So which method of sale should you choose?  To help make a more informed decision, realestateVIEW.com.au has compiled a list of pros and cons to weigh up when selling your home.

Selling at Auction

Benefits

1)      Sense of Urgency; Auctions generate a sense of urgency amongst buyers.  This sense of urgency is due to there being a set ‘end date’ for the sale of the property and this compels potential buyers to make a decision on the day.

2)      Competition Amongst Buyers; At an auction, competitive bidding amongst potential buyers means that the selling price often exceeds the expected value of the property, maximising the sale price for the seller.

3)      Reserve Price Protection; An auction provides sellers with protection in the form of a reserve price.  This means that your property will not sell unless bidding reaches a pre-agreed level.  Further, there is no ceiling price, so you have the opportunity to achieve a price well above your expectations especially if there is a competitive crowd.

4)      Set Terms; Auctions are suited to situations where the owner wants an unconditional sale (no cooling off at auction) or wishes to set specific terms of sale, such as settlement terms to suit the vendor.

Limitations

1)       Cost; There may be additional costs involved to sell a property via auction to cover the cost of hiring a specialist auctioneer.  It is important to discuss and compare the costs to sell via auction or private sale with your agent.

2)      Sales Evidence; For properties where there is ample accurate sales evidence, an auction may not be the best way of selling.  For example, for a large block of identical units which are all of a similar specification, everyone would be aware of the sale price of other units, thus private sale could result in a higher sale price per property.

3)      Special Conditions of Sale; Generally, auctions are not suited to buyers who wish to purchase subject to finance as often bids are unconditional.  This limits the potential number of buyers that your property could appeal to.

Tips for a successful auction

• Selecting an auctioneer; The auctioneer will play a key role in the success of your sale, particularly in a scenario where only one or two bidders turn up on the day.  Ensure you see several auctioneers in action before deciding on whom to go with.  Ask them about their agency’s strategies to maximise the best price for your property, and choose an auctioneer with a proven track record in auctions and an excellent knowledge of the local area.

• Setting a reserve price; Settle on a final reserve (i.e. the lowest price you are willing to accept) in the days leading up to the auction.  It is important that the reserve is well planned, so that you don’t end up negotiating this half-way through the auction when time, pressure and emotions are high.  It is also important that you do not disclose or discuss your reserve price with anyone except your agent/auctioneer.

• Contracts; It is important to make sure you have the contract and vendor statement available well before the auction date.  This way you will have everything prepared in advance, and not have to stress over these details in the days leading up to the auction.

• Accepting market value; Be prepared to accept the market value on auction day, provided there has been competitive bidding between multiple bidders.   Sometimes auctions achieve results lower than your expectations as a result of market conditions, and this is why you need to properly plan your reserve price.

Private Sale / Treaty

Benefits

1)      Less intimidating for buyers; For many potential sellers and buyers, the thought of an auction can be quite overwhelming and intimidating.  For this reason, private sales / treaties can be beneficial in that sellers have more time to consider offers made by potential buyers and vice versa.

2)      Urgency to sell;  Private sales / treaties are suited to sellers that do not have an urgency to sell, and where they may be open to accepting different sale terms, such as an extended settlement period, sale subject to finance or subject to the sale of the buyer’s home.

3)      Cost; Selling via private sale / treaty can often prove to be less expensive than an auction, as marketing campaigns for private sale properties are usually not as extensive.  It is important to discuss and compare the costs to sell via auction vs private sale with your agent.

4)      Privacy; As a private sale / treaty occurs through a negotiation process, it provides greater privacy and enables you to keep the specific details of the sale out of the public eye.

Limitations

1)      Cooling off period; Private sales / treaties are usually subject to a cooling off period (this period differs by state), as a result the buyer could change their mind after contracts have been signed.

2)      Sale length; Selling via a private sale / treaty method often can take more time than an auction.  This is because there is no specific end date to give prospective buyers a sense of urgency.  No deadline may also mean that potential purchasers may not be motivated to act as quickly.

3)      Maximising the sales price;  A key limitation of private sales / treaties is that the price is negotiated down compared with auctions where the bids increase.  This means that the property is less likely to sell for more than the asking price.

Tips for a successful private sale / treaty

• Creating interest in the property; If timing of the sale is important to you, discuss your options with the agents you are considering engaging to sell the property.  Some options to speed up the sale may include: additional advertising; setting a lower asking price; being flexible about inspection times; or making some quick cosmetic changes to the property.  You may also consider selling via “expression of interest”, which calls for offers by a specific date.

