I frequently have buyers looking at properties, particularly first home buyers, who when asked, comment that they don’t yet have their finances sorted. This is a perfect situation where using a Mortgage Broker or Advisor could be beneficial, but they may be unsure of how one works. A great Advisor can not only help you secure a mortgage, they can also save you money, time and stress by dealing with all the small details that can be overwhelming when trying to get that first or dream home. Stuart Dowie of Dowie Mortgages has advised clients for over 20 years. Having assisted well over a thousand clients with their home purchases, I asked him to help answer some of the questions that get asked about what Mortgage Advisors do and how they could help you.
So what exactly is a Mortgage Advisor?
A Mortgage Broker or Advisor is someone who acts independently of banks and other financial institutions. “We work with people who want finance, be that a first or fifth home buyer, an investor or those who haven’t had to deal with the bank for a long time. We then work with possible lenders to obtain a mortgage or other loans for them. Banks and other lending institutions have traditionally sold their own products, but as the market for mortgages has become more competitive, the role of the Mortgage Advisor has become more popular, especially in terms of sourcing finance packages best suited to each clients particular requirements. Currently in New Zealand and Australia up to 40% of mortgages are done through Advisors.”
Why should I use a Mortgage Advisor?
Navigating the maze of lenders and loan options can be daunting for anyone in the market for a mortgage. Clients across a wide spectrum will each see differing benefits in working with an advisor. Many clients who are more than capable of arranging their own finance might utilise the services of an Advisor, just to save time and money. Alternatively, being guided through the whole process can be particularly beneficial for first home buyers. As well as helping to secure finance, an Advisor will help make sure you get your loan structured to optimally suit your particular income and cash flow position. A common end goal is to assist in rapid loan reduction whilst retaining a fair degree of flexibility along the way. So, whether you are looking at getting into your first home, whether you’re upgrading, downsizing, refinancing, investing or re-fixing, an Advisor can help and it always pays to be able to access the right knowledge and advice.
How do I choose a Mortgage Advisor?
Choose a broker who may have been recommended and has the experience. “Relationship is key, so you need someone who you feel comfortable with, can communicate well with you and who you can trust. We will ensure that the interests of the client are paramount”. The Professional Advisers Association (PAA) Code of Ethics states that ‘an advisor will provide ongoing professional advice and service to the client, obey all rules governing business and/or professional activities and maintain a level of integrity expected of a professional’. “Confidentiality and privacy are of utmost importance for any client we work with”.
What should I expect when I meet with a Mortgage Advisor?
It’s all about you! You’ll often have more than one meeting with an Advisor, but generally, a first meeting will consist of getting together with your Advisor to chat about:
- your current situation, financial position, and what your objectives are
- who the applicants are for the loan
- what your current deposit/equity position is and whether there are any further options
- general information on income/savings/banking history
The Advisor will complete your application form, assemble all the necessary material in terms of documentation supporting the above, and in turn prepare your application and submit it to the appropriate lender.
A good advisor will give you confidence that they not only understand your situation but can help get you into the position you want to be in.
Why don’t I just negotiate with my bank?
Why limit yourself to just one option?
Any given lender may review your financial situation, but can only present options that they have on offer. And this may not be the best offer you can get. They may even turn you down.
A Mortgage Advisor has access to a wide range of lenders and options, as well as generally more knowledge of the best and most appropriate channels for any given application.
Then there is also all the time you would have to spend researching all the options like interest rates and fees from all the different lenders. An experienced Advisor knows this information already, so all you will have to do is make decisions on where to buy, what to buy, organise the move and your insurance etc.
How can they save me money?
An experienced mortgage broker will get the best home loan deal for you. They know what is being offered by all the banks and can work out which one will be the best to achieve your goals. Whether that is:
- paying off the loan as quickly as possible
- getting the best interest rates to reduce your repayments
- using a home loan to finance other purchases
- or making sure you get enough money for what you want to purchase
How can they save me time? And stress?
Applying for finance can be complicated and stressful. There is comparing what is on offer at each bank, reading the fine print, then going through the negotiation and application processes yourself. An experienced Mortgage Advisor knows all this already, as well as exactly what information a bank will need, and will make sure you get all that together before the loan application is made. Your Advisor can also help fill out the necessary paperwork for your loan application.
“You only get one chance to make a first impression, so make it the best application possible. Sometimes this may mean an Advisor will recommend you wait a month or two to make your case stronger for a positive outcome”.
Then there is also trying to work out legal jargon and making sure you aren’t missing any important information like interest rate increases, fees and other conditions. An Advisor will get this sorted for you too. Sometimes it’s great to be able to leave it to an expert!
