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Mar 26, 2024
How to succeed at auction
Whether you win or lose in an auction environment, your success rate depends on how you play the game. Employing smart strategies and displaying ongoing patience are two key steps to ensuring that you will succeed at auction, regardless of whether or not you secure the property at bidding time. Do your research From first-time buyers to seasoned investors, doing your homework is an essential component of building or enhancing wealth creation. Auction research means investigating not only median house values in your region, past, present and projected, but also conducting first-hand research for the real estate on offer. Pay particular attention to nearby amenities and future developments. Is the big picture for schools, community centres, transport networks and business centres in good shape? Talk to local council members to assess what’s on the drawing board for public buildings and other essential developments in your neighbourhood or region. Alternatively conduct this research online via available local council communications. Consult the estate agent or property representative You may be able to glean not only the reserve price but also the agent’s expectations for the final sales result. Find out if the vendor is amenable to prior offers and what figure might be acceptable, in terms of market value and successfully securing the property before the fervour of auction fever takes hold. Read the fine print It is essential that you seek qualified legal advice when reviewing and before signing any real estate contracts. From a legal standpoint, lawyers and conveyancers can highlight any leverage that you can use to your benefit during the lead-up to auction. This includes the possibility of longer or shorter settlement periods, reduced deposits and any personalised terms and conditions. What to do on auction day If you are a first-time bidder or simply an anxious buyer, would you be better off employing a qualified buyer’s agent? Doing so can bring a wealth of knowledge and product services to the auction equation. Buyer’s agents typically seek out properties that meet their client’s criteria and negotiate the purchase of the property chosen, whether by private sale or auction. They may focus on a specific property, or an entire portfolio, depending on the client’s investment needs. If your heart is set on the property in question and you’ve conducted due diligence, many buyers would be wise to engage a buyer’s agent. The chief aim of a buyer’s agent is to bid on behalf of the potential buyer at auction. This is because bidding at auction can be intimidating and emotionally daunting — so it can help to have someone objective to represent your needs in the heat of the moment. Lastly, if you are employing a buyer’s agent, sit back, relax and trust in their expert guidance and auction strategies. If you are doing the bidding, prepare to stick to your game plan, no matter how high the stakes are raised. Exercising caution and control will stand you in good stead for auction success, either immediately or at the next auction.
Feb 26, 2024
Mistakes to avoid as a first-home buyer
Whether it’s a new apartment or an old one – or even a house in the outer suburbs – finding an affordable home isn’t easy for anyone starting out. And in all the excitement of house hunting, it’s all too easy to make mistakes. The following tips are designed to put first-home buyers on the path to achievable and manageable property acquisition: Gain pre-approval Just knowing you qualify for a home loan is not enough. Before you start looking at properties, go to lenders and find out how much they are willing to lend you. This will help you focus your attention on houses you can afford, so you can avoid the disappointment of finding your dream home and then learning you can’t have it. Understand your mortgage options Getting a home loan may be easier today than it was in the past when you had to save for years for your deposit. But it’s also riskier and can be more expensive. A no-deposit loan comes with the added cost of mortgage insurance. You might like to ask yourself: would I be better off making a deposit and saving on the ongoing cost of mortgage insurance? Get advice from a variety of lenders and discuss all your options with them. Don’t borrow beyond your means Sometimes first-home buyers make the mistake of borrowing beyond their capabilities. This can stretch your finances to the limit and will not allow you to make improvements to your property when you move in. Worse still, you might not be able to afford to enjoy life in your new home. If you face unforeseen financial problems, it could mean having to sell your house before you have substantial equity in it. Be proactive Many first-home buyers will benefit from being proactive and doing independent research. In addition to getting in touch with professional real estate services, you can find auction results and past sale prices online. If you narrow your searches down to the suburbs and even streets where you want to buy, you can find out what properties are selling for. When a vendor’s agent, who will always be acting on their client’s behalf, gives you a price, you will be in a position to make a realistic counter-offer. Get a pre-purchase inspection report Some of the best real estate deals are older homes that need minor or cosmetic repairs and renovations. Some of the worst deals are older homes that need costly major repairs. Those major repair jobs might be hidden from view. Saving a few dollars by not getting a pre-purchase inspection report from an independent building inspector can cost you thousands of dollars after you move into your home. To be on the safe side, have a pest inspection carried out as well. Don’t underestimate additional costs When you buy a home, you pay more than just the cost of the house. Some additional costs include: home insurance moving costs inspection reports stamp duty council rates transfer fees Know your costs and budget ahead of time and you won’t be losing sleep when you move into your new home. Remove emotion from the equation Buying your first home is an emotional experience, so it’s too easy to let your emotions blind you. Take your cue from lenders to home renovators, who think of only one thing when they buy a house: “What will my return on investment be?” If a professional doesn’t think a house offers a good return on their investment, they walk away. If you are in the process of looking for your first property, give one of the RealWay Team a call so we may be of assistance. Property is our profession.
