Should you bother with what the tenant says?

Well, of course you should. But you shouldn't let their requests get in the way of your own priorities in life.

The last thing anyone needs immediately after settlement is bills. Some effort and money was invested in cleaning the place. We repaired a few things around the house that needed doing, and replaced the existing lampshades in the unit. To improve presentation prior to renting. There had never been a need for a letterbox by the previous owners, but one was required now before we could rent. Things were generally done economically. We were looking forward to getting a tenant into the place.

The property was advertised and a tenant was found remarkable quickly. I was pleasantly surprised by how quickly it was taken. The agent was considering several applicants and gave it to a young woman who had a few pet cats.

Very soon after our new tenant took up residence she came to us with a request. She was concerned the unit would get hot and uncomfortable for her cats if they were locked up all day with the doors shut. The house had two sliding glass doors along with two sliding aluminium screen doors. They were security doors but not as tough as some products on the market, and of course the fly screen was nylon. Not the most durable thing when cats start scraping at the door. She was concerned the screen doors would not offer sufficient security if the main doors were left open. Could she please have security screen doors fitted?

As it happened she knew someone, a friend, or a friend of a friend, who was in the business of making and fitting security screen doors. He could do a deal because of her relationship with him and the price would be good. And he would fit a new screen door to our downstairs unit at the same discounted price.

We briefly explained our financial situation, which I doubt interested her. Basically, we were saying we couldn’t afford this. Stainless steel mesh insect screen doors are relatively expensive. She volunteered to pay for the doors herself. She must have said that without thinking, and possibly bit her tongue afterward. At least it indicated the strength of her bank account. We agreed to have the doors fitted, but only if she purchased them and we undertook to make regular repayments to her each fortnight. I find that arrangement so bizarre: she was to pay us rent for living in the property, we were to pay her for screen doors.

Anyway, we had three aluminium and stainless steel screen doors fitted to the house. I had seen these things advertised for some time. They have an aluminium frame with stainless steel mesh. The screens give the impression of having the door open which of course allows more of the view to be seen. In hindsight we should have said something along the lines: no, put up with things as they are or move out.

Experiences like these make you hard. Particularly when unexpected car repair bills hit. There were a few other expenses too. Clearing the debt was tougher than expected.

Looking for a tenant

The real estate agent was surprised when we said pets were okay. Most rental properties don’t allow tenants to have pets. The agent said allowing pets would open up the market for us.

The property has polished floor boards. So there are no problems if are any little ‘accidents’ occur. No carpets to worry about. Anyway, the floor lost its highly polished surface many years ago and is looking a bit scuffed. So, the odd scratch that appears on the floor will blend with the existing marks.

Within a very short time someone was interested in renting. Actually, a few people were interested. We left the decision to the agent. A young woman took the place. She had a few pet cats for company, and seemed happy in her new home.

Is it safe?

What is it about people with their disregard for the dangers of electricity? A lot of people like to dabble with their home electrical systems. It can save you money, and if you are competent why not. But if you don’t know what you are doing – do yourself a favour and and leave it alone!

There could be a whole variety of problems that might cause what's happening in this picture.  The heater itself could have a problem, perhaps the power outlet has been damaged, or the insulation at the plug might have been damaged.  It is images like this that were on my mind and led me to change the fuses in my new property.

My new property is an older building and the house wiring uses fuses in the meter box rather than circuit breakers. I bought some fuse wire and set about replacing all the power and lighting fuses. Everything was working okay before I started. I just wanted new fuse wire in each fuse. It’s not as odd as it seems.

The fuse wire in most of the fuses seemed okay. The occasional one was discoloured, which is perfectly fine.  But if got so hot to cause a discolouration you have to wonder what was going on. They all got replaced because I had no way of telling for sure that the correct rating fuse wire had been fitted to each fuse. Fuse wire for lights is thinner than that used for the power system. The thickness can give an indication, but you don’t know for sure what’s in there. So, I replaced the lot. Except for the stove and main fuse which generally never blow and ordinary usage wouldn’t affect them.  The only way to be sure of what’s fitted is to replace the fuses with new, correctly rated, fuse wire.

One fuse caught my eye. The fuse wire on one had been replaced with copper wire. How did I know it was copper wire? Because it was very flexible and comprised multiple fine strands twisted together like you would find after stripping the insulation from a piece of speaker wire. What idiot would do such a thing? I don’t know but I suspect it happens a lot.

If you overload the wiring in a correctly wired and correctly fused circuit the fuse will blow.  That's what's meant to happen.  The fuse blows before any damage is caused.  But if fuse wire has been replaced with something else you are removing a safety device, and run the risk of starting a fire.  The example in the picture would be easy to see and smell, but if the fire starts in a wall cavity or in the ceiling you are unlikely to know about it until the blaze is well alight.

I was checking the fuses because of previous experiences. I bought a house in Tasmania many years ago, and just out of curiosity I had a look at the meter box and all the fuses. There was a huge piece of copper wire in one of the fuses. (Huge: think power cable.) It was plainly dangerous.  From that day onward I never trust what other people put into their fuses. When I bought my next house in Canberra I made the same check, and you guessed it, one of the fuses had a piece of copper wire installed. It was a thin piece of wire, but it wasn’t fuse wire. So, it’s no good.

I can just imagine the scenario. Someone loaded up the circuit in the house with too many appliances, or some electrical gadget developed a problem and the fuse blew. And the power went off. This would have happened in the dead of night, or on a Sunday or public holiday when the shops were closed and there was no fuse wire to be found anywhere, and there was a house full of guests. So, what did the numskull do? Grabbed the first bit of scrap copper wire they could lay their hands on and stuff it in the fuse, and think it’s fixed. Wrong! No doubt done with the intention of replacing it next time they went to the shops, but that never happened, because they forgot.

