14 August 2019
It’s tax time and that means many Australians are finding a bit of extra cash in their bank accounts. Whether you’re planning some DIY projects or using it to inject some style into your home, here are some tips for getting more bang for your buck.
While it’s no secret that investing in good quality homewares is worth it in the long run, what are some cost-effective ways to make a major style update in the home?
Lead interior designer at Porter Davis Homes Victoria Patrizia Romeo says investing in a mature indoor plant is a great way to instantly change the look of a space.
“Investing in a taller, more mature plant can be a great way to add a focal point within the space,” she says.
“Different areas of the home will provide different conditions for your plants, so make sure you research the needs of the plant you want to buy. This will ensure that your investment will, literally, grow over time.”
If you are looking at making subtle changes to your home, consider adding house plants. Photo: Porter Davis
The bedroom is your sanctuary, so investing in bedding is a no-brainer. Romeo says choosing a natural colour tone is best for making the most of your money.
“Natural fabrics such as linen, bamboo and silk are great to use, they’re durable,” she says. “Pairing these with feature cushions and chunkier statement throws is a great way to add layers within the room.”
Garden expert Bonnie Grants says now is a good time to get out in the garden and prepare for spring, and you can’t go wrong spending your tax dollars “exploring what your green thumb can do”.
“Planting now and prepping the soil, spending money on trees, grass and fertilisers is the best way to set yourself up for spring,” she says. “There’s nothing you can do to your garden that won’t be worth the money in the long run.”
Topping up your garden shed now means you’ll be ready for spring.
When it comes to what to plant, flowers with bright colours are always a winner.
“I love the Alyssum flower because it’s such a good insect attractor and it can withstand just about any climate, so you’re not risking much planting it while it’s still cold,” says Grants. “It’s also unusually small so it can be planted anywhere, even in veggie patches or in planter boxes.”
Getting the garden furniture sorted out before spring sets in minimises the risk of any surprise damages.
“At the very least take a look at your garden furniture see if anything needs replacing, and make the most of the end-of-financial-year sales,” says Grants. “It’s also the perfect time to spend a little extra on gardening tools. Plus, pruning is best done at the end of winter, so you’ll need some good gear.”
Utilise different colours and textures to create an inviting and peaceful atmosphere. Photo: Porter Davis
The old saying you get what you pay for applies to homewares too, so putting your tax return towards something with a higher price point than you normally would is something to consider. Romeo says a sofa is a big ticket item that shouldn’t be passed up for a cheaper alternative, but it’s also important to think about your lifestyle when choosing one.
“Leather is more durable but can be costly and a white sofa may look great, but it’s unforgiving when it comes to children’s messy fingers,” she says. “Stick to neutral tones and a sofa which suits your style and can adapt to changing trends.”
11 June 2018
Buying your first property is hard, so let’s make it easier for you.
Congratulations! You have decided to take the plunge, you have done some reading on what the various responsibilities when it comes to being a homeowner, you have spoken to the bank and have an idea of how much you are able to afford.
These steps take some time so we are here to encourage you to take the next step in home ownership. We know it’s a little bit nerve wrecking and a little bit scary, but we have compiled some advice from our in house experts to help you with this exciting time!
Looking for affordability without compromising on location
For many of us, your first home is not going to be your forever home. We recommend taking a holistic approach to purchasing property. Even if you are going to be living in that property, look at it as an investment as well.
For those first homebuyers who do not want to compromise on space, you may have to look further out depending on your budget or look for townhouses or terraces. If you are looking to keep more of your lifestyle, an inner city apartment may be the apt living situation for you.
What we emphasise is buying smart and seeing your home purchase as more than just a living situation but a step in growing your portfolio. You might want to ask yourself “How much rent will I get for this apartment?” or “What has been the capital growth in the area over the last few years?”.
We think asking these questions will not only give you peace of mind if you have to move out and rent or sell your property, but it is also how many people start their property portfolio. The first one does not have to be picture perfect, but it helps if it is a sound investment.
Location and amenities
The building, home or internal features are not the only things that you should consider when you buy. Are you in a desirable school catchment zone, are there amenities or transport facilities planned in your area or has a new shopping centre been planned?
Looking at the amenities and area around you is particularly important, as they are great financial health indicators that the area you are looking to buy in has infrastructure and amenity to attract people to live there.
