Helpful Tips

A-Z of Real Estate Part Two

Marketing-

You are selling your most expensive asset and you want the world to know.  Maybe there is one more person you could reach, who loves your house and will pay a little more.  You must be prepared to spend a little to make a lot.  You can’t sell a secret.  Marketing campaigns in Sydney can cost $15,000 or more.  On the Central Coast, you can expect to spend between $2,500 and $5,000 for a reasonable marketing budget.  For a quality home you should consider upping that marketing budget to $10,000.  An extra commitment of $1,000 here could reap you ten times that amount. 

Negotiating-

This is where your real estate agent makes- or costs -you money.   No one ‘gives’ away your home but a good negotiator can put an extra thousand or two in your pocket.   Or ten.  Or twenty.  Or more. Buyers must also feel they are happy to pay the price and a good negotiator will ‘feather the edges’ so both parties win.

Open house-

A necessary evil or a really great way to introduce your home to prospective buyers?  Yes, you might get some sticky beaks or local nosey parkers, but who cars?  Your home is neat and tidy and looks its best, and they might just tell their colleague at work.  I think open houses have value for most properties and allow buyers to look at a home ‘anonymously’. 

Professional photography-

Please oh please get a professional to do this.  How do you expect to make a million if you won’t spend $500? Most clients these days are also choosing to get a lifestyle video to help their property stand out in the crowded  market.

Qualifications-

Is your agent fully licensed, or do they at least hold a Certificate of Registration? This may not be something people think to ask, however it is imperative your agent is qualified to sell your biggest asset.

Realestate.com.au vs Domain.com.au-

Typically Domain attracts out of area buyers and realestate is more likely to attract local buyers. This is slowly changing as local buyers get behind realestate.com.au. Personally I advertise on both, because who wants to miss out on that one buyer who might pay $5,000 or $50,000 more? 

Stamp Duty (also known as transfer duty)-

The very annoying tax paid to the government on the purchase price of the property, paid by the purchaser.  Its a variable calculation and there are online calculators, but to offer an example,  stamp duty in NSW on a $800,000 property is $31,490 as of Sept 2018.

Target Market-

The buyers we want to target for your property.  If your home would suit as an investment or holiday home, or needs lots and lots of work, we need to target the buyers who would pay the most for this type of property.

Underquoting-

Is just bad for everyone, and illegal. Under quoting means an agent is advertising a property for less than market value. This practice of underquoting can cause interested buyers to waste time and money on inspecting properties, getting reports and attending auctions based on misleading estimates of the selling price 

Vendor-

A fancy word for seller. Which comes from the Latin, then French word to sell, Vendre.  

Walk through-

A final visit to the home by the buyer, just before closing the deal. The property should be in fundamentally the same condition as when you originally saw/purchased it.

eXchange-

A formal legal process creating a binding Contract of Sale. Conditional (with some terms to iron out) or Unconditional (committed, baby), once both sides sign, and the contract is dated, you are exchanged.

Yield-

A term for investors- how much annual return you are likely to get. A prospective year’s rental income as a percentage of the property cost.

Zoning-

A tool controlled by local planning authorities or council to control future development. Permissible uses in the area, density of building for instance.

For part one of everything real estate, click here!

A-Z of Real Estate Part One

Agency Agreement –

The legal document binding you to your chosen agent.  Can be for any period of time and can be exclusive or open.  Typical in 2260, agency agreements are for 12 weeks and generally exclusive so you work with one agency but everything is negotiable. 

Buyer –

What it’s all about!  Finding the best buyer for a property, one who might pay a premium and accommodate the sellers’ terms and conditions.  Where will you find your buyer? 

Contract –

Prepared by a solicitor or conveyancer and must be obtained prior to listing the property for sale.  The front page will be completed except for the buyers information and the price paid.  Your real estate agent will provide a copy of this to any prospective buyers. 

