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BetterNews // November2013

Understanding and meeting

your client’s unique needs

www.betterbond.co.za


3 Consumers still hungry for homes and loans

7 Getting a better connection with clients

There is still a healthy increase in the number

Finding out what modality your client

of home loans that are taken up.

fits can go a long way to strengthening your relationship.

5 How to help ‘rebound’ clients Preparing post-recession clients to purchase homes again.

9 International: wacky, weird and wonderful... See how sellers are boosting sales with these unusual tactics.

We are an authorised financial services provider (license number: 24015). Nedgroup Life Assurance Company Limited administers BetterSure. P  olicies are underwritten by Old Mutual Alternative Risk Transfer Limited, an authorised financial services provider. BetterSure and BetterQuote are part of the BetterBond group.

12 Spoken from the heart Clients give a word of thanks to BetterBond employees.


Consumers still hungry for homes and loans

“This speaks to the quality of applications we submit as well as an improvement in the banks’ willingness to lend,” Rademeyer says. “Being familiar with the banks’ application requirements, we assist clients to assemble all the required supporting documentation before submitting an application. In some instances we may also refer a client for credit repair before making an application. “And of course we are able to motivate applications individually and submit them to a number of different banks if necessary.” Indeed, he notes, the ratio of applications declined by one bank but approved by at least one other showed a y/y increase of 18% at end-October, resulting in a 9,5% y/y increase in BetterBond’s overall approval ratio. “In other words, we have been able to secure a bank approval for three out of every four applicants that have come to us in the past 12 months – and in real terms, we have been able to help more than 25 000 SA families fulfil their dreams of home ownership.”

According to the latest statistics released by BetterBond Home Loans, which is SA’s biggest mortgage origination group, the number of home loan applications received by the group increased by 5,06% in the 12 months to end-October, compared with the previous 12 months, while the total value of those applications showed a 12,26% y/y increase.

Oct ‘13

% change YOY

10,15

R967 122

5,65

R192 389

3,61

R174 922

-9,08

R522 924

R664 797

27,13

R691 477

4,01

Average firsttime deposit

R57 031

R81 073

42,16

R69 005

-14,89

Average borrower income

R35 623

R42 677

19,80

R46 374

8,66

Average first-time income

R21 443

R29 836

39,14

R32 450

8,76

% of total applications declined by one bank, approved by another

21,38

42,44

-

40,22

-

BetterBond overall approval percentage

48

71

-

76

-

Oct‘11

Oct ‘12

Average purchase price

R831 059

R915 395

Average deposit required

R185 684

Average firsttime price

% change YOY

In addition, says BetterBond CEO Shaun Rademeyer, the total value of home loans formally granted through the originator showed a huge year-on-year increase of 23,85% at end-October – by contrast with the 2,7% y/y growth in overall household mortgage balances reported by the Reserve Bank at the end of the third quarter. “This shows,” he says, “that there has been healthy increase in the demand for property over the past year, in spite of all the cost-of-living increases that consumers have had to contend with, and the fact that home prices have been rising (see table). “Secondly, these figures indicate that applying for a home loan through an originator like BetterBond really does give prospective homebuyers a better chance of being granted that loan, with the value of bonds that we were able to secure for clients having grown at about six times the rate at which household mortgage lending grew in the general market.” The BetterBond statistics also show that its initial decline rate (the percentage of applications declined by the first lending institution to which they are submitted) showed a y/y drop of almost 9% at end-October, to 38% of applications submitted.


How to help ‘rebound’ buyers Five years on from the ‘Great Recession’ and many of those who lost their homes because they were unable to pay their home loan instalments are ready to buy again before property prices rise too much more, or interest rates start climbing.

debt judgments, but everyone needs to make sure their ‘house’ is in order before they even think of applying for a new home loan. Old debts and judgments need to be paid off and cleared from their credit history, and a couple of years of bills being paid in full and on time would help enormously. In

And many of these “rebound” buyers are highly motivated and a pleasure for agents to

fact, they should do their best to completely pay off any other debt – like credit card

work with because they’ve already experienced the benefits of owning a home rather than

balances, car finance or personal loans – or lower it significantly, because lenders can’t

renting – or having to share accommodation with parents or siblings.

approve a loan if the borrower’s debt-to-income ratio exceeds the National Credit Act guidelines.

