Select Conveyancing

Are you trying to decide if you should buy a house and land package or if you should buy off the plan?

When you are trying to decide, it may come down to your circumstances regarding the better option for you.

Here are the key differences:

Contract types

House and land – 2 contracts, one for the land and one for the builder to construct your house

Off the plan – 1 contract with the developer

After you sign the contract

House and land – You own the land as soon as the contracts are signed

Off the plan – You own nothing until the building is complete

Deposit amounts

House and land – Could be as low as $1000

Off the plan – 5% to 10% deposit is required

How much flexibility is there

House and land – Generally, with a house and land package, you will have far more choices to personalise your home

Off the plan – You may have the ability to make some changes, and it will just depend on the developer.

Settlement process

House and land – Once construction is complete

Off the plan – Within two weeks of completion

Mortgage payments

House and land – Generally, you start paying interest payments on the land as soon as the land settlement occurs. Then as payments to the build occur, your interest payments continue. Once your home is handed over, you begin paying your full mortgage payments.

Off the plan – Once the construction is complete/settlement, your payments will be due.

Stamp Duty

This varies from state to state in Australia, and it also depends on what each government is offering, for example, if you are a first home buyer.

 

When you are ready to purchase your next property, we look forward to hearing from you. Nicola – Select Conveyancing

As the old saying goes – Everything is negotiable!

One of the aspects of choosing a real estate agent to sell your property is the fees they charge. In Australia, agent commissions are not regulated; the market instead sets them. This means that the prices can vary greatly from agent to agent. It would be best to ask enough questions to understand the break up of all the costs to sell your property. Spending on agent fees and commissions may see your finances for your next property impacted more than you realise.

Fees and commissions

Across Australia, real estate agent commissions vary from 1.6% to 4% of the total sale price of your property.

In Sydney, the averages are between 1.6% and 2.5%. They may also have tiered commission rates which increase their return if the property sells for above a specific figure. On top of this, you may have other fees; this is purely the commission.

Advertising and marketing fees are between 0.5% to 1% of the value of your home. These fees generally include street signage online and print advertising such as brochures and flyers.

Fixed fees or tiered commissions

The two options of fixed or tiered are worth considering when you are selling your home.

Fixed – A traditional method of the sale price multiplied by the commission rate. For example; $800,000 sale price x 1.97% commission = $15,760 payable to the agent.

Tiered – Based on the performance of the agent. You agree to a target sale price, and anything above that price is set at a higher commission. For example, Target price $850,000 at a flat rate of 2% commission and then 6% commission for everything above that price.

Negotiating fees and commissions

• Ask upfront about the agent’s fee and commission structure when interviewing them. Don’t be shy – When you compare agents, you want to compare evenly.
• If you are hoping for a record price, your agent may not be prepared to drop their fee as they need to work often a lot harder to get a record price.
• Don’t just pick the agent with the cheapest fees and commission; you may get what you pay for.
• Remember that everything is negotiable.

Is the agent any good

Ask your friends and family or anyone you know for a referral to an agent they have used and were happy with.

Look for a local agent familiar with your area and ask about their track record. Find reviews and gain as much information as you can before deciding who will sell your home.

When you are ready for a conveyancer, selling or buying, we are here to help. Get a quote from Select Conveyancing. 

With intense competition in the market, making an offer can be terrifying.

Is it too low, is it too high, what other offers have they received, what do you do if the offer is accepted?

What does ‘an offer’ mean

Making an offer on a property is to put forward in writing the price that you are prepared to pay for a property.

This ‘offer’ is then taken to the owners and either accepted, rejected or further negotiated.

If your offer is only verbal it will not be taken seriously and not taken to the seller (vendor). You must put it in writing.

The steps to take

Finance – You need to have your finance preapproved

Do your research – Research the area/s you are looking to buy to see what properties are worth

Legal – Speak to a conveyance or lawyer who will be able to review the contract of sale when you find a property

Open house – If you can try to attend the 1st open house for a property you have interest in. Here you can gauge the potential competition for this property.

Deciding to make an offer – If there is an auction planned you need to give the seller (vendor) a reason to take your offer and not go to action. It is not always the highest price, it may be agreeing to the terms that the vendor needs as part of the sale. Offer your best price and don’t play games.

Building and pest inspections – Completing these is essential if you don’t want any nasty surprises.

Offer accepted – Pay your deposit

So how do you make an offer on a property

Ultimately making an offer is both exciting and a scary time. However, if you have your finance in place and the professionals to help you it doesn’t have to be difficult.

The team at Select Conveyancing are here to help you every step of the way to owning your new home. Contact us today. 

Was it your New Years resolution to buy a property?

Buying a property still is one of the most popular New Years resolutions of 2022.

A recent poll by Canstar

New polling showed buying a property remained one of Australians’ top financial New Year’s resolutions for 2022, despite prices rising by the fastest annual rate since the 1980s over the last year.

The survey by financial comparison site Canstar showed 18 per cent of participants, representing an equivalent of 3.6 million people, had made a New Year’s resolution centred around money, with 21 per cent of this cohort resolving to buy a property to live in.

