Monthly Archives: July 2021

Signing contracts of sale for any property can seem daunting, at first. But, when handled correctly, the procedure should be straightforward and easy to understand — for buyer and seller.

During the negotiation process and once a deal has been agreed to by both parties, a contract of sale is signed by the vendor and purchaser. This legally binding document is prepared by real estate agents, solicitors or conveyancers and is managed by your solicitor or conveyancer.

Timing is everything

At this point, special conditions can be negotiated on your behalf. But if special conditions or stipulations are to be written into the purchase agreement, both purchaser and vendor should consult with their legal counsel prior to signing. 

Any special conditions outlined in the contract need to be fulfilled between exchange and settlement. This includes any work required by the vendor.

Furthermore, a contract of sale may include conditions such as inspections or valuations.

Special conditions should be discussed with your solicitor when drawing up your contract of sale. This service is designed to protect and inform both seller and buyer.

Any special conditions should clearly indicate what needs to be done and when, who is responsible for actioning what needs to be done, who is responsible for payment and what are the consequences if the action has not been completed within the due date.

It’s recommended that special conditions must be as precisely worded as possible to avoid future disputes. It adds that all amendments and extra conditions should be signed and dated by the seller and the buyer. It is advisable to seek the advice of property lawyers and conveyancers to ensure that the special conditions are drawn up correctly.

Special conditions to consider

Check in with your legal team and consider any legitimate special conditions online that can be written into standard contracts of sale. These include, but are not limited to, pet approval by body corporate; sunset clauses (your rights and options); buyer’s right to access the property to carry out renovations prior to settlement date; subject to the seller acquiring alternative property (which clearly favours the seller and can be waived at their sole discretion); and stipulations surrounding inspection of the property (which favours the buyer and can also be waived at their discretion).

While the conditional options can seem like a legal minefield to the layperson, consulting legal advice will help to streamline the process and clarify the contractual fine detail. Most states and regions can be subject to their own real estate legislation, so it pays to be informed and aware of your legal rights in your location of sale.

A valuable property manager is a gift for landlords, yet also beneficial for tenants. Being able to please and appease both sides of the equation is a rare commodity.

If you’re in the market for a responsible, reliable and reputable property manager, here are the must-haves for all savvy investors. 

Know your product

Researching the property values and comparative rentals in your region is essential for gaining not only the appropriate rate of return for your investment but also ensuring that you attract desirable tenants.  

Seek property managers with a proven track record in offering quality over quantity. Consult investor friends and colleagues, even owners of neighbourhood properties who often maintain inside knowledge. Attention to detail, an accent on management rather than tenancy procurement and high response rates for landlord and tenant should be prioritised when shopping around for property managers at local estate agents. 

Ideally, appoint a trusted manager within close range of your property. Direct access and a hands-on approach to emergency maintenance and repairs issues are essential safeguards for your investment. This makes perfect business sense to good property managers and landlords alike.    

Be informed about your rights and responsibilities

If you have invested in property with the primary aim of long-term tenancy, the most important lesson is an awareness of rental laws and the dual rights and responsibilities of landlord and tenant.  

The type of questions you should ask yourself include: do you plan to lease to pet owners? If so, make sure that contractual agreements that are in place help you and your tenant abide by established and changing laws. 

Know your property visitation rights, which must be agreed upon in writing in most states and regions.

When it comes to your prized investment, learn the difference between unintentional and wilful damage and know your rights and responsibilities in both instances. 

Shop around for proactive qualities

Property managers who offer a personable, professional and proactive approach are highly valued by investors and tenants.  

How do you screen and secure the right tenants and how do you retain them? This question should top your list when deciding on a prospective property manager.

Other must-ask questions include: how many properties do you manage?; how many tenants are in arrears and what is your payment procurement method?; are you the sole manager of my property, and if not, who else will be stepping into the role?; how many inspections are conducted annually?; and how do you advertise my property?

