THIS ONE WON’T LAST

Many home buyers no doubt wish
they had a dollar (or a property!) for every time a real estate agent
has told them “this one won’t last long.”

Inexperienced agents use this
cliché to create urgency regardless of whether it is appropriate or
not. The result is that professional agents wishing to give their
best advice to purchasers in circumstances where the comment is in
fact justified, hold back or risk disbelief.

Purchasers need to do their
own research to determine whether they are buying in a sellers’ or
a buyers’ market.

If there are more buyers than
sellers, then there are ipso facto not enough properties to go round –
a bit like musical chairs. In this situation buyers who spend too
much time deciding whether to make an offer end up losing the
property to another more aware buyer.

Certain types of properties
are more sought after than others no matter what the state of the
market. Popular property categories vary from location to location.
But a property that is well priced will almost always sell faster
than one that is grossly overpriced.

Agents are knowledgeable about
property values over a broad geographic area, price band, and property
category. Buyers, on the other hand, may start their search looking
more broadly but by the time they are ready to buy they are
specialists in a more narrow category and price range. They will also
be well aware of the type of market they are shopping in.

In fact, buyers who are ready
to make a decision should be able to answer the question of whether a
particular property will or won’t last as well as the agent they
are talking to.

 

POSTED ON 30/08/2017 

Todd Pearce

2017

THE INVESTOR’S SLIP SLOP SLAP

Sometimes new investors make
the decision to manage their own investment property. After all, it
seems obvious – why pay an agent to do something as simple as banking
a rental cheque? It’s only when they start managing their own
property on a day to day basis that they realise the level of
expertise required to maximize income and minimize expenses. And when
the Investor finally hands their property over to an agent, it’s an
enormous relief. Their net income increases, they have a lot more
leisure time and they can sleep at night.

Professional managing agents
have the experience, expertise and up to date legal knowledge to
prevent problems developing. Mistakes can be costly and many
do-it-yourself investors find themselves in crisis management mode.
They end up trying to lock the stable door after the horse has
bolted.

Fortunately, most people hand
over to an agent before things go wrong. They realise that they’re
reinventing the wheel and that it’s simply not cost-effective.
Properly investment managers need to be legal expert and self managed
investor’s end up spending a lot of time familiarising themselves
with tenancy legislation. Even then they worry that they haven’t
thought of everything.

Investors can also have
difficulty staying up-to-date with week-to-week fluctuations in the
rental market. It takes a lot longer for trends to become apparent to
people who are looking after just one or two properties. They do all
that work and it may still cost them financially in higher vacancies.
It’s also very had to keep a distance from demanding tenants if you
don’t have a third party to liaise with.

Another area people find
difficult is communication and arbitration. A managing agent can be
more objective and less emotional. Dialogue via a disinterested third
party minimises income reducing anger, and personality conflicts.

Even negotiating rent is
difficult for a landlord, both because of the emotional involvement
and because of lack of experience. Things like knowing what rent to
set and what are fair and reasonable repairs, can be difficult
decisions for the inexperienced. The lease is the bottom line. If the
lease is not done correctly, tenants could end up squatting or living
in the property for free.

Utilising the services of a
professional managing agent is an investor’s Slip Slop Slap….It
saves them time, maximizes rental Income and minimize risk.

For a FREE market update on
your Investment property or to find out about our Landlord
“Flat Fee” Property Management Guarantee

contact Todd Pearce or Renee Dunstan on 07 4727 2400 or
reneed@pagepearce.com.au

 

 

POSTED ON 18/08/2017 

Todd Pearce

2017

Home Buyers Get A Health Check

In its latest Consumer Insight Report realestate.com.au takes the pulse
of today’s prospective buyers. We’ve discovered they’re in better health than
a year ago, and diagnosed why.

The major reason for their rosier outlook is that buyers feel
more secure they’re not going to be knocked off-course by rising interest
rates and property prices.

Increasingly, buyers are confident the market has for the
moment peaked and mortgage rates have plateaued too – and the expectation
is that both will stabilise for a while.

With rising confidence that their budgets and ambitions are secure
from spiraling home prices and upward twistsin interest rates, home
buyers are not rushing into decisions. The proportion
taking six months or longerbefore purchasing has gone up 46 per cent.
The auction market has cooled too, with fewer people going to auctions
and more of those who do bidding below the reserve.

With the slowdown in demand has come a growing supply of homes for sale.

Renters buying on the increaseRenters now make up 25 per cent of all
prospective buyers, compared with 16 per cent last year, and in the $400,000
and under price band those wanting to get a first foot on the property ladder
now make up 64 per cent of prospective buyers.