Look on suburb out from your dream location
Looking for undervalued suburbs next to the pricier areas is always a something we recommend to our first home buyers – over time, population growth and gentrification will mean that there will be capital growth in your area.
It’s always good to also look at areas with employment growth as this will increase demand for homes in that area. Finally, do your research. It takes time to go through all the listings in the area you love and view the various prices they get sold for but it’s all worth it when you know you are on to a great purchase.
28 May 2018
One of the most widely misunderstood elements of real estate is what condition a property should be in at settlement or possession.
What does ‘buying as inspected’ really mean?
In short, a property is sold “as inspected”. If there was dust on a ceiling fan when you first inspected before contracting to buy then the fan can be dusty at settlement. The same goes for a dirty oven, a blown light globe or a squeaky laundry door. If it was dirty, blown or squeaky at inspection before purchase then so it should be at settlement.
Buyers will typically expect that the property is handed over to them spick n’ span and thankfully most house-proud sellers leave their homes in an appropriate condition when moving out, however legally there is no obligation for them to do so.
What should you expect at settlement?
If you’re buying a home, it’s smart to have a realistic expectation of what to expect at settlement.
Unless otherwise specified in the contract, the seller is under no obligation to have the property professionally cleaned for settlement and it is surprising how few buyers ask that such a condition be included.
The seller’s only obligation under the contract (Clause 6.1(b) 2 of the General Conditions) is to “…remove from the Property, before possession, all vehicles, rubbish and chattels, other than the Property Chattels.”
Many modern contracts to purchase include provision for essential plumbing, gas and electrical components to be working at settlement. Hence, if at settlement the toilet cistern leaks then the seller ought to make good because the contract says so.
It is trickier when, for example, a telephone jack doesn’t work at settlement. It is not strictly electrical but it is probably reasonable for a buyer to assume that it was functioning at inspection. This is partly because, caveat emptor (buyer beware) has all but disappeared according to some legal practitioners. The onus is probably on the seller to disclose (in this case) that the telephone jack didn’t work.
How to ensure you’re happy with the property at settlement
My view is that buyers need to take reasonable steps to ensure the property they have bought will be presented to them in a condition they are satisfied with.
This can be achieved by either contracting with the seller to guarantee it and/or being more thorough when inspecting the property in the first instance. Ask the agent if it’s ok to turn on taps, flush loos, flick switches, open and close doors, open the oven, turn on the dishwasher and so on before making an offer to purchase.
Buyers ought to have a realistic expectation of what to expect at settlement when buying an established home and acknowledge that opinions of presentation are subjective.
Speak to our market experts on 9475 9622 to discuss about your property concerns
16 January 2018
As an auctioneer, clearly, I’d prefer that every auction made it to the big day. Sometimes, however, vendors opt to sell beforehand because of their unique financial or personal circumstances.
Can you really buy beforehand?
There has always been some skepticism amongst buyers whether properties are really for sale prior to auction or whether it’s just a price fishing expedition.
In my experience, vendors who are open to selling before auction, generally are committed to the idea if an appropriate offer is made on their property. I generally find there are two types of buyers who make offers before auction.
The first is the buyer who is dipping their toe in the water, so to speak, and hoping to learn the seller’s price expectation. The other type of buyer is one who genuinely doesn’t want to bid at auction perhaps because they’ve missed out on a few properties already and want to learn sooner rather than later whether they’re in with a shot.
Selling before auction happens more often in specific market conditions, of course, but also at particular times of the year like before Christmas.
Some sellers just don’t want to have their properties still on the market over the holidays and for them certainty is more important than going to auction.
So, for those sellers, they are chasing peace of mind more than the best price. Selling before auction can happen in rising and falling markets in my experience. When a market starts to shift to the positive, more buyers tend to make solid offers before auction because they don’t want to run the risk of missing out on the day.
In southeast Queensland at present there are more sales before auction than usual for this time of year, because the market appears to be strengthening. In fact, I don’t think it’s increased this sharply for a number of years. If we use history as a teacher, it may be indicating that the southeast Queensland market is shifting into another gear as we head into 2018. Conversely, when a market starts to cool off, sellers think that they don’t have the same security blanket so they opt to accept offers beforehand.
What are the pros and cons?