It’s important to know how far they spread their net (ie. on popular real estate portals; whether a ‘For Lease’ board is erected; if an email mailout is sent to past and current databases; and also if the potential manager advertises within their agency).

Budgeting for management fees 

In addition to property maintenance and repairs, there are ongoing fees when renting a property. Make sure that a full fee structure is outlined before deciding on a property manager. At its essence, a basic fee structure includes a management fee (a commission percentage of the weekly rental); a letting fee (one or two weeks’ rental); and an administration fee (usually monthly). Lastly, use your negotiation skills to gain their business and decide on the right price.

With low temperatures and some states experiencing lockdown restrictions that limit outward mobility, many householders are adopting an interior lifestyle view.

When coupled with wintry conditions shortening our daylight hours, there’s simply no place like home.

But getting your domain re-organised for a comfortable semi-hibernation is firstly a matter of assessing your cleaning and maintenance tasks.

The next step is to develop readiness for the evolution of a warm and inviting home environment.

Sharing the load

Don’t forget that sharing is halving, so ensure your ongoing workload is evenly spread and assigned to all householders.

Taking part in your group-effort big clean is guaranteed to reap lifestyle rewards — and it might even boost property values, in the long term.

We’ve devised a list that aids the organisation process and is designed to keep you and your home sparkling in all seasons.

Your year-round cleaning checklist

Daily tasks: According to recommendations, we should be doing the following tasks daily: Make the bed; Wipe down the shower; Clean around the toilet bowl; Wipe down kitchen surfaces; Wipe stove after use; Sweep kitchen floor; Wash up; Clear away the clutter, and put dirty clothes in the laundry basket.

Weekly tasks: Clean bed linen and towels; Do the laundry; Dust household surfaces; Vacuum all carpets and floors; Mop any hard floors; Give bathrooms a thorough clean; Clean mirrors and toothbrush mugs; Clean the inside of the microwave; Wipe down kitchen appliances and any surfaces not cleaned daily.

Monthly tasks: Wash all the windows; Vacuum hard-to-reach areas, including under furniture; Clean blinds and/or vacuum curtains; Wash doormats; Clean dishwasher, washing machine and vacuum cleaner; Throw away any out-of-date food and wipe cupboards.

Every three to six months: Vacuum mattresses; Wash or dry-clean pillows, bedspreads, and doonas and/or quilt covers; Wipe down the inside of the fridge; Clean out the freezer; Clean the oven thoroughly, inside and out; Wipe down internal paintwork; Have a mini garage blitz.

Annual tasks: Wipe window frames; Wipe lightbulbs; Deep-clean upholstered furniture and carpets; Empty out gutters; Clean fireplace and chimney; Have the chimney swept.

If you follow these simple steps, there’s no reason that your home shouldn’t shine, regardless of the weather or circumstances beyond your control.

Paying attention to contracts, and the information contained within them can often be the difference between a good and bad buy.

A standard contract of sale, which may include a vendor’s statement, incorporates much of the financial, planning and legal details that will determine if you decide to proceed with your purchase. 

These may include any restrictions on the titles (easements or covenants), details of all outgoings (council rates, land tax), any building approvals and notices about proposed works, how the relevant planning scheme affects the land or zoning, and proof of the vendor’s title. 

Remember that contracts vary on a state-by-state basis and according to the type of real estate transaction (i.e. auction, private sale, multiple listings or leasing). So, it’s important to secure qualified counsel in your region before signing on the dotted line. 

Seek legal assistance

Needless to say, it is imperative for buyers to seek legal advice so that any plans to develop the property are not affected by pre-existing clauses. 

It also pays for vendors to be thorough. If details are incorrect or incomplete, the purchaser can withdraw from a contract before settlement, and possibly claim damages if a discrepancy is discovered after settlement.

Documents in regular use

Three of the most frequently used documents real estate agents and vendors/lessors come into contact with are the exclusive sale authority, the exclusive auction authority and the exclusive leasing/and or management authority. 