With this experience, I can understand why replacing fuses was considered the work of a qualified electrician. Doing it with the incorrectly rated fuse wire (or with copper wire) can cause a fire. Replacing fuses is also kind of tricky. The ceramic fuse blocks can sometimes be very difficult to get out. Sometimes you have a fight on your hands to pull them out, as they can be difficult grab hold of. They can stick like someone used Loctite, or Araldite, or something to glue them in place. There is also the constant danger of inadvertently touching one of the electrical contacts during the process. Yes, I know, there are switches to shut off the power, but who’s to say the electrician wired the house correctly. Trust nothing. You should even check that the light and power fuses actually go to light and power. Like I said, trust nothing.

I left the card of fuse wire in the meter box for the tenants should they need to replace one on their own. Now that I’m about to rent the property, maybe I should replace all the fuses as a matter of course after each tenant moves out to make sure the correct rating have been fitted.

Don't adopt a "She'll be right" attitude, and forget about it.  Check it.  Fix it. Make it safe.  If you don't trust yourself, call an electrician.  It'll be money well spent.

Taking possession

I expect settlement took place smoothly enough. No problems were reported, and we drove to the coast, picked up the keys from the real estate office, and let ourselves in. The real estate agent had left a bottle of wine. I must try it someday. It was a bottle of red. I can’t understand the appeal by so many for cheap red wines.

I met someone at uni, as a student. We were playing Bridge and he offered a glass of red. I declined as most of my earlier experiences of reds were nasty. My memories of reds were rugged, throat scratching experiences. White wine is reliably easier on the taste buds. However, I was persuaded to try, mostly by mention of the guy’s wealthy parents providing him a wine allowance in addition to his living expenses. That was probably a boast, but he had spare cash, and spent it on quality wines. His father owned a small aircraft service.

Why is it that you have to spend a fortune to get a good red wine? That was the one and only time in my life I have ever drank a red that slipped down my throat with a silky richness. I love port and didn’t mind spending a few dollars on quality fortified wines. Good ports are easy to drink. Well, my friend’s bottle of red reminded me of that and it gave me a whole new impression of red wines. That was about 25 years ago and I have never come across a reasonably priced red that was as good. I have to wonder what his wine allowance was. In the mean time I’ll just stick to whites.

Most of the furniture had been removed from the house except for a few things here and there. An old cabinet had been left in a corner of the kitchen where the fridge used to be. It seemed to be covering a stain. A couple of very wobbly wardrobes were in one of the bedrooms, that we made use of. Some of these things were quite useful. Some weren’t so good. A very wobbly cabinet went straight into the garage. It was made of chipboard and water had got into it. Chipboard is fine when kept dry but starts swelling and falling apart when it gets a whiff of water. It’s horrible stuff. I don’t know why it’s still available as a building material.

We now had to get the upper unit ready for renting. There were a few things to repair, door stops to install, installing a letter box, and cleaning the place to make it presentable.

My job

The one thing I didn’t mention to my lender was my employment situation. Well, not in as much detail as I could have done. I answered all the questions that were put to me in the application form. I answered completely and truthfully. However, there were certain things happening in my life that the form didn’t ask. So I didn’t tell them.

I had been in the same job for about 4 years. I expect lending institutions like to know that you are in a steady job. It helps keep the repayments coming. The application form asked questions about my employment history and I responded with exact dates and salary. They asked about my personal finances and I responded accurately and completely.

What they didn’t know was that the company I worked for was in the middle of a restructure. This restructure had been on the go for some time, and my job had been targeted as one that had to go. I had managed to procure an alternative job; I then sought permission to quit my current job early, and start the new job the day after the old one finished; which was nice. My separation package made up a substantial proportion of the deposit for the property I wanted to buy. So, redundancy was a good thing for me. Though I have to say, I did enjoy the job very much, I knew it well and did it well, and I knew I was going to miss it. That’s life I guess. Apart from my annoyance with my employer of what was going on, because I thought management were making some bad decisions, the payout was going to help buy me a property. So, to some extent, I have to thank them for providing the means of purchasing my second property. It wouldn’t have been possible without the separation package.

Restructure: that’s a term more and more people are becoming familiar with. I’ve met with restructure experiences more times than I would have preferred. This restructure was an on- and off- and on-again experience that was really pissing me off. More than a year previously there had been a staff announcement about an intended restructure. Jobs were to go. Then notice came that my job was safe; it wasn’t going to be targeted. The restructure wouldn’t affect me. Then about six months or so later it was on again and my job was to go. Then once again they changed their mind; my job was safe. Then there was a new development and my job was to go, and it was definite this time.

It makes it difficult to plan your life when the crowd you work for can’t make a decision and stick to it. It makes you wonder about the calibre of the management. I was determined not to let their sloppiness upset my life. Though, their decision had upset my life. There is no getting away from that.

I used to live in Melbourne. I left Victoria, selling my house to move to the ACT and a new job. This job. And here I was being retrenched from it. Yes, I felt put out. My house in Melbourne didn’t sell for as much as I would have liked, the new house was purchased in Canberra for more money than I would cared to have parted with, and it was a smaller house than my Melbourne place.

Anyway, the new job had a better salary, which always helps, but the job was only a six months contract, with the possibility that it would be made ongoing. My intended lender didn’t ask me if I had plans of quitting my current job, or if I was considering changing jobs, or whether the new job was in a more or less stable environment. They didn’t ask. So, I didn’t tell them. Well, why would they? They would have had no idea. They probably assume people wouldn’t be asking for a loan unless you have a job that enables you to make the repayments.

I felt relatively sure I would keep the new job. I didn’t want to jeopardise my chances of not being approved for the loan. So, I didn’t say a word.

