Earliest Terms Contract "Wrap" in Australia

[Robert]

Hi everyone, I thought I'd share with you something which I saw yesterday.

I had a meeting at the Raine and Horne head office yesterday about a few other ventures rather then wraps. And here I am walking down the hallway in their office and what do I see...

A framed and well preserved poster hanging on thier walls selling blocks of land at Bellevue Hills (Eastern Suburbs of Sydney) via "Terms Contract" dated August 1904.

The previously earliest "Terms Contract" or more commonly known in Australia now as Wraps was 1914 as far as I knew it. But this poster puts wraps back by another 10 years.

So in effect Aussies have been doing wraps for nearly a full century, not to bad since our country is only 214 years old.

Regards
Robert

 

[Mike]

Hi Robert,

As I understand it, a Terms Contract simply specifies the terms of payment and the interest which is to be paid by the buyer. If the vendor owned the land outright and, therefore, no first mortgage existed, then the sale was not a wrap sale. A terms sale can only be called a wrap sale if the land is already mortgaged.

We know vendor finance and Terms Contracts have been around for a while but I doubt that they have been used to create a wrap as we know it today. I think wraps is a relatively new concept. The main things that distinguishes it from the transaction you referred to are: a modern wrap involves the transaction of a residential dwelling, the property is already mortgaged, and the vendor is looking to do multiple transactions as a business to produce business income aka cash flow.

So, to say that "Aussies have been doing wraps for nearly a full century" is a big leap, don't you think?

Regards, Mike