This month’s cash rate rise was not unexpected, but certainly unwelcomed, following a four-month respite from RBA increases.
When borrowing capacity takes a hit - it’s decreased by more than 30% in a year-and-a-half - the relationship between mortgage brokers and real estate agents comes into greater focus.
Buyers need greater options and solutions to be competitive in their property hunt while sellers want to be connected with people who can transact.
Nitish Kumar from Loan Market Canberra has partnered with Ray White Canberra Group’s agents and property managers for several years. As a former real estate agent himself, Mr Kumar knows how important clear and authoritative information is for real estate agents and their clients in ensuring the referral relationship offers value.
“Whenever we go through a period of change, we communicate what that means so their agents can have clear discussions with their sellers,” said Mr Kumar, who last financial year settled more than $40m in loans referred from Ray White.
“We’re now having twice weekly updates with agents on Wednesdays and Saturdays.”
The cash rate increases have been a key consideration for sellers, said Mr Kumar.
“Not every seller understands how a 25 basis point increase can impact their decisions. Once agents have been to a listing presentation, they’re increasingly asking us to talk to sellers about how they’re going to fund their next purchase and their future borrowing capacity.
“Hearing insights first-hand from a broker helps provide reassurance in their decision-making.”
Mr Kumar said access to a broad lender panel increased the opportunities for brokers to find quality outcomes for clients.
“In the last six months, we’ve had one loan declined,” he said.
Youeil Shol from Loan Market LMS is another broker who has built a high-performing business by providing quality service to agents. Last financial year, he settled more than one deal a week referred by Ray White.
“Sellers wanting to come to market now are often looking for 60-90 day settlements because they want more time to find their next home,” he said. “There’s still an undersupply of property in Brisbane.
“I’ve spent a lot of time explaining to Ray White’s sellers how bridging loans work and what opportunities they have if they want to renovate after settling on the next property.”
Whether interest rates are low or high, brokers can always offer real estate agents value in the referral partnership, and vice versa, said Mr Shol.
To learn more about the relationship between Loan Market and Ray White, click here.