However, they may not find it all plain sailing, and estate agents who would like to sell them their next home need to be prepared to help them through what may be quite a

Rebound buyers also need to be prepared to pay a substantial deposit. This may

long process.

come as a surprise to those who bought their previous homes in the days when the lenders were happy to grant 100% mortgages, but times have changed, and they

The first thing rebound buyers need to do is make a definite plan. They tend to assume

should not feel as if they are being singled out because of their previous problems.

they’re ready, even when they still have issues that need to be addressed, but an

They need to know that the majority of buyers are now expected to have some equity

experienced agent can help them work out exactly what steps they need to take to be able

in their homes right from the start, and paying a deposit does make monthly bond

to buy again and how long these will probably take.

repayments more manageable.

Next, rebound buyers must make sure they have fully repaired their credit records. Those

In addition, rebound buyers should get a home loan preapproval from

whose only impairment was the default on their mortgage will probably be able to do this

BetterBond before they go house hunting, so that they – and any agents they

more easily than those whose history is littered with other late or missed payments and

work with – know what their home price limit is and no-one wastes time looking at properties they can’t afford.

05


Getting a better connection with clients Ever wonder why you and a particular client didn’t connect? Do certain client types drive you crazy, but you just don’t know why? The answer may be in recognizing whether you (and your clients) are visual, auditory, or kinesthetic, says psychology professor and top real estate coach Bernice Ross.

stylistic differences because when there is a mismatch in styles, distrust is created and you no longer operate at peak effectiveness. “For example, a fast-talking visual will go absolutely bonkers working with a slow-moving, slow talking, thoughtful kinesthetic client who cannot articulate what is wrong with the property. “On the other hand, the kinesthetic client may well lose trust in the visual agent because he or she feels that the visual’s rate of speech is ‘pushy’. “Similarly, a visual agent who calls an auditory client about a great looking contemporary with a breath-taking view will probably receive a lukewarm response, as will the kinesthetic agent who is excited about the warm and cozy home with all these great little nooks and crannies.”

“Psychologists have demonstrated that we use all three modalities (sight, hearing, and touch) when we process information, but that one modality is usually dominant, she says. For those who are visual, how things look

However, she says, an agent who tells an auditory client how the agents in his office are talking about what a great buy this quiet property is and how his friends will be talking about what terrific property he brought, will probably have a highly motivated client. In other words, it is well worth identifying what type of client you have and then learning to speak their “language”, as follows:

is most important. You can recognize a visual person by their quick rate of speech and their attention to being “colour coordinated.” By contrast, auditory individuals are concerned about how things sound, and you can recognize them primarily by how they use their voice—they are often quite dramatic in their style of speaking. Kinesthetics, meanwhile, place great emphasis on how things feel and their speech patterns are slow and deliberate. Writing for www.realtytimes.com, Prof. Ross says it is important for agents to know about these

Visuals will use and respond to words like “look”, “picture”, “light” and “bright” and will often go in search of a home with a view. They prefer face-to-face and written communications rather than phone calls, and may be bad at remembering anything you tell them. Rather write it down. Auditory people will use and respond to words like “I hear”, “sounds like” and “tell” and will usually prefer a home in a quiet location. Their preferred communication mode is obviously verbal (phone rather than text or email) and you should not count on them to read sales documentation carefully. Rather take the time to verbally go through contracts with them. Kinesthetics use and respond to words such as “I feel”, “warm”, “comfortable” and “roomy” and generally want a home which they feel has a good atmosphere. It takes time to build trust and rapport with them and you need to respect that their feelings will ultimately guide their decision-making.

08

They will take their time with documents and you need to make sure every detail is correct.


International:

Wacky, weird and wonderful… As the housing market continues to recover, buyers, sellers, designers and developers around the world are trying out some “interesting” new ideas intended to help boost sales, says Vera Gibbons on www.zillow.com. Some examples include: • Try before you buy. Agents are now letting some qualified, serious buyers spend the night or even a few days in the home they are interested in buying. It’s a highly unusual strategy but it could help wavering buyers make a decision, and is catching on… • Pampered pets. Builders are getting more creative with the “extras” by taking ‘pet friendly’ to a new level and offering designer kennels, pet washrooms and, in some gated developments, a pet-care service that will walk, groom and even arrange “play dates” for residents’ dogs. • Make me move: US sellers in areas where there is a shortage of homes for sale are capitalizing on the fact by publishing their “fantasy” price — the price it would take to persuade them to sell, on Zillow’s Make Me Move® site. • Right in the closet. Architects and home designers are responding to a growing demand for master-suite walk-in cupboards or dressing rooms with the feel of a luxury boutique – completed with illuminated hanging rails, compartmentalized storage, shoe walls, vanity areas and a chaise lounge or two.

09


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BetterBond Newsletter November 2013  

Understanding and meeting your client's unique needs

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