Category: Buying

Using Property Data to your Advantage

And we’re off! I hope everyone enjoyed their Christmas and New Years and for those people who took time off work – had a nice, relaxing break.  2010 has now officially passed, and the team at CENTURY 21 Australia are gearing up for what we believe will be a very busy year for real estate in 2011. 

For one reason or another, people often find themselves making ‘life’ decisions around New Years.   I think it ties into the idea of resolution-making - the start of another year represents a watershed and people are determined to finally go after what they may have been planning for awhile. 

Selling a property and moving into a new type of home (e.g. downsizing from a house to an apartment) or different area (e.g. leaving the suburbs and relocating to an inner city setting) quite often arise as some of these resolutions. 

With the thought that many people may be thinking of moving at the moment, I thought I would use this blog to talk about how both buyers and sellers can make the various types of property data work to their advantage. 

In my view property data is a significantly underused tool; when employed it can give people delving into the property market some great insights into timing, locations and other important notions.  I have a feeling that many people don’t quite know how to find nor decipher the available data and thus shy away from it, not realising the benefits that it could afford them. 

The first step is to know what types of data are available – and realise that it’s not all just about sale prices.  Bodies such as the Australian Bureau of Statistics, as well as specific property data companies such as RP Data, release information covering many topics, such as the number of listings at the moment at one time, the level of housing finance being sought after and granted, the number of houses selling at auction, just to name a few.  

The trick to being smart about using data is to develop an understanding of how the relationships work between different variables.  For instance, if auction clearance rates are down but sales rates are constant, this doesn’t mean that properties are not selling but it may indicate that properties are being passed in at auction with a sale privately negotiated after the fact. 

Both buyers and sellers can then take this information to uncover opportunities.  For sellers – if you can see that the market is not supporting auctions at a particular time, perhaps make plans to prepare for private sales negotiations.  For buyers – take advantage of the lower competition at the auction and be immediately ready to begin discussions with the vendor and agent as soon as the property is passed in. 

Other types of property data such as median price and growth rates will give you an indication as to how much you should be looking to sell for, or pay, as well as which areas are either heating up or slowing down. 

 If you are interested in using property data to your advantage, then I think it definitely pays to stay abreast of the news over a substantial period leading up to when you are looking to buy or sell.  Many property journalists will take straight statistics and figures and highlight the greater meaning – reading such stories will help you to develop an understanding about what the figures indicate and how this can help you with your property plans.   


0 comments | Posted by Charles Tarbey on 10/01/2011 at 9:56 AM | Categories: Buying - Property Management - Investors -

Buying & Selling Property over the Christmas Holiday Period

As it seems to do every year, Christmas has once again snuck up on me.  The years do not appear to be slowing down and it seems that everybody in CENTURY 21 offices around Australia are busier than ever. 

An enquiry I get from many people around this time of year surrounds buying and/or selling property in the lead-up to, during and directly after Christmas and whether or not they should do it.  In my experience, Christmas can make things tricky, simply because you may not have as much time to be looking or preparing for sale as you would at other times of the year; however this doesn’t mean that now is not as good a time as any to be taking on the property market. 

For sellers, an issue that often arises is how your home should be presented.  Can you keep your Christmas tree and other decorations up? The jury is often split on this one – many people will tell you that everything Christmassy should be removed and your home should be presented as it would at any other time of year, while others will encourage you to embrace the festive atmosphere and decorate accordingly. 

My advice to you around this time is exactly the same as it would be in any other month – when presenting your home try to ensure that it is uncluttered and tasteful.  People should be able to envisage themselves living in your property and feel at home. 

For buyers, purchasing a property at Christmas time can have distinct advantages.  Competition is often reduced at this time of year, as many people are busy preparing for Christmas or have gone away on holidays.  Additionally, the properties on the market may be remnants from the spring selling season, which means they may have been up for sale for quite some time.  If this is the case, sellers are often keen to have their sale wrapped up before the New Year brings a new set of property offerings to tempt buyers away from their own.   

One thing to note when buying at this time is that many of the companies you will use to conduct your property inspections, strata reports etc, may have closed up shop for Christmas.  If buying at auction, be sure to understand that the price achieved is final – you cannot go back to the seller if a later inspection reveals flaws in the property.  If buying privately, with legal advice, try to reach a deal where your accepted offer is contingent on the results of an inspection which will take place in the New Year. 

