Page 52 - Smart Money

Chapter 2

no more 100% loans. They might think that they can get $3,000 if they
are a first home buyer, but that may not be true.

The worst outcome of these kinds of mistakes is that you lose the
property. You put an offer in and get all excited, and think you are going
to get it, and when we can’t get the finance you become disheartened.
If you had come to us first, we could have advised you and you wouldn’t
have wasted time putting in an offer. Another possible outcome is having
to go to an alternate lender because you haven’t got enough deposit, or
don’t fit the bank’s policy.

On the eastern seaboard, auctions are the popular way to buy property,
and with auctions, generally you’ve got to have your finance sorted before
you go. You bid on the day, and if you win the bid and buy the property
and you can’t come up with the money, you can be sued. So really, with
an auction, you need to talk to the bank, use the equity in your home, and
get a line of credit so that you have the money sitting there ready to pay
for it. A lot of people don’t realise that an auction is like a cash offer, and
they also don’t realise that you have to pay a 10, 20 or 30% deposit on the
day. You need to have access to those funds straight away.

You need to get pre-approval before you fall in love with a house,
otherwise the loan could be declined. Banks can take up to 28
days to process your application, so you need to give yourself
enough time for the process to go smoothly.

Making an offer

When you are ready to make an offer, talk to a real estate agent, assuming
that you have already spoken to a broker and have a pre-approval in place.
The real estate agent will take your offer to the owners of the property
to see if they are happy with the price and the times for finance and
settlement dates. If there are any requirements that the buyers have put
in the contract, such as a particular item is to stay, they also make sure
that the sellers are happy with the added conditions. If they are not happy

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