Weekly wrap - Friday 28th August
Queensland Ray White Awards
We were lucky enough to celebrate with Queensland Ray White on Thursday night at their virtual awards. A huge congratulation and shout out to them! For the 29th year in a row, they've taken out number one in Queensland. It's such a dynasty they have created. We've been very fortunate, over the 10 years we have had our business, to spend a lot of time and grow with a number of the Ray White businesses in particular, so it was really nice to see everyone together across the state, and celebrating what's been quite a turbulent year.
Top tips on preparing your application to optimise banks timelines
We want to talk about the things that are holding up some of the banks at the moment. Why are things taking so long? We've spoken a lot about timelines, and the processing time that is still in play with the banks at the moment. We used to think that 7 - 14 days wouldn't be a problem, when some banks are literally at 20 plus days just to pick-up a file, let alone do an assessment and get everything carried out.
We want to share with you a couple of things that might help in that process.
- Think credit files
They have become more and more relevant with comprehensive credit reporting; services like Afterpay and ZipPay, and all these little things that just pop up in the background, or you may think are maybe not relevant. From a bank's point of view, if client’sdon’t mention those upfront, and the assessor finds any of those in their accounts, it is considered undisclosed debt. Not that there has been any intention to have left that out, but something this little is viewed very poorly from the banks side, and can affect your application. And even when we overcome that, we then go back to the back of the queue again after waiting, potentially, two or three weeks for that application to be picked up, to provide additional documents and wait for approval. So it really can slow things down.
- Check out ABNs
Another tip regarding credit files is around ABNs. Especially this time of year, which is incredibly relevant. You could have an old dormant ABN. It could be something that is a little bit of a side hustle, which is pretty common in today's world. And you maybe don't have an accountant, or you haven't done a tax return on that for the last year or two. Those actions have a huge flow-on effect for an application, because as soon as an ABN, or a directorship, or some sort of ownership in those entities come up on those credit files again, the banks are asking all sorts of questions, and want verification about that ABN. Liabilities may beattached, so you may want to provide a letter from an accountant to confirm that it is not the case.
- Have a chat with your broker before you get on with your project
One of the things that we will do, as a business and as a broker, is get a copy of your credit files upfront, and walk you through it. Understanding the number of inquiries that may be on a credit file becomes incredibly important in terms of responsible lending. You may think that we ask a lot of questions but it's our role to ask them, because if your application goes in, and those questions come up without us having the answer, then we're back to the back of the queue again.
It means that you spend 80 to 90% of your time with us, your broker, and 10 to 20% with the bank at the end. But that's where the value is, because all the “i”s are dotted and the “t”s are crossed, and everything's checked.
A large majority of banks unfortunately at the moment have pulled back from doing pre-approvals. So our insight as your broker will help you secure a loan. We give you leverage in a heated market. There are two things you can negotiate on when purchasing a property. First is terms, and second is price. If you've got favorable terms, a pre-approval, shorter finance clauses, if you're organised, then you have a little bit more movement when it comes to price.
Here lies the benefit of working with the broker: understanding your position first, bank last. At the moment, stock is a little bit shorter, so there is a lot more competition around. Therefore, we have got to make that offer as attractive as possible, and get you in the driver's seat when it comes to negotiating and making offers.
So reach out as early as you can, ideally before you even consider making an offer.