Land Settlement Today

The scheduled settlement time is 3pm.

I'm writing this after 3pm, I guess we are officially land-owners now. My mobile rings, its our solicitor -

Ok, you're all settled now, he says. You are now in the game!

Terrific! We are now the proud owners of an area of dirt we will be spending the rest of our lives paying off :) Isn't ownership a wonderful thing?

He will be sending us a report letter later this week confirming the settlment details.

Our first mortage payment, a partial payment is due next week. I hope the Reserve Bank is kind to us for the next 30 years. As long-term renters, we paid little attention to what happened with interest rates, how things change when you have a stake in something.

So, Phase 1 is complete.

I called my lender a few minutes ago. He said he will send our application to extend along with the tender for valuation tomorrow morning. Hopefully by the end of this week, at the latest, we should hear whether we have an unconditional approval for this phase. Once we receive the documentation confirming an unconditional approval, we will arrange a meeting with our builder.

I hope Phase 2 runs a little smoother than the first phase. Wishful thinking?

The Penultimate Event?

If it's not written on your settlement documents, it's not going to happen any differently. Our solicitor acts according to the documents. The agency responsible for writing the documents (a business unit administering this on behalf of WestPac), act on the instructions of what is agreed between RAMS and the mortgagee. So, if a point such as paying the administration fees separately, is not communicated to the agency by the rep, then no matter what the rep says afterwards, what is written in the document will be exactly how it happens.

I don't know why we would think otherwise.


Actually, our solicitor shared an interesting fact with us. Mortgage lenders receive a trailing commission from the finance company based on the size and duration of the mortgage? I'm not sure whether the broking company pass this on to the actual mortgage brokers, but trailing commissions for the next 30 years on average, based on a one-time sale sounds like a good deal.


So, after stepping out of the movie theatre when I received a call from the RAMS rep this morning, I asked whether there would be any fees on the second part of our loan, when we extend it to cover the build. He said there would be setup fee for the extension. The extension process would take place after the land is settled. I told him that because of his miscommunication, I expect RAMS to waive this fee. He was quick to say that he is unable to offer this.

I told him he should at least speak to someone who can and then come back to me. He agreed and said he would...I'm not holding my breath.

There was one positive from this, we were exempt from paying the mortgage duty fees.

So, on the eve of settlement, actually, our settlement is Monday the 27th July, our solicitor told our lender it is tomorrow just in case we have any last minute problems. If there is, we could address these on Monday without incurring a late penalty fee from Landcom. Clever guy. So our solicitor after booking in a time for the title of ownership exchange a few days ago, has assured us he has all the paperwork ready. Once he receives our cheque (to cover the low valuation) tomorrow, he will complete the process.

...nice!

5 Days to Land Settlement

My phone rang. The amended repayment schedule documents were ready. Our lender drove directly to my husbands work and then mine for the required signatures.

Because our solicitor had the remaining parts of these documents, he was waiting on the amended documents to be sent to him so he could hand in the complete paperwork. It took longer than expected to receive the amended documents, so this was not possible. Our solicitor expressed concern to us and our lender that he (our lender rep) ensures the lenders solicitors were able to match up the two parts before handing it to the finance company. Our solicitor was driving to the required location this afternoon. This paperwork had to be handed in today.

I'm not sure why these documents still have it written that the upfront fees would be deducted from the total loan approved. We are adamant and have stated a number of times that we will pay these fees separately at time of settlement. We do not want to pay what would be interest accumulating on the addition of these fees. Who does? Our lender reassured us this was standard practice with all their settlement documents. We still had the option of paying for these fees separately on the settlement date.

We will watch this carefully.

Now, call it curiosity, but we decided after 'visiting' our block to have a quick look at an alternate builders display homes yesterday? We were impressed by a few of their designs, in particular, the great use of indoor and outdoor rooms to open up the house and give it an interesting appeal.


I'll let you know whether they pass the first step, can they build on our corner lot?

Jandson Homes

I wish we could say we are totally confident with our decision.

Yes, we like the home we chose. We only hope that the project to completion is run more effectively than the process taken to receive the final tender.

I'm all for the Free Site Tender offers builders use to generate interest, but this should not be at the expense of not receiving a well-prepared and accurate tender in a timely manner. It took four weeks before we were able to provide a final tender to our lender. In those last stages, I had to contact the estimator director and plead for drawings they were not going to provide because they thought the home we wanted did not fit according to the DRP guidelines. It pays to be stern and insist on the drawings so that you can contact directly the DRP to pursue your case. How many calls do you think the DRP receive from builders?