The competitive edgeTo find out in detail how the ground’s moved under
buyers in the past year and how they’re reacting to these shifts in the market,
download the Report in full here. It’s the information that will give you,
our agent partners, a competitive edge in what is becoming a more nuanced
sales environment.

 

Source: realestate.com.au 

Title: The Buyer Insights Report

May 2017

 

Are You Buying A Good Home Or A Good Deal?

As stock levels surge and sales tighten up, buyers can be tempted to
find their motivation split. Are they chasing a good buy or a good home?
When sales stagnate, stock levels swell. The excess stock is then in
competition against other homes for buyer interest.

In such market conditions, buyers are likely to find what they want
within reason. They can get a good buy or they can
get a good home. It is still hard to find a good home for a bargain price
though. The best homes still get the best prices,
even in a soft market. If a buyer’s motivation is simply to buy a property
cheaply, it does not mean that they are getting the right home for
themselves. Buyers are well advised to focus on securing the right
home not trying to nab a bargain.

Home is where the heart is. If you buy the wrong home for the
right price, you won’t be happy in the long run. If you buy the right
home within your financial capability, you will be happy in the short
and long term, even if you over pay for it. It seems an unlikely fact,
but its true!

Many financial advisors suggest that you should exclude your primary
residence from your net wealth. Unless you plan to sell your home,
invest and live off the proceeds, it does not matter what its worth. You
buy a home to make you happy and secure.

Time is very kind to real estate prices. If you plan to live in a home for
10 to 20 years, paying an extra 5% today will seem inconsequential.
If you plan to live in a home for more than 10 years, it is likely there
will be at least one boom and one correction in that time. But until
it comes time to sell, you will be largely unconcerned by such market
movements.

Even in a soft market, the best homes often attract multiple buyers.
The only homes that sell for a bargain price are the homes that no
one else wants. And you only know the market has bottomed out
when it is going back up.

 
Source: Harris Partners.

POSTED ON 24/05/2017 

Todd Pearce

2017

 

The Trusted Advisor – Help Or Hindrance, Competent Or Not?

Whenever you embark on a real estate transaction,
it is likely you will inherit advisors.

Whether you are buying or selling, many people will
offer their advice unsolicited. Some of this unsolicited advice will be sound,
some will be well meaning and some may be completely ignorant of the facts.

Buying or selling real estate is usually the
largest transaction that many will ever make. The misinformation and vested
interest that is pumped into the marketplace makes it even trickier to tread a
safe path. A real estate angel helping you through the process offering
guidance and grounded advice is an enormous benefit.

Identifying the right people to guide you is the
key though. It is quality advisors not a quantity of advisors that will ensure
you successfully transact. One thing is for certain, you need to put advisors
into two categories quickly, lest you turn your thinking inside out or upside
down. Are the advisors that pass on their real estate wisdom well meaning or
are they competent professionals? Well meaning advisors will offer advice but are
not paid to do so. Furthermore, they often don’t have to live with the
consequences of their advice.

The well meaning advisor can be a friend at work
who “bought a bargain last year” or neighbour that says “you’d be crazy to sell at that price”. It is easy for a
well meaning advisor to say “reject the offer, it’s too low”. It is easy for
them to say this because they are not the ones that could potentially sell for
less down the track. The well meaning advisor won’t be found for love nor money
if they tell you to reject an offer that ultimately proves to be the best offer. To enlist someone as an unpaid trusted advisor,
you need to look for a track record of success from this person, not a
fortunate one off transaction in the past.

For one swallow does not make a spring. An unpaid
well meaning advisor is either an asset or a liability, dependent purely on
their experience and competence.

The more advisors you inherit, the more likely they
are to conflict each other and confuse your decision making process. Competent
professionals whom are emotionally detached from the outcome are your greatest
ally when transacting real estate.

Whilst you can feel way out of your depth talking a
different language to everyone else, professionals are the voice of reason. The
competent professional has seen it all before. They won’t necessarily tell you
what you must do in every circumstance. The best professionals will often point
out issues, details or points of consideration that you may not have thought of. Through experience, competent professionals open your eyes
and ears where naivety could have easily ruled the day.

These people include solicitors (use a real estate
solicitor), family friends with a track record of success, parents, building
inspectors, independent valuers (not one from the bank), accountants or
financial advisors. Each of these people, if chosen correctly, will be devoid of emotion. Emotion is what so often rules the real
estate transaction, sometimes causing people to regret their decisions in the
cold light of day.