Oct 18, 2023
Strata Title: An overview of the basics
If you’re considering purchasing a strata apartment for the first time, it’s important to understand what strata title means and how it affects your ownership and living experience. In simple terms, strata title is a legal framework used for multi-unit buildings, such as apartments or condominiums. When you buy a strata apartment, you become a part-owner of the building and receive a “title” that represents your ownership share. Along with it comes certain rights, responsibilities, and obligations as a member of the strata community. As an owner, you have the exclusive right to use and enjoy your individual apartment. You also have access to the common areas and facilities shared by all residents, such as parking lots, elevators, swimming pools, and gardens. These amenities are collectively maintained and managed by the strata corporation, which is made up of all the individual owners. Being part of a strata community means you have a say in the decisions that affect the building. This includes participating in general meetings, voting on matters like bylaws, approving the budget, and electing the strata council members who oversee the building’s management. However, it’s important to be aware that living in a strata apartment also comes with financial responsibilities. You’ll be required to pay regular fees known as “strata levies” or “maintenance fees.” These fees contribute to the shared costs of maintaining the building, including repairs, insurance, cleaning, and the overall upkeep of common areas. Additionally, strata living involves following certain rules and bylaws that are designed to ensure a harmonious and well-maintained environment for all residents. These rules might cover issues such as noise restrictions, pet policies, renovations, and other matters that impact the community as a whole. Before purchasing a strata apartment, it’s crucial to thoroughly review the strata records and financial statements. This will give you insights into the building’s financial health, any ongoing maintenance or repair issues, and the overall management of the strata corporation. By considering a strata apartment, you’re gaining the benefits of homeownership while sharing the responsibilities with fellow owners. It offers a sense of community, shared amenities, and the opportunity to have a say in the decision-making processes that impact your living environment. Before making a decision, it’s recommended to seek professional advice, such as engaging a strata inspector or speaking with a real estate agent who specializes in strata properties. They can guide you through the intricacies of strata living, ensuring you make an informed choice that aligns with your lifestyle and financial goals. Further reading: "Why you should arrange a strata inspection report"
Sep 30, 2023
Different Types of Property Valuation
Property valuation is an essential aspect of the buying and selling process, but it can often seem mysterious and complex. To demystify this process, let’s explore the basics of property valuation to gain a better understanding of the different types of valuations available, how they are calculated, and their significance in the real estate market. Valuation, in simple terms, is the determination of the monetary value of a property. It provides an estimate of how much a property could sell for based on various factors. These factors include the property’s condition, location, aspect, features, recent sale prices of similar properties, and market projections that consider whether sale prices have been increasing, decreasing, or stabilizing. Valuations are presented in the form of reports that offer detailed information on the factors considered in determining the estimated sale price of a property. Valuations serve different purposes for buyers and sellers alike. For buyers, valuations are typically required by banks before securing a loan for purchasing a property. For sellers, valuations are crucial in determining an appropriate asking price. Both buyers and sellers can use valuations as a basis for informed negotiations. Various types of valuations are used at different stages of the buying and selling process. Let’s explore them: Automated Price Estimates Online tools are provided by lenders to offer initial indications of a property’s potential bank valuation. These estimates are helpful for getting a preliminary idea of the property’s value. You often see on real estate websites the ability to enter a property address to receive an appraisal, or evaluation of that property. This is an example of an automated price estimate. Bank Valuations One of the different types of valuations is one calculated by lenders to assess the maximum size and conditions of property loans. These valuations tend to be conservative, as lenders aim to manage the risk of loan repayment. Banks must make sure that the value of the home exceeds the amount of the loan being offered. Bank valuations are more focused on the financial aspect and may not capture the full market value of the property. Selling Agent Appraisals Conducted by real estate agents to attract sellers and maintain their reputation. These appraisals are typically more optimistic than bank valuations, as agents consider market projections and property features to present a higher value. They typically involve the real estate agent doing a physical inspection of the property. Local Council Valuations The property values are mentioned in the local municipal rates bill that property owners receive annually. These valuations determine the amount property owners will need to pay for water, sewerage, rubbish collection etc. Often only the land valuation is used for this purpose. Professional Valuations Detailed valuations are conducted by skilled professionals who consider a comprehensive range of factors affecting a potential property’s sale price. Private professionals offer this service to assist buyers and sellers in navigating the abundance of information from various sources. The final sale price of a property may align with the valuations or vary significantly. Nonetheless, valuations play a crucial role in facilitating informed decision-making when buying or selling a property. At the end of a sale, the house value is what the purchaser was willing to pay for it, but that still might not change the valuations provided by the means above. If you would like a free appraisal of your property, get in touch with RealWay.
