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How to... Sell your property for more!

 

Welcome to Pennisi’s ‘How to’ series. This issue explores the 4 key steps you must follow for a successful property sale. You may be new to the property market and this may be the first property you have sold, or you may be an experienced property seller and just need reassurance that you are on the right path. This guide steps you through the 4 stage process for effectively selling your property to get the maximum possible sale price.

1. Choose the right agent

Selling your property is an important life event which can be financially and emotionally demanding, and that’s why you need an experienced and trusted professional real estate agent to help you with the process. Find an agent you trust, who you believe will look after your interests and do a great job. Interview as many as it takes to find one you trust. Beware of agents who try to dazzle you with empty promises of an unrealistic price, or an expensive marketing campaign that promotes their agency but does little to sell your property.

Checklist – Key qualities of an ideal real estate agent:

  • A trusted reputation in the community
  • Great testimonials from past clients
  • A proven record of great sales results in your area
  • Knowledge of the market and what pricing strategy will work for you
  • Exceptional communication and negotiation skills
  • A demonstrated understanding of your needs
  • A list of buyers ready to buy now
  • Written service and price guarantee, over and above the standard industry Agreement
  • A fair fee. Cut-price agents will usually cut-price your house. Choose the agent that will get you the best price net of fees
 
2. Decide on a method of sale

The method of sale you choose for your property can influence the sale price. Popular property sale methods are:

  • Private treaty: Sellers’ real estate agent negotiates with interested parties. It takes a skilled negotiator to extract the best possible outcome for the seller.
  • Public Auction: A public sale held at a specific place, time and date after a marketing campaign lasting several weeks.
  • Silent auction: buyers make their offers in private, as a sealed bid.

Your professional real estate agent should have a recommended sale approach based on previous experience in the area to maximise your sales price.

 

3. Set the pricing strategy

Once you have selected the agent and selling method that is right for you, the next step is to establish your pricing strategy. A good agent has ready buyers. Early offers from these buyers are often the best offers. Be ready for this by deciding, before marketing your property, your idea of a great price and an acceptable price.

Consider a price range based on your expectations, market conditions and previous sales in your neighbourhood. Your agent should be able to guide you and provide insights into recent sales in your local area. Start at the high end of your range – someone may love your property – but be prepared to adjust the price quickly if offers are not forthcoming. Your price must  generate  interest  online  and  in  your  agency’s  database. A  good  agent  will guide you.

 

4. Property Presentation

Potential buyers will be viewing your property and trying to imagine themselves making a home there. A tidy garden, clean windows, polished floors and de-cluttered rooms can significantly add to the appeal of a property. First impressions matter. Showcase your property’s unique features with prospective buyers in mind, to maximise the potential value of your property and sales price.

 

Maximise the sale price of your property with this quick checklist:

  • Are you researching local agents to choose the right fit for you?
  • Does your agent have local knowledge and expertise?
  • Are they trained in negotiation?
  • Have they demonstrated integrity and trustworthiness?
  • Have you considered the different sales methods?
  • Have you decided on your ideal sales price?
  • Have you prepared the interior and exterior of your property to present it in the best possible light for potential buyers?

 

Still have questions? Why not talk to one of our agents?

With more than 44 years experience in real estate, we know that selling your property can be a challenge. We invite you to meet with us, to see if we can help you sell your property for more. Call 03 9379 5616 now to make a time.

Preparing Your Home For a Winter Sale

It's a common misconception that selling your home in winter is a waste of time. The good news about this unfounded belief, however, is that there are fewer listings on the market, resulting in less competition for you and more competition for home buyers - the stakes are higher for buyers and they're more likely to loosen their criteria for finding their perfect home. If you're considering a winter sale, here are 5 things to get sorted before taking your home to market:

 

1. It's Gutter Happen 

It's a dirty job, but somebody's gotta do it, so give your gutters a much-needed clean out before the open house. Not only are leaf-laden gutters unsightly, but you don't want buyers having to dodge cascading waterfalls on the way to the front door due to clogged gutters in the event of rain. Before you reach for the rusty step ladder, consider some safety precautions, including how sturdy the ladder is and whether the old knees are up to the job. Too risky? Hire a specialist who knows what they're doing that can also clear away any roof-top debris and install downpipes if required.

 

2. Curtain Care 

A good sturdy curtain can provide added insulation for keeping the winter chills out and the warm heating in. Being winter, buyers will want to know what your windows are packing, so make sure when they reach for a curtain inspection, your drapes are both clean and functional. If you can't remember the last time your curtains had a wash, take them down and pop them in the machine. Not sure if they are machine washable? Meet Dr Drapes, who'll pick up, dry clean AND re-hang your curtains, so you don't have to lift a finger or try to decipher cryptic care instructions.

