There are two types of buyers out there – serious buyers and tyre-kickers. I’m going to show you a little trick you can use to turn some of those wannabes into genuine prospects.
Unfortunately, my trick won’t work for compulsive teases – the ones who are tyre-kickers by choice – but it will help you with buyers who are forced to be tyre-kickers because they’re struggling to get finance.
My trick is to remember three numbers you can share with these buyers:
• 3.44
• 3.99
• 51.5
Intrigued? Let me explain.
3.44%
The next time you encounter a buyer who’s struggling to get finance with one of the big banks, ask them if they know they can get a variable home loan for as little as 3.44 per cent.
The big banks are market leaders, not price leaders. By contrast, there are several challenger lenders that are currently offering some of the cheapest loans in Australia’s history.
That includes Reduce Home Loans, whose Rate Buster Standard Variable loan for owner-occupiers is currently at 3.44 per cent (comparison rate 3.45 per cent).
Another point worth mentioning is that challenger lenders are often more flexible than the big banks. So just because a buyer has been rejected by ANZ, Commonwealth Bank, NAB or Westpac, doesn’t mean their cause is hopeless.
Of course, in a low-rate environment, borrowers need to be wary not to bite off a mortgage they can’t chew when rates do rise, but if they can’t afford the house of their dreams, maybe rentvesting is a viable way into the market.
3.99%
What if you encounter a buyer who’s nervous about taking out a mortgage because of all the recent speculation that the Reserve Bank will soon start lifting rates?
In that case, you can explain that not one but two lenders are currently offering five-year fixed rates below 4 per cent.
Suncorp Bank has an advertised rate of 3.99 per cent (comparison rate 3.88 per cent), as does Greater Bank (comparison 4.46 per cent).
So your buyers have the chance to lock in historically low rates for an extended period.
51.5%
Another way you can help struggling buyers is to direct them to a mortgage broker. Research shows that 51.5 per cent of home loan borrowers now use brokers, which is not surprising, particularly for first-home buyers who’ve never taken out a mortgage before.
Good brokers are not only accredited with a wide range of products – they also have an intimate understanding of each lender’s unique credit policies.
A good broker will keep their customer’s financial needs front of mind, making sure they’re not only in the right product, but also that they can afford to meet their repayments without going into mortgage stress. They’ll also do the majority of the paperwork for them, which can be a godsend for time-poor families.
