Downsizing

Are there any tips and tricks for an auction newbie? The chance to market and sell a home within a set timeframe, while making sure full market value is achieved, has led...
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Looking to Downsize?

The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions. Click here for full Terms of Use.

How should I present a spare room for open inspections?

Opening up your doors to strangers to inspect your home may seem a little unsettling as an idea. The pedantic side of you might spring straight for the cleaning cupboard to ensure your home is in tip-top condition. Another part of you might go through your house to make sure each room looks its best. The shy person within may say, no, this is no way to market my home.

The spare room is often an area that isn't used for any other than storage. Whether it's a few bits of mismatched furniture or old boxes, many homeowners can put all types of odds and ends here and leave them to sit for a while.

If you're about to host open inspections at your house, or you're only permitting private appointments, but you don't know what to do with your spare room, here are three simple ideas to help you.

Office

Show off the practicality of your home by installing a desk, swivel chair and a computer. Many people now have the ability to work from home and by creating a quiet, peaceful area, you can show prospective buyers what your property has to offer.

Library

Grab a few bookshelves, a comfy chair, rug and a footrest and you can easily convert your spare room into a little library. Play around with the decor to get the feel you want - whether it's a light and airy space or warm, cosy reading nook.

Fitness room

Have you got a couple of pieces of fitness gear lying around? Convert your spare room into a small gym. Whether it's a Swiss ball, yoga mat, a treadmill or a couple of dumbbells, it's easy to show the potential the room has as a home gym.

If you happen to be short by a couple of items, ask a friend or family member to lend you a few things. Don't leave your spare room empty or filled with clutter - spruce it up in whichever way you feel to show buyers the potential and options your home has to accommodate their lifestyle.

Ultimately, showing people how your home could perform, rather than how you currently use it, often widens its appeal. That's what you're aiming for - attracting the broadest possible range of buyers so your agent can maximise your price.

How can you grow vegetables with a small garden?

There’s no better way to eat healthy, save money and make the most of your property than to plant a garden.

Some home owners may feel overwhelmed by the idea – after all, not everyone is born with a green thumb. However, creating a varied and delicious garden full of herbs and vegetables can be easier than you think.

Herbs

Planting herbs is a great first step for burgeoning gardeners. Best of all, because they require such little space, even property owners with little room can have a stunning herb garden. In fact, herbs can even be grown easily indoors!

For instance, all you need to do in order to always have fresh basil on hand without visiting the supermarket is place a basil plant in a window that gets at least a few hours of direct sunlight each day.

The same can be done with delicious herbs like rosemary, sage, mint and chives.

Veggies

Vegetables like carrots, radishes, onions, tomatoes and lettuce are also very easy to grow for amateur gardeners.

Additionally, just like with herbs, there are plenty of ways to grow fresh veggies if space is an issue.

For example, while garlic cloves are a popular cooking ingredient, they are often too bitter to the taste to cook with when they sprout. But instead of tossing these in the garbage, you can simply place sprouted cloves in a glass of water and grow new sprouts.

These sprouts are not as overpowering as garlic cloves, and can go great in a number of dishes or as a garnish.

Lettuce stems from a head of romaine lettuce can also be used to grow fresh produce. All you need to do is place the intact stem in a bowl with approximately a half inch of water and place it on a windowsill that gets some sun.

Soon enough, new leaves will grow and you’ll be on your way to crafting a delicious salad.

What do I need to know when buying an apartment off the plan?

Buying ‘off the plan’ provides investors with the opportunity to buy some of the best-positioned apartments within a complex. When the market is rising, it can also sometimes offer property investors a capital gain by the time construction is completed.

Here are some tips to help you make sure you make the decision that’s best for you:
  • Make sure you look carefully at the displays that developers make available. These will show examples of carpets, tiles, kitchen fittings and finishes, colour schemes and general fittings.
  • Ask about previous projects that the developer has completed. Arrange an inspection to make your own judgment as to the quality of construction
  • Ask residents of the developer’s previous projects how happy they are with the property they purchased
  • If you’re not confident you understand floor plans, consider asking an architect to assist you with your decision making
  • Banks generally wont provide unconditional approval of your property loan when you buy off the plan. If the market moves downwards, between your purchase and settlement, you will need to be prepared to find additional funding
  • It is a good idea to include a finance clause in your contract and get a valuation ‘as-if-complete’ when you’re getting your initial approval. This will allow you to gauge how the property stands within the current market, as well as how the bank views the area and the property’s potential
  • Get legal advice before signing a real estate contract. Make sure you understand delivery timeframes, sunset clauses, size variation clauses and confirm that you are buying what you believe you are buying
By conducting your due diligence and taking your time, you can take advantage of what off the plan purchasing can offer buyers; a way to secure a quality property in the future, at today’s price.