What if I’ve been turned down? Can a Mortgage Advisor get me a loan?
It is possible. Sometimes people get turned down by a bank because of something in their financial history, because they don’t have all the records they need, are self-employed or credit impaired. These situations don’t have to hinder you but are perfect examples of where an Advisor can really be beneficial. They can assess your previous application and determine how this could be made into a positive result. Maybe a boarder is needed, or perhaps parents can help with a little extra deposit? “It is not unusual to be able to take an unhappy client and turn them into a happy client, often at the same bank. It is about making sure all required information is presented properly and credibly.”
How much does it cost?
Nothing! Not only does a Mortgage Advisor help you with all the steps towards your purchase, they don’t cost you anything. An Advisor is paid by the lender, with nothing extra charged to you.
So if you hadn’t already considered using a Mortgage Advisor this could just be the cherry on top.
Core Logic has just released the latest market statistics. Auckland prices have dropped by 0.6% with Waitakere City suffering the most at -2.2%, North Shore by 1.6% and Manukau -1.4% for the first time since April 2011.
If you are looking to buy this is a great opportunity to enter the market or look for that investment property. For those moving out of Auckland, Northland, Hawkes Bay and Southland are showing price increases but you can still move and be in a positive financial position.
If you have been toying with the idea of selling, click here to give Sheree a call or send an email to get your free, no obligation appraisal.
The latest Harcourts Property Focus has just been released - covering whether or not to downsize to a smaller home and why to choose to sell at auction. Chris Kennedy, Harcourts CEO, also talks about the misconception that auctions are only good in a hot sellers' market. It's not so, as regardless of the state of the market, an auction lets the market determine the value, ensuring the vendor gets the best possible price at the time. Pricing a property runs the risk of undervaluing it!
Read the whole issue below, and as always, if you are looking to buy or thinking of selling, get in touch with Sheree first for honest advice and top-notch service.
It's that time of the month again, and in a political environment where (at the time of writing) the results of the recent election are still to be announced just shy of a month later, the market is holding up remarkably well.
Chris Kennedy breaks down the national data below:
Although the number of properties for sale is up on the same time last year, it's interesting to note that the number of auctions is down 36.9%.
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Auckland Written Sales Year to Date
Auckland Property On Hand Year to Date
And of course, if you have any questions or want to discuss your property needs please call me, I'd love to help.
Mortgage Express has put together a useful list of tips for getting ready to borrow (and live with) the mortgage on your first home.
- Cut back on unnecessary spending
- Pretend you have a mortgage
- Do the maths
- Understand the property market
- Work with an expert
Read the full article here.
The benefits of having a team of professionals you trust can't be overstated - start your home ownership journey by contacting Sheree today!
If you aren't an experienced auction purchaser, it's invaluable to go into the process prepared and with some tricks up your sleeve to help you be the winner on the day.
Firstly, there are 5 important things to do before auction day so you are prepared to bid and win your property:
- Have a solicitor – it’s amazing how many bidders who buy at auction haven’t spoken with a solicitor about the property!
- Have your finance arranged
- Do your due diligence – have your solicitor look over the LIM and Title
- Get a builder’s report on the property
- Don’t leave anything to the last minute and get to the Open Homes in the first weekend if you can!
And on the day itself? Harcourts Auctioneer Aaron Davis has put his top tips for being a successful bidder into this video:
And of course, if you have any questions about auctions or want to be guided through the finding and purchase of a new home, contact Sheree!
Why do I give my personal details at an Open Home?
If you go to an Open Home you must sign the visitors' book giving your name, phone number, email address and sometimes your home address. There are 3 reasons for this:
- During an Open Home, the Vendor has no insurance on their property or possessions so it is a security requirement. If you refuse to give your details you can be refused entry to the Open Home and as we work for the Vendor the security of their property is very important to us.
- We also like to get your feedback on the property - particularly its presentation, and what you consider to be a fair value for it. This information is gathered and reported to the Vendors in a weekly report but who gives it is never identified.
- It's a record of who came to the open home and helps ensure the agent receives their fee if an attendee purchases the property.
It's important to note that we abide by the Privacy Act 1993 and the Unsolicited Electronic Messages Act 2007, meaning you have the right to know what information we gather about you, that we keep any information private and that we will not send you emails if you don't want us to.
So now you know why it's important to sign the visitors' book at an open home!
I frequently speak with buyers who are not only confused by the Auction process but often unsure or scared of it. As a result, they don’t consider looking at a property that is to be sold by auction.
