Viewing by month: August 2010

Have you considered refinancing your home loan?

Home loans can be quite interesting.  They are often a topic of interest in the media and most people know of their existence even if they don’t actually have a mortgage themselves.  However the finer details of what a home loan involves and how they work are often misunderstood, even to people who are mortgage holders. 

Did you know, for example, that even if it takes you twenty plus years to repay the amount you originally borrowed to purchase a property, you do not have to stay in the same home loan and there are often options for you to change lenders? In some cases the process of refinancing allows people the flexibility to improve their mortgage. 

Mortgage holders refinance for different reasons, however a common motivation is usually because an alternative home loan product has become more suitable.  Changing personal circumstances, for instance, may mean that different home loan features are needed.  In addition, interest rates movements over the years could see less expensive mortgage options become available.

The best way to start the refinancing process is often to take a good look at your current home loan and make sure that you fully understand your interest rate, all fees and the benefits you receive.  You may find that your current loan has features that were relevant when you first needed finance, however are no longer necessary (or vice versa).  Altering these features could have an effect on the interest rate you must pay. 

With a comprehensive knowledge of your current mortgage, you will now be in the best position to consider alternative home loan products and compare them with your own.
 
In order to see what mortgage products are on offer in the marketplace, a home loans broker may be your best starting point.  Brokers such as CENTURY 21 Home Loans will be able to show you a wide variety of loan choices from both your own lender and others, allowing you to easily compare the majority of options available and assess their suitability.  

Be sure to take into account all of the extra charges associated with each option, as well as any exit fees that may be incurred if you close your current mortgage.  Although you could find a mortgage with a lower interest rate, there may be no point in switching if the exit fee you will incur is larger than the monetary savings you could make. 

In the end, even the simple research process of comparing your loan to other mortgage products and talking to a mortgage broker, such as those at CENTURY 21 Home Loans, can set your mind at ease that your current loan is the best product for you. 


4 comments | Posted by Charles Tarbey on 25/08/2010 at 2:40 PM | Categories: Finance -

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 -

The importance of scent to the sale of your home

It is widely recognized that your sense of smell is an incredibly powerful tool.  As the only sense hardwired to our brains, smell has the power to create associations, often causing reactions to particular scents.  Smell influences us to the extent that companies often use additives to enhance the smell of food products, drawing us in. 

So what does this have to do with buying and selling real estate? More than you would think.

In the process of preparing their homes for sale, people sometimes forget to pay attention to an unseen, yet important aspect - the way their home smells.  When you spend a large amount of time in a certain place you often become accustomed to the way it smells.  However, particular odours that you may be used to could have the potential to gear people negatively towards your property before they have had time to even view it properly. 

Garbage is a common example.  Although you may clear your garbage bins regularly, you may not realize that the bin itself often retains a lingering smell.  Before selling your home, try to spend some time cleaning and sanitizing your internal garbage bins and always make sure to remove any rubbish from them before people inspect your home. 

It may also be a worthwhile endeavour to move your larger, external rubbish bins to a neighbour’s house while any inspections on your home are taking place. 

Another contributor to unpleasant household odours can be the types of food that you cook.  The smell of fish, cabbage or garlic, for example, often lingers for a long while after being prepared, even despite the kitchen being properly cleaned. 

With this being the case, try to avoid cooking any food that you know carries an unpleasant after-smell when you have an open inspection scheduled for soon after. 

I don’t think it will come as much of a surprise to anyone when I say that the smell of cigarette smoke is a common turn-off for buyers.  Not only is the smell unpleasant, many people associate both the activity and the odour with unhealthiness, sometimes negatively affecting their initial perception of a property. 

If you are a smoker, make sure you cease smoking inside altogether if you are planning on selling your property.  When smoking outside, make sure all of the doors and windows are closed, ensuring that the smoke is not carried inside. 

When the time comes for people to inspect your property, it may be worthwhile to install a small, plug-in air freshener with an unobtrusive scent.  But remember to keep it on a low-setting – your aim is never to overpower people’s sense of smell, rather simply to appeal to it. 