In any case, good luck if you are planning on selling or buying over Christmas.  And for everybody else, I hope you have a fun and relaxing time over the holiday season.  I will be taking a little bit of time off writing these blogs to enjoy a nice break but never fear, I will be back in 2011 to keep you all abreast of happenings in the property market. 

I hope each and every one of my readers has a happy, safe and memorable Christmas and New Year.  See you in 2011!


1 comments | Posted by Charles Tarbey on 20/12/2010 at 2:56 PM | Categories: Selling - Buying -

Take advantage of current property buying conditions

The Australian residential property market is an interesting place at the moment.   The release of a variety of different statistics in November has indicated that the Reserve Bank’s decision to increase interest rates this month (and the subsequent larger increases by the four major banks) may have translated to a behavioural change in the property market.  

From my position at CENTURY 21, I think that it can be reasonably assumed that buyers are eyeing the property market with caution at the moment.  Home buyer grants have been pulled back, mortgage payments will have increased with the interest rate rise and there is some uncertainty concerning how the RBA will act in December and throughout 2011.   

It is not surprising then, that activity in the national rental market has increased.  The RP Data-Rismark Home Value Index (released at the beginning of November) showed a national increase of 3.3 per cent in capital city house rents and 0.6 per cent in unit rents over the last quarter.  This increase in rental prices suggests that more people are choosing to rent, reducing the number of properties available and pushing prices upwards.

Another interesting piece of data concerns the national auction clearance rate which was recently reported by Australian Property Monitors to be at 52 per cent, quite a reduction from where we saw it at the beginning of the year.  It seems that while homes are still going to auction, bidders are not reaching the reserve price, resulting in the passing-in of nearly half of auctioned properties.   

So what do these figures mean for home buyers? In my view, such conditions could mean some prime buying opportunities if prospective purchasers approach the market in a smart way. 

With the increased activity and prices in the rental market, it may be a good time for property investors to take advantage of the potential for increased future income streams and consider investing in a rental property.  On the flip side, increases in weekly rents could be quite an incentive for those currently renting, but who are in a position to purchase property, to think seriously about entering the market, turning rental payments into mortgage repayments. 

In terms of reduced auction clearance rates, this may not mean that passed-in properties fail to sell at all; it is also possible that sales occur after the auction has been concluded.  If auctions prove to be unsuccessful, buyers could find themselves in situations with reduced competition and therefore potentially increased negotiating power.  Use this to your advantage and be ready, immediately post-auction, to discuss the property with the vendor – such negotiations very often result in an advantageous result for both buyers and sellers. 

Try not to let interest rate uncertainty and other factors deter you from purchasing property in the current market.  There are definitely many situations that could be advantageous and buyers need to be ready to act on them in an intelligent manner.    


1 comments | Posted by Charles Tarbey on 29/11/2010 at 2:18 PM | Categories: Buying -

Doing the research when it comes to House Hunting

The process of buying a property can be as involved or as relaxed as you want to make it.  There are those who like to view multiple properties before settling on one, and others who walk in to the auction of a property they’ve never seen before and make the winning bid. 

Regardless of what type of buyer you are, there are a few pieces of research beyond your typical building inspection that over my time in the real estate industry I have found and seen to be quite helpful when comparing properties and ensuring a certain property is suited to your needs. 

Spend some time in the area before you decide to buy
A common attribute to be found on a property advertisement is the close (often walking distance) proximity of nearby shops, schools and public transportation.  It’s surprising how many people take this at face value and are then disappointed because the ‘local’ amenities are actually quite a fair hike away. 

If the property looks like one you’d be interested in buying, take an afternoon to park nearby and walk around the suburb identifying exactly how far away certain spots are located, and the time it takes you to get to them. 

Ask about the property itself
If the property is older with clear additions to the original structure it is important that you find out when renovations were undertaken.  This should help to give you some idea as to how long you may have before further works will be needed. 

It can also help to know how energy efficient the property is.  This includes whether it has energy efficient appliances and installations such as solar panels or a solar water heater.  If it comes down to a choice between two houses, the knowledge that a certain property could have reduced energy bills may be a deciding factor.