 

3. Pack'n'Save

Storage space is high on buyers' list of prerequisites, so create some room in your cupboards by vac-packing all your summer clothes and beach towels. You can pick up a set of 4 vacuum seal storage bags from Kmart for only $12. Overdoor hooks are another secret to creating more shelving space and are ideal for wardrobes or even behind bedroom and bathroom doors to conceal night gowns, towels, scarves, beanies, belts and winter jackets.

 

 

4. Chimney Checkup

If you're lucky enough to have a fireplace, use it to your advantage and set the mood for an open home. Before you do though, make sure it's in peak condition ahead of time to avoid smoking out prospective buyers and risking fire hazards. If not properly maintained, a substance called creosote can build up on the chimney walls, which can prevent smoke from exiting the chimney top, and even catch fire, potentially causing structural damage to your home - not a good look for an open home! Depending on how often you use it, Melbourne Chimney Sweeping recommend giving it a sweep once a year to keep it safe and clean. If it's a non-functioning fireplace, don't let it disappoint - instead, celebrate the space with these decorative disused fireplace ideas.

 

5. But first, coffee!

Who's going to say no to a warm hot choc, aromatic coffee or relaxing chamomile on a cold winter's day? This little touch will encourage people to linger for longer and relax into the home, as they would if it were their own. Invest in a reusable coffee menu chalkboard and let buyers know what's on the menu, and consider some homemade accompaniments to complete the experience. 

 

 

Thinking about selling your home this winter? Take the first step today - get in touch with a Pennisi Sales Agent who can answer any questions you have regarding the sales process and prepare a free home appraisal of your property based on recent sales and auctions in your area. Call (03) 9379 5616 to get started.

Top 5 Tips For First Time Home Buyers

 

Buying your first home can be daunting – both financially and emotionally. It’s likely to be one of the biggest investments you’ll make, so the team at Pennisi Real Estate have compiled their top 5 tips to guide you.  

1.  Start saving now

House deposits can take a while to save, so it’s smart to start saving as soon as you can. Save the biggest deposit that you can. This not only demonstrates to your lender that you can exercise enough discipline to accumulate a large amount of savings, but you will also have a buffer of equity in the property from the beginning.

 

2. Buy below your maximum price

Your bank may suggest yoqu can borrow up to $400,000 in your initial meeting, but it’s much safer to search for a home that is well below your maximum price. Buy a property that you can afford now so that you don’t overstretch yourself. Many people count on a future job promotion to help keep them afloat – but what if that promotion doesn’t come?

 

3. Allow for extra costs

There are extra costs associated with buying property. Not only is there stamp duty, solicitor’s fees and inspection reports to consider, but if you choose to borrow over 80% of the property’s value you’ll be faced with lenders mortgage insurance (LMI). LMI isn’t actually for you – it’s for the lender, but you’re the one that has to pay it. These pesky extras can quickly add up and be a burden if you haven’t accounted for them. Don’t forget, interest rates are at historic lows, so be prudent and allow for at least a couple of percent increase over the next few years.

 

4.  Choose between ‘wants’ and ‘needs’

It’s very easy to confuse your ‘wants’ with your ‘needs’, but it’s important to distinguish the two when buying. Do you really need that brand new four-bedroom house in an inner-city suburb or is it something you want? Take a good look at your salary, debt levels, costs of living and what the repayments would be like for your dream property. Can you afford it? If not, it’s time to prioritise what features are the most important in your new home.  Your first home won’t be your last, so it’s ok to compromise!

 

5.  Take advantage of government concessions

When you’re purchasing your first home, every dollar can help. If you live in Queensland, you can take advantage of the Great Start Grant, which offers up to $20,000 towards purchasing or building a new dwelling. Also, make sure you apply all the concessions on stamp duty.

Rejecting The First Offer

High offers often come early during the selling process, however owners will often hold out in the hopes of a better deal coming along. Sellers can be  lulled into a false sense of security making the assumption that a good offer in the early stages of selling can mean an even better offer will come once more people have viewed their property. Unfortunately, holding out for a better price generally leads to price discounts and lower eventual sale price.

To understand why good offers often come early during the selling process, it’s important to place yourself in the position of the buyer and consider the journey that they have been on. Reasonable or above market offers often come from a ‘heart buyer’. A ‘heart buyer’ will fall into one of two categories – either they have been searching for their dream property for months on end or they have stumbled across your property and have impulsively decided they need it. In both situations, the buyer has fallen in love with your property and their emotions have paved the way for providing a reasonable offer.