Can you imagine how I felt when after receiving a favourable response from the DRP and passing this new information to Jandson Homes, they said that because they have some key people away on leave, I would not receive my final tender for another two weeks! My original request had been received two weeks prior. As I wrote, their first tender was inaccurate, their second amended tender suggested a custom styled home which was not what we were after.

I don't know why but when someone says 'custom' to me, I shiver and always think 'how much?'

Our solicitor had told us to be wary of who we choose to build. We all remember companies like Beechwood Homes who not too long ago left many families locked out of their unfinished homes. A good question he advised to ask your builder is whether the initial payment required for the contract is held in a Trust. The comfort from this is in knowing that the deposit you pay goes towards the cost of your house and not to finance the general operations of the company. We did not get the answer we wanted when we asked Jandson, but while we haven't committed ourselves financially to our final tender, we will probably go ahead.

It comes down to trust and faith in the end. We hope they won't let us down.

So, we'll keep a close eye on our build. I know we all do, that's what's good about writing a journal, it can be read by others.

The Design Review Panel: Part 2 - Revisiting the setbacks.

After finally receiving a site plan with our first choice Jandson Home, the Odyssey 43, we contacted the DRP to re-discuss our dilemna.

Our excitement at buying a 740sqm block of land lost some of its shine when we found the choice of available homes to fit within the DRP guidelines was, limiting.

I'm not confident buying off-the-plan, I guess I'm more of a visual, touchy person. If a store dummy has on a complete outfit and my size is available, I will buy the entire ensemble. So too, when choosing a house. If I can visit and walk through a display home and we are both comfortable with it, then we are more confident to purchase what we see. It should be interesting when we go through the choosing colours and material phases, I simply like what I saw at Homeworld. My response when we reach this stage, "just build one that looks like that thanks, along with the front fence and the tall banana tree on the corner next to the dining room patio.

But our precious block of land was an odd-shaped block. So while we will have a decent backyard, we will have a sizeable front yard too because of the skewed front boundary. Trying to fit our first choice home within these setback guidelines was proving to be a real challenge.

After sending four emails to the Design Review Panel (DRP), one phone discussion with the DRP and a phone call to Blacktown City Council if they would consider moving the tree bay, I received three email replies re-stating guidelines, before I received a fourth email reply with the words

From the site plan and floor plans, I think this could be acceptable, subject to
all the other Guideline/DCP issues...

Of course, like many other home-builders at The Ponds, this is a balance of compromises between building a home we want that also fits in the guidelines. Add to this the pressure of completing the build and landscaping within the required two years to receive the $5K landscape rebate. A rebate already deducted from our lenders valuation on the land, so you can expect to see us on a daily basis out there in the yard wearing our new gumboots complete with new garden tools, digging and planting.

Sound like fun? We'll see.

8 Days to Land Settlement

I wrote below in the "Meeting our Solicitor" entry that we are waiting on an amendment to our settlement documents from the lender.

Our RAMS rep called to say this paperwork should be available this Monday. As we signed the bulk of the forms a few days ago in our solicitors office, we don't expect any dramas in simply signing this amendment to our repayment changes, and then handing it over to RAMS.

By the way, did I share with you that our RAMs rep happens to drive past our house when he goes to work and back? I'm not sure whether this is deliberate as our street is a good secondary street connecting Victoria Street and Carlingford Road. He mentioned this in his email response when I recontacted him two years after our initial meeting "he often thought of us over the two years when he drove past and wondered when we were going to be ready."

So we have taken advantage of this drive-by on occassions by using our mailbox as a pickup spot. If I want him to drop off anything like their free guide to Buying your First Home, which is not available in electronic form, or when he needs to pick up anything from us, our mailbox acts as the go-between. There is no need to schedule a suitable meeting time. Actually, this reminds me of the movie "The Lake House" where the characters played by Sandra Bullock and Keanu Reeves exchange messages via the same mailbox.

I wish I could say that my lender looks like Keanu.......I can't.

All I expect is that he is professional, honest and relatable. How will we know?

When we get what we want,of course.

First Home Plus - concession on duty for vacant land

The First Home Plus scheme provides eligible purchasers with concessions on how much stamp duty is owing when buying vacant land to build a home.

As we did not buy an existing home, a different stamp duty is calculated based on the value of the vacant land. In our case we saved a significant amount of money in paying duty on vacant land knowing that when we extend the loan to include the build of our home no further stamp duty is requred.