Décor –

There are plenty of companies around to help you stage a home and a good staging company can put thousands onto your end sale price. You want to try to appeal to a broad spectrum so neutral colours are best.  You might love the purple wall, but we are not trying to appeal to You.  We want someone else imagining themselves living in the house. 

Exclusive vs Open –

legally binding agreement between seller and a real estate agency.  Do you want one agency overseeing your sale, or to open it up to multiple companies.  (p.s. – you want one!)  An honourable exclusive agent will always offer another agency the opportunity to bring through their own buyers. 

Fee or commission –

This is negotiable but really depends on your area and local customs in that area.  Don’t expect to get the best agent in town and then undercut their commission.  This person is about to negotiate on the price of your house!  Do you really want to pay peanuts (and get a monkey?) In California the fee is typically 5% or 6%. In London it ranges from 1.5% – 4%.  On the Central Coast it ranges from 2% – 4%.  Bear in mind that ½ % difference in commission for the right agent might ultimately put more in your pocket. 

Gap –

The difference between the buyers offer and the vendors expectation-and our job as agents is to close the gap. A good agent will negotiate a buyer UP to the vendor and not just sign paperwork at an unrealistic amount in order to secure the listing.

Handover –

When settlement occurs (typically after 42 days) the real estate agent receives legal notification from both buyers and sellers solicitor.  This is permission to release the keys to the purchaser and the deposit to the vendor.

Interest rates –

Shouldn’t affect your purchase.  1 or 2% difference in RBA rates should make little difference to whether you buy property.  Rates will fluctuate, your long term plan shouldn’t. Get a bigger picture and plan for your future. 

Junk –

Get rid of it!  It’s a great opportunity to have a clear out and no one can imagine living in your property if all they can see is knick knacks, old magazines, broken appliances or any other junk. Carol can advise if necessary.

Keys  –

When selling, you will need to provide a copy of your keys to your agent and those keys should be kept securely locked in the real estate companies key safe (withOUT your home address on them!)  When you purchase, some families  consider changing the locks for their own peace of mind.

Loan –

Make sure you have already spoken to a mortgage broker before you go house shopping.  You should not have to pay a fee to a reputable mortgage broker, and they should find you the best lender for your particular circumstance.  Ask Carol for recommendations.

For part two of everything real estate, coming soon!

Help! I Want to Sell My Home and Don’t Know How to Start…

One of the most stressful things we do in our lives is to sell the family home.  It affects so many core parts of our world.

♦Financial (“will I get enough money?”)

♦Physical (“I have to get it ready and how do I ever start?”)

♦Legal (“how on earth do I go about a contract or finding the deeds to the house’)

♦Emotional (“I have all these memories here?”)

♦Personal Angst (“what if no one likes my house”)

♦Trust (“Oh wow – I am handing this all to a complete stranger and hope they will do the right thing by me”)

You are not alone.

A trusted real estate advisor does more than just rock up to an open house and hold the door open for buyers. The selling process can start several months before the first buyer even hears about the home.

So here are a couple of stories of people, just like you, who didn’t know where to turn, or how to start, and here’s how a real estate agent can help:

♦ 70 something year old couple Mr & Mrs S. had lived in their house for nearly 40 years and were ready to downsize and have a more manageable garden. They had no idea where to start. We recommended a local solicitor to begin the contract of sale. The house was basically in good condition and had recently been carpeted and painted so no tidy up needed.  Just some specific advice about decluttering, changing the bedding to a fresher, more youthful style, moving some furniture around to increase floor space visibility. Small changes to increase the saleability. Took down the heavy curtains and the nets. We arranged a photographer to take photos and to also measure the house for the floorplan. We discussed strategy and whether auction or private treaty would work best and some advice about the best, cost effective places to advertise. For these clients, no newspaper and private treaty – an advertised price. We achieved their dream price in the first four weeks.

