FUND BUILD MANAGE
Building on Partnerships since 1977
YOUR GUIDE TO BUYING HOUSE & LAND A LIFESTYLE, NOT JUST A HOME
AT PINDAN, OUR REPUTATION FOR DEVELOPING AND BUILDING HIGH QUALITY DEVELOPMENTS IS SECOND TO NONE
Buying a new home can be challenging, however not if you have the right partner. For over 40 years we have built foundations based on our ethos – Building on Partnerships. Together we will help you navigate the process to home ownership. This guide is intended to provide answers to the most frequently asked questions during the home buying process.
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CONTENTS BUILDING ON PARTNERSHIPS – PARTNER
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WITH PINDAN COMMON TERMS IN THE PURCHASING
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PROCESS FIRST HOME BUYERS
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TIPS FOR SORTING OUT YOUR FINANCES
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KEYSTART
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PURCHASING AS A FOREIGNER
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SETTLEMENT
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THE SETTLEMENT PROCESS
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PINDAN AWARDS & ACHIEVEMENTS
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BUILDING ON PARTNERSHIPS OVER 40 YEARS OF EXCELLENCE At Pindan, we have been delivering excellence in construction for over 40 years. Today, our integrated property group’s expertise to FUND BUILD MANAGE property Australia wide, has a deserved reputation for solid results. In operation since 1977, and still directed today by our founding partners, Pindan has withstood the test of time to emerge as a market leader. A top performer from inception, our focus on conservative growth and diversification translates into stability and security for all who rely on us. Pindan offers a comprehensive range of services including funds management, development, design and construction, development management, asset management, project marketing and sales across multiple property sectors.
Solutions-driven and approachable, our loyal staff foster warm relationships with our clients, resulting in a consistent team throughout every project. Coupled with our flat, streamlined structure, our clients enjoy efficient decision making and timely resolutions along the way. Building on Partnerships is an ethos that has seen Pindan grow with our personal and collective commitment to get the job done. It sets Pindan apart and empowers us to FUND BUILD MANAGE property seamlessly for our partners. It is the reason why our clients choose us time and again, safe in the knowledge that we truly embody
In order to best serve our clients, our operations span Australia-wide from our head office in Perth to our 7 regional offices throughout Western Australia and state offices in Sydney and Brisbane.
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COMMON TERMS IN THE PURCHASING PROCESS The Deposit
Local government rates
The deposit is calculated as a percentage of the property’s total purchase price. Typically, you will need a 5-20% deposit, however this can depend on a range of factors, including your income and whether or not you have a guarantor, in which case you may be able to get away with a smaller deposit.
Like all residential property you will need to pay council rates and water rates.
It can take a long time to save your deposit, so it is important to understand this term early on in the buying process. When purchasing a house & land package, typically a deposit of 10% of the land price is required within 7 days from acceptance of the contract by the Seller.
Legal fees There may be legal fees associated with assisting you in the purchase and transfer/settlement process. These typically sit between $1000-$2000.
Stamp duty This is paid by the purchaser to the State Government and is based on a sliding scale depending on the purchase price of the property. There are also some stamp duty concessions available for eligible first home buyers. Information on your respective State Government fee scales can be found online or from your selling or settlement agent.
Settlement adjustments At settlement there may be some adjustments to be made, including rates and land tax liability. The settlement statement will set out the adjustments that need to be paid at settlement. This will be arranged by your settlement agent.
Lenders Mortgage Insurance (LMI) LMI is insurance imposed by the mortgage lender should you be unable to provide a 20% deposit. Lenders Mortgage Insurance protects the lender should you fail to make your home loan repayments. It is important to note that LMI is designed to protect the mortgage lender, and mortgage protection insurance is a different insurance which protects you, the borrower.
Guarantor Many lenders allow a family member to help you to buy your own home by providing additional security. The person providing this assistance is known as a guarantor. If you cannot offer the required deposit, a guarantor can be your solution by offering that extra security – usually the guarantor’s existing home equity on their property will represent this security. A guarantor is not expected to make any repayments on your loan, but if something was to happen to the borrower, the lender will turn to the guarantor to make the repayments.
