The Age has reported "The major banks are failing home buyers who want to process their loan applications online, with customers facing poor service and convoluted forms, a new survey has found".
Not surprising. In my law practice I rarely see clients using the online application route. Its either the Branch or the Broker. Occasionaly we see either a Homepath or an ING Direct, both online applications.
Homepath offers a no frills low interest rate loan. But their service in loan approval, preparing loan documentation and settlement organisational skills I would rate very poor (actually they would be in the bottom quartile). You might get a no frills loan but it's a no thrills service. You wouldn't want to throw them a curve ball.
No wonder customers turn to the brokers or the branch. You at least get service. The mortgage broker we often turn to, service is the key to their success. Submitting an application is actually an art form. Most applications are at least 20 pages long. Then they actively follow through in getting the approval and personally attend the client for signing up the loan and security documents. Full marks.
Turn to the online model. As an example I logged onto Virgin Home Loans, the newest entrant. I failed to get beyond Step 1. There are just too many fields to complete. Step 1 is one of 6 steps. Really, keep it simple. Get the customer to fill in a one page summary, collect $200 or $300 upfront and send out a mobile lender to take care of the rest. Refund the $200 if they proceed to settlement. Guys its about service and delivery.
In my conveyancing business I collect a deposit upfront. Customers dont mind. Thereafter they are committed. We collect a deposit and we then prepare and deliver vendor statements online. If the property doesn't sell we don't need to invoice the client as the deposit has covered our costs. We collect the balance of our fee at settlement.
Ditto for mortgage applications. Collect a deposit upfront and give some real service and that certainly doesn't mean some tele-worker who doesn't understand the customers needs or requirements.
Anyhow, the online forms don't work for me. I'm one of those who don't mind paying a bit extra for service.
Thursday, March 30, 2006
Wednesday, March 22, 2006
NECS - What it does - what it doesn't do
The proposed NECS focuses on the lodgment and settlement stages of conveyancing. Using NECS, practitioners would electronically:
The proposed NECS does not cover:
Source NECS
- prepare dealings and related instruments to register changes in ownership and interests
- settle financial transactions (including payment of duties, taxes and any disbursements)
- lodge their dealings with the appropriate Land Registry
- receive confirmation of dealing lodgment and registration.
The proposed NECS does not cover:
- preparation and exchange of contracts for sale
- pre-settlement investigations
- procurement of any insurances required by purchasers
- creation of loan documentation
- processes for examining and registering instruments once lodged with a Land Registry.
Source NECS
Saturday, March 18, 2006
EC lists banks for Stage 1 Pilot
EC (Victoria) will begin testing their refinancing settlements model. Financial Institutions will be able to perform a discharge & registration of a new mortgage. My understanding this does not include the exchange of funds, simply the registration angle. Stage 1 will go live from 25 August 2006. And the participants are -
Where's the NAB & St George?
Other news from the EC Project team is Stage 2 which is the full settlements model is not expected to be ready for roll out until late 2007. And after that is the national implementation under NECS.
All good stuff.
- ANZ
- Commonwealth
- Westpac
- Bendigo Bank
- Suncorp Metway
- Macquarie Bank
- Gadens (representing ING)
- Members Equity
Where's the NAB & St George?
Other news from the EC Project team is Stage 2 which is the full settlements model is not expected to be ready for roll out until late 2007. And after that is the national implementation under NECS.
All good stuff.
Friday, March 17, 2006
UK moving towards Vendor Disclosure
"Currently, one million pounds a day is wasted on buying and selling homes. Buyers often spend hundreds of pounds on valuations, legal advice and searches on sales that ultimately break down," UK Housing minister, Yvette Cooper said,
"By providing key information at the beginning of the process, Hips (Home information packs) will prevent waste and significantly cut the number of sales that fall through. That is why consumer groups have been calling for them for years."
Many property investors are supporting Hips because it is argued that they will bring a solid foundation of first-time buyers to the market. Additionally, statistics suggest that more than 40 per cent of failed transactions collapse because of a problem with the survey or a valuation inspection.
If this process is made more transparent, supporters claim that buyers will be less reluctant to make a move on the property market.
Source Assetz Property News Service
"By providing key information at the beginning of the process, Hips (Home information packs) will prevent waste and significantly cut the number of sales that fall through. That is why consumer groups have been calling for them for years."
