Recently we got the following email from a broker who’d been approached by one of our vendor finance purchasers, to 'refinance' them into a traditional home loan. The Broker’s Email "Hi Karen, I hope you are well … Just hoping that you may be able to help me, we have received an application from Roger [...]
Read MoreNot that I’m a developer but I’m told two, time critical parts of a residential development’s sales process are: Presales, and Sales of slow moving ‘end stock’. Presales usually need to be in place to allow a project’s finance to be approved and an unsold handful of ‘units’ can hold back a developer from starting [...]
Read MoreWhat is Vendor Finance? Vendor Finance occurs where the Seller (Vendor) helps the Buyer to purchase the property by allowing a proportion of the price to be paid off over time; Traditional home loan lenders are not normally involved in a Vendor Finance transaction until the buyers build up some equity in the property and [...]
Read MoreYou may have noticed in the media recently, even the big players in the home lending industry have been running foul of the Responsible Lending requirements of the National Credit Code. ASIC is obviously in the mood to show just how important Responsible Lending is. Here are four Responsible Lending requirements you need to cover [...]
Read MoreKaren & I have been to many investment and property seminars and almost all have suggested to build a team of experts around you before you start. The team of suggested experts often looks like the following: Accountant Lawyer Mortgage Broker Independent Valuer Contractors such as plumbers, painters, cleaners, pest controllers Property Manager But how [...]
Read MoreWe regularly receive calls looking for help with all types of Vendor Finance issues. Recently quite a few questions have come up, after studying old vendor finance educational material and have come as a bit of a shock. The Focus was Different Back Then These questions have highlighted just how much our Industry has changed [...]
Read MoreBack in the ‘naughties’ (the 2000’s), budding vendor financiers were encouraged to become ‘transaction engineers’. The ‘transaction engineering’ plan went: The vendor financier finds a prospective seller, i.e. a seller interested in selling their property with vendor finance, and; Enters into a joint venture with the seller to find a vendor finance buyer and structure [...]
Read MoreThe sale of a home is of huge importance to both the Seller and the Buyer, with all involved hopping for a smooth process. The traditional sales method is a well defined, relatively fast process. Normally it doesn’t have the same level of challenges experienced by longer term, vendor finance sales arrangements. How could we [...]
Read MoreRecently we heard from an experienced Vendor Financier regarding the frustration they’ve experienced around unscrupulous sellers (vendors) attempting to renege on vendor finance sales. Why Would They Do It? Our immediate reaction to that question is ‘greed’. We too have witnessed this appalling proof of what a few people will do when the ‘greed gland’ [...]
Read MoreConsumer Affairs Victoria is currently undertaking the Consumer Property Law Review. This review has consisted of three Issues Papers, with submissions to the third Paper closing on 13 May 2016. Thirty-one submissions were made. Twenty-seven of which were public submissions that were released last Friday. What Does This Have To Do With Vendor Finance? As [...]
Read MoreIn the last VFI News I outlined my thoughts on the future of the Rent To Buy in the consumer/residential property marketplace. It boiled down to; ‘The authorities/regulators are not going to continue to allow unregulated consumer home buying arrangements and, as a consequence, Rent To Buys will either become regulated by the National Credit [...]
Read MoreVendor Financiers have for years been proud of the flexibility offered when selling vendor financed residential property to home buyers. Considering the general level of financial literacy in the community, is this quiet assurance that we’re doing the right thing, misplaced? It’s been an interesting insight helping Karen in Vendor Finance Management for all these [...]
Read MoreWe recently had a Mortgage Broker ask how we, as Vendor Financiers, could assist his clients. On the basis that an example is often more effective at putting across an idea, I wrote: Hi Xxxxxx Thanks for your email. For clarity, let me give you an example: Tom, a Financial Planner, was the last finance [...]
Read MoreIt has been awhile since we last looked at common mistakes to avoid when using Vendor Finance to sell a property. While our Industry has settled down considerably since the introduction of the National Credit Code in 2010, a couple of years is a long time in the world of finance. Let’s have a look at [...]
Read MoreI forget who it was that originally suggested the following idea to me. An idea to try to defuse conflicts between individuals or different groups with opposing ideas. It went something like; ‘If both sides take immovable, opposing positions, nothing gets done. Instead it was suggested both groups. figuratively walk around the “Wall” and look [...]
Read MoreIt’s no secret that I’ve never been a fan of Lease/Options (Rent To Buys) but sometimes I wish I had something similar. Less Protection for the Purchasers From the Purchasers’ point of view, I’ve never been able to understand why home buyers are protected by the National Consumer Credit Protection Act when they buy their [...]
Read MoreDuring the recent round of FBAA Vendor Finance Meetings we asked attendees for ‘Discussion Points’ to help build the Vendor Finance Best Practice Policy. The response was great and discussions ranged far and wide. As we all know, ‘the Authorities’ have been keeping a pretty close eye on our Industry of late. It always helps [...]
Read MoreWhen you’re putting together a Vendor Finance transaction you need to oversee the following transaction modules: Marketing Application Qualification Instructing a lawyer Possession Administration An Earlier Workload Reduction Awhile back we could see the Administration task taking up way too much time, so we outsourced this module to Vendor Finance Management. The time we got [...]
Read MoreSince the Finance Brokers Association of Australia (FBAA) made a decision to represent vendor financiers and, more recently, since the first round of FBAA Vendor Finance Meetings, there has been a resurgence in interest in the Vendor Finance Industry. Hence this issue of VFI News. An issue dedicated to those new comers to our great [...]
Read MoreWe first started administering Instalment Contracts back in 2003. The trouble was, we were using a program that used the ‘American’ system of calculating loan interest, instead of using the Australian method of calculating home loan interest. How Does the ‘American’ System Work? Very generally, the ‘American’(read USA) system starts by looking at your loan [...]
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