• Pricing your property;  As the price is often negotiated down in the private sale method, it is important that you price the property slightly above the price you would like to sell the property for.  By doing so you will increase your chances of reaching your asking price after the negotiation process takes place.

According to Rich Harvey, CEO of www.propertybuyer.com.au, one of Sydney’s leading buyer advocacies, “current market conditions are making it difficult for many to get onto the property ladder. As a result, looking for alternative ways to get into your first home may be a perfect solution for many who are just starting out and unable to do so, on their own.”

“When buying property, it is important to identify what works for you and your finances and set yourself long term strategic goals and if an alternative method of getting on the property ladder will help you achieve your long term goals, you should consider it.” says Mr. Harvey.

Alternative Ways to Get on to the Property Ladder

Mr. Harvey states, “One option many people do not consider, but should, is improving their skill base and hence increasing their wage. This allows the possibility of saving for a deposit or having the ability to pay mortgage repayments.” He continues, “Education, short courses or self study are options that many do not consider unfortunately, however, they are sure to make a difference.”

But if increasing your salary is not an option, what are the other alternatives?

1. Shared Ownership

Purchasing a property with family members or friends is one alternative to consider when trying to get your foot in the door.

Buying a property with another party can provide a significant upside as the burden is spread across two parties. Shared ownership will enable both parties to save for a deposit in a shorter amount of time and allow you to take out a lower mortgage for your portion of the property.

However, you must take care and ensure that both parties’ interests are protected. Mr. Harvey advises to “ensure you get along with the person you intend to purchase with, as well as establish a written agreement stating the aims and intentions of those involved. This will help you to avoid and solve any complications in the future such as disagreements on when to sell the property and / or paying each other out.”

2. Parental Assistance

The help of parents and other family members can be vital when attempting to get on to the property ladder. Your family may be able to assist with the initial deposit or with repayments during the first few years of your loan. This option may relieve short term financial stress and frustration felt when trying to go it alone.

“This alternative is ideal to start off with” says Mr. Harvey, “however it can make buyers a little lazy as it does not teach you to stand on your own two feet. That being said, in difficult times this is a great option.”

3. Buy to Invest

“Buying a property as an investment rather than an owner occupier is another alternative way to get on to the property ladder”, says Mr. Harvey. Although you still need a deposit, once the property is occupied by a tenant, they will make constant contributions towards your mortgage via regular rental payments. However, this option may only be viable if you are currently living with family or friends rent free. Otherwise, you will have to cover the shortfall in mortgage repayments as well as pay your own rent.

4. Rent to Buy

‘Rent to Buy’ is a leasing scheme which allows the rental of a property for an agreed period of time. At the end of this period you will be presented with the opportunity to purchase the property.

‘Rent to Buy’ schemes offer the ability to move in without the substantial upfront costs. It also provides an agreement on the final purchase price of the property. Thus if you decide to purchase the property at the end of the lease period, the price you will pay is set. If you no longer wish to ‘rent to buy’ the property, you can walk away from the agreement with only a few months notice and no further commitments.

“The big advantage of this option is that you can get into your own home, without saving up a substantial deposit. However, you must be careful not to fall behind in rent and any other payments as you may lose the option to buy at the end of the lease,” warns Mr. Harvey.

Benefits to buying off the plan:

• Lock in a price – One of the advantages of buying off the plan is that you will pay the current market price for a property, even though it will be completed in the future.
• Securing a high value asset for a low initial capital outlay – While a deposit is made to secure the property (usually 10%), the entire payment doesn’t need to be paid until the property has been built. This provides you with time to organise your finances and if required sell your existing home without the need for bridging finance.
• Increase in property value – If the market experiences growth, the property you purchase off the plan today may increase in value when you settle two years later.
• Tax advantages – If purchasing for investment purposes, you may be able to claim depreciation on your tax for items like fixtures and fittings. It is important to consult your Accountant to find out if you are eligible.
• Stamp duty savings in some states – State governments (in certain states) offer bonuses and reductions in stamp duty for buying off the plan which can save you thousands of dollars.
• Seven year builders guarantee – Newly built properties in Australia come with a 7 year builders guarantee which means structural or interior building faults must be repaired by the builder.