Should I get a building and pest inspection?

Building and pest inspections typically cost around five hundred dollars but are a vital part of the due diligence process when buying a house. When buying an apartment, a strata inspection report may be more appropriate, depending on the size and construction of the block. Remember though that almost all inspection reports reveal some form of problem, particularly with older properties.

A building and pest report will provide crucial guidance as to the condition of the property you are considering and can be useful in price negotiations, if significant problems are present. Here are some tips on understanding and responding appropriately when you receive your report:
  • Don’t be shocked if your report is in the order of 30 or more pages. That’s normal.
  • The presence of ‘past termite activity’ should not be viewed as a deal breaker. What is important is the extent of the damage and whether there is evidence that corrective action has been taken. Naturally, if current termite activity is present, this is potentially serious and needs to be fully assessed and dealt with
  • It is the building inspector’s job to point everything out that he/she sees to ‘cover’ themselves. It’s important you calmly read through the information and understand what it means
  • If you have a question, phone the inspector. They will often be happy to discuss their findings and explain their relevance.
  • If major faults have been found, discuss these with your real estate agent. It may be possible to negotiate a suitable adjustment to the agreed property purchase price.
  • Be realistic. A small range of typical faults may not be fair grounds to renegotiate price

How do I work out market value so I don’t overpay when buying real estate?

"Market value" is whatever a willing buyer will pay for a property when it sells.

While this advice doesn’t help new buyers, or even experienced buyers, there are ways to work out what you should pay for a property. Here are our tips:
  • Use technology. Many real estate websites provide suburb median prices and recent sales details. Remember that a median price is only indicative of the middle price in a suburb; it may not reflect the value of the property you are considering
  • Ask real estate agents
  • When buying an investment property, rental returns are the key factor in determining value. 5 per cent gross rental return is considered the ‘rule of thumb’ which essentially converts to $1 in weekly rent for every $1,000 spent buying a property
  • Obtain a valuation. Formal valuations can cost between $500 and $1,000 but a licensed valuer must support his or her indicative price with solid comparative market evidence

What are the free online resources that every real estate investor should know about?

SOURCE: propertyobserver.com.au

The rise of the internet over the last 10 years has changed property investing materially – and the number of free resources that you can access right at your fingertips, any time of day or night, is astounding.

Here are some recommended “go to” free real estate websites and resources for pushing your investments that one step further.

GOOGLE ALERTS

Much-used and much-loved, Google Alerts can be set up for news on any area of your liking. Property Observer editor at large Jonathan Chancellor suggested in his speech at the Home Show that setting up alerts for your chosen suburb or locality plus keywords like ‘infrastructure’ or ‘government spending’ are possible approaches to ensure you buy in ahead of the pack. This scrapes local news online, as well as other commentary, and sends it straight to you.

You can set them up to be as frequent or infrequent as you like, all you need to do is send them to your Google account. You may want to also consider using an RSS reader or a bookmarking system.


A FAVOURITE LISTINGS WEBSITE

While it’s suggested that you peruse a number of listings websites (not all agents list on every portal), it’s worthwhile having a favourite that you can check in on regularly. Whether it’s realestateVIEW, realestate.com.au, Domain, Homely, Homehound or another, be active in viewing them. Property price guidance might come from sites like onthehouse. Keep an eye on areas of interest, new listings in your price range and even how much properties are renting for – this will quickly show you changes in the market, and what is selling. You’ll also get an idea of the active agents in the area. This brings us to…


AGENT RATING WEBSITES

It’s good to know the active real estate agents you can call and speak to, and potentially list your property with in future. RateMyAgent is one of these sites, that shows you which agents are the busiest and selling the most and provides some localised data.


GOOGLE EARTH AND MAPS

Such an easy portal to use, Google Earth and Google Maps will tell you a huge amount of invaluable information and orientate you instantly. Whether it’s using the Street View portal to get a better look at just how close it is to the main road, and whether you can see any graffiti in the pictures, it can also show you how close the property is to the nearest school, shops, public transport and even how close the suburb is to the capital. This is a first stop when researching a new area.