♦ Mr and Mrs D. had a rental property with a sitting tenant who had given notice. We helped the tenant organise to move out to make it as pain-free as possible for the tenant, organised a pest and building report so the out-of-area owner knew the shortcomings of the home and had the rotten deck repaired. They wanted to paint but we advised it wasn’t necessary. Suggested the massive bush at the front door be cut back to let in more light. Styled with a local company, photos and video done for this one. Auction for this one and lots of internet advertising. Sold in the first week.

♦ Mr. H. owned a small 2 bed rental unit and had some ‘harsh’ tenants. We organised the holes in the doors to be patched, the damaged carpet to be replaced and the walls painted (I even brought my own outdoor furniture and cushions to decorate the patio as the home was now empty of furnishing.)  Advised against a new kitchen. The owner wanted a quick sale so we advertised to our extensive data base before the work was even finished. Sold at the first open house.

♦ Mr & Mrs M.  owned two neighbouring properties both used as occasional weekenders, both very stuck in the 80’s. We organised a colour consultant, painter, carpets, gardener, tiler, electrician and handy man. Plus, a styling company and four months of careful hand holding later it was ready to go to market. Even though we didn’t recommend big changes, this owner wanted everything done to a high quality and replaced the dishwasher, the stove, the benchtops, the tiles, the toilets and the shower fittings. A big cosmetic freshens up which helped both properties far exceed the original expectations.

♦ Mr T.  loved his immaculate cottage which was firmly placed in the 70’s. He had an image of how the house once was and was not interested in changing a thing. We assisted with referrals to solicitor and he let me move some of the furniture around. No paint, no new carpet, no fancy stylists, no video, no signboard, no open houses, he wanted to write the advertising copy. I took my own outdoor furnishings, blankets, cushions for the bed, even a pot plant and lamp to help style the home. After a few weeks of gentle encouragement, he trusted me enough to write the copy for him and invite a few people in to see the home. He was thrilled with the result, as was the new purchaser.

♦ Mr & Mrs E. owned a weekender cottage. Little. Unassuming but crammed with 25 years of holiday furniture. And no closets. We suggested moving out some of the furniture and arrange for a removalist quote, and a tip run. They decided to take everything out and we helped with a styling company to bring in a fresh new look. No newspaper advertising, this one sold at auction for dramatically over the reserve.

So massive remodel on one end of the spectrum, to sweeping the front step on the other end, your agent should be trusted enough to advise you how to maximise your result.  Sometimes you don’t need to paint or recarpet because it won’t bring you in any more money.    Sometimes you just need to rearrange the furniture a little and trim back that one shrub.      But call in the agent even before you think it necessary because that big reno you are undertaking just to sell, may not be needed at all.  And whether you need a solicitor, a painter, a landscaper, a handyman, a cleaner, a styling company, a carpet quote, an exterior house washer, or just to think things through your trusted agent will supply all that and more.

And don’t forget, if you are after some advice, do not hesitate to call me on 0438 802 648. I have a myriad of contacts, and experience of course!

Buying My First Home Part Two

Missed Part One? Click here

So you’re ready to get serious.

Talk to the agent of the property you are interested in and tell them you want to make an offer, subject to your due diligence. Your due diligence is anything at all that YOU need to satisfy you that the property is sound and that you have found ‘the one’.  It can include a pest and building report, confirmation of your loan approval, whether there are sufficient funds in the strata sinking fund, if the swimming pool is approved, if the climate suits your orchid collection – anything at all that would be material to your purchase.

Feel free to start a little lower with your offer.

Don’t be ridiculously insulting, and allow the process to move your price upwards if necessary. I mean, yes, the agent works for the vendor but they also don’t get paid unless the deal comes together. Talk to the agent about a reasonable price to offer.  A good agent will help both sides get what they want.

There are typically three prices…

“OMG I am thrilled I got it for that”,  ‘That’s fair and reasonable price’ and  ‘I am not paying another cent’ price. Hopefully you end up in the middle of those ranges. Fair and reasonable. Remember you will have closing costs – stamp duty and conveyancing fees to consider, moving and relocating costs and possibly some redecoration back up cash. The seller doesn’t care about any of ‘your’ costs so don’t feel these are items to help you negotiate. You should have all those costs in your allocated budget.