Risks to buying off the plan:

• Falling property market – There is a risk that you may pay too much for a property if the market falls between the exchange of contracts and building completion. If this does occur you may find it difficult to secure finance for the full amount.
• Failed expectations – As many builders do not allow you to see the property until construction has completed, there is a risk that what you envision is not what you will receive. The quality of work may also not meet your standards.
• Rising Interest rates – Interest rates could increase before you settle on the property which is problematic if you wanted to fix the term of the loan at the current interest rate.
• Bankruptcy – Many buyers fear the developer could go into liquidation before the project is completed. You need to ask what the options are if this occurs; will you get your money back and what guarantees do you have?

Ensure you have a Solicitor or Conveyancer check the terms of the agreement to ensure you are protected should this occur.

Before you sign the dotted line…

• Visit the property site and check the location. If there are other constructions in the area, it may affect your view.
• Carefully inspect the display home, models and plans. Investigate the fixtures, fittings and finishes.
• Research the market conditions and speak to an expert to determine the property prices.
• Research the developer. You may wish to:
  o Ask how long they have been in the industry and how many properties they have built.o Visit your developer’s previous work, inspect the quality and speak to previous clients to determine their satisfaction with the property.

  o Ask questions to determine what is covered as part of the purchase price, for example, what fittings, floor coverings, painting and decorating is part of the package and what is additional.

  o Discuss your expectations for the property with your developer and have them written into the contract to avoid disagreement with the developer at the completion of the project.

  o Obtain guarantees of their financial status written into the contract if possible, to avoid encountering financial complications with the developer. Ask to see the developer’s balance sheet to determine their financial strength as there is a risk that if the developer goes into liquidation before the property is finished you may lose your deposit and other costs.

• Carefully review the contract with a legal professional. Take note of:
  o The completion date.o If there are penalties if you withdraw from the contract.

  o If you can visit the site during construction.

  o If you can make changes to finishes and fixtures.

  o What happens if the developers run into financial problems and what happens to your deposit?

  o What happens if faults are identified post-completion?

To help you navigate the investment process, this guide has been developed to provide you with everything you need when starting out in property investment. With the help of various tips and checklists, this useful guide will help you to secure the right investment property.

June 2011, First Edition

Buying an investment property can be an overwhelming decision.

To help you navigate the investment process, this guide has been developed to provide you with everything you need when starting out in property investment. With the help of various tips and checklists, this useful guide will help you to secure the right investment property.

• Contents
• Why Invest in Property?
• Cost of Investing
• What Makes a Good Investment Property?
• Understanding the Property Cycle When Buying
• Tax for Property Investors
• Managing Your Investment Property
• Your Responsibilities as a Landlord

Why Invest in Property?

Investing is a choice many people make at one point or another, in the hope of bringing wealth to their lives. Whilst there are many investment alternatives such as stocks, bonds and cash, property investment tends to be viewed as one of the safest and easiest options.

However, property investment isn’t for everyone. Thus if you are considering investing in property, it is important to weigh up the pros and cons.

Pre-Inspection

There are a number of documents which are usually required to accompany your rental application. Prior to commencing your search for a rental property you should collate these relevant documents in preparation for when you need to submit an application. This will further improve your chances of securing the property and ensure you are fully prepared to attend inspections.

Important Documentation

• Reference letters – any reference letters you may have had from past landlords and employers. This will establish your employment and rental history and may assure the landlord that you are genuine and trustworthy.

• Pay slips – proof of employment, your previous pay slips and bank statements will demonstrate you are financially able to rent the property.

• Pet references – if you have a pet, it is advised to include a pet reference from your past or current landlord; stating the condition of the property upon vacation and disturbance level from your pet whilst you were living there.

• Photo identification – this, in the form of a driver’s licence or even a passport, confirms you are who you say you are.

• Deposit / rental ledger – this document provides a summary of your payment history for a previous rental property. Created by your previous agent, this document is highly regarded and therefore should be on the top of your priority list.

• Cover letter – you may even wish to include a cover letter with your application form, reinforcing the reasons why your application should be considered by the agency / landlord. This extra effort will demonstrate a type of professionalism which will surely stand out from the crowd.

Scheduling & Attending Inspections

Scheduling an Inspection

Once you have found a property of interest, the first step is to contact a real estate agent and organise an inspection as soon as you possibly can. If they are proving to be difficult to contact, be persistent and keep trying until you succeed.

Ensure all applicants / housemates have also collated the above documentation. If you are the only one who comes prepared to the inspection, this will slow down your application submission and may result in missing out on securing the property.

As the rental market is extremely competitive, request an application form in order to fill it in beforehand and submit it on the day of the inspection. Alternatively, be prepared with all the required information to fill it in on the spot, in the case you are interested in applying. Ensure your application form is thorough, fully completed and neat.

