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Real Estate Agents and ‘the truth’

Some people regard real estate agents as a pack of liars and a proposal before parliament which would require real estate agents to tell the truth about properties they’re marketing might just formalise that thinking.

What’s more it would appear the REINZ are against the proposals saying changes to the status quo could open the floodgates to complaints. Now that’s a good look!

Personally I don’t see what the REINZ’s problem is. In my experience most real estate agents will substantiate any aspect of a property before telling you about it and if they don’t know the answer to any specific question, will go find out for you. Don’t believe me? Fair enough. I did say ‘most’ real estate agents not ‘every’ real estate agent!

The reality is this – as a prospective buyer the onus is on you to check out the property and make sure you’re happy with every aspect of it before committing 100% to the purchase. Remember what you learned in 5th form economics – caveat emptor. Don’t rely solely on what the real estate agent says. Even if they are a decent bloke their interests are not the same as yours and you need to make your own enquiries.

Things to check can include

  • Price – consider getting a registered valuation. Yes, it’s an expense but at least it’s an independent opinion. The bank may require one anyway.
  • Property title – Who else has an interest in the property? What kind of tenure is it?
  • The construction – what sort of shape are the buildings in?
  • Council records – is the building permitted, consented? Where do the drains go? Are there any specific restrictions imposed on the site?
  • Collateral – will the bank accept the property as collateral for your loan?

 

Doing these checks could save you from buying a lemon. For that reason we tend to favour sales which are conducted ‘by negotiation’ because they give you the opportunity to make an offer subject to checking the place out. Then if the checks don’t stack up you’ve got a legitimate exit.

 

Mortgage advice

Two interesting scenarios have come across our desks in the last 10 days and I hope they demonstrate to you why you would use the go2guys as your mortgage broker over the DIY approach.

In the first case we suggested to a couple that they tidy up a handful of things (especially their account conduct) before we  bothered to approach a bank on their behalf even though there were some real strengths to their position, not the least of which was a great level of income. The basic problem was they were clearly spending willy nilly and living outside their means. One of them was particularly forthright and decided to totally ignore our advice and approach their bank directly. I heard about the result through a friend of theirs (also a client). Yep, you guessed it – an embarrassing decline. What’s worse, we know that lender is a really good fit for them once they’d tidied themselves up. But they’ve blown their chances in the short term.

In the second case a prospective client had been recommended to us from a friend (again, the friend was a client) and after a quick look at the situation we determined that the current bank was not the right lender for what they wanted to do as they didn’t meet that bank’s lending criteria. Despite our advice the prospect felt stongly that their established 15 year banking relationship demonstrated loyalty and that that loyalty would ‘surely’ be rewarded with an approval. It wasn’t. .

I mention these examples not because I want to say ‘I told you so’ but because they’re a demonstration of the value we provide in helping you get the best mortgage available. We’re trying to give you as many aces as possible so that when your application lands on the credit manager’s desk they can see you’ve got a winning hand.

Although most people think the best mortgage deal comes down to interest rate and various loan features the reality is that the interest rate on offer doesn’t make a skerrick of difference if you can’t get the loan approved in the first place.

Talk to us – we deliver!

You don’t need 5% deposit to buy an apartment…

Buying an apartment sure has it’s attractions. They’re generally well located in the centre of a city which makes them handy to work, entertainment and shopping. The other beauty is that there aren’t any lawns to mow or gardens to take care of. Plus they have security features and privacy a regular house doesn’t always have.

And then there’s the price! As a prospective first home buyer you won’t have failed to notice how much cheaper an apartment is relative to a standard house in a similar location or on the city fringe. So when you hear banks like Westpac and ASB are lending 95% of the purchase price, an apartment seems immediately within your reach. All of a sudden that $15,000 you’ve saved up is a deposit on a pretty cool apartment. Or is it?

At the time of writing banks will usually require you to have a minimum deposit of 20% to buy an apartment mainly due to the historic volatility of apartment prices. By requiring a minimum of 20% deposit, banks give themselves a margin of safety should anything go wrong. So it’s totally true you don’t need a 5% deposit to buy an apartment…the reality is you actually need a bit more.

But fear not, this shouldn’t mean the end of your property search or home ownership aspirations. Maybe a change of tack is required (remember banks are keen to lend 95% on a regular house in most of the cities) or a little more time to save a bit more. Why not call us to discuss your options?

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