Bank fees Most purchases will require a mortgage and your banking institution will have bank fees and charges. Depending on how much you need to borrow, there may be lenders mortgage insurance you have to pay for too. Discuss with your bank or mortgage broker the relevant fees and charges and in particular, if you need to borrow more than 80% of the property’s value, ask what the Mortgage Insurance charges are and the circumstance requiring this additional insurance.
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FIRST HOME BUYERS WHAT IS THE FIRST HOME OWNERS GRANT (FHOG)?
HOME BUYERS ASSISTANCE ACCOUNT
The First Home Owner Grant (FHOG) is a WA State Government initiative to help first home owners to purchase their new first home sooner. The FHOG is a one-off payment that aims to encourage first home buyers into the market. As it currently stands, the FHOG is only available to first time buyers of a newly built property and is not available for the purchase of an established property. Eligible first home buyers who are purchasing or building a new home with a total value less than $750,000 may apply for the $10,000 grant.
First home buyers who meet a select criteria are also eligible to receive a grant from the Home Buyers Assistance Account, a grant of $2,000 which reimburses some of the incidental expenses incurred through purchasing a home.
If you are eligible for the FHOG, a concessional first home owner rate of duty will apply if the value of the dutiable property is below certain thresholds. When you claim a stamp duty concession for land, you apply the concession rate to the dutiable value of the property.
These expenses include things like; • Mortgage registration fees • Settlement fees • Inspection fees • Loan establishment fees • Mortgage insurance premiums • Lending institution fees For more information visit www.commerce.wa.gov.au
For more information visit www.finance.wa.gov.au
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TIPS FOR SORTING OUT YOUR FINANCES GETTING YOUR FINANCES IN ORDER IS AN IMPORTANT PART OF THE PROPERTY BUYING JOURNEY You need to make sure you have a good idea of what you can afford, what kind of loan you can get and how you will manage the ongoing costs associated with owning your own home. Navigating the financial component of owning property can be daunting, so it’s a good idea to seek professional advice.
Q: How soon before buying a house should you start getting your finances in order? A: It’s never too early to start getting your finances in order. When it comes to buying a house, as soon as the idea pops into your head, it’s a great idea to touch base with a mortgage broker or lending institution. This way you can discuss your potential borrowing capacity, which will help establish your maximum budget as well as any deposits required so you can prepare your savings plan. Pre-approvals are valid for three months so once you have your deposit and are ready to actively start looking at houses, this would be the time to lodge the pre-approval application.
Q: When sorting out your finances to buy your first property, where is the best place to start? A: It starts with getting a better understanding of your financial position. Have an informal discussion with a mortgage broker or lending institution around your potential borrowing capacity, maximum budget and required deposits as early as possible. During this initial discussion you can tailor a savings plan towards your deposit requirement. If you need to increase your borrowing capacity, the broker can advise if any existing credit facilities need to be repaid and closed off before applying for the housing loan.
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KEYSTART An initiative of the Western Australian Government, Keystart was established in 1989 to provide lowdeposit home loans to Western Australians unable to meet the deposit requirements of mainstream lenders. To date, Keystart has helped more than 100,000 WA households realise their home ownership dream. All Keystart loans have lower entry costs, a low deposit requirement, no lender’s mortgage insurance and no monthly account keeping fees, all of which can save you thousands. • Get into your own home sooner with a deposit from as low as 2% • No saving history required. • You can use your first home owners grant (FHOG) towards your deposit if you decide to build a new home. • No lender’s mortgage insurance. For more information, or to find out whether you qualify for a Keystart loan, visit www.keystart.com.au
Q: What are some common mistakes first home buyers make when it comes to organising finances?
Q: What are your top three tips for getting your finances sorted in preparation for buying a house?
1.
First home buyers often have a purchase price in mind which may not reflect their actual maximum borrowing capacity. You should discuss your borrowing capacity well before you get to this point to eliminate any surprises.
