Tag: Property

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Real estate & moving

Expert advice: Selling a house at auction

If you’re thinking of selling your house at auction, you will need to consider the positives and negatives of choosing this selling method. When you sell at auction, you’ll have a set time to market your home and a set date for the sale of your property. An auction can also generate a great deal of excitement and competition if there are many people interested in your property. But there’s no guarantee that your home will sell for the amount you desire. So here are seven tips to help you increase your chances of success.

1. Find a good real estate agent

Look for an agent who has a proven track record for auctions in your local area. You can compare agents by asking for their results from recent auctions. Have a look at the number of properties that were sold successfully, ie the reserve amount was met. Or you could consider attending an agent’s auctions to get an idea of how your own auction would be handled. You might also want to consider things like the agent’s experience, reputation, negotiation skills, and strategic approach to marketing.

What’s more, you can compare real estate agent fees and commissions to help you choose the right agent. Fees and commissions vary depending on which state or city you live in, but it generally includes negotiating and marketing fees, and the commission is usually between 1% and 5% of your property’s final sale price.

There are several steps to take before putting your home up for auction / Source: Pictures by Sean

2. Create an advertising budget

According to data obtained by LocalAgentFinder, most real estate agencies will charge between $1,000 to $5,000 on marketing costs for a typical individual property, with the majority trending towards a budget under $2,000. Many homes sold by auction are usually scheduled to sell after 30 days. By creating an advertising budget that’ll last for this time period or more, you’ll be able to advertise your home up until auction day. The point is to let buyers know that your home is on the market. And when you have the funds on hand, you can quickly generate interest in your upcoming auction from the start and continue to attract potential buyers until your home’s ready for sale.

3. Hold open house inspections

Another way to attract a lot of qualified and interested buyers to your auction is to conduct open house inspections. Since you only have a limited time to market your home, you need to showcase its best features. Most importantly, the house should be prepared for sale with styling and presentation and an have a strong deep clean before the openings. Here is a list of essentials to prepare your house for the inspections.

4. Pay attention to feedback

If your agent gives you buyer feedback from the open house inspections and inquiries, take these comments into consideration when presenting your property in the future and setting your reserve price. After all, when you cater to the needs and wants of buyers, you’ll have a higher chance of achieving a strong sale price.

5. Choose a realistic reserve price

You should set a reserve price that’s based on recent comparable property sales. You’ll need to compare the asking price of homes similar to yours and the price they sold for, and then decide on a reserve amount. Keep in mind that only you, your agent, and the auctioneer should know about your reserve price before auction day.

Contact local real estate agents

6. Be present on auction day

It’s best to be present on the day your property goes under the hammer. By directly observing the auction process and buyer interest in your property, you’ll be able to make better, more informed decisions in any negotiation after the auction.

7. Negotiate or run another auction when your home is passed in

If your reserve price is reached at auction, your property is considered to be on the market and is sold to the highest bidder. But if your reserve price isn’t met and your property is passed in, you can negotiate with the highest bidder or run an auction again on another day and get a great result.

By keeping these tips in mind, you can improve the likelihood of a successful auction.

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Real estate & moving

How to apply for a rental property

Renting a home or apartment can be difficult in the current market, with so much competition when a place becomes available. Making sure your application gives you the best possible chance to get the property you want takes a little advance planning. You need to ensure that you’re in pole position by following these tips.

Doing market research of rental properties

The first thing to do is to check what properties are available or may become available in the near future. Visit your real estate agents and surf the Internet for what’s in your area of choice and within your budget. You can then target specific properties or areas, saving time by avoiding unsuitable places. Real estate agents can be invaluable in your search. They have detailed property listings, and they may be able to get you a viewing sooner than if you wait until it’s advertised. The sooner you view, the sooner you can get your application in, beating others to the punch.

A house a corner for sale
Source: Niche Living

Preparing in advance

Once you’ve spotted some properties that interest you, there are some steps you can take in advance that will save you time later. When you’ve found the place you want to rent, you’ll want to get in there straight away, so get some things ready beforehand.

Money

The first and most obvious step is to have the money ready. You’ll need to have bond money on hand. as well as advance rent – usually a month, but sometimes less. If you have the money already, you can pay the landlord immediately, speeding up the moving in process. Landlords can’t afford to have their properties sitting empty while potential tenants gather up the cash, so if you can prove you’ve got it, you’re putting yourself in a great position.

Application form 

You can fill in the application form in advance too so that you’re ready to go. Most real estate agents will have general application forms containing details such as references, contact information, proof of funds, etc. You can enter most of these details in advance, leaving the specifics such as the rental address until you’re ready to go. This will save some time, giving you an important head start on other applicants.