Independent:

Is the trusted advisor independent? A neighbour whom thinks you should reject the offer seems independent. But on closer inspection, their
independence is questioned when it becomes apparent they want your apartment to
be worth more, so that theirs is also. After all they say, “the bank valued
ours for more, and they are always conservative”.

Real estate agents can be a wonderful source of
knowledge. But if they are the agent handling the sale, only in the rarest of
situations should they moonlight as your trusted advisor. Your trusted advisor
reserves the right to encourage you to act, but more importantly the right to
encourage you to pull back. This second point is in conflict with the agent’s
main motive of achieving a sale.

By all means, elicit and absorb all the advice the
agent has to offer. But reflect on it in your own time independently of the
agent and the persuasiveness they bring to an issue. If your partner has strong or differing views to you, listen to their perspective
prior to the decision being made. It is no good working out they were correct
after the fact.

Working with your advisor:

When you want your advisors advice, ask for it. But don’t tell the advisor what
you think upfront and ask them to shoot your thinking down. The advisor is not
there to debate against your emotion. If you have been sold on a persuasive
argument by a salesperson or a speaker (spruiker) at a seminar, pass the pitch
onto your advisor and ask for their thoughts – totally independent of any you
may have.

Keep in mind that your advisor is not involved to
tell you what you want to hear. They are there to tell you what you need to
hear. The more you push your thought pattern onto the advisor, the less you
hear their reasoning. After discussions, you may go against what your trusted
advisor suggests, but you do so with knowledge of the downside not just the
upside.

Often salespeople and spruikers are very good at
focusing their pitch on the upside. In the 80s when Donald Trump was flying
high, he would always ask himself “what is the worst that can happen in
this transaction?” before committing to a deal. When things went bad for Trump
in the 90s, by his own admission, it was because he failed to take his own
advice.

Rarely is a decision slanted 100% one-way and 0%
the other. There are often risks and considerations regardless of what
direction you decide upon. The trusted advisor is truly an asset to you, if
they can put you in a position to act with all of the unemotional facts before
you.

Source: Harris Partners Property News.

Seven Rules For Buying At Auction

By Neil Jenman

If you don’t know the tricks used at auctions, you
are certain to get hurt. Most auction agents have no regard for your feelings.
They want a sale and they don’t care who they hurt.

If you are inexperienced at home buying, you should
avoid auctions altogether. The financial loss of a few hundred dollars on
wasted inspections is bad enough, but it is nothing compared to the emotional
damage of discovering that the home you love was never in your price range.

If you want to take the risk, here are seven rules
to protect yourself and minimise the damage.

Rule 1. Believe nothing and
check everything

With auctions, always assume the agents are lying
to you. Sure, some may tell you the truth, but if you treat everything they say
with suspicion, you won’t be as easily hurt. There are so many lies told that
you can’t afford to believe anything until you have checked it out thoroughly.

Rule 2. Understand the
‘quoting’ lies

Experienced buyers know that agents under-quote the
selling price by about 20 percent. So, if the agent says “Bidding to start from
$300,000”, the price is likely to be somewhere around $360,000. If your maximum
price is $320,000, be careful. You could spend money on inspections, get your
heart set on buying the home and all to no avail.

If you cannot get a straight answer from an agent
about the price, or if you are certain you are being misled, you can – as a
last resort – ask the sellers about the price.

Unlike many agents, most sellers are not interested
in deceiving you. They just want you to buy their home. They do not want you to
be misled or to lose money.

You can write to the sellers at the home. If the
home is vacant, you can write to them care of their lawyer. Ask the agent for a
copy of the contract of sale. The owners’ details will be displayed. There is a
sample letter for this purpose in the Appendix. If you receive no reply do not
attend the auction.

Rule 3. Tell the agent
nothing of importance

If you don’t feel comfortable with the agent – and
the chances are that you will never feel comfortable with an auction agent –
tell them almost nothing. Just ask questions. Be strong. Answer any questions
by saying, “We are not sure what we intend to do.” Be vague. Use expressions
such as ‘maybe’ or ‘might’ or ‘perhaps’ or ‘we are unsure’.

Just remember that this is the person who will
deliberately mislead you before the auction with the quote, at the auction with
fraudulent bids and after the auction by telling you how ‘lucky’ you are. You can’t
afford to trust such agents.

Rule 4. Know the true value

The time and cost of basic research can pay
handsomely. Obtain the sales details of similar homes in the area. In Melbourne
and Sydney you can purchase inexpensive ‘post-code’ price guides. Similar
information is also available in most areas through local councils.

