Selling 2 blocks

[MTR]

Not sure what section to place under, here goes.

I will be splitting 2 blocks, currently with WA Planning, will be selling both.

The real estate agent mentioned it would need to be cash offer, as it would be difficult for anyone to get finance and this is what normally happens. It would be suggest to titles being issues which could take 3 months?

Anyone familiar with this?? Never really thought about it, but I guess people would pay cash, the blocks will be around $450K each so it would not be FHB market so they would possibly access the equity from their homes.

I was just concerned that this may limit my market when selling??

Cheers
MTR

 

[westminster]

That doesn't sounds right to me.

I would stipulate that they can have a finance clause if they wish but settlement is '21 days after titles are issued'

I have purchased this way before and not been cash and all ok

 

[westminster]

Oh I know - the difficulty is that a finance approval only lasts for 90 days

However just market when things are closer so that their finance approval doesn't run out before Settlement

 

[MTR]

However, I have seen many properties/blocks that get sold this way, prior to demolishing property and subject to titles.

Also for anyone else going down this road in WA, this is what my surveyor stated with regards to timeframes:

Timeframes for titles post subdivision approval depends on how quickly you satisfy the conditions of the subdivision approval. The next part of the process doesn?t really have much to do with the WAPC more so Local Government, Western Power & Water Corp.

 

[Tano]

Oh I know - the difficulty is that a finance approval only lasts for 90 days

However just market when things are closer so that their finance approval doesn't run out before Settlement

If your >90 days out to titles then could you prepare a plan of subdivision instead and generally will banks accept this? The bank can value and approve subject to titles being issued

 

[Brady]

Not sure about WA but happens all the time in SA.

'Settlement to occur 14 days after deposit plan is lodged'

 

[westminster]

If your >90 days out to titles then could you prepare a plan of subdivision instead and generally will banks accept this? The bank can value and approve subject to titles being issued

They can and do however if there is more than 90 between them (the bank) approving this (ie unconditional finance approval) and settlement then the approval will expire.

It really isn't the seller's problem but is something to be aware off.

 

[MTR]

Thanks all, food for thought

 

[paulie]

MTR

I sell blocks all the time well before the house is demolished, and titles are issued. Some times as option contracts, sometimes as a normal O&A contract.

You can enter a contract to sell anytime, you can only settle once titles are issued.

Market isn't limited to cash only buyers, although buyers do need to be aware they may have to reapply for finance if the settlement is going to happen well after 90 days as previously mentioned.

 

[MTR]

MTR

I sell blocks all the time well before the house is demolished, and titles are issued. Some times as option contracts, sometimes as a normal O&A contract.

You can enter a contract to sell anytime, you can only settle once titles are issued.

Market isn't limited to cash only buyers, although buyers do need to be aware they may have to reapply for finance if the settlement is going to happen well after 90 days as previously mentioned.

Thanks Paulie for this info.
Also, thinking that if the house was demolished the potential buyers could have a better idea and perhaps easier to sell. However, it is comforting to have an offer on the table.

Cheers
MTR

 

[tobe]

90 days is pretty flexible too.

Some lenders have a longer timeframe, sometimes if the borrowing is less than 80% the approval can be extended without too much fuss.

For some lenders the 90 day clock starts ticking from formal approval, with others its on receipt of signed mortgage docs, so the timeframe can be extended artificially by another month or so.

I doubt the estate agent had this as his reason for asking for cash offers. Its more likely he doesnt want to muck around with 'subject to' offers.

Selling 'plan of sub' is quite common for new estates, or greenfield sites, perhaps this agent hasnt had much experience in it in your area?

 

[paulie]

Thanks Paulie for this info.
Also, thinking that if the house was demolished the potential buyers could have a better idea and perhaps easier to sell. However, it is comforting to have an offer on the table.

Cheers
MTR

I agree, buyer's do tend to visualise better and therefore, as an agent i get alot more inquiry once the House has been demolished, however it usually all comes down to the price versus the market demand at the.