References

All landlords will check your references before they rent you their property. The best way to ensure this goes smoothly is to inform the people you use as references that they should expect a call or email. This will give them a heads up, and they’ll have time to think about what they want to say to give you the best chance of getting the rental.

Contact local real estate agents

What to do once your application has been approved

Read the lease first

Do not just sign the lease! A lease is a legal document, and it is important that you read it, from start to finish, prior to signing. A lease is a legally binding document, and failure to understand it can mean serious financial and legal repercussions on your part. If you have any questions about the lease, ask before signing, and make sure that every agreed upon term is included in the body of the lease. For example, your landlord says that the apartment is pet-friendly, but it is not stated in the lease. Be sure to get his permission in writing to back yourself up in the future. And lastly, you will need to be sure that the rent amount indicated in the lease is what you agreed to when you toured your property.

Fill out a property condition report

A property condition report highlights the condition of the property you are renting when you first move in. The purpose of this is so that you cannot be held liable for any damages to the property that existed prior to you moving into your apartment or rental house. Always make sure to fill out the property condition report thoroughly and honestly, and keep a copy for your own records. Feel free to mention the slightest flaw that you see.

A house with a lease sign out the front
Source: Cooper Jackson Sales & Rental Centre

How long is the lease?

Leases come in a variety of durations, so it is vital that you check how long the lease is before signing on the dotted line. Rental leases typically span from 6-24 months, so it is important that you understand the terms of the agreement before signing. It is important to note that if you leave the rental property before the end of your lease, your landlord can hold you liable for rent until the end of your lease agreement. Once your lease expires, you will have the option to renew, as long as it is still beneficial for both you and your landlord.

Beware of agency fees when signing a residential lease

Rental fees charged by real estate agents, more commonly known as agency fees, should not be overlooked at the time of signing the lease.

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Real estate & moving

Ask a Real Estate Agent

In the current real estate market, high demand and limited land supply gives homeowners an advantage. Ray White agent Thomas Merriman and Service First Property Group specialists, Andre Pang and Oliver Quach share their responses to common questions asked by Australian homeowners.

When is the right time to sell?

Thomas: “I would advise people thinking about selling to regularly keep up to date with the Auction Clearance rates as they typically act as a ‘canary in the mine’ for property market conditions. If the canary dies, leave, if the rates drop dramatically, pause your campaign.”

Andre: “The right time to sell depends on the vendor’s financial or personal situation. Try to avoid public holidays or long weekends during your marketing campaign, but if you can’t avoid it then add another week to your marketing campaign. My clients ask whether or not they should be selling in the winter as there are typically less properties to compete with. Serious buyers never stop looking and as long as you have the correct marketing campaign in place, they will turn up to your inspection year round.”

Source: Nicheliving Real Estate

What kind of properties are in high demand in the market?

Thomas: “Properties where people can add value, either by knocking down and rebuilding or simply renovating – especially a cosmetic reno or a quick ‘flip’ – are the properties that are in highest demand. The Melbourne trend is toward ‘terrace’ style homes and premium apartments. The idea of city living with the feel of a newly built house is a pretty desirable one, providing you have the budget. Attend the first open-home for a property and you will get an idea.”

What are some things to look for in an agent?

Andre: “There are a few ways to discern between an honest agent and a dishonest one. A genuine agent will give you a realistic appraisal with evidence and research. Lots of agents will inflate sales appraisals so you can hear your dream selling price but when an agent gives you an appraisal, check that it’s backed with comparable sales and recent data. A good agent will also design a marketing campaign tailored to your property’s needs. As everything comes through the Internet these days you don’t need to limit your search to a local agent.”

What are some tips you would give to a homeowner planning to sell?

Thomas: “Buyers aren’t visionaries- they don’t have the creative flair to see past bad curtains and unmown grass, but coming to market can be delayed by weeks if vendors are busy fixing a leak because they’ve replaced the benchtop, cupboards, stools and tapware. All this can be done over a weekend or two and you can hire a professional to get it done with no budget blowouts – but make a list and stick to it.”

Andre: “Prepare your home so buyers can imagine it as their own. Aim to create an emotional attachment with the buyer. It might be a good idea to have a stylist for your property to achieve the desired results. ”

Contact local real estate agents

Here are Andre’s tips to get your property to sell:

  • Kerb appeal: Make sure there are no weeds and the lawn and plants are trimmed. Attractive pot plants can also add to the appeal.
  • Lighting: Clean the inside and outside of your windows, turn on all the lights and draw up the blinds and curtains.
  • Less is more: Less clutter will help the room look bigger so the potential purchaser can imagine their things fitting into your property.
  • Pleasant scents: Get rid of any smoke or pet odours. Open up your windows, brew coffee or use diffusers to add some homeliness to your property.
  • Acclimatisation: This is largely weather dependent but if it’s cold turn on the heater and if it’s hot, turn on the air conditioning to create an enjoyable experience.
Source: Tattersalls Real Estate

What’s next for the Sydney and Melbourne property market?

