"Some of the major reasons why transactions are aborted are to do with the way our homebuying purchase and sale process works."
From my perspective, having previously been an adviser, let’s just say that I’m aware the job inherently brings with it, some (many?) potential frustrations.
When you are dealing with so many parts of the mortgage puzzle and you are reliant on all of those parts fitting together, it is inevitable that sometimes you simply won’t have enough pieces to complete.
The point is however at what stage do those transactions fall out of bed, so to speak. And who is culpable for it? Perhaps placing the blame doesn’t actually help anyone, but if the blame is on you, then there is always something you can do about it to make sure the incidence of aborted transactions gets lower and lower. After all, when you don’t complete, you don’t get paid, and what better motivation might there be in business to fix that particular problem.
Of course, there will be a large number of cases which fall through for reasons beyond your control. A purchaser or seller pulls out, a client’s situation changes in terms of their employment, a property which seemed a sure thing brings back a list of insurmountable obstacles in its survey, etc.
Those types of issues will always happen – they are of course, incredibly annoying when you’re the adviser, and it may well be that they eventually get sorted, but there’s often very little you can do about them.
Indeed, some of the major reasons why transactions are aborted are to do with the way our homebuying purchase and sale process works. There has been a groundswell of support for fundamental changes, not least in terms of the upfront information potential purchasers get about properties so they can make informed decisions rather than setting their hearts on a home, only to find that it’s not the dream house they anticipated weeks, even months, into the process.
It’s why I’m supportive of the greater use of technology here, particularly in terms of individual property logbooks which, provided at the outset of a property being marketed, would undoubtedly help to mitigate against these types of problems.
However, there also has to be an acceptance that problems can occur at the mortgage finance/advice stage, and in an increasingly complex mortgage market with clients who have complex circumstances and needs, there might be a danger that walking a potential client down the wrong product/lender path gets you to a very ‘early bath’ for that particular case.
Again, I’m not laying the blame at advisers’ doors here, far from it. Often the information provided by the client is not what it should be, and the true financial picture is only truly uncovered once a lender has eyed the case. And of course, lender criteria and affordability measures are not always as clear as they might wish them to be.
How many cases have been submitted based on what was perceived to be a lender’s criteria and your understanding of a client’s ability to pay, only for it to be rejected because the lender in question simply doesn’t want any more of this business, or it feels its service can’t cope with cases, or it deems the risk is too high even if publicly it is suggesting it wants this type of borrower?
Again, that’s out of your control. But what percentage of cases have you tried to progress where you were not totally convinced of the information you’d been provided with, or where having a punt on a specific lender seemed like the only option.
Wouldn’t it be far better to know from the outset the client’s full and transparent financial situation, their credit rating, and the like, so you could actually see where a case might not fit? For example, what would be the point in moving down a mainstream mortgage route, if in the background the client had adverse credit, missed payments, CCJs, and the like – but you were just simply unaware of them.
What a waste of time this would be for all concerned, and with the array of products available to advisers to get that full financial transparency now – such as Credit Assess – completely avoidable. The early you can ascertain the veracity of a case and pre-verify the client, the better. Not just for you as an adviser as it will save you time, resource and money, but also for the client themselves who may falsely believe they can secure a certain type of product when nothing could be further from the truth.
The fact is that aborted transactions not only mean a loss of income, but they also cost everyone money – if they are going to then the sooner they do ‘fall out of bed’, the better, but there’s also the argument to be made that by having all that upfront information, the better chance they have of not ever hitting the floor.
It undoubtedly makes sense for all concerned to have full clarity at the outset – the case starts with you and ultimately you can put in place the processes to ensure it has the best chance of completing for you.