A Rawson Finance knock and drop flyer lists ten reasons why a prospective homebuyer should work with a bond originator such as themselves (and a further four reasons why the buyer should let them pre-qualify him).
One of the most powerful arguments for dealing with an originator, says Rob Lawrence, national manager of Rawson Finance, is that listed as number three in their publicity '“ here Rawsons undertake to 'liaise with banks throughout the procedure and to keep the client updated and informed of the process'
'Just how vital this service is,' says Lawrence, 'is not appreciated by a high percentage of applicants. As a result they all too often lose a home that would have been a good buy for them'
Typically, says Lawrence, the bond applicant will find a home he likes and through his agent put in an offer which is subject to his getting a bond. He will then be asked if he wants a bond originator to assist with his application but will often decline this in favour of dealing directly with an organisation with which he has established ties '“ in most cases his bank '“ to whom he will then submit his application directly.
He might then discover that the format in which he has made his application is not acceptable, that more information needs to be given, and that he has to do it again. Quite often, the second application will also have to be revised, but at the end of the two or three week process, the bond might still be declined.
By now, the one month clause in the sale agreement in which he has committed to get his bond, is near expiry '“ so he goes in desperation to a bond originator who tells him that there is now too little time to get a bond within the allotted time.
When the expiry date comes up, says Lawrence, the buyer may apply for a time extension '“ but the seller has by then often received another equally acceptable offer and he will seize his chance to escape the first deal.
When DIY bond seekers do succeed in getting a bond, says Lawrence, it is also often not at the most competitive rates because the lender may be aware that this is the only being application made.
'The great advantages of working with an originator,' he said, 'are that he will only try the banks where he knows that this particular applicant will meet the specific criteria required. Because he works with all of the banks, he knows what each wants (they all have different priorities and criteria). It can happen an applicant might not meet his own banks criteria, but will qualify at one of the others.
Quite often, he says, the DIY operator, after having his first application at his own bank rejected, gives up all further effort to get a bond and thereby loses a property for which he might have got a bond elsewhere.
Those South Africans who live and work overseas, said Lawrence, are finding it especially difficult to get bonds but, again, an experienced originator can often make a difference.
'Self employed people also frequently have problems: they may find that, although they can prove turnover, they cannot prove profit because their accounts are kept in an amateurish way or not at all. A good originator will help the applicant overcome this difficulty, if necessary not only advising on drawing up professional financial statements but also by having a qualified accountant verify the profit statement'
When trying to buy a sectional title unit, said Lawrence, it is essential to present the bank with the body corporates annual accounts and possibly such extras as the outstanding levies on each unit and the time they have not been paid.
'Trustees and managing agents will only give those to an owner so the buyer will have to work through him. Again, however, an experienced originator will know this and will make his request to the owner well in time'
Quite apart from the fact that the go-it-alone applicant is likely to be less successful than the bond originator, says Lawrence, the time he spends on his quest can be damaging to his work.
'As a bond originators services are free to the client (as they are paid by the bank), it makes little sense not to use them'
For further information contact Rob Lawrence on 021 658 7100 or email rob@rawsonfinance.co.za.