Buyers must understand that buying before auction is an opportunity so you really must make your biggest and best offer if you’re serious about securing the property. You can’t try and buy prior by putting your toe in pool – you can only buy prior to auction by diving into the pool.
Don’t make an offer with the expectation that the seller or the agent is going to come back and tell you exactly what their lowest selling price is going to be, because that just doesn’t happen.
They’ll either say you’re close or you’re not even in the same ball park. Also, if a seller is prepared to accept offers prior, it’s unlikely that you will be the only buyer in the running so you must put your best foot forward.
Likewise, if you’re buying a property prior, you almost have to compensate the seller for the risk of them not taking the property to market on auction day. That means that quite often you have to pay a premium because you’re compensating the seller for not going through the campaign that they’ve been advertising for three or four weeks.
For vendors, selling before auction has to involve what I call a #noregretsprice. So it’s the figure that they’re not going to look in the rear view mirror and regret that they didn’t go to auction.
Going to auction could produce a spectacular result on the day if there are a number of competing bidders, backed up by a thorough marketing campaign. The reality is that sellers won’t know what the result will be until auction day – and for some peace of mind is more important, which is fine.
At the end of the day, buying or selling before auction can be a sound strategy as long as the vendor is prepared to accept that a higher price may have been achieved on the day and the buyer understands that they’re unlikely to get a bargain.
18 September 2017
Buyers are often sellers too. Most people who decide to sell their home also look for an alternate property at the same time and it’s not uncommon for them to find something appealing before they have secured a buyer of their own.
What is a ‘subject to sale’ offer?
Buying a property “subject to the sale of another property” is common and REIWA agents are well equipped to ensure the sale agreement is procedurally correct.
Normally, these agreements enable the seller to continue to promote their property for sale and, in the event of receiving an alternate offer to purchase (normally not subject to the sale of that buyer’s property), give notice to the first buyer of their intention to proceed with the second offer after two business days.
This colloquially termed ‘48 hour clause’ provides the buyer two business days to obtain an offer on their property or waive the benefit of the subject to sale condition.
What does a ‘subject to sale’ offer entail?
Certainly, these arrangements can get tricky. Agents need to be especially careful not to prejudice the second party by giving the first buyer a hint that a second offer might be on the way. Notices served between the parties must also be technically compliant and strictly adhered to so as to not unfairly advantage either buyer.
A crucial point for sellers to be aware of is if they are accepting a ‘subject to sale’ offer, at say $600,000, this then binds them to that sale price within the 48 hour period – even if a second unconditional offer is higher (provided the original buyer can make their original offer unconditional within the 48 hour time frame).
’Subject to sale’ offers can benefit sellers
Although this type of sale requires more effort, contracts for sale that include the ‘subject to sale’ condition, often succeed and proceed smoothly to settlement.
This type of sale also has the potential to put the seller at an advantage, with the buyer often expecting to pay a premium for the privilege and protection of settling after the sale of their own property.
Given the conditional nature of the sale, sellers are justified in asking for a higher price from the subject to sale offer. There have been instances where the seller rejected a ‘subject to sale’ offer at a premium price, only to have that same buyer return to the same property after they’ve sold and pay a lower price.
I would advise sellers to consider all offers presented to them, including those that are subject to sale. In this market where competition is high between vendors, it’s in your best interest to give consideration to all serious buyers.
29 August 2017
Have you ever wondered how property investors seem to keep buying properties without saving up for years to put down a deposit? It’s because they’re using a tactic called leverage: using the equity generated by the rising value of an existing property to purchase a new one. This property then grows in value, allowing the investor to repeat the process and buy again.
Sounds good in theory, but is it all it’s cracked up to be?
How leverage works
Leverage is a simple concept. It’s borrowing to increase the potential return of an investment. Taking out a mortgage to buy a home is a form of leverage.
Leveraging the equity in an existing property – whether a home or an investment – depends on the value of that property growing while the size of the mortgage reduces or stays the same. For example:
- You buy a property for $400,000, putting down a 20 per cent deposit ($80,000) and borrowing the remaining 80 per cent ($320,000)
- Over time, the property increases in value by $100,000. The 80 per cent mortgage would now only be 64 per cent of the property value – or less if you’re paying off the principal as well as the interest.
