How do property purchases work?
PROBIZ accountants have access to property purchases and may offer/introduce opportunities to their own clients for a commercial fee.
PROBIZ historically have not sold property solutions direct to the commercial market but have used third parties (like FNG Limited) to showcase projects to accountants only who in turn undertook their own professional due diligence (as any of their clients would expect) and offer their clients properties through endorsement. Many accountants have endorsed projects through brochures, websites and on stage at events.
FNG Ltd offers no investment advice but offers property consultancy and advice on geographical territory such as reasons buying in the EU zone, economic climate and amenities of projects. This usually takes place via a seminar showcase. Typically, clients utilising tax planning with their accountants have been encouraged by their accountant to consider such property investments.
For a commercial fee, accountants undertake their own due diligence and offer their clients/prospects properties through:
- Their own advice. This can be from Partners and managers of their firm.
- Seminars that they hold and pay for at a venue typically based near their offices. Accountants use their own staff to manage the venue and their clients on the day.
- FNG Ltd may assist the accountant in areas of due diligence but accountant is aware that purchasers are not FNG Ltd clients but remain clients of the accountant. Purchasers become contracted to developers and financial institutions such as banks if they receive funding for the property purchase and are not contracted to FNG Ltd or their accountant.
- Accountants undertaking their own due diligence to introduce their clients to properties, often purchase units when they believe they have spotted opportunities (typically for medium to long-term returns on investment). Their purchases often encourages their clients to purchase and often acts as an endorsement. FNG Ltd doesn't directly work with accountants' clients and therefore accountants are encouraged to fulfil most of the necessary consultancy as their clients trust their relationship with their accountant.
- Many accountants who have purchased properties have endorsed projects on stage in front of audiences as large as 400 independent accountants, which demonstrates that a significant number of professionals are endorsing projects at the time of sales. The endorsement typically covers valuations or guidance on sales purchase through lawyers and banks (assuming funding), quality of project and often based on having seen the project, communicated to bank managers, developers and lawyers.
- Accountants may receive marketing fees for introducing clients. The accountant receives a fee which is payable for the following typical work:
- Undertaking relevant due diligence.
- Arranging property seminars at the accountant's own cost and using their own staff for event management.
- Advising and consulting the client on the project after the seminar.
- Spelling out the risks to clients before clients engage.
- Stating facts on the project such as the amenities.
- Helping clients fill any relevant bank funding forms.
- Attending with client to sign bank forms or assisting in the arrangement of power of attorney.
- Visiting the property alongside their client or instead of their client.
- To check developer/purchaser contracts with their client before client signs.
- To consult clients of any changes to projects due to any changes in planning or development.
- Advising clients of foreign exchange if relevant, or directing clients to relevant experts.
- Purchaser remains client of accountant and once purchased becomes a client of the Developer, Bank (if they undertake funding) and lawyer they select or has been recommended, etc.
- Clients make their own decisions on bank funding but may seek assistance from their accountant, lawyer or any personnel from the bank before engaging.
- Clients sign the developer's paperwork with support from their lawyer and possibly seek advice from bank (if funded) or accountant.
- FNG Ltd role will be to give economics of the European Union. Outline the benefits of purchasing in specific countries. Showcase developments which PROBIZ do not own but have the rights to showcase (and at times the exclusive rights). Any images of developments are not created by FNG Limited, but are sourced from developer and their third parties.
- If a purchaser faces issues with financing and bought via a bank loan, then the client must typically seek advice from either the bank or appropriate lawyer.
- Issues with maintaining mortgage payments should be typically consulted with bank, lawyer or accountant.
- If purchaser has issues with the property then the client must seek advice from developer who has signed a contract with the purchaser.
- If investor doesn't wish to continue investment due to world economic crisis, financial challenges or for any other reason, then they should typically consult the developer, lawyer and the bank (if they have received finance).
- For advice and guidance on rentals there are plentiful local estate agents around developments showcased. FNG Limited can refer purchasers to agents.
- Purchasers are responsible for their own due diligence. They have access to the development via developers, support from lawyer and advice from bank if they are in the process of or have taken relevant funding.
- Payment to accountants acting as introducers/consultants.
- Such payments are typically made following purchaser's exchange of contracts. The accountant is being paid a fee for typical services shown above.
- A selected list of accountants acting as introducers per project may be provided for advice on the project.
Typically accountants are informing their clients of all the above information as they proceed with their own purchases, meaning they have done their due diligence for their own purchases.