home buyer bargains

First home buyer bargains will become again become abundant and first home buyers will enter the market again using the new higher first home owner grant and stamp duty concessions and credits to acquire homes. Discounted home prices will again be back in force and negotiated home prices will be to the buyers advantage and purchase.

Fully funded home loans will also then be brought on line again as the market hots up and lender competitive activity returns, low interest rates will be feature of this return to bargain buys in order to attract all first home buyers, non first home buyers and investors back into the market.

Rent to Buy plans will not work

Rent to buy plans will appear again in a market depressed with credit restrictions showing slow recovery but will not survive well, as inflated rent to buy priced schemes cannot be sustained. Rent to buy in any event gives no security of title to the intended buyer.

Discounted homes

Bargain homes and discounted home prices in NSW, Queensland,Victoria and Western Australia are beginning to appear as mortgagee sales and foreclosures take effect.

Negotiated home buys

Buyers agent negotiation and discounted home purchases can be acheived by professional negotiators such as IOS who are believed to be the only company in Australia providing such fully funded negotiation packaged home loans.

Australian Home Bargains

The other states and territories will have their own share of the downturn particularly SA and Tasmania.  WA will have a downturn but not as pronounced as the other states largely due the continuing resources boom in that state fuelling demand and affordability from the higher wages paid to employees. Should that boom falter and demand from the primary users like China decrease, then an appropriate reaction effect will be felt in WA as well.     

Queensland bargains homes, and NSW bargain homes are now most pronounced as Queensland repossessions and Queensland mortgagee sales start to take a stranglehold on the economy.

Impaired credit applications

Impaired credit home loan applications from poor credit record applicants can be arranged but interest rates are higher and LVR lower.     

Low deposit Home loans

Low deposit home loans will be almost impossible to achieve in this current downturn and lack of credit facilities will tighten the lenders resolve to deal only with good credit applicants.

Ask IOS about their 97.5% mortgage insurance included home loan

Lower income earners will also find that bargain home and discounted home sales coupled with top up amounts from equity sharing packages, may be the only way of entering the home loan market in Australia. Ask IOS about our equity sharing packages.

Cheaper home loans and lower interest rates 

Cheaper home loans, cheaper mortgages, cheaper interest rates and lower interest rates will probably eventuate once the Government realises that further boosts are required in consumer spending to reverse the deflationary and help assist the liquidity in the current credit squeeze crisis currently affecting the Australian housing market.
Equity sharing and professional negotiating services provided by IOS can however dramatically reduce the home purchase cost and save the buyer costs by incurring a lower mortgage requirement.

Discounted home purchases

Finding discounted homes is a job for experts, reduced home prices can be achieved with professional negotiation by experienced negotiators.

Professional home purchase negotiation

Those seeking to enter the home owner market should first consult an independent facilitator such as IOS, who have the range of institutional lenders via Equity Credit Pty Ltd a recognised industry member with impeccable credentials through its Director Les Saker with some 40 years experience in banking and finance.

Experienced and respected financiers and brokers

Equity Credit is a founder member of the (MFAA) the regulating body of the Broking industry , Mortgage Finance Association of Australia .

The buyers tool box and the vendors tool box both need a modicum of joint funding assistance. Joint buyers and joint funding will also be of great help to vendors/ sellers. Joint buyers can be funded much more effectively in a joint owner home loan, joint owner home loans can be two or more persons whose joint income enables the home purchase to be made. Investors have used this method for many years using joint income and often vendor finance or sometimes called secondary finance to enable the home purchase to proceed.