Okay. Just got a call from my real estate agent. We are selling a 3brm home in Adelaide. Just a little villa, 400m2 block, average condition.
council value $240000, bank valuations:
$285000 Feb 08
$275000 Aug 08
$265000 Feb 09.
We advertised at $285000 - $295000. We have just received an offer for $295000.
First home owners. They are putting in $8000 cash. $14000 FHOG. With costs etc etc, their loan will be $282000.
Thats an LVR of 95%
If they NEEDED to sell the house, cost = $10000.
So, they have a house worth $285000, a debt of $282000.
If house price has dropped 1%, breakeven.
If house price drops 10%, $25000 loss.
All you first home buyers out there - please be careful. If one of you loses your job, you are stuffed. If you both lose your job....