1.
Start depositing the approximate amount of your proposed mortgage repayments plus other expenses into a savings account. This will help you manage your budget and achieve the 5% genuine savings deposit that is generally required when purchasing your first home.
2.
Many first home buyers aren’t aware of all the options that might be available to them to help them get into a home sooner. There are a range of Government initiatives available, including the First Home Owners Grant as well as lending opportunities through institutions like Keystart to help those with little or no deposit to purchase their own home.
2.
Do your homework on the type of purchase scenario to best suit your situation. Each purchase scenario comes with its own set of pros and cons.
3.
If you know the area you want to live in, a good idea is to rent a home there first to understand the cost of living and associated expenses of the area as it can differ place to place depending on local rates and travel costs to and from work/ schools. Importantly, it provides you with good insight into the location before locking yourself into an area that may not suit you in the long-term.
3.
It’s quite common for first home buyers to be gifted funds or perhaps they may sell an asset such as a car in order to cover their required deposit. There are certain criteria that must be met when it comes to the deposit requirement and the criteria may vary depending on each individual scenario. This is something that can be discussed in the initial informal discussion with your mortgage broker.
4. First home buyers often ignore their protection needs, so it’s important to not only be able to afford to service your loan and keep your house, but to also be able to do it in the event of any accidents, illness or injury. FUND BUILD MANAGE | 11
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PURCHASING AS A FOREIGNER Foreign Investment Review Board (FIRB) A Federal board that examines proposals from foreigners wanting to invest in Australia. There are FIRB rules that apply to residential real estate sales in Australia. The Australian Government’s policy is to ensure foreign investment in residential real estate increases supply and is not speculative. It aims to channel foreign investment into the housing sector to increase supply of new housing and benefits to the local building industry and its suppliers.
Things to consider: • Foreign non-residents or short-term visa holders can invest if the investment adds to Housing stock (i.e. new dwellings, off-the-plan or vacant land) • Non-residents cannot buy established dwellings as homes or investments • Temporary Residents can purchase a dwelling after approval, but it must be used as their residence in Australia
General rules • All foreign non-residents are required to notify FIRB for approval of any proposals to acquire residential real estate in Australia • All temporary residents are also required to notify FIRB for approval of any purchases in real estate. A temporary resident is one that resides in Australia and: Holds a temporary residential visa Has submitted an application for Permanent Residency (PR) and holds a bridging visa • Fines apply if you need approval and do not apply for it • FIRB applications can be completed online with a fee payable at the time of the application.
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SETTLEMENT WHAT IS SETTLEMENT? Property settlement is the legal and official process when ownership of the property is transferred from the seller to you, the buyer. Generally there is a settlement period which gives you time to organise your finance, paperwork and everything you need to settle the transaction. When the settlement date comes around, the whole property transaction officially ‘settles’. At the time of purchase you will be required to select a settlement agent (also commonly referred to as a conveyancer) who will manage the settlement process for you. You may already have a settlement agent chosen or your sales agent may be able to provide a recommendation.
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THE SETTLEMENT PROCESS THE SETTLEMENT PROCESS CAN SOUND SOMEWHAT DAUNTING IF YOU DON’T UNDERSTAND WHAT IT ENTAILS.
With the right preparation and knowledge, settlement day is something to look forward to, as it marks the start of the next chapter in your life. As soon as practical after entering into the contract, if not done at the time of entering into the contract, please advise Pindan Realty whom you wish to nominate as your settlement agent/solicitor to act on your behalf at settlement. Pindan Realty will forward them the original contract along with instructions for their action. Please note, your settlement agent/solicitor is required to lodge the original contract with the Department of State Revenue for assessment of duty within two months from the contract date. Failure to do so may result in a late lodgement penalty fine being raised by the Department. For house & land purchases, the first step is to settle on your land. The settlement process is made up of three steps – Valuation, Pre-settlement and Settlement.
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1.