These forms provide exclusivity for the vendor/landlord and agent — for the vendor or landlord to sell or lease only through the nominated agent, and for the agent to exclusively sell/lease the property. Knowing that you are dealing with an agent who will represent your best interests and comply with your instructions and an industry code of conduct is also important.

Fee structure should be explicit

Vendors/lessors should be aware that agents’ fees and marketing expenses were deregulated in 1995. 

Agents must inform vendors/lessors that their commissions and outgoings are subject to negotiation before signing any authority.

Conveyancers streamline the process

Conveyancing, when expressed at its simplest, is the transfer of an interest in property from one person to another.

It may sound logical, but conveyancing involves so much more than just checking rates, the preparation of the Transfer of Land document and handing over the keys.

For the job to be done properly, the title should be researched thoroughly by someone who knows the meaning of all the legal jargon, such as inquiries about rates, planning, zoning, notices and orders made by public authorities that have control over, or interest in, the land to ensure that no liabilities or encumbrances are passed on to the new owner; and satisfying stringent mortgagee requirements.

Common issues relate to caveats and covenants attached to the property, illegal extensions that have not been approved, the property differing in size from that on the title, and damaged or missing inclusions or chattels at the final inspection.

The main advantage of conveyancers over solicitors is cost (usually an all-inclusive fee) but ensure that the conveyancer has sufficient professional indemnity insurance and a solicitor on hand — at no additional cost — should the need arise.

Do-it-yourself conveyancing kits are available for those brave enough to attempt it but be warned that there are many pitfalls, including indemnity insurance.

A beautiful piece of hand-crafted furniture or lighting is a joy unto itself. 

Not only does it offer a striking feature for your interiors that owners and viewers can admire in equal measure. But it also builds upon an heirloom collection that offers enjoyment for future generations and makes sound investment sense.  

Furniture and lighting designers that shine  

Depending on your style and budget, if you’re in the market for a designer item to grace your home, we highlight a shortlist of Australian and New Zealand furniture and lighting makers to consider.

Wallpaper* recently showcased a selection of designers from Oceania in its annual Global Interiors 2021 collective. 

These include:

Ross Gardam

Melbourne furniture brand Ross Gardam has developed a global reputation as a furniture maker and lighting designer of note. The Breeze side tables are one example of the brand’s multilayered experience in design, sustainable manufacture and tapping into local artistic connections.

Resident

The Isabella chair by Auckland brand Resident is a hallmark piece in slender steel and padded base. Established by Simon James and Scott Bridgens in 2011, Resident continues to win fans and accolades for its furniture and lighting design brilliance. 

Daniel Emma

Colourful design geometrics define the work of South Australian design duo Daniel To and Emma Aiston. Their Mobile series, made from wood paint and wire, is a perfectly poetic and playful artwork for any interior space. 

Jam Factory

Adelaide not-for-profit creative hub Jam Factory is said to ‘champion the social, cultural and economic value of craft and design in daily life’. This ethos of the more than 50-year-old, state government-supported artisan collective culminates in the Solute lighting collection of sconces, pendants and floor lamps by Liam Fleming and Dean Toepfer.   

Douglas & Bec

New Zealand father/daughter design duo Douglas Snelling and Bec Dowie have become synonymous for their Arch Pendant light. This striking yet subtle feature piece is formed by a trio of suspended glass panels or brass finishes. Its concealed light source can be directional or diffused, depending on mood. 

View the websites of these designers for their full range of furniture and lighting. Good Design Australia, The Design Institute of Australia and The Designers Institute of New Zealand also offer award-winning designer product ranges.   

(Source: Wallpaper*)

The question of homeownership versus contributing to a landlord’s investment is an age-old conundrum when buying your first home.

Homeownership is a worthy goal that can build wealth and provide security. But depending on different lifestyle stages and priorities, buying versus renting is not necessarily for everyone.   

