Chapter News

When the bank says no!

By Nick Viner – Buyers Domain

Buyer’s Domain Principal Nick Viner works with clients who are time-poor professionals looking to buy investment properties or family homes in the Inner West, Eastern Suburbs and North Shore with budgets from $500,000 to $4,000,000. Mr Viner shares his experience on the difficult elements of a sale when it falls short of success.

I recently worked for some clients who had been looking for a family home in the Inner West for nearly three years. My client’s budget was approximately $900,000 and, as you can imagine, with the market changing considerably in the last three years that was a difficult brief.

I felt it was vital for my clients to identify their actual needs before I began their brief. It emerged that space, yard and an outdoor lifestyle was paramount. For their budget, this was no longer achievable in the Inner West so I suggested a number of other areas, one of which was Baulkham Hills. Within just 4 weeks, I helped my clients secure a three-bedroom family home with lock up garage and a swimming pool in Baulkham Hills. The price was just $800,000. However, there were further challenges along the way.

An unreliable third party

As my clients were relying on finance, I liaised with their mortgage broker to ensure that an unconditional loan approval could be obtained within the cooling-off period. I had spent a significant amount of time analysing the comparable sales and was stunned when the first bank valuation came in at $33,000 less than the purchase price.

Unfortunately, my clients’ mortgage broker had left to go overseas without telling anyone and her assistant was out of her depth.

It was clear that because of my clients’ financial position, they could no longer proceed with the purchase unless the bank valuation came in at the purchase price.

First, I set out a detailed email disputing the original valuation for the broker’s assistant to forward to the bank. Then I recommended that my clients speak to another broker to arrange an alternative source of finance.

After liaising with my clients’ solicitor and then asking the selling agent to extend the cooling off period – twice! – the second valuation came in at the purchase price. On the same day the finance was approved unconditionally by the second lender, the original bank overturned the first valuation.

The fact that the original bank valuation did not support the purchase price was a shock. The absence of the mortgage broker at such a crucial time made things very difficult.

Communication was instrumental in completing this transaction. Good communication with my clients enabled me to steer them away from their original target area to another part of Sydney. Good communication with my clients’ solicitor, the selling agent and the banks ultimately kept the deal on track.