- You refinance, increasing your mortgage up to 80 per cent of $500,000. You create a cash pool of $80,000, which can be used as a deposit to buy an investment property
Property investor and mortgage broker Jane Slack-Smith of Investors Choice Mortgages highlights a number of benefits to this strategy.
“Using equity in this way minimises risk by keeping your cash in your pocket – you’re not using your cash reserves,” says Slack-Smith. “It also takes a long time to save cash – say, five years to save $100,000. In that time, property values are likely to increase faster than the interest on your savings.
“By using equity in an existing property, you can get into the market today and buy at today’s prices, benefiting from the coming years’ growth.”
There are risks to leveraging equity to buy investment properties. First and foremost, you have to be certain that you can service all the mortgages you’re taking out, otherwise you could lose some or all of your assets. Researching potential purchases thoroughly is essential to avoiding a bad investment, says Slack-Smith.
“Leveraging equity doesn’t relinquish you of the responsibility of researching before buying an investment property. You should ensure that you have a clear strategy – flipping or buying to hold – as well as ensure you’re buying in a good suburb.”
You could also end up being plagued by cross-collateralisation if you’re not careful. This is where lenders use equity in more than one property to secure the loan. While it may allow you to borrow more in the short term, in the long term it could hinder your empire-building plans.
“Cross-collateralisation reduces your flexibility. If you want to draw out equity from an investment property in a few years, it means the bank may refinance your entire portfolio, rather than just one property.”
Depending on how individual property values have changed, that could mean you’d be unable to access any equity. While cross-collateralised loans can be disentangled, it can take up to six months.
Plan of attack
It’s essential that you plan ahead before you start refinancing. A good mortgage broker should be able to help you with this process.
“It’s important to have a clear initial plan of how you’re going to set out your finances. If you plan to buy two properties, ensure you have enough equity to cover the deposit, stamp duty and buyer’s agent fees for both purchases.”
Slack-Smith recommends setting up individual loan splits against your first property that will only be used to finance the purchasing of further properties. The interest on those splits should also be tax-deductible, as long as those splits are only used for investment purposes. She also recommends setting up the splits as lines of credit, rather than as a conventional mortgage.
“A line of credit is usually a little bit more expensive, but it’s like a big credit card – you don’t pay for what you don’t use. Just be disciplined and don’t use them to finance new cars or holidays!”
Leveraging equity growth in your existing properties can help you build a property empire faster – as long as you set it up correctly from day one and do your research. Otherwise, you could find your portfolio collapsing faster than a house of cards.
14 June 2017
Nicola McDougall via domain.com.au
Whether you’re a homebuyer or a homeowner wanting to refinance, valuations can result in you uncomfortably sweating on that all-important final number.
But, while valuers are professionals who clearly know what they’re doing, are there any strategies to improving your valuation?
Should you highlight every single improvement when the valuer is on-site or is it best to leave them alone so they can get on with the job?
Herron Todd White national director Valuation Tony Higgs says it can be beneficial for owners to be on-site but you don’t want to be over-eager.
“Obviously we’re trying to get as much information as we can while we’re on-site and if the owner is constantly following us around and going, ‘This is the toilet. This is the laundry’, well, those sorts of things we can work out for ourselves,” he says.
“It’s those things that they’ve done recently that they want to point out to the valuer, which is great, and that’s the stuff we want to know.”
For properties that have been recently renovated, Higgs suggests owners mention the improvements at the start of the valuation process and then point them out once the valuer has moved inside the property. Photo: Jessica Shapiro
Highlighting improvements which might be not immediately visible, such as solar panels, is also a good idea, Higgs says.
For properties that have been recently renovated, Higgs suggests owners mention the improvements at the start of the valuation process and then point them out once the valuer has moved inside the property.
Higgs says being on-site during the valuation not only allows owners to provide relevant information to the valuer, it also helps them to understand the process.
Metropole Brisbane Director Shannon Davis meets valuers on-site to point out improvements as well as to provide information about comparable properties. Photo: Peter Riches
“For the owner, it’s always beneficial for them to be on-site because they can get an understanding of what the valuer has done while they’ll out there,” Higgs says.
“If they’re there with the valuer at the time, and if there are issues that they want to raise, that’s the best time to flag them.”
Metropole Brisbane Director Shannon Davis meets valuers on-site to point out improvements as well as to provide information about comparable properties.
And he’s not afraid to challenge a valuation that’s nowhere near his own research.