Many property investors are supporting Hips because it is argued that they will bring a solid foundation of first-time buyers to the market. Additionally, statistics suggest that more than 40 per cent of failed transactions collapse because of a problem with the survey or a valuation inspection.
If this process is made more transparent, supporters claim that buyers will be less reluctant to make a move on the property market.
Source Assetz Property News Service
Sunday, March 12, 2006
Online, Some Home Buyers Find a House of Cards
Online listings have created an opportunity for unscrupulous sellers to try and resell dilapidated houses for inflated prices.
By KATIE HAFNER - NYT
By KATIE HAFNER - NYT
Friday, March 10, 2006
End of 2006 will see agreement on how NECS is implemented
The National Steering Committee held its second meeting in Sydney on 24 February 2006 and approved the program of work that will lead to a decision about implementing a National Electronic Conveyancing System (NECS) by the end of this year. The work program includes an extensive period of consultation with government and industry participants in all States and Territories as well as four independent consultancies to advise on special aspects of the NECS.
National Consultation
The Steering Committee approved a change to the way consultation will be organised. Instead of having four forums made up of Land Registries, Revenue Offices, Financial Institutions and Legal Practitioners/Conveyancers as was originally provided for in the National Governance Arrangements, the forums are now to be based upon the major processes in using the NECS to complete a transaction.
The four forums are to be:
User Identification, Accreditation and Training, focusing on who can use the NECS and what the pre-requisites are.
System Access and Usage, focusing on the rules applying to users of the NECS and how it will be used.
Lodgment Process and Security, focusing on the preparation of dealings and instruments and assuring their integrity and security prior to lodgment with a Land Registry
Settlement Process and Payments, focusing on the preparation and execution of financial settlements as well as the payment of fees when a settlement is not available
Source Electronic Conveyancing in NSW - Newsletter No. 14
National Consultation
The Steering Committee approved a change to the way consultation will be organised. Instead of having four forums made up of Land Registries, Revenue Offices, Financial Institutions and Legal Practitioners/Conveyancers as was originally provided for in the National Governance Arrangements, the forums are now to be based upon the major processes in using the NECS to complete a transaction.
The four forums are to be:
User Identification, Accreditation and Training, focusing on who can use the NECS and what the pre-requisites are.
System Access and Usage, focusing on the rules applying to users of the NECS and how it will be used.
Lodgment Process and Security, focusing on the preparation of dealings and instruments and assuring their integrity and security prior to lodgment with a Land Registry
Settlement Process and Payments, focusing on the preparation and execution of financial settlements as well as the payment of fees when a settlement is not available
Source Electronic Conveyancing in NSW - Newsletter No. 14
Wednesday, March 08, 2006
Negotiating the deal
I picked up a book from a Glenferrie Road Thrift Shop "Success in Property Development" published 1989 written by Chris Lang of Gardner + Lang. The book gave insights into the property development deals of the 80s as well as a typical overview on how to structure & model a commercial property development syndicate.
In the appendix Chris wrapped up by distilling the 3 crucial elements in negotiating the deal: information, time and power.
Information Someone said that 'to be forewarned is to be forearmed" and information is forewarning. Gather all the information you can about the property you want to buy and the person or firm from whom you want to buy and about his/her agents. Herb Cohen in his landmark book You Can Negotiate Anything, wrote: 'Remember that what you want to know going into the negotiation process is the real limits of the other side ... the extent beyond which they will not go.'
Time Coher further wrote: 'Dont be surprised when you receive the initial reaction to your proposal. "No" is a reaction - not a position. With the passage of sufficient time and repeated effort on your part ... every "no" can be transformed into a "maybe" and eventually a "yes".'
Sometimes an excellent deal can be done by grasping an unexpected chance quickly. If you have fast access to money you can snatch a property that comes on the market without warning, offered by a vendor who urgently needs to sell, often at a reduced price.
