Not every property buyer in Melbourne takes the time to get expert property advice before they put up their hand at an auction or sign a contract. For the unprepared, there may be some shocks as they may not have considered professional property finance advice.
Property value is often different to the contract price that people agree to pay. Banks work on lending to a percentage of property value not percentage of purchase price. It is an important distinction that some people are unaware of.
A bank will appoint a valuer to inspect a property that is the subject of a home loan or investment property valuation. They will lend a percentage of the value that their valuer places on a property NOT a percentage of what the agent says it is worth or the contract price.
Buyers will be obliged to come up with the difference in value to market or contract price in cash one way or another at settlement. There can be financial shocks for people who do not get expert advice when buying property and that includes access to independent accountants who can assist with the implications of land or property value, stamp duty and legal costs.
Often a property buying advisory service can be a one stop shop that helps people into real estate in a stress free way.