Attending the Inspection

When attending inspections, be sure to make a good first impression. Introduce yourself and be polite, friendly and enthusiastic. This, along with your neat, tidy and presentable appearance, will help you stand out and be remembered when agents / landlords are looking through all the applications.

When you are viewing the property, treat it and its belongings with respect. By doing this, the real estate agent will get a preview of how you may act if you lived there. Likewise, if you show your enthusiasm and state why you like the place, it may showcase what kind of tenant you might be; eager and likely to sign a long lease.

If you are happy with the property and your application is ready for submission, it is important to be prepared to pay the first month’s rent and a bond should you be successful.

Post Inspection

Ensure you follow up with the agent a few days after you have attended the inspection. This will showcase your interest and dedication to the property, as well as guarantee that the agent knows your name, hence becoming more familiar with you and your application.

To ensure that you appoint the most suitable agent to manage your property it is important to do your research and meet with a few agencies before making a final decision.

Once you have shortlisted a few potential property managers you should meet with them individually and ask them some key questions to make a more informed decision.   Below are some of the key questions we feel are important for you to ask before you make that final decision.

Questions to ask when interviewing a property manager:

1. Does your agency have a dedicated property management department?

Some agencies will view the task of property management as less important than selling and will therefore leave this task up to the front desk staff or receptionists. Discover if the agency is experienced in the area of property management and has dedicated staff to effectively manage your property.

2. Is a director/owner of the agency overseeing the property management department?

How focused is the agency on property management? The more important property management is to an agency, the more successful they may be at effectively managing your property.

3. How many years of experience do you have in property management?

Experienced property managers will be able to attract the best tenants to look after your property and deal with those that become difficult.

4. Can you provide me with a written comparison of rental values in the market?

An experienced and knowledgeable agent will be able to benchmark comparable rental properties on the market and advise you of the optimal rental return you should receive from your property.

5. What is your process for reviewing potential tenants?

How do they determine whether the tenant is suitable for a property? Do they conduct police checks, or checks regarding their past rental history, current employment, etc?

6. How many properties are you managing at the moment?

Are they representing many other people, hence being reputable and successful? Bigger however is not always better, it is also important to establish if you will be a priority and get the service and attention required during the property management process.

7. Will you go to court to represent me if needed?

In the case that you experience difficult tenants, you may need to go to court to resolve certain issues about the bond or other matters. The property manager you decide on will need to be experienced and willing to support you in these times.

8. Will you advise me of any maintenance and repairs that need to be made to the property?

In particular when non urgent repairs need to be made, will you seek approval before getting items repaired?

9. What are your fees?

Enquire about management fees as well as any other costs a property manager may charge. Typical fees you may incur include those related to sourcing tenants, ongoing management of property and monthly statement fees.

10. Can I please see some references or contact details of the landlords using your property management services?

What level of service was provided to past clients? Did they take care of the landlord and follow through on all which was promised?

Your home is overpriced

Overpricing is the most common mistake and reason why homes do not sell particularly in a flat market. If your home is overpriced, even by the smallest amount, it will be noticed by buyers and it may turn buyers away. Overpricing will also immediately put your home in competition with properties that offer better value for money. To ensure a successful sale, your goal is to compete with the houses similar to yours in the market.

Overpricing may also result in your home remaining on the market for too long. This can damage your chances of a sale as the buyers will begin to question and wonder if there are more serious reasons why it isn’t selling.

It is a buyer’s market

A buyer’s market occurs when the number of homes available for sale exceeds the number of buyers who are looking to buy. In a buyer’s market, buyers have the power in the negotiation process therefore being inflexible on terms like settlement may also be impacting your ability to sell. It is therefore vital to consider where you would be willing to be more flexible to secure a sale.

Your house lacks appeal

In a sluggish market, there are fewer buyers and excess stock. If your home lacks appeal it could hamper your ability to sell as those that are the most appealing are the ones attracting interest. Therefore you need to work on your home’s appeal. Investing a little bit of time and energy into ensuring your property is presented in the best light can go a long way in attracting a qualified buyer. If your home is not showing well, you will fail at attracting buyer interest.

Street Appeal / Outside the Property

>> A neat entrance will enhance street appeal and leave a positive first impression. A good first impression will entice buyers to come in and inspect your property and ensures your property appears to be well maintained and taken care of. You may consider:

»» Painting or replacing the front door

»» Fixing the letter box

»» Tidying up the front garden by cutting down overgrown plants and trees and keeping the lawn neat.