According to the OSR rules in NSW, there is no duty on vacant land valued up to $300,000. As our land purchase was higher than this, we had some concessions of duty to pay for vacant land purchased between $300,000 and $450,000.

Or solicitor sent us these forms to complete after exchanging on the contract. The forms can be found on the Office of State Revenue, NSW website htttp://www.osr.nsw.gov.au

We used the following formula found on the site to calculate the duty we would need to pay. Simply multiply your purchase price by 0.1049 and then subtract $31,470.

We handed this cheque made out to OSR to our solicitor to process on settlement. Settlement on Landcom properties are 30 days after exchanging the contract. This is a lot earlier than the normal 42 days.

The In-between Days

Also known as the calm-before-the-storm, or a 'breather' before the next lot of challenges.

Good time to review

1. budgets
2. updating calendar with important dates such as: settlement due date; tender expiry date; mortgage due dates etc.
3. research and add to favourite list, forums for useful tips related to any step of the process
4. update my blogs and
5. general housekeeping {and I'm not talking about washing the dishes :)}

I think it's time for a cuppa....

Preparing the application for the First Home Owners Grant

After completing a similar application for the Exemption of Stamp Duty, this was fairly straightforward.

As we were operating through an approved agent, RAMS, he only required the Category 1 proof of identity documents. Of course, just in case, we had certified copies for all the other categories.

For now, our lender has filed our application as he still needs from our solicitor the certified copy of the contract for the land signed by Landcom and the contract to build.

Of course, a contract to build will only happen after we receive an approval for the extension of the loan. We still have a valuation process on the tender to happen. I hope we don't have the problem we had when they valued the land for less than the purchase price!

We have 120 days to decide on the tender. As renters, we do not want to pay a mortgage on vacant land any longer than we need too.

So, we're waiting.

Meeting our solicitor

We were fortunate. My sister in-law had worked with a competent and trustworthy solicitor in a firm for 12 years, so he came highly recommended. We didn't bother looking for another for comparison.

He's fairly old school, a man with years of experience who seems to still enjoy doing what he does without the frills and hype. This suits us just fine, we're not frilly and fancy people either.

He has a very methodical approach in our meetings and is well paced in explaining what each documentation is and why it is included. He did confirm that when he and the sister-in-law worked together, they were 'punctilious' in handling their cases. Nice word, consider this the word of the day.

So far, he has gone through the land sales contract with us, we completed the Exemption from Stamp Duty paperwork for the OSR, handed over a nominal cheque to cover Stamp duty because our land cost more than $300K, and signed the large documentation of settlement and mortgage paperwork delivered by our lender.

We are waiting on one amendment to the lender documents that will still need to be inserted and once our solicitor works out all the Landcom rate fees and the 'gap' we have to pay by Thursady 22nd July to cover the valuation coming in lower than the purchase price, everything at this stage, looks good.

Because we received the build tender later than we liked, we will settle on the land first. D-day for us is Friday 24th July 2007.

According to our lender, we should be able to extend this land loan to cover the cost of the build. Our lender should be confirming this increase any day now.

I hope so.

Valuing Land based on Gift Incentives

My phone rang.

Hi Berny, its X from RAMS, your valuation came in below the purchase price because of the gifts/rebates?

What!

Okay, but so what? So what if there was an incentive by Landcom or Blacktown Council for people to buy land at The Ponds?

So, while we would have bought land without the Woolworths Gift Card Incentive or Landscape and Build Rebate, Yes they were nice incentives that made us purchase earlier rather than later.
What we didn't expect is that RAMS (WestPac) would value this land by looking at the purchase price and then taking away the Woolworths gift value of $5K and the Landscape/Build rebate of $5K. They said that the purchase price would have taken into account these rebates. The Sales Office at The Ponds said that wasn't the case.

So, RAMS recognises Woolworths cards as liquid monetary forms?

We look forward to paying our mortgage payments with the Woolworths gift card. Would that be payment by VISA, Mastercard? No, Woolworths? Gail Kelly seems to think so.

So, we were ready to put up a case to have this valuation reassessed. We even spoke to our solicitor as to how we could do it. Funny, he didn't seem to think it was an issue and even saw it from the banks perspective.

Huh? I thought you were our solicitor, not RAMS. Don't worry, I'll write a post about choosing a solicitor, next.

In the meantime, we are arguing with our RAMS rep. The gift and rebate are NOT gauranteed. If we exchanged after the Woolworths gift date expired, would they then be revaluing our land higher by $5K? If we don't build within 2 years of contract build date, we miss out on the landscape rebate? These are not guaranteed rebates. What the heck is this valuer thinking?