Thomas:  “The RBA has lowered interest rates further and have increased the restrictions on loans for investment properties but the thing is, investors don’t set rental prices just as vendors don’t set sale prices. The market will take care of that, demand will always win out and people can only afford what they can afford. Once again, this may be the beginning of the end of the boom market, if this happens.”

Andre Pang: “The market is expected to plateau and move sideways for a number of years. Investors should seek high yields instead of growth at this moment. I also see an increase in studio developments like the ‘Melbourne Quarter’ project in Docklands which offers micro studios ranging between 25-33 sqm. While there is still an undersupply of property, affordability is still a major issue and studio apartments are very normal in other parts of the world, it’s only a matter of time that Sydney and Melbourne will adopt a similar mentality.”

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Real estate & moving

10 things to know before buying your first investment property

Property investment can be a very lucrative business. You chosen a dream investment property, got an approval for a loan or opted for a contract for deed, but is it the right decision? There are numerous examples of people making significant gains and profits through a real estate portfolio. But it can also be a highly risky use of your money. And regardless of the size or type of property, your plan to invest in it will almost certainly require a substantial initial and ongoing spend. That’s why it’s essential to take additional care when investing in property to ensure you minimise your risks as much as possible, protecting your hard-earned cash.

Here are a few things you should know and consider before investing your money in the real estate market.

1. The price is right

Any real estate investment aims to grow your capital through the increase in the value of your property. Central to this is selecting the right property at the right price. But it’s not always clear cut. A cheap property may have tremendous growth potential, but it may also be in an area when the market is merely affordable. Likewise, a high-end property may hold its value, but it also may not offer much growth.

2. Ensure you have the money to support the investment

Property investment can be very lucrative, but the gains are usually measured over the long-term. You don’t want to be forced to sell a valuable property early because you don’t have the capital to support it. Before making any investment carefully consider the short and long-term running expenses to ensure your budget can handle it. When reviewing your financial status and capability to fund any expenses for your future investment property, be mindful of any remaining personal loans you may have, as they may affect the amount the bank will allow you to borrow.

Source: Buildtech Homes

3. Seek help you can rely on

Turning a profit from an investment property can, at times, be a full-time job. A property manager can help ease the burden doing everything from managing the day-to-day issues to helping you select new tenants and reviewing rental costs. The best thing is they are usually paid as a percentage of rent collected, so if you’re not making any money, they won’t cost you any.

4. Study the market

Real estate markets are often operating in a microcosm with prices on one side of a street being slightly higher than the other, for instance. When looking to maximise returns, every little edge, you can get matters, so it’s important to study your rental market carefully before you buy. You can start researching online, but local knowledge is hard to beat.

5. Select the right mortgage

There are a variety of different mortgage and financing options available when it comes to buying properties. Finding the right model is not always as simple as selecting the cheapest one as the way the financing is structured can affect tax deductions. Consider all the options and your circumstances to find the best financing deal in the long run for your investment.

6. Leverage equity

If you already have existing properties, then leveraging the value tied up in them can be an excellent way to fund further investments. If you have a $500,000 property with only $100,000 left on the mortgage, then you have $400,000 equity you can leverage. Leveraging an existing property also opens up the possibility to leverage against the investment property further down the line and has potential tax benefits.

7. Negative gearing

Negative gearing allows you to claim tax relief if the investment amount is larger than its income returns. This can enable you to make a technical loss on the investment property while creating an overall profit by offsetting other taxable income. Negative gearing isn’t a good reason on its own to buy an investment property, but it can help with structuring your finances and budgets.

8. Limit unexpected surprises

Unexpected surprises can be catastrophic for an investment property. A sudden large spend on maintenance work can make a massive dent into your finances. Limit your risk of being surprised by having the property professionally inspected before making any commitments.

Source: Constructive Building Consultants

9. An investment not a home

An investment property is a business, not a home. It’s important to keep this in mind when renovating and decorating. Everybody has unique tastes and styles, but an investment property has to be able to appeal to anybody. Simple and neutral tones are perfect as they are inoffensive and have wide appeal.

10. Long-term thinking

Property investment is not a short-term cash generator. Your property can often take years or decades to show the type of large profits you seek. The investment will usually require further spending and time commitments along the way. Keep this in mind when making your financial and life plans.