Pros and cons of change

If you’re ready for a change and have a regimented savings plan in place, property purchase could be your next move. 

On the other hand, if the onus of homeownership seems daunting, and you are in career or relationship limbo, now might not be the right time to take the ownership leap.

Affordability versus lifestyle

When starting out on the property ladder, your disposable income can seem obsolete. However, this needn’t be the case. 

Careful financial planning and adhering to budgets should ensure that renters and owners can afford occasional lifestyle perks.

Adding interest to equity

Even though interest rates are at record lows, if you have decided to commit to a property purchase, be mindful that the bulk of your repayments for the first few years will go towards interest. 

Lenders and financial experts advise that you should combat this and cut your loan duration in half by paying double the required amount, especially in the early stages, if possible.

On the move or staying put?

If you have amassed a healthy deposit, plus extras, are able to get into the market and have firm plans of settling down, now could be the best time to buy. 

Real estate is an investment, like any other. So, if you are uncertain about career or relationship developments, or are unwilling to rent your property to tenants, estate agents and investors advise postponing your purchase plans. 

Continue in the meantime to build upon your savings. 

Limited budget and not handy

If the thought of ongoing repair costs stretches the finances to breaking point, and you’re not the DIY type, renting could be your best option. 

One of the major perks of renting is that your landlord is responsible for incidental property repairs. 

However, if the thought of unforeseen costs is not off-putting, potential homeowners are advised to save at least $5,000 for emergency repair funds before starting your property search.        

For further information, contact your property manager or estate agent to discuss the pros and cons of renting versus buying. 

Buying a property requires more than a deposit. 

Pre-purchase costs can add up to 10 per cent to the price of an average family home. 

Some of these, such as conveyancing, stamp duty and mortgage costs, are only incurred once. 

However, inspections and valuations may need to be carried out on more than one property. 

Here’s a guide to keeping these costs in check.

Essential fees to build into your budget

• Property stamp duty — a tax on the value of the property paid at the time of purchase to the state or territory government varies from state to state
• Mortgage stamp duty — sliding scale on mortgage amount varies from state to state 
• Mortgage insurance — usually paid if a mortgage exceeds 80 per cent of the property value 
• Application fees — paid to the lender to meet legal, valuation and administration costs of loan establishment 
• Inspections — including pest inspection, council building certificate, building inspection and land surveys 
• Contract examination — this incurs solicitor’s fees for inspecting the property contract 
• Conveyancing — the legal process of enabling the transfer of property ownership 
• Insurance — building and contents 
• Relocation — such as moving costs and utility deposits 
• Repair — the cost of essential property repairs.

Of course, if you’re in the market, pre-purchasing costs don’t stop there. 

Other areas to consider include: 

Structure

Most buildings over 10 years old will have several defects, which may be minor, such as a leaking downpipe, or major, such as subsidence caused by severely leaking downpipes over a number of years. 

Unless you know what to look for, a pre-purchase building inspection is, therefore, a must. 

But thoroughly checking five or six properties can get expensive.

It, therefore, pays to become familiar with the usual signs of problems, such as rising or falling damp (dark patches around the cornices, bubbling paint on walls, distinctive smell), poor underfloor ventilation (bouncing floor) and leaking roofs (dark patch on ceiling, indications of plaster repair). Expect to pay between $200 and $500 per inspection depending on property type. 

Modifications

Illegal modifications can cause real headaches, and many lenders require a council building certificate as evidence that the property complies with requirements. 

Bathrooms and toilets are the biggest problems — a toilet too close to the kitchen and DIY plumbing being frequent indications of unauthorised modifications. Familiarity with local planning codes can make spotting these modifications fairly straightforward. 

A council building inspection and land survey will cost about $600 per property.

Pests

Termites can attack a new brick-veneer the same way they will attack an old terrace.

Cockroaches, too, are indiscriminate and can cost thousands of dollars to get rid of if they are entrenched. 

