Browse Forums Building A New House 1 May 22, 2012 2:31 pm Hi All, One of those days today and im a bit confused about the whole process as i am a first home buyer. I have paid a part deposit with S1monds and with the real estate for a particular design and land I signed land contracts a month ago subject to finance with remainder deposit due in 4 weeks. The conveyancer called today to say that the remainder of the deposit was due today and that i need my finance formally approved before doing so. I called the mortgage broker and he said the finance cant be approved until the building contracts are signed and did i know the date of the land being titled (which i was told by the real estate was still unknown). I then spoke to the conveyancer again to say that the mortgage lender hadn't formalised my loan and she said i needed to put through an extension with them. So i guess my question is does all that sound normal? Regards, Matt Re: help, deposits / contracts / drawings / broker 2May 22, 2012 2:34 pm heya - it sounds quite normal to me as i had to repeatedly seek extensions on my block. my situation was similar, i had paid around oct last year on the land and they wanted the finance within 60 days. that wasnt possible seeing as how my partner had to wait 6 months in her job to be elegible for finance. we kept seeking extensions until i think april this year so about 7 months in total. the developer happily obliged as the land was not even titled yet (still isnt) we got our formal approval in april. Oct 10 - Council Approval Oct 23 - Site scrape Oct 29 - Footings and Prelay OCT 30 - Slabbed Nov 6 - Bricks Delivered Nov 13 - Brickwork started Re: help, deposits / contracts / drawings / broker 3May 22, 2012 3:00 pm mattowen Hi All, One of those days today and im a bit confused about the whole process as i am a first home buyer. I have paid a part deposit with S1monds and with the real estate for a particular design and land I signed land contracts a month ago subject to finance with remainder deposit due in 4 weeks. The conveyancer called today to say that the remainder of the deposit was due today and that i need my finance formally approved before doing so. I called the mortgage broker and he said the finance cant be approved until the building contracts are signed and did i know the date of the land being titled (which i was told by the real estate was still unknown). I then spoke to the conveyancer again to say that the mortgage lender hadn't formalised my loan and she said i needed to put through an extension with them. So i guess my question is does all that sound normal? Regards, Matt A) You only need to sign the build contract - there shouldn't be a need for the land itself to be titled in order to sign the build contract. B) It is correct that the bank wont give finance approval just on land alone - the build contract needs to be signed. C) This process should be relatively easy, but only having a 4 week time frame to get contracts drawn up and signed for the build doesn't leave much margin for error (if any) so the vendor should be willing to include a "subject-to-finance" clause in the land sale contract (this is a common thing in new home builds). The subject-to-finance clause will protect your deposit as long as you have made all reasonable efforts to obtain conditional approval for finance from a lender (which the broker will have done for you) and can supply an anticipated date upon which the finance application should be formally approved by the lender (this will be based on the anticipated date of contract signing for the build). Considering that the land hasn't even titled and there's no firm date for when it will title yet it's a bit rich to expect unconditional finance at your end so soon, so not having it should not prevent you from paying the remainder of the deposit (as long as the land sale is subject to finance as discussed above). Having said that I'd be lighting a fire under s1monds to get those contracts drawn up and signed ASAP... Some people apparently have nothing better to do than comment on other people's sigs. Re: help, deposits / contracts / drawings / broker 4May 22, 2012 3:12 pm Im not in any position to give advice but thought I might just contribute what we have done. We needed to obtain full finance approval for the land which is due to title in the next few weeks, the build contract was no where in sight (Builders dragging their feet). We have obtained full finance approval on the land and conditional approval on the build (the condition being they need the fixed price build contract to provide a formal approval for the build) effectively we will have to obtain formal approval twice but it means that we have the finance approval for the land sorted and ready for when the land titles. From the date the land loan was approved we have 90 days to accept the loan offer and sign the paperwork however the paperwork can not be drawn up until the land titles, if we go over the 90 days we just have to update the bank and they will extend it for us. We went through a fantastic mortgage broker and this was the best way she could see for us to do it as the developers set a date we needed to provide finance approval by. Re: help, deposits / contracts / drawings / broker 5May 24, 2012 6:54 pm mattowen Hi All, One of those days today and im a bit confused about the whole process as i am a first home buyer. I have paid a part deposit with S1monds and with the real estate for a particular design and land I signed land contracts a month ago subject to finance with remainder deposit due in 4 weeks. The conveyancer called today to say that the remainder of the deposit was due today and that i need my finance formally approved before doing so. I called the mortgage broker and he said the finance cant be approved until the building contracts are signed and did i know the date of the land being titled (which i was told by the real estate was still unknown). I then spoke to the conveyancer again to say that the mortgage lender hadn't formalised my loan and she said i needed to put through an extension with them. So i guess my question is does all that sound normal? Regards, Matt i think that's normal as we were on the same predicament. Our bank wouldn't give our formal approval until we have our building contract signed. we already paid our initial dep , plus the remaining 5% and has requested for an extension on our land loan approval date as our building contract signing is slated first week of june. i just got a message from my conveyancer and the builder has done the extension and I have spoken to my lender and advised her that I will bring the signed building contracts once completed and she said valuation shouldn't take long, normally a week. Re: help, deposits / contracts / drawings / broker 6May 25, 2012 12:34 am At this stage, we are still waiting our build plan/contracts being finalised / signed, then we can have our loan approved and paid. Seems everyone are going similar way. Re: help, deposits / contracts / drawings / broker 7May 25, 2012 8:12 am oh man , sounds like your settlement date (where you give the majority of your deposit) is too close! we asked the developer what the latest day we could settle and she give us 2 months. in that time, plans were drawn up, colour selections were made, HIA building contract was signed, finances put through for approval then settlement (which is today for us!~). we went through the conveyancer and broker that our builder had already have relationships with so they communicated beautifully between themselves and us. it sounds quite stressful for you! hope all these information helps. the developer required a certain date to have financial approval prior to settlement as well, we had our date extended and it was no biggie. becareful, if you don't settle on the date that it states on your contract, you may need to pay late fees and loose out on any incentive offers given to you by the developer. (ie 10k off your land price etc) Thanks. I called VBA today and they said it was a Consumer Affairs issue, the old handball. Seems like the government organisations don't want to do their job at the moment. 2 7573 Broker here - legislation says that every true broker must put the clients best interests before theirs so in theory they must offer you the best options for you on their… 2 46019 Thanks very much! And would the landscaper/contractor generally involve the engineer or is that something the client would do? Thanks for your help 2 10036 |