LOCAL TENANCY PORTALS

If you’re a landlord, then get yourself armed with information. All of the legislation is online, and now there are even hubs that provide guides and assistance for landlords and investors. Consider spending some time on different Tenants Union websites as well, these help quickly show you common renters’ concerns and how you might assist as a property owner. You will also want to have the details for your local tribunal on hand.

Legislation by state and territory:

New South Wales

Queensland

Western Australia

South Australia

Northern Territory

ACT

Tasmania

Victoria


INVESTOR FORUMS

Investing in property doesn’t have to be a lonely task and that doesn’t mean you always have to spend money to attend groups and meetups. A number of forums exist for you to speak your mind with other property buyers, and naysayers. From Somersoft to renovation forum Home One, whatever your investment tastes there’s something for you. A number of industry experts are often also online and able to answer questions via the forums.


TELEVISION RE-RUNS

Missed that episode of The Block that everyone’s discussing (it gets tense when it’s up against My Kitchen Rules)? Or want to get some background on Location Location Location? They stream them through their websites, and at least include past seasons for you to get your fix.


BRAND NEW AND COMING SOON RESOURCES

The National Building Code of Australia is soon to be freely available online under new changes - great news for owner builders and anyone considering a structural renovation. And, in the last year, we've seen a crop of new websites offering useful assistance in all areas of investing. Genworth launched their LMI Toolkit in November last year, and new website and app realAs believes they have the algorithm that will accurately determine what a property will sell for (with a success rate of usually within 5%). Another startup, Next For Sale, allows potential sellers to list before they are actually sellers.

What is the best strategy to win when buying real estate by auction?

While it may all come down to who has the deepest pockets on the day, sometimes how you bid will influence just how high the other bidders are prepared to go.

However, the most important factor with a real estate auction is to decide what is your realistic limit in advance. Be prepared to be a little flexible, but don’t allow yourself to get carried away with emotion. Here are First National’s tips:
  • Obtain pre-approval for your loan before the auction. This provides you with confidence that the bank will support your highest bid.
  • Some people like to enter the bidding early and then keep bidding strongly in the hope that other buyers will find their tenacity off putting
  • Some buyers like to open the bidding with a very high bid but this can risk paying too much for the property
  • Others prefer to wait until the bidding appears to be exhausted, before starting to compete
  • If two bidders keep upping their bids by similar amounts, some buyers believe it is advantageous to suddenly bid with a stronger, larger increase than has been generally taking place throughout the auction. This is thought to convince competitors that you are determined to succeed and will just keep bidding
  • If the auctioneer indicates that the property is to be ‘passed in’, make sure that you are the highest bidder if you wish to have the ‘first right of refusal’ following the auction. This means you will be first to have the opportunity to negotiate with the vendor

Whatever your style, the one thing that rarely works to anybody’s benefit is being loud and obnoxious. Other bidders sometimes say they are prepared to pay much more to make sure that somebody that is rude does not get their way.

What is the best strategy to win when buying real estate by auction?

While it may all come down to who has the deepest pockets on the day, sometimes how you bid will influence just how high the other bidders are prepared to go.

However, the most important factor with a real estate auction is to decide what is your realistic limit in advance. Be prepared to be a little flexible, but don’t allow yourself to get carried away with emotion. Here are First National’s tips:
  • Obtain pre-approval for your loan before the auction. This provides you with confidence that the bank will support your highest bid.
  • Some people like to enter the bidding early and then keep bidding strongly in the hope that other buyers will find their tenacity off putting
  • Some buyers like to open the bidding with a very high bid but this can risk paying too much for the property
  • Others prefer to wait until the bidding appears to be exhausted, before starting to compete
  • If two bidders keep upping their bids by similar amounts, some buyers believe it is advantageous to suddenly bid with a stronger, larger increase than has been generally taking place throughout the auction. This is thought to convince competitors that you are determined to succeed and will just keep bidding
  • If the auctioneer indicates that the property is to be ‘passed in’, make sure that you are the highest bidder if you wish to have the ‘first right of refusal’ following the auction. This means you will be first to have the opportunity to negotiate with the vendor

Whatever your style, the one thing that rarely works to anybody’s benefit is being loud and obnoxious. Other bidders sometimes say they are prepared to pay much more to make sure that somebody that is rude does not get their way.
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