I suppose at some point the lender could have contacted my employer to check me out. Perhaps they did. Wary of not being approved for the loan, I kept quiet about it. Each time I received an email or phone call from the lender I felt on edge. I was always expecting a question on my employment situation that would have given the game away. Fortunately, it never happened.

Westpac stuffs up

My funds to cover the deposit were held in two accounts. A Westpac savings account had the payout from my previous employer. I had just changed jobs while in the middle of a real estate deal. The money was from the termination payout. The remainder of the deposit was held in an offset account linked to my existing home loan, which had a cheque account facility. I wanted to write a cheque, but there were insufficient funds in the cheque account to cover the deposit. It was about $10,000 short. So, I needed to transfer some money to make up the difference.  That shouldn't be too difficult.  Surely.

That evening after work I rang Westpac telephone banking. I explained that I wanted to transfer some funds, mentioning that I wanted the funds transferred quickly. The person on the phone said there would be no trouble in transferring the funds, but advised that it might take a few days, and added that if I wanted to transfer the money quickly it would be best to visit a branch and speak to a teller. This person emphasized that the process would be much quicker through a teller at a branch of the bank. So, a visit to the bank was required. I thanked him, and made that my first priority in the morning. I was up early and waiting at the front door of my local bank branch at opening time.

There was plenty of money in the Westpac account. I asked for $10,000 to be transferred, and I provided the account details. How long would it take, I asked. Usually overnight, the teller said, but she explained that as the funds were to be transferred to another bank, they couldn’t tell me exactly how long it might take, but probably the day after next. This was remarkably similar to what I had been told by the online banking person on the previous evening. And I mentioned my recent experience of the evening before. The young teller I was speaking to admitted to being inexperienced and sought advice from her supervisor, who turned out to be a nasty piece of work.

I explained my request and passed on the advice I received from Westpac telephone banking. That’s wrong, the supervisor said, it is much faster for telephone banking to have done it for you. She added that telephone banking is always saying that. And they’re wrong, she snapped at me. She then directed me to a telephone in the corner of the bank that I could use to contact their telephone banking service if I wished.

I wonder if there was no phone in the corner of the bank and had the closest public telephone been down the street somewhere whether she would have directed me to the pubic telephone box.

I was in a bank and a supposedly experienced banking officer was offering the use of telephone banking services when there was a teller sitting across the counter from me. I found this experience bizarre. I didn’t know what to say. The stupidity was bewildering, but what really offended me was the aggressive and offhand manner of this person. This was a Westpac experience; I’d like people to know that. I suspect the funds would be transferred equally fast or slowly by either method. I declined the use of their telephone and asked the teller to continue with the transfer. I was getting fed up.

With the funds now on their way to my cheque account I wrote the cheque for the property deposit and took it to my solicitor explaining what I had done, and asked him to hold it for a while. This was on a Tuesday. The solicitor agreed not to post the cheque and contract until Friday, which would be more than ample time for my funds to be transferred and cover the cheque.

On the weekend I saw the $10,000 appear in my account. The cogs in the financial machinery were turning. The funds took longer than expected to be transferred but the money was in my account. The cheque was covered. The transfer took about four days rather than the estimated two that Westpac advised. I doubted the mail service would be very fast in getting mail to a regional area meaning the cheque wouldn’t have reached the real estate office before Tuesday. Everything was working out. Wrong!

I got a call from the real estate agent early in the week to say the cheque had been dishonoured. I apologised and said I couldn’t understand why that would have occurred saying I would look into it. I was panicked.

How could this be? Had I made a mistake? Had I misread my account statement? I was beginning to doubt myself. I felt a sinking feeling as various possibilities for what went wrong began circling my mind. I skipped work and went home where I could try and come to grips with this.

At home I checked my account again. The $10,000 was definitely there. The account total balance had gone up. The total balance was greater than the cheque I had written. No home loan payments had taken place. But a new entry had appeared: a $40 dishonour fee. How could this be?

I rang both financial institutions. Neither of them helped. Though, in speaking to some informed staff from both I got to the bottom of it. The cheque had been dishonoured because the $10,000 was forwarded with a note from Westpac instructing that a 7 day hold be placed on the release of the funds, which caused my cheque to bounce. The $10,000 had been transferred as though it had been a cheque, in which a certain time has to pass before access to the funds was allowed. The staff where my cheque account was held, very reasonably asked if the $10,000 was a cheque deposit. I said no, and they couldn’t understand why this request was made.

The staff at the Westpac telephone banking were helpful and courteous, and in particular a woman I spoke to. She was a supervisor at telephone banking. She confirmed that the funds had been transferred as though it had been a cheque. She could see from my account that the money was available and should have been transferred without a hold. She could not explain what had happened. To her credit, she deposited into my account $40 in lieu of the dishonour fee that I was penalised by the other financial institution. This was nice, but it didn’t help me pay the deposit.

The real estate agent needed the deposit without delay. Ironically, I was advised that if the cheque were to be presented again on the next business day it would have been okay. Had the real estate agent not have been so quick off the mark to bank the cheque the funds would have been available. But the agent couldn’t present the cheque again as it was still in the hands of the bank and wouldn’t be returned for a week or so. Another urgent visit to the bank was required.

I rang the real estate agent and explained what had happened. Though I doubt they would have had much interest, and may have been wondering if I were some sort of charlatan. I asked for my cheque to be returned when they got it, and requested their bank account details and made a cash deposit. It was a different bank but fortunately only a short walk from my own. My pockets were stuffed with two envelopes bulging with $100 notes to cover the $30,000 deposit. It’s surprising how much space money occupies. I was a target waiting to be robbed. Fortunately, within a short time the deposit was safely in the real estate agent’s trust account. Perhaps I should have done this first time around, but money transfers are supposed to make things easy, not difficult. I hate Westpac.