“There can be some valuations that are way off. We’ve challenged valuations before, especially near the turn of the market,” he says.
“You might have someone who’s just out of the odds who brings it in $20,000 or $30,000 under, but we’re at the market coalface day in and day out.”
One such valuation, Davis says, was a valuer who missed one bedroom entirely and therefore came in about $70,000 below the expected value.
Insisting on an on-site rather than kerbside or desk-top valuation could help to reduce mistakes and also potentially improve the end result, Davis says.
“I think wherever possible, it’s worthwhile to meet the valuer at the property and show them through the scope of works and bring a list of comparables as well,” he says.
“Also (challenging a valuation) might cost a little bit more… but spending money to get access to more money can be really worth it if you’re acquiring an appreciating asset.”
24 May 2017
State Treasurer Ben Wyatt today announced the $15,000 First Home Owner Grant (FHOG) for newly built homes will be cut back to $10,000 on 1 July 2017.
Mr Wyatt said the previous Liberal Government’s decision to increase the FHOG by $5,000 in December last year was not an effective mechanism for stimulating additional construction of homes.
“Given the disastrous state of the finances which we have inherited, we need to remove any ineffective spending.
“Ceasing the boost early will allow the State Government to fund higher priority areas while ensuring Western Australian first home buyers continue to be eligible for generous Government assistance,” Mr Wyatt said.
REIWA analysis shows that the introduction of the grant in January 2017 did little to stimulate activity levels in the new-build market.
At the time of the grant increase, REIWA President Hayden Groves said the Institute was concerned the $5,000 boost would widen the gap between established and newly built properties for first home buyers.
REIWA Councillor Suzanne Brown said now that the FHOG is returning to $10,000, REIWA hopes this will help to even out the playing field, albeit marginally, between the established and newly-built market.
“However, there is still work to be done to help first home buyers purchase an established property as the gap remains significant,” Ms Brown said.
18 May 2017
Author: Rachel Preston-Bidwell via reiwa.com.au
Renting out your property for a reasonable price and turning it into a successful investment can be challenging, especially in the current market. We share some tips on how to make improvements to your home to get a tenant in as quickly as possible and obtain a rent price that works for both parties.
1. Make some home improvements
If your investment property is a little older, it may benefit from some low-cost cosmetic renovations, including:
- A coat of paint
- New blinds or curtains
- Fresh carpets
- Updated/modern light fittings
Freshening up your rental property and repairing any damages can make a big difference to a prospective tenant.
You may also wish to consider installing features such as air conditioning, security screens or an alarm. These types of items can potentially add value to your property and also be an attractive incentive to a tenant.
Read more about the features tenants want in a rental.
2. Consider tenants with pets
Many landlords won’t allow tenants with pets, so those who are willing to be pet friendly are at a particular advantage and can potentially attract a higher rent return.
If you are concerned about a pet damaging the house, talk to your property manager about a pet bond, in addition to your main bond, to cover fumigation costs if required at the end of the tenancy.
3. Speak to a property manager
Property managers have a good understanding of the rental market, including the types of properties in demand in a particular area and the going rent prices.
Speak to a local property manager for recommendations on rent and even about what improvements you could make to your investment property. They can also help ensure you don’t overcapitalise on your rental, by recommending what improvements are sought after by tenants and what to avoid.
If you’re looking to rent out your property, speak to us on (08) 9475 9622 or email firstname.lastname@example.org
03 May 2017
Christina Zhou via domain.com.au
- Worst house on the best street taking up the best spot
- Buying the best or worst house on a block
- Off-the-plan buyers seeing losses and lacklustre growth
Buying the worst house on the best street is a classic real estate adage, but it could be among the worst investment advice for those who don’t do their due diligence.
Crumbling houses being marketed as a “renovator’s delight” or a “blank canvas” may appear to be a bargain or an entry in to the area, but it might also require a buyer with deep pockets to do a thorough update.
Wakelin Property Advisory Richard Wakelin said buyers who purchase the worst house on the best street might need to spend a lot of money on rewiring, restumping, re-roofing or re-plumbling. The property might have “hidden costs” and also unfixable issues such as backing onto apartments or light industrial-type property, he said.