Sep 26, 2023
Resale potential and buying property
When it comes to selling property for capital gains, timing is crucial. Additionally, having the necessary resources to upgrade to a better area is equally important. Before buying a property, it’s essential to consider its resale potential, especially in adverse circumstances, to ensure a profitable outcome. Stay focused and informed First and foremost, location remains essential. To determine a neighbourhood’s potential for future growth, analysts consider various factors, such as the overall appearance, quality of schools, access, shopping, crime levels, and absence of negative factors like living near a rubbish tip or freeway. By focusing on these factors, you can make informed decisions about purchasing properties that are likely to appreciate in value. Be strategic and patient with property decisions Saving for a property purchase should be a priority for those looking to invest in real estate. Even small amounts saved each week can make a significant difference in the long term. Paying fortnightly rather than monthly can result in more repayments per year, reducing the interest paid over time. Furthermore, any additional income, such as wage increases, tax refunds, or financial windfalls, should be put aside to accumulate savings for a future property purchase. Be disciplined and prepared Discipline and preparation are crucial for becoming proficient in planning your finances. By paying attention to various factors, you can make informed decisions about property purchases, ensuring you pay the right price for a property. Additionally, these practices can help you get ahead in life, making smart financial decisions that lead to long-term financial stability. Various resources are available to help you with your personal finances, so check with your local finance bodies for online calculators and budgeting apps. By taking advantage of these resources and implementing the practices mentioned above, you will be more informed about your property decisions. By considering resale potential when purchasing a property you are taking into consideration factors that will influence your capital gain.
Sep 13, 2023
Buying property at the right moment
Buying property is one of Australia's greatest opportunities for wealth creation and timing the market during real estate investment is crucial. While some investors focus on time in the market, successful ones take matters into their own hands. They often look for uncapitalised areas to invest in and predict where the market is heading to maximise profits. Mastering capital growth Investors need to work their capital as fast as possible to capitalise on the expected growth in the real estate industry. Understanding the different markets and buying in upward-trending areas is necessary for smart investment decisions. Australia and New Zealand offer various state-based property market cycles that provide opportunities for investors to move their money to the next lucrative location. Buying property with a counter-cyclical strategy Affordability and sales volume are two principles that excite or deflate a market. Sales volume has a direct correlation with sentiment, and when people are not buying, investors can secure smart deals. On the other hand, when people are buying, investors can sell and make a profit. Running counter-cyclical to the mindset of other buyers is essential for psychological purchasing, as following the crowd can be harmful to an investor’s bottom line. Market limitations Understanding market limitations is critical for any investor. Every market has a limit, and a market can only sustain so much before becoming too expensive or oversupplied. Local markets tend to perform strongly and steadily without experiencing extreme highs and lows like global megacities such as Dubai. Markets with diverse economies tend to inflate and deflate but still rise in value consistently. Mastering ‘timing the market’ Buyers might purchase real estate too late in the cycle and this can be detrimental to their investment goals. Smart investors pounce on market capitalisation by following guidelines that indicate future boom areas. These guidelines include interstate investors buying into the area, high auction clearance rates, and local investors beginning to return to the market. When opportunity knocks, timing the market becomes crucial rather than just relying on time in the market. To analyse market sentiment to the best advantage, investors need to understand the volatile components of the marketplace and avoid extremes. The real estate industry provides opportunities for smart investors to predict future trends and capitalise on them. By understanding the market and being counter-cyclical to the mindset of other buyers, investors can secure smart deals and maximise profits. If you have any questions about how this situation might affect your investment, make sure you get in touch so we can give you the best advice possible.