Again, become familiar with the more obvious signs (check the roof cavity, especially for termites; check cupboards and under furniture for excessive cockroach frass) and call a pest inspector only if it seems acceptable. 

Pest inspections will cost about $250 per inspection.

Valuation

Before lenders agree to lend money against a property they require a satisfactory valuation.

For those buying at auctions, and bidding on several properties, this can be an expensive exercise. 

Costs vary according to the lender but expect to pay about half to one per cent of the value of the property. 

Become sufficiently familiar with market prices by utilising

Tapping into a real estate agent’s expertise for an informed assessment of a property’s value can often alleviate the need to approach a lender and incur unnecessary costs.

There are two schools of thought when it comes to enhancing your lifestyle and increasing property values. 

Making the most of raw material (i.e. your place of residence or investment property), where location and median house prices are desirable, suggests the need for a complete overhaul or partial home improvement.

However, if your property is irreparable or the ongoing renovation bill is beyond your means, interest and energy, it might be time to make amends. This entails either starting afresh with a new build or moving further afield. 

Asking yourself a few crucial home truths and answering them honestly and impartially will determine if you should stay, redo or go.

If you’re planning to stay

You should first consider the cost and time factors involved in a comprehensive renovation of your existing property. A custom-built kit home looks good on paper, but there are reasons for their affordability and financial incentives, including negligible room to move on design amendments.

Of course, signing up for a project-built property often takes into account any unexpected legalities and extra expenses. The build quality depends on the experience and reputation of the home builder, so research media sources carefully and ask for referees or testimonials.

Employing the services of a registered architect ensures an expertly designed, and original, end result. This obviously appeals from a lifestyle and property values perspective. However, how much is too much to pay when considering the type and style of residence for the current location, as well as your long-term goals?

When balancing these factors against median price trends in your region, you might be advised to rebuild or renovate with a master builder who allows for floorplan amendments or additions — while also providing an affordable price point.

The detonation equation

Before you set your sights on obliteration, bear in mind that custom builds can cost up to 90 per cent more per square metre than volume builds. If budgets are tight, minimising space in favour of a unique, high-quality build should be your goal. 

Timeline is another crucial factor. Consider that construction projects invariably involve delays, either major or minor. While these are often contractually accounted for, it’s important to have an alternate plan in the event that moving-in expectations are extended. 

Complete rebuilds and even minor renovations can be stressful, costly, time-consuming and messy. But if you’re prepared to manage the emotional wear and tear and have peace of mind of employing a quality builder/architect, the finished product can be worth the ongoing trials and upheavals.  

Set on your next property adventure

If the financial outlay and lifestyle stress of rebuilding or renovating seem overwhelming, your next property acquisition may well await. 

This also poses various questions about whether a fresh change of neighbourhood or region is on the agenda. Balance this proposition against surging property prices and your long-term plans. Can you afford to buy in the same area or are you willing to compromise on cost versus property type by purchasing further away? What is your major lifestyle aim (i.e. downsizing opportunities, occupy now/rent later or younger families who require a larger home)? The answer will predetermine your next property of choice. 

Real estate experts suggest there’s always a different type of residence and location to suit every stage of your owner-occupier or investment goals. Securing suitable options at the right price are key considerations for most home buyers. Consult your local agents to receive qualified advice about taking the next step in your successful property journey. 

Selling your home is one of life’s major decisions — with successful outcomes often attributed to the real estate agent representing your property. So, it makes sense to do your research if you aim to minimise stress and maximise financial returns. 

Big or small: tailoring a perfect fit 

Broadly speaking, smaller boutique agencies can claim to have a personal touch, tailoring marketing campaigns and providing the flexibility of principals working in a hands-on role. On the other side, bigger agencies have the resources and reach to bring more buyers to your door. 

But smart vendors should survey the total package being delivered, rather than focusing on the bottom line of how much commission the agent will accrue. 

