Welcome to this week’s ponderings….
Amazing! People are still doing things without getting approval…
At times we need some extra space and proceed to convert garages into bedrooms commonly called store rooms, build a garden shed over the sewer easement or install a roof over the patio for better use of the space. Very often that is done without the necessary local authority approvals much to the chagrin of incoming buyers let alone the scope of stress it can cause owners if not handled properly.
Those situations can, of course, be fairly easily remedied by negotiating through it, removing the offending items and/or simply applying through the right channels for the necessary approvals.
In most cases like the above and because situations like that are preempted, they often come with no surprises. As a result, the stress levels involved can be fairly moderate and manageable.
However, not necessarily so with finance approvals. This stage of your sell process can cause lots of angst!
Waiting for finance approval usually takes longer than the build and pest phase by at least a week and in many cases two weeks or more before final decisions by lenders are given.
As a seller, you will know the suspense of waiting.
Some sellers, rightly or wrongly, will move forward arranging many next steps in anticipation and hope of things proceeding. Then, wham! No approval, contract falls over and the seller is left with having to rearrange and start all over again along with the grief and stress of shattered plans.
The impact of this can be minimized by agents educating buyers as to the value of such efforts beforehand by knowing not only their limitations, but also what they can actually buy.
Yes correct, it is not as bad as getting your foot cut off or worse, but it is all relative to the situation(s).
For some, it is heartbreaking and can often be due to lack of finance preapprovals being arranged by the buyer before entering a contract and, in my experience, buyers knowing that they can’t proceed beforehand can be clarified before you as seller even know of the buyer.
That, I believe, is far better than getting everyone’s hopes up in the first place – no false promises, no false hopes and thus avoiding any unnecessary stress.
With the recent royal commissions into banks and financial services, things have tightened severely, and people are finding they can’t actually get the money they previously were led to believe they could.
(In case you missed it last week, see the article repeated below)
Currently things are very different indeed.
For example, I was recently told by an owner whose contract fell over that the agency involved had a spate of more than 12 falling over due to finance!
Heavens, you would think that after the first one or two and especially in the current climate, lessons would have been learned. But apparently not – all 12+ had verbal approval only.
In my mind and more than ever before, it is now time to insist on written evidence of finance pre-approval before writing up a contract. This still will not guarantee finance because as you know, that same pre-approval can go astray due to valuations and other unknown matters not stacking up for the buyer, but at least as a seller, you will give yourself a better opportunity at fulfilling your plans.
Approval or No Approval, that is the question and I believe it is your right as a seller to know.
Until next time, Happy, Listing, Selling and Fulfilling Your Wishes!
PS As an aside, some unscrupulous agents may use the “falling over due to finance” as a way of getting you to reduce your price – be wary of this behaviour.