But that is the exception. In most negotiations it is a plus to possess a great deal of patience. The fact is deadlines are often fictitious - products themselves of the negotiating process - 'Let's get the deal wrapped up by Friday.' Therefore, they are more flexible than you realise. Another fact is that shifts in position are made towards the end of a negotiation, not at the beginning when the parties are trying to get the feel of the deal; indeed Cohen states that '80 per cent of all concessions are made in the last 20 per cent of the negotiating process.' Of course you have an advantage if you know the other party does have an urgent need to finalise; it means you can hasten very slowly indeed in the hope of forcing concessions - again, the value of having as much information as possible.
Power Then there is power - of which Henry Ford said: "Power is based upon perception. If you think you've got it, then you've got it. If you think you don't have it (even if you've got it) then you don't have it.'
Some people have a lot more financial muscle than others. But some people have more muscle than they realise. When I talk to a lot a first home buyers I say to them, 'Do you realise you have a lot of power when you are sitting opposite the bank manager and asking for money?' They say: 'You've got to be joking. He's got the money, so how do you have any power?' I say: 'It's simple: You are talking to one bank manager and you say to your fiance who banks with another: "Look dear, I'm not sure whether we should get it here or perhaps from your bank." The chances are the first bank manager won't let ou get out the door. When you ask for money, he's going to find it very hard to turn you down.'
The power principle in negotiations is that you have to create the illusion of options; you let the vendor party know that you are considering the puchase of other properties - it does not realy matter to you whether you buy their property or some one else's.
Expertise is another important negotiatiing tool. The other party tends to respect you if you clearly know what you are about - but, of course, the newcomer investor cannot really know; that's where your retained estate agent can put the advantages of technical knowledge and experience in your corner.
Always remember: if you let the vendor name the price, you can name the terms - the way the price is going to be paid.
In the appendix Chris wrapped up by distilling the 3 crucial elements in negotiating the deal: information, time and power.
Information Someone said that 'to be forewarned is to be forearmed" and information is forewarning. Gather all the information you can about the property you want to buy and the person or firm from whom you want to buy and about his/her agents. Herb Cohen in his landmark book You Can Negotiate Anything, wrote: 'Remember that what you want to know going into the negotiation process is the real limits of the other side ... the extent beyond which they will not go.'
Time Coher further wrote: 'Dont be surprised when you receive the initial reaction to your proposal. "No" is a reaction - not a position. With the passage of sufficient time and repeated effort on your part ... every "no" can be transformed into a "maybe" and eventually a "yes".'
Sometimes an excellent deal can be done by grasping an unexpected chance quickly. If you have fast access to money you can snatch a property that comes on the market without warning, offered by a vendor who urgently needs to sell, often at a reduced price.
But that is the exception. In most negotiations it is a plus to possess a great deal of patience. The fact is deadlines are often fictitious - products themselves of the negotiating process - 'Let's get the deal wrapped up by Friday.' Therefore, they are more flexible than you realise. Another fact is that shifts in position are made towards the end of a negotiation, not at the beginning when the parties are trying to get the feel of the deal; indeed Cohen states that '80 per cent of all concessions are made in the last 20 per cent of the negotiating process.' Of course you have an advantage if you know the other party does have an urgent need to finalise; it means you can hasten very slowly indeed in the hope of forcing concessions - again, the value of having as much information as possible.
Power Then there is power - of which Henry Ford said: "Power is based upon perception. If you think you've got it, then you've got it. If you think you don't have it (even if you've got it) then you don't have it.'
Some people have a lot more financial muscle than others. But some people have more muscle than they realise. When I talk to a lot a first home buyers I say to them, 'Do you realise you have a lot of power when you are sitting opposite the bank manager and asking for money?' They say: 'You've got to be joking. He's got the money, so how do you have any power?' I say: 'It's simple: You are talking to one bank manager and you say to your fiance who banks with another: "Look dear, I'm not sure whether we should get it here or perhaps from your bank." The chances are the first bank manager won't let ou get out the door. When you ask for money, he's going to find it very hard to turn you down.'
The power principle in negotiations is that you have to create the illusion of options; you let the vendor party know that you are considering the puchase of other properties - it does not realy matter to you whether you buy their property or some one else's.
Expertise is another important negotiatiing tool. The other party tends to respect you if you clearly know what you are about - but, of course, the newcomer investor cannot really know; that's where your retained estate agent can put the advantages of technical knowledge and experience in your corner.
Always remember: if you let the vendor name the price, you can name the terms - the way the price is going to be paid.
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