Real responsibilities: in a nutshell

The estate agent is responsible for advertising the property, showing potential buyers through it, conducting negotiations, arranging the contract note, and following the sale through to settlement.

Prospective sellers should seek the opinion of at least three agents, effectively auditioning them for the role. 

But before even selecting the key three, vendors should study auctioneering techniques over several weekends, personal presentations at open for inspections, and even call the respective offices to check on the firm’s professionalism, courtesy and efficiency. 

Shortlist hot seat

Once you have developed a shortlist of agents, it is a good idea to create a set of questions to ask the listing agents. Besides the standard queries about sales results for similar properties in the area and marketing expenses (ask for an itemised schedule and payment plan), further questions should include:

• What type of buyers do you believe would be attracted to this home?
• What do you feel are the good/bad points of the property?
• What do we need to do to improve its presentation?
• Will you (personally) be handling all aspects of the sale?
• Can we talk to some of your past clients?
• How will you help me understand the conveyancing process?
• How did you arrive at an estimate of the value? 

Once you analyse the various responses, marketing plans and costs, it’s then fair to compare your top contenders and handpick the chosen one. 

Ballpark figure on the money?

The eternal questions of what the home is worth and when is the best time to sell should also be tempered with the current economic climate — which can affect values, leading to re-evaluation of expected price targets. 

In most cases, vendors will opt for a property representative they feel most comfortable with, preferring the perception of honesty and quality that money cannot buy.

Whichever real estate agent you choose, it is important to select a Real Estate Institute-affiliated member, as it is compulsory for them to be covered by professional indemnity insurance.

Good luck with your sale and also your next purchase.

Industry analysts and the renting public alike are acutely aware of the housing affordability crisis. 

Research by the Australian Housing and Urban Research Institute shows Australia is short 173,000 affordable dwellings for rent, with Sydney alone short 60,000 dwellings.

The research also shows that 71 per cent of all lower-income, private-rental households struggle to pay rent that is in itself considered unaffordable.

The Morrison government pledged $124.7 million in the May 2021 budget towards this aim, which is to be channelled in states and territories via the National Housing and Homelessness Pledge.

This was trumped by an Opposition election response of a $10 billion future fund to be spent on 30,000 new dwellings over five years — in an effort to resurrect the social and affordable housing crisis.

‘Build it and they will come’

The widely publicised build-to-rent (BTR) projects throughout Australia and New Zealand offer untapped potential for growing families in need of affordable accommodation and extra space.  

BTR, which involves the development of multi-unit residential buildings for long-term rentals, rather than sales to individual owners, was created to help address the housing shortages.

Ignite (a not-for-profit University of Melbourne alumni group) research indicates that young families account for 40 per cent of households, many of whom are living in barely affordable, cramped conditions within multi-level apartment towers.

The research also found that school and social commitments and shorter commute times are keeping these tenants in dwellings longer than the average professional tenant — presenting greater impetus for the relatively recent BTR phenomenon.

“From a developer’s perspective, the cost to acquire a tenant compared to the return on a tenant is significantly better,” says Ignite researcher Derek Huynh. 

“Young professionals might only want to stay for three years—if it’s a family, they want to remain there.

“And build to rent can hopefully create a seamless upsizing or downsizing experience when a family wants to add another child or when their child is old enough to move out,” Mr Huynh says.

Similar New Zealand scenario, albeit slower paced

An increase in potential investment opportunities for BTR developments in New Zealand is building, albeit, at a slower pace than other Commonwealth countries, a report from commercial real estate firm JLL says.

According to news site stuff.co.nz, the report suggests that COVID-era 2020 built a more compelling case for BTR as a viable part of the solution to the housing crisis. This looks at how and why it could help on a number of fronts.

The report adds that the sector has struggled to get off the ground in New Zealand — unlike in the UK, where it has taken off over the past 10 years, or even in Australia, where it is gaining popularity.

(Source: Urban Developer; stuff.co.nz)