The Westpac stuff up had enraged me. On my visit to the Westpac branch I was itching to catch the eye of the supervisor who botched this. I wanted a word with her. I wanted to tell her what I thought of her and Westpac. She would have got an earful of abuse. She wasn’t on duty. And unfortunately the teller who dealt with me that morning had to wear my grumpiness. I had him count the money several times; when he finished weighing the notes on his machine (which I didn’t trust), I got him to do it again manually in a private bank office. He was irritated by my request. I didn’t care. Stuff them.

Finance approval

I received an email and a phone call from my new lender shortly after my visit to the solicitor. The content of which was to say my application had been approved. Are emails written confirmation? Do they really count? They are a form of written communication, but do they carry the same weight as a piece of paper delivered by Australia Post. My solicitor seemed to think so.

So, that’s it. The deal is a happening thing. We have a new property. Well, almost. Things were beginning to look positive.

I wondered if the telephone conversation I had a few days earlier with a finance rep made a difference. I was at a Westpac branch getting a statement when someone rang me. I fibbed and said Westpac had been tempting me with their home loan deals.  I said they were trying to get me to change lenders. It wasn't really true, but I wonder if that helped get things moving a bit faster.  The fear of loosing a potential customer.

I was feeling happy, and had a lilt in my step. Although, another problem was about to occur that was completely unexpected.

Meeting our solicitor

We made an appointment with our solicitor. The solicitor’s office was on the top floor of one of Canberra’s few tall buildings. We took the elevator to the top and got out. The office was on the next floor up. That’s odd, and a thought occurred to me. I began to think of the movie “Being John Malkovich” and that weird seven and a half floor thing. We climbed the remaining stairs to the office. Glossy stairs, shiny handrail, gleaming black marble everywhere. The office was perfectly neat and spotless. We sat on the plush leather couch and waited for our solicitor. It was such a surprising contrast being led into our solicitor’s room to see an untidy tousled haired unshaven man. So long as he can do the job. That’s all that counts.

We looked over the contract with the solicitor. Property contracts are boring documents with few interesting sections. Though their detailed maps are worth a second look, and documents showing the history of the property makes interesting reading. Some of the maps and diagrams are ancient, and you get an opportunity to check out all the previous owners. There’s a lot of legal mumbo jumbo to look through. It was a tedious meeting. Our solicitor was slow and he pondered over things that didn’t interest us.

The property has an access lane at the back. I don’t know what the history of that was; possibly something to do with sewerage and access. Most of the properties have a driveway leading from the lane, with some having a carport. Our property had a garage that was accessed from the lane. That was in addition to the driveway that came off the street. It was unusual. Our solicitor studied it and pondered the situation, and took pains to point it out. Yes we knew the set up. Despite us telling him we’d seen the property, walked around it, and knew about the lane our solicitor pondered some more and took pains to discuss the easement and describe the hazards.

In some ways it would be good to learn how to undertake your own conveyance processes. There are do-it-yourself kits available, though I’ve never been game to try it. Perhaps if someone deals in a lot of property it might be worthwhile. There was a news item on the weekend about a real estate scam that caught my attention.  If it's true the solicitors didn't do much of a job in checking ownership.

The document had to be signed and the deposit paid. Up until this point no money had exchanged hands. And that wasn’t going to happen until my finance was approved. We asked the solicitor about making the sale conditional on securing finance. This was not possible, he said. I was amazed. Properties can put purchased subject to the sale of another property. So why wasn’t this possible. I don’t know but it was annoying.

There was a clause in the contract, our solicitor pointed out, which would hit us hard if we backed out of the deal for some reason, or did not proceed on the specified dates. We asked the solicitor to sit on the contract for a while. There was no way it was going to be signed with that sort of clause, at least, not yet. Not until finance had been approved. The waiting continues.

The vendor gets tough

Up to this point the vendor's agent had been leaving messages trying to get things moving faster. Possibly being pressured by the vendor. This had been going on for a few weeks. But the most recent call was different. The most recent contact had a vicious edge to it.

The message was along the lines, if exchange does not take place within a week the property will be put back on the market and listed with another real estate agent. It had a nasty tone. These vendors didn’t seem particularly nice at all. Of course, the agent had always been polite to me. I could tell that the real estate agent who rang me wasn’t pleased with the vendors either. After consideration, it seemed to me to be an empty threat.

From things we’d been told by staff from various real estate agents who knew this particular property this threat didn’t make much sense. Various agents had said the property had been on the market for ages. It was priced way too high initially and wasn’t selling. We were told that there had been a few offers in the past, but all had been rejected. They had shifted agents once and it still wasn’t selling. Anyway, it occurred to me that should the vendors have decided to relist the property with another agent I would have spotted it with the new agent and I could have worked with them. By all accounts we were the only people showing any interest in recent months. Chances are that we would be buying the property from whichever agent they chose to sell it through. Surely the vendor didn’t think listing with another agent would magically release a whole new bunch of potential buyers that would somehow have excluded us. Anyway, I was doing all that I could, under the circumstances. This was an annoying development.

I can understand the agent feeling miffed by this recent development. After all, it’s the agent who stands around showing people through the property week after week waiting for some punter to come along. I imagine they wouldn’t be impressed if, after hooking me, the vendors decided to pull the property from sale and change agents.

It was with this aggressive attitude of the vendors and all the badgering they had been doing in recent weeks that we decided to cancel the arrangement to buy the existing furniture that was in the house. The arrangement would have suited us, but it was also done in part to save the vendor the inconvenience of having to deal with it. They lived in Sydney and may not have wished to go to the trouble of moving it. Stuff them; they can keep their furniture. But we still wanted the property. Though the thrill and excitement of owning it had been eroded.