Approximately 2 to 3 months prior to completion At this stage it is important to organise your finances and provide the contract of sale to your mortgage broker. Often the mortgage broker will also require a receipt for the deposit paid when the contract was signed, a floor plan of the property and a rental estimate (if relevant).
2.
Approximately 2 months prior to completion After arranging your finance it will be time to notify your settlement agent/ solicitor. You will need to advise them how you will be providing funds for the settlement of your property. If you do not reside in Australia, if you’re travelling overseas, or if it will be difficult to contact you during this time, please speak to your settlement agent/ solicitor about appointing an Enduring Power of Attorney and the legal requirements involved with this.
3.
Approximately 1 month prior to completion
SETTLEMENT NOTIFICATION The time period between receiving the notification to settle your property and the actual settlement date is dependent upon your contract of sale and will vary across different properties. The seller’s settlement agent/solicitor will send a notification to your settlement agent/solicitor once titles have been issued. At this point, your settlement agent/solicitor should contact you, or the person advised to act on your behalf, and your bank to book in a settlement date.
WHO ATTENDS THE SETTLEMENT? Generally, in Western Australia the process is facilitated by the following people: • A representative from the buyer’s settlement agent • A representative from the seller’s settlement agent • A representative from the buyer’s lender • A representative from the seller’s lender Usually the buyer and seller themselves don’t attend – instead, their settlement agents act on their behalf.
Before your finance is approved your bank may require a valuation on the property, depending on the property and your financial situation.
4.
Approximately 3 weeks before settlement You will be notified once the application for titles has been submitted for house & land purchases “off the plan”. Pursuant to your contract, you are required to settle on the land according to the time agreed in your contract, typically 10 business days. If you have purchased land after titles have already issued, then pursuant to your contract settlement is typically due from 21-42 days after the contract date.
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PINDAN AWARDS & ACHIEVEMENTS National Award for Best Multi-Units/ Apartments in Australia 2013, 2007
National award for Best Commercial Building in Australia
Best Multi-Units/ Apartments 2018, 2017, 2014, 2013, 2010, 2009, 2007, 2006, 2005, 2004, 2003
Best High/Medium Density Development 2015, 2009, 2005
Best Commercial Building
Best Historic Restoration/Renovation
2019, 2018, 2016, 2015, 2014
2015, 2009
Best Commercial Alterations/Additions
Best Aged Care Facility
2015
Best Office Building 2019, 2018
2019, 2011, 2008, 2007
2019, 2017, 2016, 2012, 2009
Best Regional Project
Best Education Building
2019, 2018
2018
Asset Management Information Management 2018
Best Industrial Building
Ric New Rising Star
2019
2018
Indigenous Apprentice of the Year 2018
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The Pindan Group is a leading Australian national property group that provides fully integrated property solutions Australia wide under its three core business streams FUND BUILD MANAGE.
#1
#1
LARGEST MULTI-UNIT BUILDER IN WA & TOP TEN LARGEST IN AUSTRALIA
LARGEST SEMIDETACHED DWELLING BUILDER IN WA & TOP TEN LARGEST IN AUSTRALIA
TOP 10
TOP 40
LARGEST HOME BUILDER IN WA & TOP 40 LARGEST IN AUSTRALIA
LARGEST NON-RESIDENTIAL CONSTRUCTION COMPANY IN AUSTRALIA
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Perth 191 Great Eastern Highway Belmont, WA 6104 T +61 (08) 9471 5300 pindan@pindan.com.au Sydney Level 13 1 Castlereagh Street Sydney, NSW 2000 T +61 (02) 9247 3222 info@pindancapital.com Brisbane 3/9 Cordelia Street South Brisbane, QLD 4101 T +61 (08) 9471 5300 pindan@pindan.com.au
Pindan does not give any warranty for any error or omission contained within this brochure, which is subject to change. The brochure is a general guide only. The information and images are intended as an introduction to apartment buying and is general in nature, not financial advice. You must rely on you own inquiries and seek professional advice from a qualified advisor, if required.
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