Importance of a bond pre-approval

ONE aspect of the Rawson Property Group’s Western Cape operations, which he finds particularly satisfying, says Wayne Albutt, regional sales manager for the Western Cape, is that only 23% offers to purchase do not materialise into a conclusive property transfer of ownership.

“By far the most common reason for a transfer not following on from the agreement of sale is that the offer to purchase has been made subject to another condition met. This is usually either that the buyer’s existing home or some other property he owns will be sold first or that he is awarded a bond for the amount he has applied for.”

A “failure” figure of 23% may seem high, but it is in fact way better than that of the industry average. The question, therefore, is how do Rawson Western Cape franchises achieve this?

Albutt says it is the result of ongoing estate agent coaching by Rawson trainers about the importance of helping buyers to pre-qualify for their bonds. This consultative role, he says, calls for considerable tact and sympathy on the part of the agent, but the properly handled will result in the buyer seeing his financial situation in the same way that the banks do and being completely realistic about his prospects of getting a bond.

A further reason for the high success rate in this field is that the Rawson Property Group has the big advantage of having within its structure its own bond origination division, known as Rawson Finance.

The staff of this division have a double incentive to achieve successful applications because this increases not only their own earnings, but also those of the franchises they serve.

“Rawson Finance has a 14% higher hit rate than the national average on bond approvals for the simple reason that it does understand comprehensively the criteria on which the various banks work and the many factors likely to mitigate against a successful bond application.”

“Furthermore, when an agreement of sale is subject to the sale of another property it is of very little value unless the other property is being actively marketed by a competent agent and at a market related value.”

It is here that the bigger footprint of a national brand, such as the Rawson Property Group, becomes valuable, says Albutt.

“With another franchise quite probably in the area where the ‘other’ property is being sold, the other franchise can report on and possibly assist the other property to find a buyer.”