0 comments | Posted by Charles Tarbey on 16/08/2010 at 12:40 PM | Categories: Selling -

Good news for home owners as interest rates are left on hold again

For those home owners with a mortgage, or prospective buyers looking to purchase real estate soon, last week’s interest rate decision by the Reserve Bank of Australia was good news and brought some relief. 

After almost a month of speculation that interest rates would be increased in July, the RBA decided to keep rates steady at 4.5 per cent, making this the third consecutive month that interest rates have been kept on hold. 

The RBA’s decision came off the back of official inflation data for the June quarter which showed that inflation was far lower than expected, potentially indicating that consumers are spending with caution.  Glenn Stevens, the Governor of the RBA, said that he expected core inflation to fall within the top half of the RBA’s target zone until mid-2011. 

As a result, many economists are now expecting that rates will be held at 4.5 per cent until mid-2011, unless there is an increase in consumer spending. 

For mortgage holders the rate decision buys some more time before the possibility of an increase in monthly mortgage repayments occurs.  But how long will this last? Nobody can be certain.  Definitely until the first week of September when the next decision is due and very possibly into next year. 

I think that the wisest financial approach to this unknown period would be to prepare your budget and position yourself well for potential rises in the future.  Now is the time to consider your household expenses and look to see if there is a little bit spare here and there which can be used to build up the equity in your mortgage.  Now that we’re coming to the end of winter for instance, the savings you start to make as you reduce your heating costs could be contributed towards your mortgage. 

For prospective buyers, as banks are likely to increase their rates in line with the RBA, you now have at least another month to secure an attractive fixed rate mortgage.   Our internal CENTURY 21 data suggests that property listings are currently up compared to where they were last year, which means that there could be buying opportunities aplenty near where you are. 

Whether interest rates change next month or next year, just remember that they can’t stay on hold forever, which means that your monthly mortgage repayments could change.  If you plan ahead for this, you can effectively diminish the effect that any increase in rates has on your budget. 

 


0 comments | Posted by Charles Tarbey on 09/08/2010 at 12:31 PM | Categories: State of the Market -

Real Estate and The Election

It won’t be long until August 21 rolls around and all Australians will be asked to make a decision about who is to lead our country for the next three years.

From the perspective of the property industry, this upcoming election holds a number of key issues, including increasing population growth, interest rate uncertainty, housing affordability and taxes. 

From my position as General Manager of CENTURY 21 Australia, regardless of who wins the election, I see very clearly an opportunity for whichever party is elected to address the worsening housing situation we are seeing in Australia. 

The fact that Australians are worried about their ability to afford basic housing is no secret; even the Governor of the Reserve Bank spoke publicly a little while ago about his fears that his children would not be able to own their own homes due to the property boom in Sydney.

There are a few reasons for the housing supply shortage that we have started to see and expect to worsen, however many agree that government policy (at all levels, not just federal) seems to top the list.   A recently released J.P. Morgan report, for example, suggested that the supply of new houses has clearly been restricted by government policy restraints. 

Housing is a basic need, and as such, housing availability and affordability is an issue of vital importance to the Australian public.  This election represents an ideal time for our leaders to step up and acknowledge that housing is a major issue by making policy decisions that aim to address the situation. 

Australia is already at a deficit when it comes to the amount of houses needed – data from the period between the last quarters of 2006 and 2009 shows that the construction of new dwellings was approximately 180,000 dwellings short of demand (J.P. Morgan).  It will likely take significant reform to ensure that construction commences and the deficit is reduced – as opposed to this deficit simply worsening into the future. 

But we are still at a stage where large-scale land release strategies and incentives to increase housing construction can have a significant impact to improve the national supply shortage.  This is good news – the only barrier of course being the uncertainty of electing a Government who will enact the necessary reforms. 

In my mind, it could be very disappointing from a real estate perspective to see little change result from this election.  The issue of Australia’s housing shortage isn’t one that can simply disappear. 

 


0 comments | Posted by Charles Tarbey on 02/08/2010 at 12:50 PM | Categories: State of the Market -