I thought it would be good to clarify the process and answer some of the questions that I get asked as a Real Estate Salesperson.
Why are properties sold by auction?
The auction process is a public process. This means the sale is open in a public forum and nothing is hidden. It generally means an instantaneous sale for the Vendor.
Private negotiations are Tender, Price by Negotiation or Asking Price. This means a final sale price will generally only be known to the successful purchaser, whereas an auction is a cash sale. If you want to buy at auction you must have your finance, builder’s report, LIM and any other due diligence finalised before auction day.
A reserve price (the price at which the vendor is happy to sell) is set with the Auctioneer and Vendors prior to the auction. This figure is often decided on from the feedback of visitors to the Open Homes. (The reserve figure is also confidential and is never disclosed by the Auctioneer or the Vendors or Real Estate Salesperson.)
Therefore, what a property sells for at auction is determined on the day, by the market - those who are there on the day with the intention to buy and both buyer and vendor can be happy with the result.
What happens if there is an offer made before the auction?
If a buyer makes an offer to purchase the property before the auction that is acceptable to the vendor, the auction is brought forward. This must be within a minimum of 48 hours, including one working day, of the offer being accepted. This allows for any other interested parties to be notified by the Real Estate Salesperson, and give them the opportunity to bid if they so wish. The bidding at the auction then starts at the price which has been accepted by the vendor, and if there are no further bids it is sold. If there is more bidding by other buyers then the auction continues until it is sold to the highest bidder.
What if the property doesn’t sell on auction day?
If you are a buyer who cannot make a cash offer at auction, it is still a good idea to be at the auction of any property you wish to purchase. If it is "Passed In" (doesn’t sell) the property is then available to the “Conditional Market” - those buyers who can purchase on the condition their bank approves their mortgage application, or it may require a builder’s report, an LIM or a valuation. These conditions will have a certain number of working days in which they must be satisfied for the contract to become unconditional and, once they are, the property is considered SOLD.
So if you are a buyer who is “Conditional” don’t shy away from an auction as you could still become the lucky new owner. At the very least you will learn a lot about property value and can use this knowledge to help you purchase in the future.
Do I need to register to bid at an auction?
This is not required with Harcourts.
Do I need to be represented by a Real Estate Salesperson at an auction?
No, you don’t. But if you have come through the Open Homes prior to the auction, the Agent who is running the auction will help you and bid for you under your instructions if you aren’t comfortable doing it yourself.
What deposit do I need?
Generally, the deposit is 10% of the sale price and must be paid into the Real Estate Agency’s Trust account within 24 hours of the conclusion of the auction. Most buyers do this by bank transfer, but if you don’t have the 10% deposit available immediately we can complete a ’Variation of Deposit’ which is signed by you, and by the Vendor prior to the auction.
Can I change the settlement date?
Yes, we can complete a ‘Variation of settlement date’, again to be signed by both the Vendor and Purchaser prior to the auction.
The purchase of a new home can be a stressful process, so it's important you deal with an agent you trust to guide you through it. If you are looking to buy, give me a call or send me an email and I can help you find and secure the perfect place.
Are there rules around dealing with Real Estate Salespeople?
Yes! There are rules that Real Estate Salespeople must follow, regardless of the company they work for that govern the way the industry operates, and these rules affect you.
For example, as a buyer it’s always a good idea to find a Salesperson you like, trust and are happy to work with, and it's important you go with them to see any properties you are interested in - they can speak with salespeople from other companies and take you through their properties as well. We always ask that you meet us outside an Open Home and not go onto the property until we are there with you.
If a Salesperson sends you information on a property that it isn’t their listing, and you go to the Open Home without them, the Salesperson running the Open Home (often the listing agent) can claim you as their buyer. The Salesperson who you chose to work with initially can no longer deal with you on that property, and, if you end up purchasing it, the Open Home agent will be paid instead of the Salesperson who introduced you to the property in the first place.
So if you have a preferred Salesperson, always go with them to view properties you are interested in for the first time so you don't get stuck with a stranger!
If you're looking for a salesperson to guide you through finding and purchasing your new home, contact Sheree today.
The REINZ property report shows that although an average of 47 less houses per day were sold in August 2017 compared with August 2016, prices are not falling. Home owners are holding onto property unless they absolutely have to sell. The imminent election, Winter and the LVR changes have all conspired to slow the market and return it to a more normal market.Harcourts CEO Chris Kennedy breaks down the national sales data and explains the effect the election is already having on the real estate market.
National Overview - August 2017
Across New Zealand, new listings were down in August by over 21% compared to the previous year.