It was at about this time I heard some news that took my attention. There was a news item on TV. It may have been coincidence, but a few days before the vendor made this threat there was a news segment that took my interest. The essence of the news story was to say that real estate prices were moving upward again. The news report said that the upward movement related to capital cities only. There was also an implication that the financial crisis may have been coming to an end. I wondered if our vendors had spotted that news item too and may have considered they might have been able to get more money for their property. Perhaps they were wondering if there were any buyers out there willing to pay more than we had them locked in for with our offer. We were certainly dragging our feet somewhat. Though, the news item focussed on major cities, which was certainly not the location of this property. There was no comment in the bulletin regarding regional towns.

I suspect with finance being tight, jobs being lost, that investment properties or holiday houses would be getting sold, and country areas would be the first to see property sales. People are not going to sell the family home if they have an investment property. And that was the appeal for us: get a bargain if we can. On the other hand, perhaps the vendors were just pissed off with us for taking too long to finalise the deal. Who knows? Though, it’s not as though real estate prices had fallen to bargain basement give away prices. This property was okay and it was a fair price.

Anyway, it was remarkably soon after that news bulletin that the vendors seemed to be getting agitated and wanted things to move faster. I was still having difficulties with the finance people. I was on edge over the deal. I wanted the property, but had no funds as yet.

Request from the lender

The lender eventually requested identification documents to be forwarded, or rather, demanded documentation. Some grumpy person rang me. Rather than a pleasant greeting the caller snapped at me. Where is my identification material, he demanded. I explained that no one had asked for anything.

Had I not doubted my chances of being approved I would have grumped right back. Despite the grumpiness, this was a positive step. When I enquired about doing this at an earlier stage I was advised not to trouble myself. Then I got this demand as to where the material was, as though they were waiting for me and I was dragging my feet. The documents had to be copies endorsed by a JP and posted to them.

I guess that’s the trouble when the lender doesn’t have an office and everything is done by phone or by email, and with different people dealing with you. In fact the original person I was working with took some recreation leave and I had to work with someone else, then the original bloke came back for a time and then he got sick and was off work again. I don’t know if these breaks and different people were to my disadvantage, but it would have slowed things.

You could put a case that this is where these institutions fall down. Banks fall over themselves trying to demonstrate that online banks can’t provide a good service. They say they disadvantage themselves by not having a shop front. To some extent that’s true, but I’d rather have the lower interest rates than the good service. In my experience that good service is sometimes difficult to find amongst the shop front banks even when you look for it, despite what they say. My experience of the average financial institution with a shop front leaves a lot to be desired. The only thing I dislike about the online services is the risk of fraud associated with financial dealings when using your home computer with the various viruses, worms, Trojans and the like.

The last thing they requested of me was proof of my ability to pay the deposit. They wanted bank statements. I immediately obliged and took a lunch time trip to my bank (yes, a Westpac shop front) to get the documentation they requested. I couldn’t give them a statement, as I didn’t have one yet. My payout money had only been in the bank a few weeks. I doubt they’d be interested in the slip of paper teller machines print out.

I wondered if this was where things were going to get difficult. I had just changed jobs, and I wondered whether I might be questioned on this subject at some point. It was something I thought might cause everything to come crashing to halt. At that precise point in time I was working for a different company than I had been when I applied for finance only a few weeks before. I provided all sorts of information when I applied, everything related to the old employer: payslips, group certificates, but nothing for my current employer. Well, when I completed the application form I didn’t have the new job. What else was I to do? I had only just started the new job and it was too early to even have my first payslip.

Anyway I was at the bank. I told the teller what I wanted: a statement showing my balance. I explained that it was a request from a financial institution where I was applying for a home loan. I expected the bank would print it on some sort of official looking lettered headed paper. But no, it was a printout on a plain sheet of paper that was stamped using an inked rubber stamp with the bank’s name, and dated. It looked pretty ordinary. I was unimpressed, and I said so. The teller said she knew what was required and it would be acceptable.

The teller reminded me that they have a loans officer who could discuss the bank’s home loan options. This was a Westpac bank, and I have black-listed them. Westpac’s staff had given me some really poor treatment in the past so I have decided not to use Westpac other than a simple transaction account. I listened to the teller and politely declined. At that point in time I was quite happy to pursue my current application, if they’d have me.

I had just finished with the teller by a few seconds when my mobile rang. I was actually pushing my way through the door of the bank when it rang. The caller was a guy from the lender reminding me that a bank statement was required. An email and now a phone call. How much notice do they think I need. It was a different voice on the phone. Not the grump I had spoken with earlier. Anyway, I told him I was at the bank at that very moment doing exactly what was requested. He seemed pleased. I told him I had the statement in my hand, and that I’d send it to him today. Then a thought occurred to me.

I considered it would do no harm to give them some encouragement in processing my application. I dangled a carrot in front of them. I mentioned that while at the bank I was asked by the teller why I wanted the statement. I related how I mentioned I was looking for a home loan and the statement was required as part of my application. I then went on to say that the bank officer began to put a sales pitch to me and sell their home loan services and explain the benefits of getting a home loan through Westpac rather than the company I had my application with. This is a very reasonable scenario because it happens. You do get badgered. However, none of this took place, other than a short chat. A loans officer was there and could have spent time with me, but I declined. Instead, I embellished the experience. I wanted to give the impression to the guy I had on the phone at that moment that Westpac was seriously after my custom. It was all a bluff, but it may have helped, because a few days later my application was approved.

The next few days proved awkward because at the time I had no idea of how my loan application was progressing. I didn’t know how close the application was to being approved; they didn’t communicate anything of this nature.

Being hassled by the agent

The pressure was on again in quicker time that I would have liked. The vendor’s solicitor must have mailed the contract to my solicitor immediately. My solicitor contacted me asking us to call into his office to sign the contract so that exchange could take place. That’s a commitment I didn’t want to make until I had some home loan finance organised. I put off making an appointment. That didn’t worry my solicitor, but I began to get badgered again by the vendor’s agent.