If you feel you have a good chance of buying the
home, you should consider contacting a registered valuer for an accurate and
unbiased opinion. The money spent on a valuation is well worth the risk.
Contact the Australian Property Institute (details in Appendix).

It would be far easier for everyone if all homes
had an independent valuation before they were sold. Both sellers and buyers
would have the benefit of independent and unbiased information.

However, a valuation, while unbiased, is still only a guide. If you love the
home you might willingly pay more than the ‘value’. But at least you have the
benefit of a valuation on which to base your decision.

Rule 5. Get legal advice

Some homebuyers try to save hundreds of dollars and
in doing so they risk thousands. Don’t let this happen to you. If you are keen
to buy a home at auction, consult a lawyer before you sign anything or spend
any money. A home costs hundreds of thousands and a lawyer costs hundreds. And
remember, the last person to take advice from about a real estate auction is
the auction agent. You can have your lawyer speak to the agent on your behalf.
Some lawyers will even accompany you to the auction. Good lawyers are great
value when buying a home.

Rule 6. Do not bid too soon

The most important rule at an auction is NEVER BID
UNTIL THE PROPERTY REACHES RESERVE. Until then, it is not for sale and it makes
no sense to bid on anything that is not for sale. No matter how much pressure
you receive, do not play into the agent’s hands by bidding too soon.

Dummy Bidding

Agents are so desperate for early bidders, they
will do anything to get the bidding up from its low beginning.

Some will plant dummy bidders in the crowd. Or pay
‘dummy bidders’ to pretend to be buyers. Others will just ‘pull’ bids from
walls or trees. This is fraud. It is justified by the use of a thin legal line
known as ‘the vendor’s bid’, which means that a seller has the right to bid on
their own home provided that the auctioneer declares this – which is almost
never done. Even if the auctioneer does declare the vendor bid, ‘dummy bids’
are never declared.

The television program, Money, once did an expose`
on dummy bidding. Hidden cameras filmed an agent boasting how he paid dummy
bidders. Later, a reporter asked him if he ever paid dummy bidders. His answer
was “No. Never”. The TV program showed two scenes – one with him proudly
describing his deceit and the other with him denying it publicly.

Dummy bids are a central part of the auction
system, despite the denials of agents and Real Estate Institutes.

But dummy bidding stops once the home reaches the
reserve price and is ‘officially’ for sale. And that is the only time you
should bid.

The Reserve Price

The reserve price is the lowest price the agents
have been able to ‘crunch’ sellers into accepting.

And this is where auctions really favour you as a
buyer. You will know the sellers’ lowest price, but no-one knows your highest
price.

With the attention on the sellers’ lowest price,
buyers save thousands at auctions.

Rule 7. Keep your highest
price a secret

Once the home reaches the sellers’ lowest price
(the reserve), it is going to be sold to the highest bidder. Let’s say $320,000
is the reserve and your highest buy price is $350,000. Under

no circumstances will you exceed your highest price (you can’t afford to).

But you are very likely to be the highest bidder
long before you reach your highest price. If there is another bidder whose
highest price is $330,000, then you will buy the home at the next bid above
$330,000 which will most likely be $331,000. And you will save $19,000.

Thousands of buyers are paying thousands of dollars
below their highest prices at auctions. All because the agents do not understand
the principles of negotiation. As one buyer said, “It is like stealing money
from the sellers. Why do the agents let this happen?”

The losses for sellers and the wins for buyers are
caused because the auctions start at a low price instead of a high price. And
when something starts low, the chances are that it will finish low – or at
least lower than it would have finished if it had started high.

Paying The Price – Is A Reduction Justified?

After months of searching for the right property, the joy of finding a suitable home is soon replaced with a desire to secure the subject property for the best (lowest) possible price.

The focus question moves from “is this the right home?” to “what is the right price?” In working out who the unreasonable party in a negotiation is, it is important to remember that fear is pulsating through buyer and seller.

A buyer’s fear of overpaying for a piece of real estate is equalled only by a seller’s fear of underselling. A negotiation can quickly turn into “the sellers are greedy” and “the buyers are bargain hunters”.

Issues such as buyer competition and/or market conditions will dictate whether the buyer needs to come up in price or the seller needs to come down. Sometimes both parties may need to make a move to get the dance going.

Relating the general market conditions to an individual sale campaign can be an error. A seller who puffs out their chest and states “it is a boom out there, so we want top dollar or we are not selling” may inadvertently send their best buyer packing. Even in a booming market, sellers still decline the highest offer, only to sell for less down the track.