Tax depreciation and stamp duty concessions should not be the main considerations for buying an investment. Photo: Jessica Shapiro
“It definitely falls into the lure of a renovator’s delight, and most people get badly caught out by what they have to do to get the foundations of the actual building right,” Mr Wakelin said.
Some property advisers point to seemingly attractive tax advantages and stamp duty concessions that come with buying off-the-plan, but buyers who overlook other fundamentals could find themselves stumbling into an investment pit hole.
Investor Neda Tesic, 32, was encourage by her ex-partner and a former financial advisor to buy an off-the-plan two-bedroom apartment in Maidstone, about eight kilometres west of Melbourne’s CBD.
High rental yields could mask the property’s scarcity value. Photo: Peter Riches
She sold the property in 2015 for less than what she bought it for in 2008, during which house prices in the suburb took off.
“[They] talked about depreciation and I just took it for what it was, not realising the full story; in terms of how inflated it would be,” said Ms Tesic, who works in sales for an accounting software company. “It was so hard to get tenants in there as well because there were so many other apartments in the area.
“It was a very expensive lesson,” Ms Tesic said, adding that she would now take more time to research and look at comparable sales in the area.
Experts say time in the market is key. Photo: Simon Bosch
Mr Wakelin said many poorly performing properties were marketed with tax advantages as their main selling point.
Tax attractions such as gearing strategies, depreciation allowances and stamp duty savings might assist the financing of an investment in early years, he added, but they should not be the primary reason to invest, because too often they mask the property’s scarcity value and propensity for capital growth.
While some investors try to time the market, many property experts argue it is better to buy when you can afford it.
“Time in the market” rather than “market timing” was the key, but investors needed to do their research very thoroughly, Mr Wakelin said. “Procrastination is the greatest thief of time.”
An investment offering high rental yields could also raise a red flag.
Allen Wargent Property Buyers principal Pete Wargent said the worst investments over the past decade in Australia had been those where people had focused on the rental yields to the exclusion of almost everything else.
Though mining towns offered rental yields of 15 per cent or more during the mining boom until 2012, it reflected the risk in the asset, he said.
“A lot of people have been badly hurt, particularly since 2012, and I think some of the high-profile locations that have been hit have been small mining towns, but even in some larger areas like Gladstone have had some severe corrections.
“That’s probably been the worst advice in Australia over the last 10 years.”
Sydney buyers’ agent Victor Kumar, director of Right Property Group, said one of his bad investments was a serviced apartment he bought in 2009, with the intention of hosting friends and family and using it as a holiday pad.
Though the gross rent could look really attractive, a lot it goes into the letting fee and running costs, Mr Kumar said, adding that serviced apartments were also very seasonal.
12 April 2017
Modified by realestate.com.au
Did you know that the rate of Auctions being sold is now an average of 28 day on the market? Whilst the Perth market average days on the market for Selling via Private Treaty is 76 days. Here at Porter Matthews Metro we have a well thought out Auction process and success rate, if you have queries as to how this method might suit you, please give us a call on 9475 9622 or email us at email@example.com
Read more here why Auctions are becoming more popular in WA.
Perth real estate agents are predicting an increase in the popularity of auctions over traditional offer-acceptance sales in Western Australia, saying auctions could help fuel the state’s dull property market.
Auctions are not typical in Perth and only represent about 3% of the market, but agents and auctioneers say that is changing, with a growing number of vendors favouring auctions over private treaty sales.
CoreLogic data shows the number of auctions in Perth is on the rise, with 1964 held last year, compared to 1692 in 2015. So far this year, there have been 404 auctions in Perth.
First National Druitt & Shead Doubleview principal and auctioneer Rob Druitt says auctions have become more popular because it heralds speedier sales in a slow market.
Druitt says auctions enable the vendor to get a quicker understanding of where their property sits on the market, with the intensive marketing campaign usually spanning 30 days.
“The other important phenomenon is that in this market, the ‘no price marketing’ clearly isn’t working… because the market is driven by price. If your price is right then the market will see value and you’ll get offers.
“Price is the driver in this market. Buyers are looking for value.
“In inner-city Melbourne… 80-90 % of properties sell by auction. In Perth, you’re only talking about 2-3 % of total transactions. It’s a smaller number but it is rising and there’s a number of prominent firms around Perth who are embracing it more and realising the benefits for both the buyer and seller,” he says.
Acton chief executive officer Travis Coleman says the number of auctions in Perth has been on the rise for the past three or four years.