This was the second most popular resolution ranked by the survey’s 2124 participants, despite national price growth of more than 22 per cent over 2021.

The most popular resolution was saving money, with just under a quarter of participants aiming to grow their bank balances throughout the year.

Buying an investment property came in third, with 10 per cent of participants naming this as a major goal for 2022.

This came on the back of the latest ABS lending indicators data which showed new investor lending reached $9.73 billion in October, the highest level recorded since April 2015.

This shows that not even record prices have slowed Australians need to own a home.

Home prices

Following a year of FOMO and lower than average listings, buyers could soon find themselves in a better position to bargain if the forecasted slower price growth in 2022 come to pass.

December data showed that while home values in Sydney increased more than 25 per cent in 2021, the monthly pace of growth had slowed before the end of the year.

Property prices in Sydney grew by just 0.3 per cent in December, representing the softest monthly reading since October 2020.

After several months of low supply, properties listed for sale in Sydney rose to just short of 4 per cent below the five-year average in the lead up to 2022, providing more choice for homebuyers after a year of intense competition.

Conclusion

While there have been some incredibly crazy years of the property market you can still buy the home you dream of. Make sure that you still take the time to do your research and do not rush into anything that you may regret in the future.

The team at Select Conveyancing are here to help you every step of the way. Contact us for your next property purchase or sale. 

 

Reference news.com.au

If you have been following the property market you will have seen some crazy times over the last couple of years.

This month (October 2021) the Australian Prudential Regulation Authority (APRA) announced changes to the serviceability buffer. This buffer is what it expects the banks and lending institutions to use when they are assessing mortgage applications.

The result is a reduction in maximum borrowing capacity for many who are trying to borrow.

This serviceability buffer is designed to ensure a borrower could still service a mortgage if interest rates were to rise. Banks will now be expected to apply a serviceability buffer of 3 percentage points, rather than the previous buffer of 2.5 percentage points, from October 2021.

For example, a borrower being offered a mortgage rate of 2.8% will have a maximum loan size determined by their ability to service a loan with an interest rate of at least 5.8%.

How will this change be felt?

If a borrower feels this impact depends on two things:

1. It only reduces the maximum borrowing capacity and not everyone borrows the maximum they can afford.
2. The buffer is not the only restriction on how banks decide the maximum loan size.

It is expected that as investors usually are hit with higher interest rates this change is likely to affect them more than home buyers.

What does this all mean?

It is more important than ever to ensure that your preapproval to purchase is up to date and you try to stay under your budget when you are looking to buy.

Overcomitting yourself to a mortgage may not be worthwhile in the long term for your own peace of mind and the chance that interest rates may move in the future.

At Select Conveyancing, we are here to help you with both your property purchases and your property sales. Contact us today

This blog is written as a guide and we strongly recommend that you seek your own financial advice. 

Online property reports can provide a large amount of information some of which is valuable and some not so valuable. It can help to provide you with a large amount of information that may or may not help you to decide on a property that you are looking at.

Home lenders are just one place that will offer free property reports and there are plenty of others to choose from.

What is included in a property report?

Depending on where you produce your report the information is likely to vary, however in general you can expect:

Property details – Address, pictures, floorplan, bedroom numbers, bathroom numbers etc…

Estimated value – Typically this is shown as a range with a low, middle and high value. It is determined by recent sales of similar homes in the area and it is not always an accurate reflection of what the price will actually be.

Property history – Previous sales of the property showing the year and price.

Similar properties – If there have been similar properties sold or for sale, they are generally listed. Often similar properties which are up for lease are also listed for people who may be looking to buy as an investment.

Suburb data – Nearby schools, the median property value, demographics of the local population and more.

Limitations of a property report

It can never be a substitute for going to see the property yourself. While there may be similar properties no other property is going to be exactly the same and there are many variables that can impact its value.

Should you use other online tools

There are an endless array of tools both online and offline for you to research properties.

• Other real estate websites
• Hiring a buyers agent 
• Using an independent valuer
• Visiting the local council’s website

Conclusion

Property reports are just one step in researching the property that you are looking to buy. Once decided it is ultimately the inclusion of your conveyancer that will help to ensure that the property and its contract stacks up to your expectations.

For all your conveyancing needs contact Select Conveyancing Lane Cove.

You have been through the arduous task of finding a property, agreeing to a price, arranging inspections and exchanging contracts with your home deposit.

Now you need to wait for the property settlement day, what can you expect! Settlement day usually takes place approximately six weeks after you exchange contract, however different time frames can be agreed upon.

Settlement Day

This is the day that both your financial representative (mortgage broker) and legal representative (conveyancer) arrange the passing of ownership to you.

On this day your conveyancer meets with the vendor (seller) legal representative along with yours and the vendor’s financial representatives.  Cheques and documents are exchanged and transferred into your name. Your representatives are all there to ensure that everything takes place correctly. Traditionally this process was done in person at an agreed location, now it is all electronically processed.

Just prior to the settlement you will have a final inspection of your new property. This is the day for you to ensure it is in the condition that you expect it to be.