Take care when buying off the plan
Just as older properties could be in need of work, new, off-the-plan properties are not always perfect.  It is often worth doing some research into the developer or builder of a new property, taking into consideration how past projects have stood the test of time and whether the developer has delivered on time.  By doing such research you may be saving yourself further angst down the line if something goes wrong from the developers end.   

By considering a property of interest beyond your conventional (and still very important) professional property inspections, you may be able to determine its appropriateness to your needs, or have further means of differentiating it from other properties also under consideration.  In any case, researching a property and its surrounding area is very important to ensure that you are happy with your new purchase.  


1 comments | Posted by Charles Tarbey on 22/11/2010 at 2:13 PM | Categories: Buying -

The value of buying off the plan and points to consider when doing so

There seem to be two schools of thought when it comes to buying a brand new house or apartment ‘off the plan’ (i.e. before construction on the property has even started).  Some people love the idea that they are the first person to live in the home and relish the fact that everything is new.  Others would prefer to give a building a few years to age, to see how it stands the test of time. 

An article in the Sydney Morning Herald entitled ‘How to buy new’ caught my attention the other day.   I thought it would be an interesting one to share with you, given the stamp duty concessions that the New South Wales government has been offering to the buyers of land and new houses and apartments since the budget. 

In the article, the author Carolyn Boyd goes through some of the things that must be considered when buying an apartment, house or land, starting with the fact that you should avoid falling into the trap of a false sense of security just because it’s new.

Inspections are essential and questions should be asked about exactly what is included in the type of housing you are purchasing.  The display suite is usually the top of the line, most expensive option available and will often include more costly finishes and appliances.  Before buying, ensure you know exactly what will come in the dwelling you decide on. 

As well as knowing exactly what is included, it is also important to understand exactly where in a building or development lot your new property will be situated.  Again, while the display suite may be ideally situated facing the north, your new block of land or apartment may end up with little sunlight.   

The article also recommends that research be conducted into the properties planned around the one you are buying into.  There is nothing worse than buying an apartment which you think has a view, only to discover upon moving in when the complex is built that another building has also gone up beside yours, effectively ruining your outlook or stealing your sunlight.  It is usually a simple exercise to check with council to see if any other developments are planned around yours and to determine the effect this will have on you. 

Finally, it can be a worthwhile exercise to investigate the history of the developer and builder and to talk to owners of properties they have built in the past.  It can be comforting to know before you buy that you are dealing with competent and experienced professionals. 

The stamp duty concessions that we are seeing make it a very worthwhile exercise to research buying off the plan.  As it is with any property purchase, research is an important aspect of the process.  The aim of this research should be to determine as much as you can about the actual property you are purchasing, ensuring there are no unhappy surprises when your new home is actually built. 


0 comments | Posted by Charles Tarbey on 18/10/2010 at 9:41 AM | Categories: Buying -

Settle on inclusions before buying at auction

It’s a realization that can be incredibly frustrating, sometimes tarnishing the experience of moving into a fantastic new home – “But I thought they were leaving the dishwasher/shutters/built- in heater…” 

Many people often assume the inclusion of various fittings, fixtures and appliances in their purchase of a property.  In some situations, it only comes to light upon moving in that various household items which were present upon earlier inspections have been removed and taken with the previous owners to their new address.

The best way to avoid this situation is to cover every eventuality before you settle on a purchase or raise your hand to buy at auction.  Although property laws can differ in each Australian state, a property’s sale contract should usually be made available to each prospective buyer, which will outline all household items that are included in the sale. 

You should try to get a copy of this contract as soon as possible, giving yourself ample time to go over it with your legal representation clarifying any issues you may have regarding inclusions.  For instance, it may be assumed that a set of plantation shutters are included with the house, however it is not set out specifically in the contract.  This should be discussed with the sellers and the contract amended to reflect the outcome. 

Remember, once your bid is accepted at auction, it is taken that you accept the sale contract in its current form.   You will not usually have a chance to change or add any household items once the hammer has dropped. 

If you have addressed your legal paperwork correctly to begin with, you could have the grounds for legal recourse if you realize that certain household items that had specifically been included in the sale contract have been removed from the property.  Usually the best approach can be to contact the real estate agent who has been handling your purchase, who can then contact the seller.  In many cases, a simple misunderstanding has occurred and the items can be easily returned. 

