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.