»» Cleaning out garages and sheds to make them look more spacious.

»» Fixing little defects such as dripping taps or broken gates, and ensuring any fencing or other outside areas do not need to be re-painted.

»» Ensure your house number is clearly visible.

>> Wash down and clean external walls, gutters and any outdoor furniture.

>> Update the garden by simply adding some mulch and / or planting colourful flowers. Both of these inexpensive methods will instantly improve the appearance of your garden.

>> Ensure any water features such as pools or ponds are clean.

Inside the Property

>> Painting in natural, contemporary colours will instantly update your home without spending too much money.

>> Cover old sofas with new throws and cushions.

>> Change flooring to modernise and update a dated look.

>> Changing the lighting fixtures, both inside and outside the property can provide a more modern look.

>> Eliminate any unnecessary clutter to make the rooms more spacious. This may include removing extra furniture which is overcrowding the rooms.

>> Clean carpets or wash curtains to remove any lingering odours and to breathe new life into tired furnishings.

>> Tidy up cupboards and clean up storage areas.

>> Fix little defects such as dripping taps or noisy doors and windows.

>> Fix any cracks in the flooring or tiles and patch any holes in the walls.

Our Top Tips:

Capitalisation – It is important not to over capitalise when making improvements. The cost to improve particular areas may not net a higher return in the sale price (over and above the investment). Therefore it is important to discuss this with your valuer or agent before making the investment.

Stylist – If your furnishings are a little outdated but you do not have the time or money to replace them, you may wish to consider hiring a stylist. An experienced stylist will replace your belongings with hired furniture, to give your property a makeover.

Time of open for inspections – Try to coordinate open for inspections at times which may present your property in the best possible way. If you choose to showcase it at night, ensure all lights are turned on and blinds are open to make it more inviting.

Open for Inspection / Auction Day Checklist

• Aside from the initial preparation which can be made before listing your property, it is also important to ensure your property is impeccably presented on all open for inspection days and the auction day. Use the below checklist to make your home shine.

• Clean! Pay special attention to walls, floors and remove any mould from tiling in the bathroom and kitchen.

• Remove any items that are cluttering the rooms and ensure everything is put in its place. Pack up any everyday living objects such as children’s toys in a box / basket and take with you when you leave the property for the open for inspection.

• Remove or replace any favourite items or fixtures which will not be included in the sale of the property i.e. chandeliers, appliances, etc.

• Bake fresh bread, cookies, etc. or brew fresh coffee just before the open for inspection begins. Friendly aromas are inviting and create a homely atmosphere.

• Set the mood by putting on relaxing background music.

• Use your best linen and towels to display; ensure they are clean.

• Buy fresh flowers and display in numerous places to brighten up the place.

• Remove your pets from the house.

• Keep bins out of sight, both inside the property and out.

• Do not linger. Leave the premises at the time of the open for inspection.

This guide has been designed to assist you in the moving process, from start to finish, making your move as smooth as possible. We’ve put together some tips that will help you have a stress free move.

July 2011, First Edition

Moving can be tough. Especially if you haven’t moved before or if you have no idea where to start. This guide has been designed to assist you in the moving process, from start to finish, making your move as smooth as possible. We’ve put together some tips that will help you have a stress free move. Moving with kids, pets or just need some general advice on how to move? We have got it covered.

• Contents
• Where To Start
• First Time Movers
• Packing Tips
• Booking Moving Services
• Connections and Change of Address
• Moving into a Brand New Home
• Moving With Special Requirements
• Moving Interstate/Overseas
• Moving Checklist

Where to Start

So you’ve decided to move, but where exactly do you start? There are many things to consider when moving home, from utility connections to notifying companies of your address change and organising all your moving services for the big day.

Firstly, think about what date you are going to move. Think about what services you may need, from truck hire, removalists, cleaners and more. Once you have set a date, you can work towards getting everything else organised.

One of the most important things to consider is organising your utility connections and disconnections. This should be organised 2 weeks prior to your move, to ensure you aren’t left without electricity on the day you move. Some connections can take a few days to commence, so make sure you get organised early to avoid any extra stress.

Telling people of your new address is something that most people leave until the last minute, resulting in lost mail and late bills. Don’t get caught out, make sure you organise any mail redirections with Australia Post a few weeks before the move – you can set a date for when the redirection starts.

Download the Moving Checklist.