Once all the above financial and legal processes have taken place and all is correct you are able to collect the keys for your new home. You can pop the champagne and move in or prepare it for renovations or for tenants.

A few items prior to settlement day

Insurance – both property and contents insurance is one of those necessities. To comply with your mortgage agreement you may have had to arrange property insurance and share a copy with your financial provider for settlement to take place. An additional consideration is that depending on the property you are purchasing there may be insurance issues to consider. Is the property subject to flood, are you in an area with a high crime rate? It can be wise to check insurance costs prior to exchange, just in case there are potential problems.

Moving – When it is your own home, particularly your first home, moving in is exciting more than it is stressful. Make sure you plan for your move by arranging the removalists early and clearing out any clutter rather than moving it with you.

Renovating – Will you be renovating before you move in or once you have moved in? If you are very organised you can have trades ready to go immediately following settlement or you can move in and get the feel of your home before you start renovating.

Renting it out – By choosing a property agent prior to the settlement you can minimise the amount of time that your property may be empty before you find a tenant for your investment.

Conclusion

Buying a property is always an exciting time. Whether it is your first property, the third or fifth property you should be excited by the process of this big investment. Having the right people (professionals) around you purchasing a property is a wonderful way to secure your financial future.

When you are buying a property contact Select Conveyancing Lane Cove as your legal representative for the sale. We can help you before, during and after settlement day, so you know just what to expect.

A real estate agent who assists in you finding and purchasing a property is known as a buyers agent. They generally offer a number of services which range beyond finding a property that meets your needs to:

• Appraising the property
• Inspecting the property for you and with you
• Dealing with vendor agents
• Negotiating a sale price
• Bidding at auction
• Arranging property inspections
• Gain access to off market properties
• General property advice
• Benefitting you by only having to deal with one person rather than various agents

Selecting a buyers agent

• Ensure they are a licensed real estate agent including checking their license credentials
• Are they exclusively representing the buyer only in the purchase transaction?
• What experience do they have in search and negotiation?
• What fees are there for the service and what will be charged if they don’t find you a property
• Assess their terms and conditions to see what happens if you are not happy with their performance
• Do they have a large network of agents they work with
• Are they a member of any industry associations
• How often will they be in touch

Rules of conduct according to fair trading NSW

• When signing a buyers agency agreement, the agent is required to prepare and give you a statement of property details, which is signed by the agent.
• The buyer’s agent must declare any conflict of interest in representing you. The agreement must specify:
  • details known to the agent of the type of property to be purchased
  • details of any special instructions about the property to be purchased eg. requirement for vacant possession.
• The buyer’s agent must keep you informed of each stage of the negotiations of a purchase price
• The buyer’s agent is required to obtain the best possible purchase price for you
• The buyer’s agent is not to exceed the agreed purchase price in negotiations or at auction without your express written authority
• The agent must not accept any payment for referring you to a selling agent

Agency agreements

When you find a buyers agent there will be an agency agreement for you to sign. Do not sign the agency agreement before you understand what it means for you in terms of costs and what the agent is committing to do for you. If there is anything you don’t understand, contact Fair Trading or your solicitor.

Commission, fees and expenses

Buyer’s agents may charge a fixed fee or a percentage of the purchase price. You can negotiate this price as it is not set by law.

Disputes

If you have a dispute with your agent and you are unable to resolve it, you can lodge a complaint with NSW Fair Trading or call 13 32 20.

Conveyancing

When you have found your property contact Select Conveyancing to look after all your conveyancing needs to finalise the purchase of your property.

If you are a property investor or you are thinking about investing in property then keep reading.

Most people are familiar with stamp duty as a one-off payment when you purchase a property. Land tax is different, it is an annual or quarterly tax paid to the state or territory when your investment property is. It applies for land with our without a building, so when I say land it is the value of the land alone regardless of the building on it.

Land tax is currently a concern only for property investors however in NSW this may be changing. NSW has plans to eliminate stamp duty and replace it with a land tax which is payable for the duration of homeownership. In NSW stamp duty can be quite costly and even prohibitive to buying property. The proposal will turn this into a land tax that is payable ongoing for both owners occupiers and investors.

What does land tax currently cost for investors?

Varying state to state land tax also has thresholds and tiers – currently, for NSW the threshold is $755,000 land value.

Above this in NSW $100 plus 1.6% of the land value is payable. If your land value is $1million your land tax is $4020 for one calendar year.

VIC – Victoria has a sliding scale for land above $250,000

QLD – Queensland has a sliding scale for land above $600,000

SA – South Australia has a sliding scale for land above $450,000

WA – Western Australia has a sliding scale for land above $300,000

ACT – Australian Capital Territory has a fixed fee and a sliding scale

NT – Northern Territory does not charge land tax

TAS – Tasmania has a sliding scale for land above $25,000

As a property investor, land tax is something that you need to take into consideration as it will impact future expenses for your property. Land tax is deductible and your accountant should be able to provide you with further answers based on your circumstances.

If you are looking to purchase an investment property please contact Select Conveyancing Lane Cove as your local conveyancers.