At a time when it would have been good to have things move quickly this new lender worked at a leisurely pace. If only the vendor wasn’t in such a hurry to close the deal.

My application with the new lender was progressing. I was contacted to provide documents in addition to what had been requested in the application package: more financial statements, rates notices etc. It was reassuring to know that the wheels of industry were turning. Though, I wonder why they didn’t ask for this stuff earlier.

Furnishings

Although the property was vacant, it was furnished. The vendors had been renting the house to weekend visitors and holidaymakers for a few weeks or days at a time. In fact, the real-estate ad gave a brief run down on how much the property could earn from casual rentals.

Short term rental properties at the coast probably do quite well, particularly as the local motels get booked out on long weekends and the Christmas-New Year holiday season. The summer temperatures at Batemans Bay are usually a few degrees cooler than Canberra, making it a very pleasant place to be. Winter too is a nice change from Canberra with its day and night temperatures generally always being colder than they are at the coast. Weather wise, the appeal of the coast is fairly universal throughout the year.

The house was kitted out almost in a motel fashion with almost everything anyone would need to move in and spend a few days. In addition to the furniture there were stereo systems, TVs, microwave ovens, crockery etc. Some of the furniture was in very reasonable condition; other pieces were virtual throw outs. I particularly liked the dining table and chairs. There were two double beds that looked okay. Though, I didn’t have much use for the bunk beds. The lounge chairs seemed well past their best, as were some of the cabinets and wardrobes. The crockery and kitchen items could have been good to have. Although I didn’t need any more TV, video, nor stereo systems they could have been OK to have. There was always ebay to get rid of any unwanted stuff. There was a mixed bunch of stuff in the house. We wondered if they would be available for sale too.

I had taken photos of all the rooms in the weeks prior to making the offer. I’d poured over them studying every detail of the place. In all, I think I had taken about three hundred pictures both inside and outside the property, and around the garden and in the garage. I knew exactly what all the furnishings looked like. With any property I’ve had an interest I’ve snapped a few photos. If I have been very interested I’ve taken dozens of photos. Perhaps four or five photos per room, including the hallway, bathroom, toilet, and laundry. And I’d go for close ups of anything that looks dodgy so that I can study it later, but in fairness I also take photographs of the good aspects as well.

It’s possible to miss things that will be captured in a photograph. You might not spot rusted gutters until you see them in one of your photos, or rotting timber decking, or a roof line that might be a problem or the general condition of the roofing steel or weather boards. Photographs can reveal so much when you study them later. Even aspects you weren’t able to study while inspecting the property become available to you later: the street, the neighbour’s place, and the general lie of the land. Inevitably, taking so many photos gave me an idea of the furnishings and fittings that were in the house.

Anyway, using ebay I checked the completed listing prices as a guide to estimating the value of everything. This is not a reliable method, but it does provide a general idea of price. There is no way I could match any ebay items exactly with my photographs, but a lot of ebay stuff comes remarkably close. Because I was checking completed auctions on ebay I didn’t care where they were located; just the last selling price. I think it helped.

If you use ebay and didn't know this feature was available, you should give it a go. When you are signed in, click on the 'advanced search' function, and tick the 'completed listings' box. When you search for anything its only completed auctions that are displayed. All the green items were things that sold at the price shown, which gives you a good idea of what people are paying. The red items are the things that didn't sell. It's really handy.

We made an offer on the furniture and contents which was subsequently upped to $2000 and we accepted. The deal was to be done privately. It would save us transporting furniture and saved the vendors from having to clear the house prior to sale. The vendors may also have priced it accordingly as they may have considered the cost of removal, or there may have been storage costs to consider. Anyway, what can you get for $2000? It seemed an okay price.

The existing lender

As soon as I could, I contacted the lender that was financing my current home. From the information I provided on the phone, the rep said I would probably be approved, and he asked me to submit an application. This actually took a few days to prepare. It’s a painful process completing these multi-page application forms.

After considering our finances and commitments the deal seemed to be a no go. That was disappointing. They could help me, but only under certain conditions. Their assessment also took more time than expected. In fact, I had to get on the phone to them, rather than being contacted by the lender. Time was pressing.

They wanted me to jump through too many hoops. But I did have a very interesting conversation that had a favourable effect my interest rate. On my existing home loan, that is.

They took issue with my credit card limit. I couldn’t quite see the point of the credit card issue when it was raised, as I always cleared the debt before the due date each month. But I can see their point now. The point is that there might be debt, which might make it difficult to make the home loan repayments if the card debt builds up too high. They also wanted me to have a larger deposit for the property. This wasn’t going to happen. At the time of these conversations I had an offer on a property. I had no interest in saving for a larger deposit. I’d lose the property to someone else, and I wanted to avoid that.

The interesting thing that occurred during my enquiry to this lender was related to my current interest rate. Without my asking, the rep offered me a discount on my current rate. I’d never heard of a discount before. At least, not during a conversation such as this. I was almost dumbstruck, but not so dumb as to say that’d be very nice. So, the way this works is that whatever the going flexible rate is at any particular time that this company has set for people’s home loans, for the life of my home loan, the interest rate I will be charged will be 10% less than everyone else. I asked if he’d confirm that in writing, and sure enough an email came through to say just that. To say I was amazed is an understatement. There has to be a lesson here for everyone. Perhaps everyone should try for a discount. What have you got to lose? It’s possible they wanted to ensure they kept me as a customer. Perhaps they thought along the lines that here’s a client who’s shopping around, if I don’t get satisfaction with them they may have feared I’d walk off and refinance everything with some other company, and so lose my business. I don’t know. I never asked them.

These enquiries were at about the time the Australian Government had put out its offer of guaranteeing the big banks. My home loan wasn’t with one of the larger Australian banks. Perhaps they were losing customers and just wanted to hang on to me and this was the inducement. It worked.

