BUILDING LOANS ARE DIFFERENT

It's exciting when you find the perfect place to build your dream home! But remember that when a bank grants a purchaser a building loan to build on vacant property, many compliance issues arise, making the registration of the transaction somewhat more lengthy.

Banks require long lists of documentation to ensure that there is adequate value in the home to be constructed to cover the loan, and also that all legalities are complied with so that the bank can sell the property in execution without unnecessary complication, should the purchaser default.

This could cause delays in registration if not complied with BEFORE registration and even lodgement. Here are some examples of the documentation that may be required.

It is best to get professional advice when applying for a building loan to make all the additional paperwork as painless as possible.

Contact the property professionals for more info: allison@rivigangroup.com

<original article from stbb>

Going in with eyes wide open

Contracts can be daunting – especially if you don’t deal with them in your normal course of work.  Signing an Offer to Purchase is a complex agreement that has many facets to protect both the buyer and the seller.  At Rivigan Property Group it’s our job to know these contracts and know how to communicate them to our clients in a way that is clear, honest - and in their best interests.  Many people run into exciting purchases with their eyes wide shut – hoping for the best.  Unfortunately, if you’re not going to read and understand the contract, you may encounter severe problems later on.
 
Before even getting to the point of signing an Offer to Purchase, we strongly advise that your finances and pre-approved bond details are organised and ready.  It is essential that your financial position be as stable as possible, should it change after signing the contract and if it was signed in good faith, it will not be a reasonable and legal consideration to renege on the contract.

Once you get to the point where you have checked out the property, or the developer, and are happy to sign an Offer to Purchase you are well on your way to a smooth and beneficial transaction.  A signed offer constitutes a Deed of Sale; it sets the precedent for all further legalities around the ownership of the property so it’s important to know all the details.

Here are the first five considerations to take note of in your Offer to Purchase:

The effect of debt

Debt can be used most efficiently in order to grow an investment portfolio and purchase items that we need before we have acquired the full purchase amount.  This is only possible, however, if debt is managed properly and wisely.  Debt can have positive effects, but it can also have severely negative effects.

There are two types of debt: good and bad.  Good debt, quite simply put, is manageable and sustainable.  When you have what you need and are staying on top of your monthly repayments, you are in a good credit position, i.e.  you manage your debt well.  This is a common situation for many people who buy houses, cars or perhaps a few other expensive items, for which they can afford the repayments.  Affordability of debt refers to monthly repayments that are due in order to pay back the amount that you borrowed.

Bad debt is the opposite: you over-extend yourself and are unable to maintain repayments to your creditors.  This means that the debt that you have incurred is unaffordable.  This is typically caused by bad spending habits when people buy too much too soon, but it can also happen in the case of a hike in the interest rate or the tragic and often unavoidable loss of employment.  In order to manage your debt situation you need to manage your lifestyle.  There is an old idiom “cut your coat according to your cloth” - a basic budgeting principle to ensure that your costs do not exceed your income.

BONDS: How to get one smoothly...

You’ve saved for a deposit, you’ve cut clippings and searched the top websites to know what you want in your dream house.  Now, you need to get a bond.  Statistics show that nearly nine out of ten buyers* finance their homes with a bond, which means that virtually all buyers require home loans.

The good news is that obtaining a loan is not that difficult – but getting the best loan for you, that’s the potentially shaky part.

In recent years, good bonds have been harder to get as banks have tightened the loops that you need to jump through.  But getting a bond doesn’t need to be a difficult process – not only are banks once again offering 100% loans, but we can also guide you with a few tips to being a smooth operator when it comes to applying for a home loan.

Can I afford it?
One of the best reasons for acquiring a pre-approved loan is to find out which market you are able to buy in.  Although house-hunting can be exciting, it’s made far more enjoyable when you know that the house that you like is actually in your price-range and that you have a pre-approved bond, with all credit checks done, waiting for you.

You also need to consider that there are upfront costs of transfer and registration fees, which usually have to be paid outside of the bond.   Monthly repayment affordability is commonly calculated at around 30% of your gross income, but there are further factors that are considered that will determine the size of the bond that will be granted.

SOLD! Now what?

Congratulations! You have a happy buyer, but the process is far from over!  We want you to be fully ready and prepared for the steps that are common to every sale to make sure that you have no surprises.

Selling your house is a stressful process.  We work to reduce that stress by communicating with our clients throughout the deal because we value long-term relationships and want to invest in you, not only now but also for the future.  We strive to communicate as often and openly as possible, without compromise.  Rivigan Property Group have staff employed for the sole purpose of managing all the paperwork and dealing with the legal beagles so that you can relax!  

Once an offer to purchase is signed, the process continues as follows:

• You will receive a copy of the sales agreement from your agent
• Your agent sends another copy and instruction to the conveyance attorney on your behalf
• Your agent assists the buyer in obtaining the necessary finance (if applicable)
• Th bank will inspect the property for valuation
• Once your bond is granted the bank instructs bond attorneys to proceed with registration of the sale
• Your agent will assist with electrical wiring and borer beetle inspections, and certificates where applicable
• The conveyance attorney then requests title deeds and prepares documents for signature by both parties
• Your agent will ensure that the buyer's transfer costs have been placed with the conveyance attorney
• The conveyance attorney applies for cancellation requirements of your existing bond and transfer duty receipt from the deeds office
• The conveyance attorney applies for rate/levy clearance certificates from municipality or managing agents
• The conveyance attorney will request a guarantee from the bond registration attorney
• Finally, the conveyance attorney lodges all necessary documentation with the deeds office
• The sale will be registered into the buyer's name approximately 7 - 10 days after lodgement has taken place
• The conveyance attorney pays out the nett proceeds of sale to you

Phew, a process that is designed to ensure that you receive optimal service and the best deal for your home.  Make the smart choice and do it right the first time with the Rivigan Property Group.