Getting your hands on Sydney property hasn’t been particularly easy for people who don’t have access to traditional financing. According to the October edition of CoreLogic’s Housing Market and Economic Update, Sydney’s median house price rose 17.6 per cent in the year to September 15.
Combine these rapidly climbing prices with the fact that lenders generally find it riskier lending to borrowers with poor credit rating or who do not have conventional proof of income.
Buying a home in this region can be somewhat of an uphill battle. Fortunately, low doc and bad credit home loan specialists are always there to ensure these buyers have financing solutions. Not to mention, interest rates, despite seeing a small hike by a few major banks, are still lower than they have been in a while. Still, it doesn’t change the fact that buying a home in this region can be somewhat of an uphill battle. This mission can be made even more laborious when real estate agents underquote prices.
No more underquoting in NSW
According to the Real Estate Institute of New South Wales (REINSW), all real estate agents have the responsibility to abide by certain principles when marketing property. These include making reasonable estimates of selling prices and keeping records of how they came to the estimates and when this figure is revised. As said by John Cunningham, deputy president of the organisation, this practice ‘tends to rear its head during a hot market’.
New underquoting reforms mean more transparency from agents.
Underquoting is when agents undermine these and advertise an estimated price as lower than the true prediction, be it through your marketing material or privately with buyers. As a buyer with a low doc loan, this makes your house hunt more frustrating as you waste time and effort going to open home viewing and auctions for property that were never truly within your price range.
All this is set to change in New South Wales, as new law reforms mean that agents now have more obligations to follow that will see this practice stamped out. As of January 1, agents must include the true estimate of a home’s estimated selling price as written on the sales agreement. Furthermore, the top number in a forecast price range cannot be greater than 10 per cent from the bottom figure.
There are also a few more laws real estate agents will have to follow that will bring true transparency and accuracy to price estimates. As someone with a low doc home loan, you’ve already jumped over the hurdle of missing certain paperwork that conventional lenders need. The last thing you need is smoke and mirrors to contend with, and this law reform will get rid of just that.