Don’t obsess about overpaying.

Everyone wants a steal but its unrealistic. Markets go up- and markets go down. You will have done your homework at this point and know where relative value sits. Don’t dig your toes in over $5,000… The vendor AND the buyer have got to walk away satisfied or the process doesn’t work. $5,000 extra on the mortgage will be pennies a day, but it might pay off the marketing package for the vendor which could allow them to move ahead. Its none of your business how much “they” are making on the transaction! If they are making a massive profit or making sixpence, that’s their business. (You wouldn’t pay extra if they were making a loss, would you!) Hopefully you get an amazing house for an amazing price – but don’t hang your hopes on that scenario.

Back to due diligence.

Do make sure you organise a pest and building report to make sure the property is structurally sound, or a strata report to make sure there is enough funds in the kitty and that there are no scary issues with the building. This is usually done in the cooling-off period once the offer has been accepted. Again, be reasonable. If you are buying a 28 year old house, have some expectation that it won’t be a brand new property. You want it to be ‘as expected’ for a property of that vintage. Talk to the inspector too. Sometimes their written reports cover their butts so extensively that it looks terrifying. Verbally they may be more human.

Happy with the reports?

Once you are satisfied, and with consultation with your solicitor, you then pay the balance of the deposit (typically 10% but sometimes you can negotiate to 5% of the sale price). This generally occurs after the cooling-off period has expired, and you are ready to proceed. This is when the sale becomes an ‘unconditional sale’ and the settlement process begins. Remember, whatever deposit you pay at this point, you will still owe 10% if you default between now and settlement. The deposit is held in trust by the real estate company and handed to the seller once settlement has occurred. In New South Wales, typical settlement is 42 days, but anything can be negotiated between the buyer and the seller – BEFORE you sign contracts. If you want more time after contracts have been signed, the vendor might say yes – but they might say no too, and you have no leverage.

Key points to remember:

  • Sort your finances out and save save save!
  • Know what your borrowing capacity is before you start looking, shop around, but also find a good broker that will do the work for you
  • Do your research on the area, agent, current market, everything!
  • Utilise the agents in the area, they (should!) know the area like the back of their hand
  • Remember to take into account extra costs eg stamp duty, conveyancing fees, etc
  • Don’t skip on your due diligence, this may bite you in the behind!
  • Organise a pre-settlement inspection with your agent

Buying a house is daunting – but its the best feeling once you receive the keys to your first home.  Good luck!

Buying My First Home Part One

I’ve recently spent time with my 20- something nieces and nephews and realised they know little about how to go about buying their first house. So, if you are 20-something (or 30-something or even 40-something!) and have a vague idea about stepping on the property ladder, here are a couple of directional arrows.

Start off by sorting out your credit history.

If you have accumulated a massive credit card debt or owe some unresolved student debt and are getting snarky letters, you will have to smooth some of that out. I’m not talking about legit HECS debt, but rather the mean emails that make you cringe. Just stop getting lattes and UBER eats, and pay your bills down. Or preferably, pay them off. And make saving a lifelong habit.

Talk to a financial person about your loan.

This might be changing imminently but in Australia, every sensible person goes to a mortgage broker. You don’t pay them anything (the bank does) and you should be able to find a better loan than you would on your own. They might also have an alternate loan source that you wouldn’t necessarily have explored. And don’t go to six different banks trying to see if you can beat them – every time your credit is checked there is a flag left on your credit history. If a bank sees you have tried to get a loan with five different financial institutions and are now trying theirs, you might find this reflects poorly for you. A mortgage broker will also be up to date with any governmental rebates or first home buyers grants available to you. This could save you tens of thousands of dollars.

Once you have a clue about how much you can borrow start to do some online research.