I was speaking to a rep form another lending institution. Well, I was shopping around, after all. The rep asked who my home loan was currently financed with. I told him. His response surprised me. He said he didn’t know they were still in business. Comments like that do nothing for your confidence in your financial situation. Is it practice for these people to put fear into people’s minds?

Our offer is accepted

It may be stating the obvious, but it’s probably wise to grab some money before going on a shopping trip. It could be embarrassing having the shopkeeper wrap an item only to discover you only had a few coins in your pocket. The same is true with real estate deals.


We found a suitable property and made an offer. Thinking back on that day, I must have seemed a little off hand to the agent. Just before the agent got off the phone with our final offer the agent said she didn’t think the offer would be accepted. This was just some real estate trick to try and have us to increase our offer. It had no effect and asked her to put it to the vendor all the same. I also said we were going out in the afternoon; off to the movies. We love going to the movies.

Driving into town we chatted about the property and whether our offer would be accepted. We considered if it was accepted then we’d have a new property; if not then that would be too bad. We’d just keep looking for another property in the area. There seemed to be plenty of properties on the market. Anyway, late in the afternoon the phone rang. It was the agent. She seemed a little perturbed. It’s amazing how people don’t listen. I said we were going to spend the afternoon at the movies. Despite that, the agent seemed annoyed that we weren’t contactable. Don’t people know that you switch the mobile off when at the theatre?

Anyway, our offer had been accepted. All we needed to do was provide our solicitor’s contact details to get things rolling.


Actually, there was more to do than just contact our solicitor. I had to find a solicitor, but there was a bigger problem. I had to get some finance. I should have made a few serious financial enquiries before shopping around for a property, but I didn’t think there would be any problems. There were problems.

These photos are of Surf Beach at sunset. This is the local beach. This spot is not much more than five minutes walk from the property. There was plenty of incentive to get everything organised.

This ad must be a joke

There was a radio advertisement that made me laugh. One of the Canberra real estate companies was advertising that its company more than any other could sell your property and get you more cash for the sale than any other.

In addition to the radio ad I noticed the following appears on the Blackshaw web site:

Proven sales record
At Peter Blackshaw Real Estate we continually achieve higher prices right across Canberra.
We have achieved more record-breaking sales in more suburbs than any other agent in the ACT. (check it out)

I don't know about you, but this seems dumb to me, and I think Blackshaw are assuming we are all idiots. Perhaps Blackshaw needs to be treated to the same lack of regard as they treat the punters.

The thing about real estate companies is that they are stuck between buyers and sellers. Property owners want to sell for as much as they can get. Potential buyers want to buy for as little as possible; everyone wants a bargain. In real estate you can’t keep both buyers and sellers happy. And there’s seldom a fair price in real estate. Generally, when someone talks about the great deal they got, rest assured, someone else missed out badly.

There doesn’t seem to have been a lot of thought gone into that ad. Sure, pushing the notion that selling your property for more than the opposition might offer may attract a few potential owners with a property for sale. But it doesn’t take too much imagination to consider that the punters are listening to that ad too. Why should they buy anything from a company that is essentially announcing that they are going to be ripped off.

The importance of tick boxes

I received a telephone call from the Macquarie bank. They said I was behind in my repayments. And we all know what that means. If you don’t keep up with the repayments for something it gets taken away from you.

It’s Macquarie Bank that funds my home loan for Virgin Money. I wonder why Virgin doesn’t fund its own loans. I would have thought Virgin was big enough. Anyway, the person from Macquarie rang to say that I was behind in my repayments by $1339.13. I recall that amount being flagged as my first repayment in an email that had been sent to me.

This was disappointing news, and disturbing. I had thought the repayments would have been the least of my worries. I had a job, I could afford the repayments, and salary deductions had been set up. So what was going on?

In my previous home loan I was aware of the importance of making as many early repayments as possible. A lesson from a few years previously sprang to mind. I’d taken out a small loan with a Tasmanian cooperative building society. The loan was only for a few thousand dollars. The person setting up the loan asked if I would like to delay the repayments by a few weeks, or was it months. I can’t remember. It sounded like a generous offer, and I never questioned it. I only thought how generous it seemed. That was my mistake. Financial organisations aren’t generous. I didn’t enquire further, and I was stung.

When the loans officer had made the offer, I had assumed she had meant:

• we can put a freeze on the repayments and interest charges,
• you can have this loan now,
• make no repayments for x amount of time, and
• you will be no worse off than had you started making your repayments straight away.
  

The loans offer should have said:

• we’ll allow you to skip the first few repayments for x amount of time, but
• interest will accrue and add to your principal based on our current charges.
  

The principal grew much higher than I thought reasonable, and it took me a long time to get it below the amount I’d borrowed in the first place. Had I known what was about to take place from the inception I would have declined the offer. The loans officer was did not fully explain the ‘offer’ and I didn’t pursue the details.

With that lesson in mind, when I went along to Westpac for a home loan I was adamant about when my first repayment would begin. I had things worked out in my mind such that when the loan took effect (settlement), I had my first repayment going into my account on the very next business day. There’s not a lot of interest that can accumulate in one day, but my first repayment dropped the principal more than would have happened had I waited for a fortnight or so before the first repayment was made.

So, when Macquarie rang to tell me that nothing was being paid off my home loan I was astonished. I explained to the disinterested person who rang that I had about $90,000 in an offset to the loan. I believe the way this works is that if I make repayments greater than the minimum my offset is increased by the difference. If I make repayments that are less than I should, or presumably if I don’t make any repayments the offset amount is reduced, but the loan keeps getting repaid. Actually, I don’t make repayments to the home loan account, but make deposits into the offset account. Presumably, funds flow on a periodic basis from my offset account to the home loan account. So, what was going on?