Sep 8, 2023
Property types: exploring what suits you
When it comes to choosing the right property, it can be a challenging decision. Should you buy an existing home or build a new one? This is a common dilemma. Let’s look at some options to consider before you make your decision. To buy or to build; that is the question Purchasing an established home provides certainty about what you’re getting, but it may require additional expenses for renovations and repairs. On the other hand, building a new home allows for customisation and personalisation, but it can be time-consuming and challenging to visualise the final result. Building a new home may offer cost savings in terms of stamp duty. The affordability and feasibility of building a new home versus buying an existing one often depend on the desired location. Is buying “off the plan” right for you? Another option to consider is buying “off the plan.” Buying this type of property involves committing to the purchase before construction begins or when it is partially completed. The construction timeline provides an opportunity to save more money after paying the initial deposit. However, a significant risk of buying “off the plan” is that the property market may change during construction, potentially impacting the property’s value and your borrowing capacity. Do house and land packages fit your needs perfectly? House and land packages have gained popularity, particularly among first-home buyers in capital cities. These packages are often available in new suburban developments where the land tends to be more affordable. An advantage of house and land packages is that the houses are built with modern materials and energy-efficient appliances. However, it’s essential to note that some packages may not include extras like fencing or gardens, so you should consider the additional costs. Do fixer-uppers fit your budget best? For those seeking a more affordable option, fixer-uppers can be an attractive choice. Purchasing an older home that requires renovation or repair can provide a larger block of land, but the cost of renovations should be factored in. Depending on the extent of repairs needed, the expenses may surpass those of purchasing a newer property. Conducting a building inspection report can help identify any major damages that require attention. Do you prefer the strata-living lifestyle? Apartments and units are becoming increasingly popular, especially in urban areas. They often offer a more affordable alternative to houses, but additional costs such as quarterly strata levies for maintaining common areas should be considered. Newer apartments with more amenities are likely to have higher levies. However, apartments and units require less maintenance compared to houses, allowing homeowners to spend more time enjoying their living spaces. Need a bigger space for family gatherings? Consider townhouses and villas Townhouses and villas also provide a more affordable option with lower maintenance requirements. These properties are typically held through strata title, similar to apartments, which means there will be levies for building maintenance. Unlike apartments, townhouses and villas often include an outdoor terrace or courtyard, providing a private outdoor space. Need more affordable house and land options? Dual occupancies and duplexes are perfect choices Dual occupancies and duplexes involve two homes built on a single block. Each home has its own title and may offer a small garden or backyard space. Duplexes are similar but usually share a wall between the two dwellings. Noise and privacy considerations associated with townhouses also apply to duplexes. Both dual occupancies and duplexes are generally more affordable than detached houses due to their smaller land size. Do the research Before deciding on the type of property that suits your needs, it’s crucial to create a budget and a list of your necessities. Researching financial costs, locations, and the desired neighbourhood will help narrow down your options and make an informed decision. Get in touch with the RealWay team to help you find the perfect type of property.
Aug 14, 2023
Buying and selling a home simultaneously
When considering buying and selling a home simultaneously, it’s important to have a well-thought-out strategy to ensure a smooth process and avoid financial loss. Most people aim to sell their current home for the highest possible price, buy a new home at the lowest possible cost, and minimise the hassle involved in the process. But the question remains: should you sell first or buy first? First off, get your home ready for sale The first step in this process is to prepare your current home for sale. Simple DIY projects like a fresh coat of paint and completing odd jobs can help increase the value of your home. Additionally, paying off more of your mortgage before selling can also result in a higher profit. Buying and selling at the same time - get ready to decide When deciding whether to sell or buy first, it’s best to aim for the settlement on your new property to occur a few days before the settlement on your current home. This will give you more time to move and minimise the stress involved. However, unforeseen circumstances can arise, and the decision of which to do first will depend on various factors such as the current market, your ability to afford a bridging loan, and your equity. What happens when you sell first? Selling your current home first has the advantage of knowing exactly how much money you have to spend on your new home. However, you may need to rent temporarily while looking for a new property, which can result in additional costs and time spent packing and unpacking. Selling first also runs the risk of a gap between sale and purchase, during which property prices may rise. What happens when you buy first? Buying your new home first can remove the need for a temporary rental and prevent you missing out on your dream home if you find it before selling. However, overestimating the selling price of your current home or underestimating the time it takes to sell can be costly. Additionally, having bridging finance can result in paying off two loans until the existing home sells. Before making a decision, it’s essential to understand the potential costs and time involved with each option. Careful planning and consideration can ensure a smooth process and minimise financial loss when buying and selling a home simultaneously. If you have any questions about how this situation might affect your decision to buy or sell a property, make sure you get in touch with our team so we can give you the best advice possible.