Working with brokers: why it works
In all industries, experience counts. When it comes to mortgage broking and dealing with the biggest financial transaction a person will make, having the knowledge that enables you to anticipate the challenges your clients will face is what really stands out from the crowd.
Trev Shand of Loan Market Bendigo is a mortgage broker who can do just that: recognise the risks and address them before it’s too late.
“I was working with a client who was applying for a 97 per cent loan against an established home. 97 per cent lending is a very tight, high-risk space. It means the borrower has a very low deposit and there’s no room error,” Trev explains.
The client Trev was working with was negotiating to purchase a property through Ray White Bendigo. He told Trev that the house was in a great location however it needed some work.
“As soon as I heard the property needed work I immediately knew we’d run into valuation issues. The first thing that came to mind was order an upfront valuation to avoid any shortfalls.”
The valuation came back on value, however, it held a high risk rating for two reasons: there was a broken cement sheet at back of property which raised the risk of ‘potential of asbestos’ and the house was deemed uninhabitable due to not having a kitchen sink installed.
“The vendors had begun renovations but had not finished the kitchen, hence why there was no sink installed. I never knew a house needed a sink to be deemed habitable. If this valuation was ordered by the bank directly, the deal would have been declined on the spot and I don’t think you could recover it,” Trev explains.
Trev contacted the local agent from Ray White Bendigo and explained the situation, it was agreed that the vendor would replace the broken cement and install a kitchen sink.
“The works were done within a week and I was able to order a second valuation. The risk rating was back to normal and the house became liveable, all because of a because of a sink,’ Trev said.
The amended valuation was sent on to the bank and Trev’s client was approved for his loan. He purchased the property and both purchaser and vendor walked away happy.
“My client was impressed because we got him approved for a 97 per cent loan in the first place. He was a savvy borrower and he understood the risks - he appreciated that what we did what had to be done. He walked away a very happy customer,” Trev said.