After some telephone calls, lots of people checking on things, it got fixed. It turned out that when the loan was being set up (was that by Virgin or Macquarie; who knows) someone forgot to start the automatic transfer of funds system. Some tick box on some computer screen somewhere had been left un-ticked. Was that some form I had forgotten to complete and send away, I enquired? No, it was something that gets done their end, and someone just forgot to do it.

I was reassured that everything would be okay in the future. But I wondered how much my principal had increased because no repayments have been made. They say they will look into that aspect. And I thought the problems were over. Thankfully, I had deposited my tax return into the account not so long ago, which would have helped. Though, it makes you wonder about the people who run the financial world.

The previous owner

K, the previous owner dropped by. She promised to pick up some gym equipment that had been left behind in the carport. She also spoke about arranging to finish some carpentry work on our wardrobes. The stuff in the carport was no problem at all. We had left a ton of stuff in Melbourne. That was not an issue to us. However, the wardrobe situation was troublesome.

Despite promising that work on the wardrobes would be finished before we moved into the house the work had not been completed. The mirrored doors had been fitted, and while the wardrobes were new, which was nice, it would have been better had the job been completed. Some of the railings were missing from the inside, and the drawers needed fascias to be fitted to improve their appearance. Wardrobes are pointless if you can’t hang your clothes in them.

A $90,000 loose end tidied up

The Virgin card arrived in the post this afternoon. At last I can correct that dumb mistake that occurred during settlement and deposit the $90,000 cheque. But I wonder what it has cost me in increased interest repayments.

S called in at the Belconnen solicitor’s office to pick up the cheque. She was treated in an offhand manner by the staff at the office. That was at William Heague, Belconnen. She was amused to note, that when they spotted her title (Dr) their manner changed markedly.

Stupidity, incompetence, and lies

At settlement I had a couple of cheques issued in my name, the larger of which was in the region of $90,000. The cheque was not drawn at my request and was done due to absent mindedness, error in judgment, or incompetence by the people undertaking settlement on my behalf.

I had rang David, from Virgin Money when I first got wind of it as I was concerned I hadn’t completed all the various forms exactly as required. He telephoned to say I had completed everything correctly. So why did the Virgin agent and my solicitor go making decisions on their own and fowling things up? My solicitor had said she was advised by Virgin to draw the $90,000 cheque. It could have been that the Virgin agent knew little about banking, nor how to conduct a property settlement. It could have been that the solicitor had little regard for my interests. I don’t know what it was, but someone had goofed. No one sought advice from me. If there was any doubt they should have contacted me and asked.

I rang Wridgways to find out when our furniture would be delivered. It would be delivered on the 4th July. Now that’s curious, considering Wridgways in Melbourne said our things would be delivered definitely before July. It sounds as though Mark De Lacy, the Melbourne Wridgways guy, was making things up when he said our furniture would be delivered before the end of the month.

Is that the technique? Whenever there is a problem, just open your mouth and tell the punters a whole heap of crap. It doesn’t matter whether it’s true or not just smooth the waters to get them out of your hair. Well, it fitted with the whole Wridgways experience.

A duty of carelessness

The solicitor rang. She said, “Settlement went through without a problem.” This was really good to hear. And then she dropped a bombshell. She mentioned, in what seemed like a passing comment that there was a cheque for about $90,000 in my name. The cheque was in her office and ready to pick up.

Wrong! Wrong! Wrong! Wrong!

This was dumb to write a cheque. This amount was to remain in my home loan offset. I didn’t need this money as a cheque, cash, or anything else. This was an amount that was built into my home loan should I need cash for something in the future, but at the home loan interest rates.

The home loan interest is calculated on the amount that is borrowed. I had no intension of borrowing the full amount available to me, but now that a cheque has been issued the interest that will be calculated will be based on the full amount, rather than just the cost of the house. While these funds remained in the offset I would not be charged interest on them.

This offset amount was never actually intended to be borrowed. It was money for a rainy day; a kind of nest egg. However, now that a cheque has been issued I will be paying interest on an additional $90,000 that I have no need for. She said she “…was instructed by Virgin’s agent to draw all funds.” I find that difficult to believe. It was Virgin that had set up the offset. Surely, they knew what an offset was. Surely, they’d know they were going to send me a cheque book. Surely, they’d know I could write my own cheques whenever I wished. Whatever it was that happened between these two at settlement I’ll never know, but between the two of them they goofed badly, and stuffed me up into the bargain.

Put it back into the account, I said.
It can’t be done, the solicitor said.
Why not, I asked.
Because it’s in your name, she said.
I have no means to put it into my account, I said.
She said sorry.

Aggh!

Virgin Home Loans claim that one of the ways they keep their interest rates low is by having no shop front. With a bank you front up to one of their branch offices and carry out your business. With Virgin there is no branch office that you can visit to speak to someone from Virgin Money. Everything is done by phone, and if you want to make additional payments you go to your local Post Office with your special Virgin Home Loan ID card in hand and make the deposit, and your deposit gets directed into your account that’s encoded on the plastic card. This seems a simple process, and that’s how I would deposit the cheque into my home loan account. However, as a new customer Virgin Money hadn’t got around to sending this card. Without the card I can’t return the funds to my account. So, until the deposit card gets delivered I’m paying out more on interest than I need.

I think I just need to remind everyone about the people I’m dealing with: My home loan comes courtesy of Virgin Money who provided the cheque that I don’t need, and my solicitor who works with William Heague accepted this cheque without my instruction.

Both the lender and the solicitor appear to have shown little interest in my needs. Acted contrary to my wishes, in fact. You’d think with mobile phones someone might have spotted this whole situation as a bit odd, and thought, perhaps they should speak to me. But no, that was too difficult. Lazy sods. And to think these people bill for their services.