However, this is to be expected in the month leading up to an election, with listings generally down by around 20% before we go to the polls.
Sales were also down by 11% nationally compared to 2016, with the biggest drop in the central region of 20%.
Harcourts NZ CEO Chris Kennedy says he expects to see a recovery after the election, when speculation around the government is over.
“However, it is also undeniable that there has been a general slowing in the housing market across New Zealand, and particularly in Auckland, due to Reserve Bank restrictions and a sharp decline in the number of foreign buyers.”
Kennedy says there will not be a “crash” as low supply and high demand remain the main drivers of New Zealand’s property market.
Net immigration in the year to March 31 was close to 72,000, with construction of new houses not coming close to keeping up with demand.
Chief Executive Officer
Harcourts New Zealand
REINZ Head of Marketing Vanessa Taylor has just released her report on the New Zealand property market for August. There has been a fall Nationally of 17.5% in property listings which is not unusual in the lead up to an election and Winter.
What is interesting is the changes that have occurred in demand across the country and the areas which are now experiencing an increase which is also leading to an increase in price.
Harcourts CEO Chris Kennedy breaks down the national sales data and explains the effect the election is already having on the resl estate market.
As election day nears, sales are down across the country by 18%.
Harcourts CEO Chris Kennedy says it’s a time when many New Zealanders hold off on making important financial decisions, to see the lay of the land after election night.
“At Harcourts we traditionally see a dip in the number of new listings and sales in the weeks leading up to an election, as much as 20%. And then when the results are known and people are feeling secure again, listings return to their pre-election levels.
“To a lesser extent, the same phenomenon occurs in winter. People believe it’s a smart move to wait until the spring before selling and, resultantly, sales drop because there is less choice on the market.”
However, Kennedy says it is inarguable that the property market has dropped from the heights of 2015/16.
There are many reasons for an overall drop in sales. Investment has fallen off due to the Inland Revenue Department’s introduction of the bright-line rule, the Reserve Bank’s loan to value ratio restrictions, and foreign investors facing a more difficult task in transferring money out of their countries.
The good news is regardless of what happens during the election, our economy is thriving and business confidence is high. This is not going to change overnight.
“So, yes the property market has changed. Real estate goes through cycles and this is totally normal.
“Things have slowed, but that doesn’t mean there is going to be a crash. Just an adjustment in sales levels, prices and expectations.”
Chief Executive Officer
Harcourts New Zealand
National: Average sale price year to date
Auckland: Written sales year to date
This Sunday at 10.30am an immaculate family home on the edge of the Kaiwaka river is going to auction - and it will be sold!
On offer are 4 bedrooms, 2 bathrooms and just over a hectare of land on the edge of the Kaiwaka river.
Don't miss your chance to make this your lifestyle, and as always, conditional buyers are welcome!
Last year we saw restrictions placed on the purchasing of property by investors which required them to have a significantly larger deposit than previously. This occurred as the price of properties, particularly in Auckland, was increasing at a rate that was impossible for the first home buyer to compete (and investors were taking advantage of this). Meanwhile, the Government was trying to slow the market.
The Reserve Bank increased the deposit required from investors to purchase property and this finally slowed the investor market - we have now seen a definite slowing in sales as a result.
However, the market has continued to slow and this article discusses what steps may need to be taken to reverse this trend.
If you are wondering what is really happening in the New Zealand property market this article (Making Sense of it All - Nick Goodall, Senior Research Analyst, CoreLogic) will be a huge help. The media is publishing confusing and often conflicting “facts” about the real estate market and the direction in which it is heading. This has been of huge concern, in particular, to first home buyers, and, has in many cases, put them off continuing to achieve home ownership.
Nick Goodall from CoreLogic has just released the last figures showing the slowdown in the property market has now reached across the country except for Tauranga.
With uncertainty around the upcoming election and a reduction in mortgages being applied for through the banks, what this means for those wanting to buy their first home is really that if you can you should be buying now.
Winter is the best time to buy and if you find a property you like and can afford, go for it! None of us have a crystal ball and we can’t say what the market will be like in 3 or 6 months’ time.
362 Forest Hill Rd just sold - if you want to know how much for, give me a call on 021 883 275.
Sales are down and so are prices!
Harcourts CEO Chris Kennedy announced the average house price in Auckland is now $947,809, down 0.6% compared to May 2016.
While an average drop in prices is good news for buyers, it's not all bad news for sellers according to Kennedy:
"The new normal means that selling for top dollar is not as simple as listing your property anymore. Vendors need to work with expert sales consultants, be creative when looking at marketing platforms and realistic when it comes to price."
Read the full report here: