Archive for category: Buying

Buying or Building a Home? Look Before You Leap

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excavator in front of a house under construction

Buying a home is the largest financial commitment most people make during their lifetime, so it makes sense to spend some time researching every aspect of home ownership before making any decisions. Many potential buyers make the mistake of looking for their ideal property first, bypassing the initial planning, which may not be as exciting as house hunting, but if done well, saves a lot of anxiety later.

Carefully Check Your Finances

The most important step is to take a realistic look at your financial situation. Whether you are building or buying an existing property, a mortgage is a necessity and one that is likely to take many years to pay off. It is not enough to look at your current income and assume that it will be sufficient to cover the mortgage and expenses. You need to ensure you can meet these commitments over the term of the loan.

Include ALL Costs in your Budget

You should also remember that whether building or buying, there are additional costs to be met before any property settlement takes place. These costs should be carefully researched and included in your budget. Government stamp duty, building inspection and conveyancing fees, moving costs and connection fees for utilities like water and power are just some of the likely costs to budget for. However, there could also be some government grants and concessions available to you depending on your situation.

Keep Comprehensive and Accurate Records

You should keep records, either paper-based or digital, of every aspect of your journey to home ownership. Over the weeks and months of the search until you finally move in, you will speak to real estate agents, building experts, legal experts, local government employees and others. You will gather quotes, copies of contracts, building plans and other documents which you may need for future reference. It is quicker and more efficient to keep it all in one location.

Only Deal with Experts

Remember also to get expert advice, especially if you are new to purchasing property. As you start working your way through the process, you will have dozens of questions, and while some may be easy to answer, others will need investigation and the opinion of people with relevant qualifications. Getting the right advice first up will save a lot of problems later.

Our real estate agents here at Bunbury Real Estate have the training and experience to find the perfect block of land, house or apartment for our clients. We are members of the Real Estate Institute of Western Australia and we have received many industry awards for our professionalism over a period of years. Our staff are ready to assist you in your property search.

How to Improve the Presentation of a House that Won’t Sell

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home for sale sign

It seems that, regardless of how the real estate market is performing, there are always some houses that just will not sell. Even in extraordinary times like those we are currently experiencing, with the demand for residential real estate continuing to rise, some properties languish on the market.

Helpful Suggestions to Get a Sale

If this is the situation you are in, some suggestions from experienced real estate agents may help to identify issues that are holding back a sale. By accepting and acting on their advice, you could soon have willing buyers queuing to inspect and make offers on your property.

Sellers should understand that buyers look at your property differently than you do. While you love having the family photos, children’s sports trophies, knick-knacks you picked up in Bali and other precious reminders on display, potential buyers will see an indelible imprint of your memories. Remove personal mementos and put them in storage.

Clear Out the Clutter

Now continue to de-clutter. Buyers want to see how much space there is, and that is difficult when choked with unnecessary furniture. Don’t make the mistake, however, of stripping the

rooms bare. Some furniture is needed so buyers can visualise how much will fit into the space.

Fix Minor Repairs

Check every room for minor repairs you may think are trivial. A cupboard with one unsecured hinge, a corner of the carpet that sticks up, or an off-centre bathroom tile are all things that you accept and overlook, but to a potential buyer they show a lack of maintenance. This makes them question what else may be hidden.

Present a Clean and Tidy Property to Buyers

This next suggestion seems obvious, but it is common for cleanliness in homes to range from magazine quality to non-existent. Some sellers don’t see keeping their home clean and tidy as a priority, but if the property is dirty and littered with rubbish, many buyers will be unable to see beyond the junk. Clean it up and keep it clean.

The same applies to the exterior. If the backyard is a dump, clean it up. Mow the lawn regularly, trim overhanging trees and out-of-control shrubs, keep fence lines and pathways clear of grass and weeds. Remove any unnecessary clutter from the approaches to the front door. First impressions are important.

These are some of the suggestions our sales agents at Bunbury Real Estate have made to clients who believe they should leave any changes for the new owners. Our advice is always to present the property in its best light. We are not suggesting over capitalising the property, but it should look inviting and habitable.

Is There a Knack to Successful Property Investment?

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two people holding sold sign

In a national property market that appears to defy all common sense, first-time investors are looking for some guidance before they take that first step. Residential property prices are at an all-time high, and interest rates are also at an all-time low. Understandably they are torn between the two extremes.

Do they take advantage of low interest rates and buy now at top prices? Do they wait to see if the market drops and take the risk that prices won’t climb higher, pricing them out of the market? What if they buy now and current market prices take a massive dive? They are then locked into a huge mortgage on a property that has lost significant value. How will that affect their overall financial position?

There is so much conflicting advice, and past property booms and busts have shown that even the experts can get it wrong. However, many successful investors believe that, just like any other important undertaking, planning is the secret to negotiating the property market and its quirks and variances.

Most investors already in the market started their investment plan by looking for a property that offered capital gain. The rental income paid most of the mortgage, and the expenses generated by the investment were claimed as a tax deduction. Their plan was to wait for the market to rise, thus creating equity. When there was enough equity in the property to cover another mortgage, they purchased another investment property.

The capital growth part of the plan allowed many people to build sizeable property portfolios, but for those looking further to significantly increase their cash flow the next step was to invest in commercial and industrial properties that offered lower capital growth but higher cash flow.

None of this is really a secret, but rather a considered strategy depending on the needs and goals of the individual investor. The most important part of the plan is to select the right type of property. This involves careful investigation of the properties on the market, and most importantly, their location. All this is time consuming, especially for the investor who is starting out and still needs to work to pay the bills.

This is why the best part of the plan for an investor is to find a real estate company whose sales representatives know the market. Here at Bunbury Real Estate, our professional sales agents have many years of experience at finding suitable properties, negotiating sales contracts, and assisting our long-term clients to build their property portfolios. Contact us if this could be you.

Do This Before You Even Think About Buying Your First Home

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checklist written white notebook

Buying your first home is one of those life occasions that can invoke both excitement and terror, both at the same time. The excitement is dreaming big and spending days looking at property until you have some knowledge of your local real estate market. The terror is the reality of signing up for a mortgage that may take years to repay.

Where to Start?

The starting point is to find out how much money they can borrow. This will vary depending on individual incomes, the size of the deposit and the policies of various lending institutions. Saving enough for a reasonable deposit is a big obstacle for first home buyers, so most state governments have a range of assistance programs. For example, in Western Australia, eligible applicants can access up to $2,000 to help reimburse them for incidental expenses associated with purchasing a home.

Incidental Expenses Plus a Deposit – Are You Kidding?

What are incidental expenses? As if saving a deposit wasn’t hard enough, other costs that need to be covered are mortgage registration fees, conveyancing fees, valuation and inspection fees, mortgage insurance premiums and lending institution fees. This is not a complete list as these costs can vary from state to state and this program may not be available in every state.

State Government Grants to Help Out

The biggest assistance package for first time home buyers is the First Home Owner Grant that is offered by most states, including Western Australia. The grant provides up to $10,000 to those eligible, and again, this amount can vary from state to state. This is an excellent boost to the finances for those buying their first home. There may be time limits on the application process, so it is wise to check the eligibility criteria before making any decisions.

Our property sales professionals here at Bunbury Real Estate know our local market and are ready to assist first home buyers find a suitable property at a price they can afford. We also can help with general information about these grants and other actions that buyers should take before deciding on a property, but as in most matters, they should also seek other independent advice.

Keep Some Extra Cash Aside

This could be in the form of valuation fees and building and pest inspection fees to check for faults or other problems. Stamp duty is levied by the state governments, payable by the buyer and is calculated on the selling price. Buyers should also insure the property immediately they sign the contract of sale. Calculating these costs in advance and setting money aside to meet them will allow the first home buyers to enjoy their new home without immediate financial stress.

Do Your Research Before Buying Your First Home

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buying a home

Buying your first home is one of life’s most exciting experiences. Most buyers get caught up in all the obvious activities such as selecting a location, inspecting housing stock, planning renovations and shopping for furnishings to suit their chosen property. With some basic knowledge of lending practices, they have also secured a mortgage and have moved into their first home.

What They Didn’t Know

A few years later, with more information and experience behind them, many of these buyers would now admit that there were some important things, had they known them at the time of purchase, would have changed the way they approached their quest.

A Mortgage is Just the Start

The first thing they would have done differently is to monitor their spending habits. Although they had saved a deposit, they underestimated their spending preferences. They were able to cover the mortgage, but other regular expenses attached to home ownership such as property rates, insurances, repairs and maintenance were a struggle until they controlled their spending. In hindsight, they should have created a realistic budget, which included the non-essential purchases that they had to forgo to achieve their home ownership dream.

Don’t Fritter Away Your Deposit

Some buyers underestimated additional costs that ate into the deposit they had saved. Fees and charges, such as stamp duty, transfer fees, building and pest reports, conveyancing costs and solicitors’ fees can amount to thousands of dollars. The better alternative is to research these costs and save extra money to maximise your deposit. If additional costs are chipping away away at your deposit, you need a good strategy for setting up a budget.

These are all issues that we are familiar with as property managers. At Bunbury Real Estate, we spend time with prospective buyers to find out the types of properties they would like us to show them. We also do our best to qualify each client to make sure that we are not wasting their time showing them properties that are out of their price range.

Pay Extra Each Month and Shorten the Loan

Many buyers wish they had understood more about the actual cost of the interest on their home loan at the start. Those who paid the minimum off their mortgage each month were not really getting ahead, while those who paid more than the minimum were reducing both the principal amount of the loan and the interest. This also shortens the term of the loan if the extra payments can be sustained over time.

Insure It Before You Own It

Finally, most first-home buyers did not know that they needed to insure the property they had under contract, even though they were weeks away from settlement. This was an unexpected up-front expense, but essential to protect their financial interest in the event that the property was damaged prior to finalising the sale.

Buying First Or Selling First – A Constant Conundrum

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buy a house first or sell first

One of the regularly debated issues in residential real estate is whether it is best to sell first before buying another property, or better to buy something else before selling. This is the dilemma most sellers face once they have made the decision to place their home on the market, and unfortunately, there is no definitive answer. It depends on individual circumstances.

When Buying First There is No Urgency to Sell

When sellers plan to buy another property first, there is no urgency for them to sell their current property. They still have a comfortable place of residence from where they can search for their ideal next home. They are also in an excellent negotiating position, especially if the seller is under pressure to get a quick sale.

Buying first means no regrets for a missed opportunity. And if the circumstances are right, there is also the option for capital gain on both properties in a rising market. It also means that there is no nightmare rush to vacate the original property before settlement. This allows for a leisurely and stress-free move to the new property.

Buying First

However, there are some traps when taking this route. For example, securing a loan for the second property will place sellers in the position of having two mortgages. If the original property should be slow to sell, the financial strain may force a sale at a reduced price. Also, sellers may not have the option of buying first if their lenders require that the original property be sold first.

Our sales professionals at Bunbury Real Estate deal with these issues every day. They know whether market conditions are weak or strong, and if the type of property the client is looking for is available in their search area. Clients researching the pros and cons of buying first or selling first should discuss their situation with one of our sales professionals so they can make informed decisions.

Selling First

Selling first gives the owners time to research the market and settle on a price, and to prepare the property for sale. They have the flexibility of considering offers and negotiating settlement terms that suit them. Financially, they would be more attractive to lenders when applying for a mortgage for their new property.

Don’t Wait Too Long

Regardless of whether the market is moving or stable, the golden rule in this situation is, if possible, to buy and sell in the same market and not wait too long to secure the next property. If property prices rise sharply, sellers could be left unable to afford the homes they had hoped for. Neither choice of selling first of buying first is wrong provided all circumstances are considered before deciding.

How Property Market Trends Affect Pricing

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property market trends

In a depressed property market, the biggest frustration for sellers is that they won’t be able to sell their home unless they sell at any price. However, once the market starts to move in either direction, it is essential to monitor the trends before changing the price. It also equally important to seek professional advice when pricing your property.

Check Market Trends Before Changing Pricing

It is the same situation in the rental market. Most lessors look to the end of any tenancy as an opportunity for a rent increase. However, if the rental market is depressed and vacancy rates are high, good tenants are hard to find. Again, monitoring the property market is vital before tinkering with rental prices.

Does Supply and Demand Really Rule?

Like most sectors of the economy, movements in real estate are driven by supply and demand. According to market economic theory, as a commodity becomes scarce, prices rise. This prompts more suppliers to enter the market to satisfy demand, which in this instance is real estate. As prices continue to rise beyond the capacity of the market to pay, demand weakens, suppliers leave the market and prices fall.

Swings and Roundabouts

Some markets are much more volatile than others, with large swings back and forth depending on trading conditions. Some parts of our agriculture industry, for example, can have trends that range from high to low in one or two growing seasons. Thankfully, the trends in the real estate industry are more long term. But this does not mean that we can ignore the market.

As both selling and letting agents, our ability to respond to property market trends is part of our service . The staff at Bunbury Real Estate keep up to date with property market statistics. This allows us to advise both our clients if they need to adjust their rents or sale prices.

Additional Advice to Keep Everyone Informed

We also like to clarify to clients that there is no Australia-wide property market. Even within the same state, there are differences between regions. For example, the market in a capital city will be different from an inland market with corresponding differences in pricing. It would be unrealistic for a seller in a regional town to expect the same price for a comparable property near the beach.

The current overall market trend in all states shows strong buyer activity and low levels of quality housing stock. Along with low interest rates, improving business and consumer confidence, a growing economy and COVID vaccinations being rolled out, our industry should be stable for some time.

Are You Considering Future-Proofing Your Investment Property?

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building house rolled up house plans

Property investment across the country is still generally sound, despite the difficult year just gone. As a society and an economy, however, we have learnt the hard way that we should always be prepared for the unexpected. We should always have a Plan B – just in case.

Short-term vs. Long-term Tenancies

Residential property investors have generally had a steady cash flow as the demand for rental accommodation has been strong. Indeed, they have not usually been forced to choose between short and long-term tenancies as both options have been available. However, the times are changing.

Flexibility a Key Benefit

There are some advantages to short-term tenancies for owners. Flexibility is a key benefit. The property can be used by friends and family for short periods between tenancies. Bad tenants can be moved on quickly. If a lucrative long-term opportunity comes along, the owner can move back to a long-term arrangement.

Higher Rental Returns; Less Wear and Tear

Short term rentals often attract higher rental returns, especially in competitive locations. There is less wear and tear as the properties are inspected, cleaned and repaired after the end of each tenancy. Also, the owners have the flexibility to sell the property at any time as they’re not locked into a long-term tenancy.

Our professional property managers at Bunbury Real Estate work hard to ensure that our property owners maximise their rental returns – both short- or long-term rentals. Every property is given the same care and attention. All tenant references are thoroughly checked.

Long-Term Rental Income Security in Uncertain Times

None of these benefits are as important as security for some investors, especially in these uncertain times. Many owners are relying on the rental returns to pay the mortgage on their investment properties. They prefer the stability of long-term lease agreements with a set date. This allows them to plan their cash flow as the rental income comes in at a constant rate. They also are not vulnerable to off-season variables that may see their properties vacant for weeks at a time.

Fewer Costs, Simpler Management Arrangements

In addition, owners have fewer costs as long-term tenants usually pay for utilities. Properties are not being advertised every few weeks or months. Owners are not refurbishing or paying clean-up costs as often as short-term rental owners. Long-term owners are also not interacting regularly with their property managers.  For them, this arrangement makes managing their investment simple and stress free.

Is Buying an Apartment That Has Not Been Built a Good Idea?

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Apartment living is increasing in popularity in our capital cities and some of the large regional centres. With demand showing no sign of slowing in the short term and with stocks of new and older apartments in short supply in some areas, home buyers and investors are turning towards buying off-the-plan.

Pay a Deposit, Sign a Contract and Wait

For those unfamiliar with this method of buying real estate, the prospective buyer selects the apartment they want from plans and artist impressions of the completed product. They pay a deposit and sign a contract to buy an apartment that will be built in the future or is in the process of being built. At this point there is no completed physical property to be inspected.

Fixed Price Protects Buyers from Price Rises

There are upsides to this way of buying but there are also downsides. Starting on a positive note, when buyers sign the contract the price is fixed, protecting them from price increases that could occur in a rising market by the time the building is completed. Also, buyers pay a reduced deposit, and as they do not settle the transaction until construction is completed, they have extra time to sort out their financials.

Stamp Duty Concessions and Rebates

There are also savings on stamp duty, as in most states, if the buyer signs the contract before construction starts, stamp duty is only levied on the value of the land, not the entire contract price. In Western Australia, the Off-the-Plan Duty Rebate Scheme offers a rebate of 75% on the duty paid on residential multi-tiered apartments, subject to certain conditions.

What Goes Up Could Come Down

On a negative note, one of the downsides to buying off-the-plan is the possibility that after buyers have signed the contract, the market could fall substantially, and unless it recovers before the building is finished, those buyers could be forced to settle on an apartment that has fallen in value.

What If the Developer Can’t Finish the Project?

Another downside is the possibility that the developer may go into liquidation before the project is finished. Like any major purchase, buyers should exercise due diligence over the financial stability of the developer. This is one of the biggest risks in buying off-the-plan. If this happens, buyers may lose their deposits, so it is worthwhile to investigate the reputation of the developers.

Our staff at Bunbury Real Estate are experienced in sales and property management, and coupled with comprehensive local knowledge they are well positioned to find the right property for every client. They have many apartment options to offer clients looking to buy, as well as providing advice to existing apartment owners who want to rent out their apartments and need up-to-date appraisal information.

To Rent or Buy – That is the Question

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man and woman carrying boxes

Owning a home with a yard big enough to accommodate two cars, a caravan and a pool was once the holy grail for most Australian families, but demographic and lifestyle changes have given dwelling buyers far more options these days, than those available to their parents. Housing lot sizes in major cities have shrunk to the bare minimum, and the growth in apartment living has become a long-term lifestyle choice.

For Those Who Prefer to Live in a House

Many home seekers have already decided that an apartment is not for them. They may have an aversion to living too close to neighbours or have possessions that need space to display and store. Perhaps they already have a menagerie of pets, or they want a yard and garden to get outdoors and enjoy leisure time. Now their only decision is whether to rent or to buy.

Pros and Cons of Renting

Renting is an excellent option for those who struggle to save a house deposit. Once tenants pay their bond and the first couple of weeks rent, they can move in and, provided they pay their rent on time, the property is theirs to live in and enjoy, with just the occasional pre-arranged property inspections to manage.

Another benefit of renting is that, apart from keeping the property tidy and well-managed as required by the tenancy agreement, the landlord pays the repair and maintenance expenses. It is also easier for tenants to move to another area at the end of their tenancy if they wish. However, this can be a negative if they want to stay but the owner does not want to extend the tenancy.

Our sales and property managers at Bunbury Real Estate see both sides of this conundrum every day. They use their market knowledge and professional expertise to assist clients to find the accommodation solution that suits their individual circumstances and lifestyle choice.

Pros and Cons of Buying

Just like renting, buying also has its positives and negatives. Those with a deposit and a housing loan can either buy an existing property or build a new home. People who buy rather than rent usually want stability and to become a permanent part of a community. They know they must pay for repairs, but they also have the freedom to decorate to their own taste.

On the downside, emergency circumstances can see homeowners desperate to sell their property for quick cash. This leaves them vulnerable to losses through market fluctuations. However, as owners, they can, instead, raise cash using the equity in their home rather than sell. The biggest benefit to buying rather than renting is that eventually, they will own a substantial unencumbered asset.