As a seller, the best way to avoid any misunderstandings regarding items to be included in the sale of your home is to be clear and upfront from the beginning of the selling process.  If you would like to take a particular appliance or fixture with you, make sure this is stated in the contract of sale and that your selling agent informs prospective buyers of it. 

If you have any questions regarding what household items/fixtures are usually included in the sale of a property, please contact your local CENTURY 21 real estate agent, who will be able to advise you. 


0 comments | Posted by Charles Tarbey on 24/08/2010 at 1:43 PM | Categories: Buying - Investors - First Home Buyers -

Professional property inspections - should you have one before buying?

It is a question that we often hear from buyers who are considering the purchase of a property - should I have a professional property inspection conducted before buying? While I can’t speak for every real estate agent in the business, from my experience I can tell you that arming yourself with the knowledge from a property inspection usually puts you in a much better position. 

The purpose of a building inspection is to determine any issues that may exist in a property that you are looking to purchase.  This will allow you to make a judgment about the property based on all relevant information. 

You should ensure that the specialist you employ to conduct your property inspection is appropriately qualified and properly insured.  Inspectors are often professional builders, architects or surveyors. 

The inspector should examine all aspects of the building to which there is access.  This includes the building’s interior, exterior, roof, under the flooring and any other on-site structures, such as fencing, sheds, carports and driveways. 

Be aware that there are some aspects of a property that building inspections may not cover, for example the presence of pests and defects that arise in certain weather conditions, such as flooding.  It is often a good idea to clarify with the specialist exactly what will be covered before the inspection takes place. 

After the inspection you should receive a report, detailing the state of all elements examined.  Note that a building inspection does not usually include a quote for any remediation works – in most cases this will need to be obtained separately. 

The different methods of selling a property will affect when the property inspection should take place.  In the case of a property going to auction, you must have completed a property inspection prior to sale.   Once you have won the auction, you will have no recourse if faults in the property become evident.  

In some cases when a property does not go to auction, it may be possible to have an inspection conducted after an offer has been successfully accepted.  In this situation, your purchase could be contingent on a satisfactory inspection report.  Your real estate agent will be able to offer further advice and guidance in these cases. 

If an inspection finds a fault in the property, this doesn’t mean that you shouldn’t purchase it.  However you will now have the opportunity (time permitting) to obtain a quote for works to rectify the issue, which can sometimes be used to enhance your negotiating position.  Alternatively you may choose to abandon your purchase altogether if the price of extra works needed falls outside your budget.

 


0 comments | Posted by Charles Tarbey on 19/08/2010 at 9:35 AM | Categories: Buying - First Home Buyers -

What's in a (street) name?

A very interesting study came across my desk the other day that I thought was worth sharing.  Apparently, in the UK, living on a ‘street’ isn’t all it’s cracked up to be. 

A study by the UK property website Zoopla looked at the average property values for each of the 858,000 residential locations in the UK.  It found that properties located on ‘Hills’ and ‘Lanes’ are worth more than the national average, while ‘Streets’ and ‘Terraces’ have the lowest average property values. 

Other value-topping names included ‘Lane’, ‘Mews’, ‘Park’ and ‘Green’, while  ‘Crescent’, ‘Court’ and ‘View’ didn’t fare so well. 

Why the price discrepancy? A simple conclusion to jump to would be that the less common street types represent the pricier places to buy.  But this is not so, according to the study.  The least common of the top 20 street names, ‘Square’, has an average value only slightly higher than the national average, while ‘Lane’ is one of the most common names but still possesses the highest average price tag.   

The study reminded me of some press in Australia that I read awhile ago which considered the effect of street names on house buyers.  Some real estate agents spoke of buyers being put off by certain street names, and gravitating towards others. 

Sound ridiculous? Apparently not to the residents of Bogan Place, Wahroonga in NSW.  So sick of their street sign being stolen, not to mention the negative connotations associated with the word, in 2008 the local council was petitioned and the street was renamed ‘Rainforest Close’. 

What then, is the meaning of such research for buyers in today’s market?  I don’t really think a street name or type should be seriously considered as a deciding factor in a property purchase. 

It is perfectly natural for certain names to resonate well with you, while others may not seem as desirable.  However, there are many other factors that come into play to determine the value of a property and its appropriateness for you. 