Blah blah blah. Stomp, stomp.

Well, I wish I could write that we were able to get another valuation that came in at either the purchase price or above. I can't.

We never pursued it in the end. We simply accepted that we were 'ripped off' and comforted ourselves with the knowledge that while we put pressure on ourselves to raise the difference by settlement, at least we will have a lower loan and some immediate equity.

I read a few days later on an online Australian Home Forum that some people who had experienced this valuation issue with their lenders at The Ponds were able to start a new application with another provider and achieved that higher valuation. Good on them I say.

Of course, I couldn't help but write an email to our RAMS Rep after reading the above post and chastise him for not thinking to do this. I dug the point in a little more when I said that the successful lender in the example was St George, who is owned by WestPac who also backs RAMS, so why the double standard?

Okay, enough said regarding our valuation experience.

While I read in this useful home forum that the Woolworths Gift card won't be available for collection until after settlement, we may still try and pay some of our future mortgages with our Woolworths card.

We'll let you know if we succeed or if in the end, whether we even bothered.

Choosing a lender

I had banked with CBA for 8 years and Bankwest for 2 years. My husband is a long-time customer of WestPac.

Yes, we asked what they could do. Two years ago most lenders seemed willing to lend up to 100% or in some cases 105%. We had no problem receiving an unconditional approval then.

Of course, things change. One guarantee, things always change.

We had also spoken back then with Aussie Home Loans, RAMS and an online lender, Rate Buster.

All of them had value.

It's funny how in the end, because I could only find an old email from the RAMS rep that I emailed this rep with a simple question, can we get a home loan? All he had to do was reply, confirming he was still working for RAMS and answer my question. Well, he did. And he said yes. After a few meetings in person and the fact he is on my speed dial, RAMS seemed as good as any to go through this home loan process all over again.

Of course, it was a comfort factor to hear after our decision was made that RAMS were named the Winner of the 2009 Money Magazines, Non-Bank Lender of the Year. We all remember a few years ago about the problem with low-doc loans and how RAMS were saved by WestPac when they were destined to become Australia's highest-profile casualties of the credit squeeze. A credit squeeze triggering what we are still experiencing today as another day during the 'worst global economic situation ever'.

So, what was next? After deciding to buy land, we requested a valuation. We weren't expecting any problems.

Choosing a Corner Designed House

Wow. We both liked instantly the look of the Jandson home on the corner at Homeworld.

Even better, they had house designs for either left or right access to the garage.

So, we accepted the free site tender offer a few weeks back by Jandson and because we weren't sure which of the Odyssey designs would fit on our Lot, we asked Jandson to recommend an Odyssey design that would best fit our piece of land. Of course, we did say our preference was for the Odyssey 43, advertised online as the 'flagship of the Jandson home design range'.

After two weeks, we picked up a hardcopy of the Odyssey 40 tender.

Flicking through the proposal, everything looked okay, so we looked at the site plan.

Hmmm.....why is the Odyssey 40 showing that the garage access is from Levy Crescent? And, where is the drawing of the tree bay which is shown in the contour plan on this tender site plan?

Obvious questions we thought.

Answer, Well the Odyssey 43 is too big and goes beyond the rear setback guideline. We also thought the tree bay could be removed?

I can feel a headache coming on.

The Design Review Panel - Part 1: Can you move the tree bay?

I wonder how many emails the Design Review Panel at The Ponds receive each day? Answer, far too many for them to handle and respond back to in a timely manner. I know.

So, after a nicely phrased response to my first email saying 'it is not possible' to relocate the tree bay, they did offer the following consideration....

"We would be willing to look at reducing "rear" setbacks, as there are really
two "sides" in this corner lot, as long as privacy, yard space, etc was all
ok."

Of course, prior to this statement, they had written earlier in the same email...

"It is often difficult to make a house designed for a standard lot "fit" successfully onto a corner. A good test is to look at the elevations that face each street and ask yourself if you would be happy if each was the "front" of your house. It must look interesting and be "articulated" with different elements to break up long flat walls. Unless the house is designed for a corner location, the outcome by 'tacking on' changes or additions can sometimes be not so good. The home you nominated will need some work to present well to the secondary frontage and express the corner".

So, while we were disappointed our Bellmarch home could not be built, we decided to go back to Homeworld and specifically look at corner designed homes. A corner home for a corner lot, sounds good.

I only hope these level of controls from the Design Review Panel are consistent and continue throughout the development of what is supposedly going to be a community of 3000 households.
Come to think of it, we hadn't seen any two-storey homes built or being constructed on corner lots at The Ponds? We saw the 'sold' signs on these corner lots, but very few had any activity.

