Hi all,
I am looking at selling my property as a vendor finance option, i currently have somebody interested. Is there someone who could shed some light on the pros and cons for this, and any other information i need to know, from who to get contratcs for this, do you use an accountant for all the weekly mortgage figures or can you do this yourself.
Any help would be greatly appreciated.
Regards
Jaster
It is a fairly simple calculation so i would be doing it myself using a simple Excel spreadsheet.
Just need to bear in mind that post July 1 2010 you now need to be Licensed or an Accredited Rerpresentative of someone who is Licensed to offer such a product.
Richard Taylor | Australia's leading private lender
Richard,
Thanks for that. Could you let me know how you get licensed, or are there other ways to do this, Can my investing property company get the advice off someone and pay someone who is licensed to do this for me. And any websites that may help give me more information.
Also i have been doing some research and found the following info on a lawyers website,
Does this appear to be true and correct.
Engaging in a credit activity is restricted to a person who does so as a business – one-off credit
activities are not subject to the National Credit Act, and so no Australian Credit Licence is needed
to be held where one-off credit is provided. Therefore a one-off sale with an Instalment Contract or
a Second Mortgage does not require an Australian Credit Licence. Note that ‘one-off’ should not be
taken literally – it is possible to enter into more than one Instalment Contract or Second Mortgage
without needing to hold a licence – the test is whether you engaging in credit activities, that is to
say, are you carrying on credit activities as a business
.
Hi jaster12
Yes the new Act does have provisions that allow one off credit transactions for individuals such as yourself. However the "gotcha" is that the setup and on going running of the transaction still has to be as per the requirements of the new National Credit Code (NCC).
I suggest you find a Registered or Licenced ACL holder to undertake the due diligence of potential buyers (and establish the required "paper trail"), ensure the Instalment Contract is structured correctly and can administer the resulting loan in accordance with NCC requirements. We usually use a short JV agreement when to get this done.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Paul,
Thanks for that,
Do you know of anyone who can help in this regards and what there fees are worth to set this up.JAson
(JAster )
[email protected]Hi Jason
Setting up this type of arrangement is something we're doing all the time. We usually set it up so that our costs are added to the selling price, i.e. it's a no cost process for you. Thanks.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Paul,
Are the costs weekly or one off payment.. Can it be done in a way that you just do the initial set up etc and thats all.
Regards
JasonAlso i believe the buyer can use the first home owners grant.
What sort of deposit do you usually ask for, i was looking at 10%, though this buyer has stated they may not be able to do this.
Regards
Sorry i mean the buyer may not be able to come up with ten percent. Are you able to give me a break down of what you believe will be the set up.
The house will be sold at $340,000.
On a 30 year contract.
I was thinking of a 1.5percent increase in interest, is this the standard or is it higher or lower.Hi Jason
As we are getting into the nitty gritty of the specific numbers for your property, it may be easier to give me a cala.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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