Distance from public transportation, schools, local amenities and the city will have much more of an impact on value than street name, and should all be taken into consideration before a decision is made.  


0 comments | Posted by Charles Tarbey on 27/07/2010 at 1:50 PM | Categories: Buying -

Some reasons to consider owning over renting

We’ve been hearing a lot in the media lately about housing affordability worsening and the preference of many to rent as opposed to buying property. 

Buying a home is a significant investment; for those used to renting it can sometimes be difficult to comprehend the financial outlay involved in making such a purchase.  Many people I have come across are uncertain about the direction of interest rates, and worry about landing themselves in an expensive mortgage.  Some would rather the ease of simply paying their weekly rental amount. 

This is completely understandable – I think most people have worried about their mortgage at one point or another.  However, the way I see it, mortgage payments are very similar to rental payments, with one difference. 

Rent lacks the predictability that a mortgage repayment represents.  If you opt for a fixed-rate mortgage, you can plan out your repayments in advance for quite a substantial period of time.  Rent on the other hand can change depending on the length of your lease arrangement and is affected by market conditions.  If for some reason you must leave your rented property, there is no guarantee that you will be able to find a similar place for the same price. 

Every mortgage repayment made is a regular contribution, and after a period of time you will own a substantial investment.  If you wish to do so, this investment can be liquidated, and when sold is often worth more than the sum of your repayments (including interest). 

When renting, on the other hand, you are making the same regular contributions, however you will never see the money again. 

Putting talk of money aside, there’s something quite satisfying about owning your own home.  You own your walls, can paint them any colour, hang anything on them, or even knock them down if that’s what you feel like doing.  Landlord inspections or maintaining maintenance standards will never be events that you have to deal with. 

Owning your own property is not for everyone, but can definitely be worth the effort and saving.  The way I see it, with rental payments in many cases equalling mortgage repayments, buying should be at least considered as a very real and financially sensible option.


0 comments | Posted by Charles Tarbey on 05/07/2010 at 9:29 AM | Categories: Buying -

First things first – to buy or to sell?

A question that CENTURY 21 agents are often asked concerns the timing of the moving process – should you buy or sell first? In my experience, there really isn’t one correct way of moving house; buying first works for some people and selling first is the right choice for others.  I thought I’d use this blog to go through some of the benefits and disadvantages of both as I see it.

Selling your home before buying another is often considered a safer way of doing things; once you sell, you know exactly how much money you have available to spend on your new property, and it will be in your bank account ready to go.  In many cases, you’re so wrapped up in preparing your property for sale that there just isn’t enough time to also be house hunting anyway.   

Synchronizing the sale of your own home and the purchase of another can sometimes be tricky.  If you haven’t found a suitable property to purchase by the end of your settlement period, you will be forced to rent until something you like comes onto the market. 

Now renting can be expensive and it only eats into the money that you will use eventually to buy something with.   Rental agreements have to be signed which will lock you into monthly payments, sometimes for an extended period.   We sometimes see people so exhausted by a failed property search, then a rental search followed by a move, that it takes some time before they start the house hunting process again.   

Now with many residential property forecasters predicting further robust growth in home prices this year the idea of buying before selling has some merit to it.  If you can buy at a lower price and then sell when values have increased slightly, you could very well gain financially. While this can happen, always remember that prices and markets fall as well. 

Unless you’re in a position to be able to afford both homes at once, you will likely need to sell the original property in order to fund the new one.  Not surprisingly, this can create a fair bit of stress.  Some people can handle this stress while others may find it extremely unpleasant. 

It has been in the news lately that there is a bit of a shortage of properties in the rental market.  If you are in a position to afford your two properties comfortably, then it may not be a bad time to consider holding on to your original property after you move and renting it out.  There are certain tax implications to consider here, however you may find that this is a suitable solution for your situation. 

Ultimately, common sense is usually a good guide.  If you live in a property that looks like it may be hard to sell, then buying before it has been purchased may perhaps not be the best idea.  Alternatively, if you live in the type of house that is in high demand and you find something that you love before it sells, then buying could be the right option for you. 

In any case, whatever decision you make should be based entirely on your own personal circumstances.  It may help to talk to a real estate agent you trust and get his or her opinion.  

 


0 comments | Posted by Charles Tarbey on 22/06/2010 at 12:00 AM | Categories: Selling - Buying -