Also I find copter photographer works wonders, and you can blank out the existing house, see attached.

 

[paulie]

attached this time

 

[MTR]

Thanks Paulie
Yes, I like this, it is very effective, good to view what's around. What does this sort of thing cost???

cheers
MTR

 

[MTR]

90 days is pretty flexible too.

Some lenders have a longer timeframe, sometimes if the borrowing is less than 80% the approval can be extended without too much fuss.

For some lenders the 90 day clock starts ticking from formal approval, with others its on receipt of signed mortgage docs, so the timeframe can be extended artificially by another month or so.

I doubt the estate agent had this as his reason for asking for cash offers. Its more likely he doesnt want to muck around with 'subject to' offers.

Selling 'plan of sub' is quite common for new estates, or greenfield sites, perhaps this agent hasnt had much experience in it in your area?

Hi tobe
Not a new estate, this is an established area.
This re agent is very experienced in all this and surrounding areas.
I need to have another chat about this.

Cheers
MTR

 

[mflying]

MTR,

as others said contract will have "14 or 21 days after registration of DP"

And


from buyer point of view, if they signed the mortgage documents, loan will be conditional to that clause too... (i dont think 90 days approval rule applies there... but i am not MB.. so MB may want to confirm)

 

[paulie]

Thanks Paulie
Yes, I like this, it is very effective, good to view what's around. What does this sort of thing cost???

cheers
MTR

Only around the $230 mark - talk to Hia from Coptercam - 0409 122 179

 

[paulie]

MTR,

as others said contract will have "14 or 21 days after registration of DP"

And


from buyer point of view, if they signed the mortgage documents, loan will be conditional to that clause too... (i dont think 90 days approval rule applies there... but i am not MB.. so MB may want to confirm)

Hi MTR

Not sure what you are reffering to as DP (Deposited Plan, Development Plan??) either way, that will not cover you properly if you're entering into O&A contracts for the sale of the proposed blocks.

What you need to do, or have your agent do, is write the settlement date clause as;

" 28 days after Finance Approval, or 14 days after the Issue of Title, whichever date is latest".

This gives you the Seller maximum flexibility and protection if / when something goes wrong with the processes required to get to the new titles and settlement.

To get a property sub divided, and the successful issue of new titles you are dealing with Government departments, pretty much all the government departments, Local council, WAPC, Landgate, western Power, Water Corp, Health Department, so expect loads of red tape, job sharing, people on holidays, lost communications, un motivated workforce = delays.

 

[MTR]

Hi MTR

Not sure what you are reffering to as DP (Deposited Plan, Development Plan??) either way, that will not cover you properly if you're entering into O&A contracts for the sale of the proposed blocks.

What you need to do, or have your agent do, is write the settlement date clause as;

" 28 days after Finance Approval, or 14 days after the Issue of Title, whichever date is latest".

This gives you the Seller maximum flexibility and protection if / when something goes wrong with the processes required to get to the new titles and settlement.


To get a property sub divided, and the successful issue of new titles you are dealing with Government departments, pretty much all the government departments, Local council, WAPC, Landgate, western Power, Water Corp, Health Department, so expect loads of red tape, job sharing, people on holidays, lost communications, un motivated workforce = delays.

Thanks Paulie
I do expect some red tape, been down this recently for my 3 villa development. This information has been very useful.

Basically would like to have the blocks under contract and settle when the titles come in. Though I think the market is now changing, damn it.
Have you noticed this?? or is it winter?

 

[paulie]

Thanks Paulie
I do expect some red tape, been down this recently for my 3 villa development. This information has been very useful.

Basically would like to have the blocks under contract and settle when the titles come in. Though I think the market is now changing, damn it.
Have you noticed this?? or is it winter?

Market has softened a little in general, still good turn over levels, but not rampant price growth, and as usual it is a two tiered economy in Perth.

Anything under $500k is struggling a bit, the higher end of the market being plus $600k and especially over the Million's is doing rather well.

Of course individual suburbs have there own micro economies of supply and demand, which suburb's are you selling into?