HOMEBUYERS in Brisbane are missing out on thousands of dollars in savings by failing to get pre-approval for finance before making an offer to buy a property, according to one of the city’s mortgage brokers.
Daren Crawford (pictured right), of Trademark Finance, said having pre-approval gave buyers huge bargaining power and could lead to significant reductions in the purchase price, but many buyers were unaware of its importance.
“The vast majority of buyers in Brisbane – I’d say up to 80 per cent – don’t have pre-approval when they make an offer to buy a property,” he said.
“Most operate on a buy first and secure finance later policy, but it’s much smarter to do it the other way around.
“Buyers should always secure finance before they start making offers to purchase, with the benefits being multi-fold – it means you know what you can afford before you commit to purchasing and it gives you the confidence of knowing you’ll be able to secure finance.
“But, importantly, having pre-approval also means you have greater bargaining power, so when you do make an offer to purchase a property you can make it with a seven-day finance clause, rather than 21, which will be a very attractive proposition for a seller.
“If a seller has multiple offers they are more likely to accept the one that has the shortest closing period, and they’re more likely to accept a lower offer if they know finance is virtually guaranteed.”
Mr Crawford said people looking to buy property in Brisbane would benefit from having pre-approval since the expectations of sellers had recently boosted.
“There has been a great deal of commentary around the Brisbane property market, with predictions of good growth to come and, despite the fact prices haven’t moved upwards yet, sellers have raised their expectations around what they can achieve for their property,” he said. “Since it’s no longer a buyers’ market, buyers don’t have much bargaining power, but pre-approval can give them some power back. It can help them to negotiate a lower price as they’re able to settle on the property faster.”