“A lot of people are doing it because we’re moving from a market where there are extended days on market and we’re trying to shorten that and bring the price discussion to a head in a shorter time.
“Auctions are not just limited to the upper end of the market. [Acton Coogee agent] David Bombara is doing it down in Spearwood, the mortgage belt areas, with great success and actually selling quite a few properties prior to auction,” Coleman says.
He says auctions are a transparent property sales technique and generally mean quicker turnaround times, rather than having a property sit on the market for four to five months, or in some areas even longer.
Realmark Western Suburbs director Adam Gilbert says the increased take-up of auctions across Perth was due to the competitive market and shortage of supply.
“What the market wants is transparency. In a market where there isn’t a real understanding as to what is a real price, what is a market price and what is an agent price – the market is saying just give me an opportunity to have a go.
“Auctions are very transparent, very honest, aligned with what the market wants and they do bring urgency not only for the buyer but the seller… to make the best decision in a shorter period of time.
“I think agents in WA need to get in tune with the current market. The market is evolving, the landscape is changing, technology is assisting buyers to gain information in a much shorter period of time so I think we give our sellers the option to consider auctions,” Gilbert says.
But CoreLogic head of research Cameron Kusher says with declining values in Perth it is unlikely that auctions will become more popular in the short-term.
“Auction volumes were a little higher last year than they were in 2015 for Perth, however, auction sales still represent a very small proportion of the overall market.
“Although selling by private sale in Perth is tough, a lot of vendors probably feel as if it is not worth the additional expense to sell at auction, particularly when the success rates have typically been well below 50% this year,” Kusher says.
22 March 2017
Kevin Eddy via Domain.com.au
Deal with caveats and encumbrances early
A major cause of anxiety that can cause settlements to be delayed are undetected legal caveats and/or encumbrances on a property. These must be legally lifted before you can settle.
Ideally, you should aim to buy a property with no caveats or encumbrances upon it in the first place – you can uncover these by instructing your solicitor or conveyancer to carry out a title search prior to purchase, or at the very least before the contract goes unconditional. If anything crops up, your solicitor/conveyancer should instruct the seller’s legal counsel to resolve the issues – or you can simply walk away from the purchase if you prefer.
Make sure the money is in place
One of the most common reasons for settlements being delayed or failing altogether is the funding not coming through. Mortgage approval is usually dependent on the bank’s valuation of the property, which may not take place until late in the buying process. If the valuation falls short, you could be in big trouble.
Results Mentoring property coach and experienced property investor Brendan Kelly says you should make finalising your funding your top priority after signing the contract of sale.
“If you’re on a standard settlement of between 30 and 90 days, get your loan approved once you’ve signed the contract or gone unconditional,” says Kelly. “Make sure it’s all done well in advance of settlement.”
Even better, choose a bank that will pre-approve your loan or accept your evaluation. A mortgage broker can help you find a lender who will do this, as well as help you find the best loan for your circumstances.
Be proactive as D-day approaches
You may have a great conveyancer or solicitor, and the bank may have approved your loan, but you should also take responsibility for ensuring the settlement goes ahead as planned. You should be proactive, albeit not pushy, in ensuring that things are progressing well as settlement date approaches.
Kelly recommends chasing up your conveyancer/solicitor, your bank/mortgage broker and the vendor’s solicitor or real estate agent between seven and 10 days before the appointed settlement date.
“Call, don’t email, the key players, and ask the following questions,” says Kelly.
- Is everything on track for settlement on [this date]?
- Is there anything that is missing that could stop settlement?
- Is there anything you need me to do/anything I can do to help?
“Follow up your calls with emails confirming the conversations. That way, if there are any problems, you have evidence that you’ve ‘done your part’,” he adds. “This also helps counter any demands for additional funding or payments from your end if things go wrong.”
Kelly adds that you should repeat this process three days out from settlement as a final check. The day before or on settlement day is often too late to resolve any problems and settle on time.
Proactive preparation should mean your settlement goes smoothly, but don’t panic if it still doesn’t go to plan. There’s usually a grace period to resolve any problems, and nine times out of 10 all the parties involved will pull out all the stops to make sure settlement goes ahead within a few days.
To discuss any settlement matters please give Conveyancing HQ a call on 08 9478 6677
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