Don’t be precious about what suburb just yet, just spend some computer time and learn where you can and can’t afford. There is simply no point in setting your heart on the suburb your parents live in, if they have been climbing the property ladder for 45 years and have a mansion on the beach. Be flexible, be reasonable and think a bit about resale and future growth too. You don’t have to be a property guru to know this. If you are the only person in the world who would be okay living next to the city dump, you will probably find this doesn’t bode well for your future capital growth (or profit on the value of the property).

Search the ”sold” portion of the website you are using.

The For Sale section is really a ‘wish price’ for the seller.  The Sold section is actual achieved prices. Not always the same thing and make sure you toggle to put the sales into recent date order. You want to see what sold two months ago, not in 2011.

When you have worked out what sort of area you are interested in, start to hit a LOT of open houses.

Real estate agents don’t care. If they have bothered to open the front door, you are welcome there. Just mention that you are early in your process, not yet qualified and doing some research. Real estate agents – despite the press – are generally helpful and useful sources for you.

Get into as many available properties as possible.

You must stand in the living room, check out the natural light, the location, the outside of the building if you are buying a strata or body corporate home (unit or townhouse). There are some things you CAN change (the grotty lino in the bathroom, the green paint in the hallway) and some things you simply cannot change (the big hill blocking all the sun through the winter, the roar of cars from the freeway). Start to get a feel for what is your non- negotiable, and what could be your compromise items. You have to kiss a lot of frogs before you find your handsome prince.

Be a bit flexible at this point.

Yes you may have to put in a new kitchen eventually, or redo the carpets but could you suck it up and live there to start with? And when you bring along your mother/best friend/ auntie to ask for their opinion, be mindful that they have not slogged through all the rotten apples so have nothing to compare it to. They think there are there to ‘be the voice of reason’ and I can’t tell you how many excited first-time home buyers get discouraged when their well-meaning cousin points out a hairline crack in the stucco outside and disparages the whole property. You will get a property inspector to tell you about the structure and any faults. You don’t need Aunt Hildas input.

Click here to head to Part Two!

Thoughts After a Conference…

Some musings after attending a huge national conference.

  • Learn the difference between any think and any thing.  (Just to give you a wee clue there is no such word as anythink.)
  • Learn the difference between Free and THree.  If you are older than five you should be able to pronounce THR together in a line.  If not, move to Germany and just say TRee.  

Presentation.

If you are a woman and presenting, do not wear any tight beige/ taupe/ nude t-shirt.  While it may look stunning in real life, with the stage lights of the conference beaming down, you just look naked.  I mean, naked. Its very distracting.

Please remember that lots of people have paid a lot of money to attend the conference and watch and listen to you. Practice a few times, and ask someone to help you with your slides so they are engaging and remember that its not a lecture.  We want to see some interesting images too.

If you have flown around the world to speak to us, get your hair brushed before you get on the stage.  Or even cut the week before.

We are not at a bar or in a club.  Put some socks on. And stop dropping the F-bomb.  We all know it, we all use it, but not while presenting in front of 4000 people.  Have some respect for your audience.

Stock standard common courtesy.

If you want to talk to your best mate sitting next to you in the auditorium, just remember we can all hear you.  You might want to continue your private chat outside so we can all hear the speaker on the stage. This one also applies to the theatre, movie and live but will save that for another spray.

And while I am on an old lady rant…

Remember, you are in AWE of something. Not orr.   You are GRATEFUL. Not greatful. You don’t ‘loose’ something, you LOSE it.  Its a sneak PEEK (with your eyes), not peak (with a mountain goat).And if you can’t work out the difference between THERE,  THEIR and THEY’RE… Well!  I FRO my hands in the ERR.Now to leave you with musings from one of my favourite poets, Brian Bilston, here is The Grammar Police:

‘the grammar police got him

split his infinitive open,
removed his colon
and left him lying commatose

the next day he was pronouned dead

full stop’