Conversely, in a soft market, a buyer who acts with an attitude of, “I am going to low ball every vendor until I pick up a bargain” will continually get pipped in the negotiation by competing fair minded buyers. Even in a soft market, good properties are still contested by multiple buyers. 

Properties that sell for bargain prices do so because they often have a major flaw, or flaws, that cause the wider market to dismiss it. If you feel that you have snagged yourself a bargain, be careful, you may have bought a lemon. When a buyer’s primary goal is low price before quality real estate, the buyer may get a low price on a property, but they are unlikely to get a quality piece of real estate.

Cheap is rarely good and good is rarely cheap.

As prices continue to drift lower, trying to price in an Armageddon scenario to your offer will cause the agent and seller to continue searching for another buyer. Regardless of where you think the market price may go, every property has a value in today’s market. Any vendor will justifiably expect that price or higher, during the negotiation process.

A bargain hunter waiting for prices to crash usually ends up waiting as opposed to buying.

There are two key questions to ask yourself when making an offer to purchase. 

Can we afford to pay the owners price?

Is the owners price fair and reasonable in the current market?

To suggest that an owner should come down in price because the wider market conditions are weak is a flawed thought process. If the agent and seller have priced the property correctly for the current market, there is no need for the owner to come down in price.
As a buyer, if you find the right home at a fair price that you can afford, pay the price before someone else does.

Source: Harris Partners’ Property News.

The Price is Right

Have you ever wondered why some families and buyers are confidently choosing to upgrade their homes in the current market? Even though it is down!

Did you know the slowdown in the property market is in fact financially advantageous for homeowners and property investors who want to upgrade their homes or buy investments properties?

Everyone knows that properties are drastically cheaper today than they were just a few years ago. Because of this, today’s property owners have the opportunity to trade up to a larger and a better quality home at a more affordable change over price than they could in the past.

The fall in prices provides these property owners who wish to upgrade an excellent opportunity to trade up to a better home with a smaller changeover cost. The gap in price difference between a more expensive home and a cheaper one is much smaller today than it was two, three or four years ago. We are also currently experiencing increased demand for lower priced houses and this provides a great opportunity to pay an even smaller changeover cost.

With the market currently bouncing around what I believe is to be the bottom of the property cycle, an increasing number of homeowners are realising that this is the best possible environment to upgrade their existing home to one that might have been out of reach a few years ago.

Undoubtedly when market prices are down people who understand this concept and upgrade their homes are the real Winners. When the market turns – and it has too sooner or later – property owners who have made the move and bought bigger and better quality homes in better locations will not only enjoy an immediate improved lifestyle but will also benefit from the increase in capital growth that will inevitably follow.

Keep Your Home Safe On Social Media These Holidays

It appears safe enough: posting a holiday snap on Facebook, uploading an airport check-in on Foursquare, or announcing dinner plans on Twitter. But these private moments broadcasted on social media may be cues for burglars.

In recent years social media platforms have become a tool for thieves with location sharing features often used by unsuspecting holiday makers when uploading happy snaps. These features tell people who’s on holiday and indicate an empty home.

Typically burglars will attempt a house burglary quickly, often avoiding homes with extra security, alarm systems, cameras and sensor lights. Those thieves assured homeowners are on holidays may take extra time and leave with more valuable goods.

This holiday season try turning off location sharing on social media and don’t announce interstate travel plans with the world. Better yet, make sure your home address hasn’t been shared and if it needs to be, do so by private message. Checking privacy settings for individual social media platforms is recommended and reverse stalking yourself will reveal just how secure are your personal details.

Back at the house, security measures can be taken to help dissuade thieves over the holidays. A big deterrent is a visible security system and the threat of a professional response. The simple sight of a car in your driveway can also give the impression that someone is at home. Why not consider having a neighbour park their car in your driveway as they come and go over the holiday period or you may choose to leave your car in plain sight, but just remember to take the keys with you.

RACV general manager home services Peter Brindley says, “thieves have been known to check for car keys in obvious spots and steal cars, right from your own driveway,” he says.
“Having your home burgled is already emotionally traumatic, and having the car taken too makes it even worse.”

Set light timers inside the house and leave the radio on because nothing says an empty home than a dark quiet house. Outdoor lighting and gravel driveways provide visual and audio signals to neighbours that something might not be right so investing in motion-sensing porch and garden lighting is advisable. Ask the neighbours or friends to collect the mail and any newspapers or get them diverted.

This silly season be safe online and on holidays, and feel secure that your home is too.

Read our story on keeping the outside of your home secure, and find out more about home burglaries with the nine-part Safe as Houses series.

Source: Royal Auto