I wonder, is there anything else we don't know?

Building on a Corner Lot at The Ponds

We paid the deposit for a site inspection and tender to Bellmarch.

Our email was filling up quite nicely with all this documentation from The Ponds. The contours, the inline plans showing that the land was expected to be registered anyday now. We noted some kind of comment about a tree bay on Levy Crescent which meant the garage would have to be on Stream Place, so we dutifully passed this onto Bellmarch.

Of course, we were curious as to why this fairly large lot (740sqm) was not sold already. We were told there was a deposit on the land but the finances fell through so the land was available again.

We didnt' think too much about it. We just thought we were 'lucky'.

Okay, so after a week (fairly fast turnaround), we received the tender from Bellmarch. It looked okay and then we looked at the drawings and wondered. Why is the house located with garage access from Levy Crescent? Didn't Bellmarch read my email about the tree bay being right in front what looks like a natural access to a garage?

Short answer, no. Their suggestion when it was pointed out to them. Well, it is a fairly odd shaped lot you have there, our home is primarily for a standard shaped lot. I know, how about we detach the garage?

We didn't let them continue. We want internal access to the garage. We do not want to carry bags, shopping etc. in the rain from the car to the house. Then came the question we began asking ourselves and to anyone and everyone with any contact to The Ponds.

Why were the trees planted on the streets before house plans are drawn? Why was there no consideration of where the trees were actually planted when it is obvious to everyone that it was blocking the natural access for a driveway? Why? Why? Why?

So after a rant to ourselves and The Ponds sales office, I thought it was time I wrote to the Design Review Panel. I had a simple request. I was simply going to ask them to relocate the tree bay a few meters......

Buy established? Buy to invest? Build? What?

We first looked at buying a house in 2007. Unconditional loans were quickly approved back then. With two strong, steady incomes, everything you could say was 'sweet' (as they say in NZ). We made a few attempts at viewing open homes on the weekends but couldn't find anything we both liked. However, we had visited Homeworld during our travels and agreed that IF we were to build, we would start with the Bellmarch 'Manhattan' home.

But, complacency set in, whether our 'do nothing' two years ago was a blessing in disguise, we're not sure, but we were surprised that even with my redundancy in late 2008, we were still in a position where we could buy a reasonable house according to our RAMs broker. Thanks to my husbands career.

So, we looked. We looked for 4 months. I went first and then dragged Mal and the kids with me all over Northern Suburbs, Northern beaches and as far as Berowra. After renting in Epping for 5 years we thought living nearer the Hornsby area would be a welcome relief to not paying the daily tolls for the M2 and Lane Cove tunnel when driving to North Sydney. Why is driving to work so expensive when you live on the Northern side?

Anyway, during one of our occasional visits to Homeworld, the rep at Bellmarch mentioned that if we wanted to build the Manhattan we should look at buying land at The Ponds.

Our instant reaction, 'Great! Now we can add the M7 tolls to the daily expenses'. We weren't too enthusiastic about living in the North West but we decided to drive to The Ponds, for a look.

We drove through Newbury and I remember seeing this as a new land development area a few years back. After driving in circles trying to find The Ponds Sales office, we didn't find it on that day. We did smile however when we drove past some newly built houses and saw couples with shovels in hand, spending their weekends planting, or laying new dirt in preparation for paving etc. I looked at Mal and said, that will be us if we decide to build here. Being a North Queenslander, he said he was more than ready to roll up his sleeves on what would be our 'own' piece of land. He was more curious as to whether I was up for it. I'm still wondering.

Okay, now I'm waffling.

After finally giving up the idea on buying an established home or a small unit in Dee Why...aahh the beach, I registered our interest to receive email updates from The Ponds office on the 22nd May.

On the 26th May I received my first update. The prices for the size of land blocks looked great. After looking at land and house options for a good 4 to 5 months now I felt comfortable with the asking price. Of course you would need to add the toll prices and travel time to the cost of living out west when you are working in North Sydney and the older son high school next year near Hyde Park in the city.

On the 28th May we put a deposit for a block of land in the IRIS release. Silly me, I thought they were like any sales office and open to negotiation. Why would they? There were dozens lined up behind you that wouldn't even ask. So, we paid the deposit and sent an email to Bellmarch to 'get ready' we were interested in a quote to build on our lot.

Oh dear!

What is all this stuff we received in the email from The Ponds about a Design Review Panel and certain guidelines and restrictions when building on corner lots?

What the heck is this?