Browse Forums Real Estate 1 Dec 01, 2010 10:34 am Hey guys, I've posted this on whirlpool but I also wanted to see if you guys could help me too So we got our finances together and we're unconditionally approved to borrow 251,000 for a home we saw about 4 weeks ago (Listed at 251,950). It's priced well as it's a 3 bedroom brick veneer home, tile roof and big backyard (~980sqm block). We didn't talk it down alot because we've been in the market for awhile and there's not a single 3bed brick home here in our small central west town under 300k. The house needs renovation, but it's still liveable. Needs new kitchen, driveway needs concreting, painting which I can do, and new flooring in the lounge/dining (thinking floating floorboards). We knew all this beforehand and were still happy to spend 251k. We were told that the property never had termite damage by the agent, however pest control did a report 2 weeks prior to ours and based on what was found there was some damage but not much. Since THEN, now that we've had building and pest done, the house has been previously drilled for termites around the concrete slab, but there's been significant termite damage in the home (pest inspection said none active in home), and active termites in a large tree behind the property (which have since been drilled + poisoned). Its amazing cause it was the same company that did the inspection prior as well. The damage is in the hallway walls which connects to the bathroom, and the wall linking the kitchen to laundry. No truss damage, but the house is made of radiata timber, which termites love. The builder has quoted roughly 20,000 to fix the damage found, and we put that to the agent. The owner has since dropped the price to 230k even. Knowing that if we purchase the property we will be able to fix the found damage (new bathroom and part of the kitchen + a new laundry) is the risk still worth it knowing that there could be more damage? It's damn cheap for a brick home here, and I feel confident (helped dad with reno's) that I could do some of the work needed, but we just don't know what to do. It sounds like a good deal on paper and we can't afford to borrow the extra for a brand new home (roughly 300-350 incl land), but what do you guys think? Also if we purchase for 230k, can we still borrow the extra 21k from the bank to repair the damage? Thanks guys Edit: typos Re: Help! First home buyer - Termite damage! 2Dec 01, 2010 9:43 pm Would it value up at $300K if not for the termite damage and with a quick reno (You said there's nothing in the area under $300K)? Not sure whether the bank would lend you the extra (have to ask). But if not and you could get the money elsewhere, do the work and reno then get a reval and pull the extra out to pay it back. Work out what it will cost to do the termite work and the reno. Then work out what the reval will be. The numbers will let you know whether it's worth it. You'd want to be pretty sure there's no more hidden damage also. If you pay $230K and it costs $30K all up you would want a reval of at least $290K to make it worthwhile. But remember the fact that there is/has been termite damage will always be reflected in the sale price. Help! First home buyer - Termite damage! 3Dec 04, 2010 6:53 am No the bank will not lend you extra to fix the termite issue. And it may even lead to them valuing the property lower should they be aware of the issue. Most lenders will never lend above the contract price so whatever is on the contract is what the bank goes on (or sometimes lower if they think you are overpaying). You would be best off getting an exterminator company in as well as a licensed builder to see what they estimate the damage is and what the procedures / costs involved are to fix and ensure the problems don't return. Some things are worth waiting for. Re: Help! First home buyer - Termite damage! 4Dec 14, 2010 3:09 pm i would give it a miss as the bank will not gieve you the money to fix it and as someone else said the bank may value it lower because of it and be careful because in some state you are required my law to tell any buyers that there has been termites in the home,There is always a big change that may come back and I can tell you from experience it is a heartbreaking scence to find our home has termites it is.I would move on and think yourselves luck the pest report found it before you bought it we were not so luck our pest report found nothing until in the home over 1 year finished building 40 square home on 5 acres with perry homes.working on the landscaping just finished pool deck with ://forum.homeone.com.au/viewtopic.php?f=31&t=2217 Re: Help! First home buyer - Termite damage! 5Jan 26, 2011 1:20 am [quote="Joel C"]Hey guys, I've posted this on whirlpool but I also wanted to see if you guys could help me too So we got our finances together and we're unconditionally approved to borrow 251,000 for a home we saw about 4 weeks ago (Listed at 251,950). It's priced well as it's a 3 bedroom brick veneer home, tile roof and big backyard (~980sqm block). We didn't talk it down alot because we've been in the market for awhile and there's not a single 3bed brick home here in our small central west town under 300k. The house needs renovation, but it's still liveable. Needs new kitchen, driveway needs concreting, painting which I can do, and new flooring in the lounge/dining (thinking floating floorboards). We knew all this beforehand and were still happy to spend 251k. We were told that the property never had termite damage by the agent, however pest control did a report 2 weeks prior to ours and based on what was found there was some damage but not much. Since THEN, now that we've had building and pest done, the house has been previously drilled for termites around the concrete slab, but there's been significant termite damage in the home (pest inspection said none active in home), and active termites in a large tree behind the property (which have since been drilled + poisoned). Its amazing cause it was the same company that did the inspection prior as well. The damage is in the hallway walls which connects to the bathroom, and the wall linking the kitchen to laundry. No truss damage, but the house is made of radiata timber, which termites love. The builder has quoted roughly 20,000 to fix the damage found, and we put that to the agent. The owner has since dropped the price to 230k even. Knowing that if we purchase the property we will be able to fix the found damage (new bathroom and part of the kitchen + a new laundry) is the risk still worth it knowing that there could be more damage? It's damn cheap for a brick home here, and I feel confident (helped dad with reno's) that I could do some of the work needed, but we just don't know what to do. It sounds like a good deal on paper and we can't afford to borrow the extra for a brand new home (roughly 300-350 incl land), but what do you guys think? Also if we purchase for 230k, can we still borrow the extra 21k from the bank to repair the damage? Thanks guys Edit: typos /quote] I really feel for you! What is your LVR? and which lender? The bank does not lend you the money based on your purchase price only!! it's common for people get the home loan with "cash out". Depending on the lender and product they will limit the amount you can cash out based on your LVR amount. You can use cash out for a number of reasons- Deposit on a 2nd purchase, renovations, refinance debt, Shares ( this is a bit tricker).... Ie - Westpact standard home loans - cash out allowed only 10k, LVR must be under 90% Macqaure bank Optimizer loan - No max on cash out, LVR capped at 90% and must have reason for all cash out over 5k. So for a new loan in affect you can apply for a 80% LVR, plus $x amount as cash out, this will take your LVR amount up and LMI might be payable so it's not the best option. Note: 1. Not all lenders/ product allow cash out 2. They will have limit on your cash out amount - anything under $5,000 is usually ok with them 3. They will ask for a reason and proof 4. Cash up to your MAX "approved borrowing limit" and LVR only. 5. Banks tend not to like cash out because of termite for new loans and they may de-value your pre-approved limit as well ( different story for existing home loans) 6. If your cash out reason/proof is for "renovation" - they will ask for quotes, receipt and the payment will be given to you as installments based on what needs to be done first. Regards Michael Michael Chan | Australia wide Mortgage Broker Michael@ShapeHomeLoans.com.au | 1300 74 5626 | Fax: 02 8212 8909 http://www.ShapeHomeLoans.com.au there was an event. The question is whether the builder had the insurance and whether the event was covered. The workmanship is a separate conversation. 10 23763 Not much in this responce. My suggestion is, what are you looking to build and why. This will all be impacted by the local councils planning scheme. Familiarise yourself… 6 5867 Yes, neither is termite damage that is not covered by your house insurance. 3 6591 |