It is crucial to understand that ‘heart buyers’ are highly motivated. They recognise the value your property can provide them and they move quickly to secure their dream home. Therefore, when such offers arise, it is important not to automatically dismiss the offer on the hope that an even better one will come along. Remember, there are rarely buyers that are motivated enough to offer a good price from the very beginning yet plenty of buyers who are happy to sit around and wait for the price to drop.

Give careful consideration before accepting or rejecting early offers. This is when having a trusted agent can come in handy – they will be able to provide advice on whether they think this is the highest the buyer is willing to pay and whether the offer is comparative to the price that similar properties have sold for in your area.

Five Mistakes To Avoid When Investing In Property

 

1.  Not doing your research

When purchasing an investment property, it’s important to do your research about the location, local amenities, rental yields, vacancy rates and the property itself. While it may not always be possible, you should aim to know as much as you can about the neighbourhood you intend to invest in. Be wary of ‘booming markets’ such as mining towns and tourism centres. These may produce excellent returns over the short term, but how will the investment stack up long term if there is an industry downturn? Remember, a good investment is not one based on speculation.

 

2.  Not having a professional property management team in place 

Many people assume property management is simple and think they can do it all when it comes to taking care of every aspect when managing their property. This can quickly become a stressful and tedious task, not to mention the ever increasing legislative requirements that fall upon landlords – it might even start to feel like another job! A professional property management team can take care of everything, from advertising the property, screening potential tenants, filling the vacancy quickly, conducting regular inspections and answering tenant requests for maintenance and repairs, amongst other services. A good property management team will give you peace of mind and keep everything running smoothly – if that isn’t the case, find yourself a new property manager. Too many investors make the mistake of keeping a poor property management team on for far longer than they should have.

 

3.  Forgetting about tax benefits

Andrew Pennisi says “the golden rule is that you always invest of the strength of the investment alone – any tax benefits that go with it should be regarded as icing on the cake”. However, you should be very aware of what you can claim come tax time. By not taking advantage of tax deductions, you could miss out on hundreds or even thousands of dollars in potential returns. Ensure you have tax depreciation done - even with existing properties there are claims to be made. Another benefit of having a property management team in place is that they record all expenses and outgoings for your tax purposes.

  

4.  Know your numbers

As with any property purchase, the figures can quickly start to add up. While you need to factor in normal costs associated with buying such as stamp duty, conveyancing, council rates and building and pest inspections, it’s vital to also account for all the extras that come with property investment. This includes but is not limited to maintenance and refurbishment costs, landlord protection insurance, home insurance and body corporate fees if applicable. Older properties will generally require some immediate maintenance, as things always seem to go wrong in the first few months, so allow for the cost of a few repairs when considering your budget. Ensure you allow for two weeks of vacancy per year. If you price your property to the market, it won’t stay vacant for an extended period of time. Have a financial contingency plan in place in case rental returns drop or you need to sell. It’s always smart to underestimate your incoming funds and overestimate your outgoing expenses to avoid an unpleasant surprise when the accounts are finalised each year.

 

5.  Focus on the long-term

Some people treat property investment as a ‘get rich quick scheme’, however this is rarely the case. Generally speaking, the longer you hold onto a property, the better your chance at reaping a greater profit. If you’re planning on values rising in a few short years so that you can sell your property at a large profit, you are speculating rather than investing and may be sorely disappointed come sale time. 

 

If you feel at risk of making any of these investing mistakes, get in touch with our team and we'll walk you through how to make the most of the investment opportunities available to you. 

 

What You Need to Know Before Purchasing an Off-The-Plan Development as an Investment Property

 

Three things you need to know before purchasing an off-the-plan development as an investment property

Many investors gravitate towards purchasing off-the-plan developments due to the perceived benefit they offer. Off-the-plan developments are often marketed as an easy way to enter the property investment world and the glossy brochures can certainly make them look an attractive choice. Being new builds, investors can maximise depreciation and minimise maintenance costs, which assists with boosting returns. Although this seems promising, due diligence needs to be exercised before signing the contract. Here are some tips before purchasing an off-the-plan development as an investment.

Be wary of guaranteed rental returns

Many developers offer a ‘rental guarantee’ to entice investors. It can sound like an attractive option at the time – the market rent may be $350 a week, the guarantee $500 a week. Sounds too good to be true? That’s because it is. Once the rental guarantee expires, the investor is forced to accept rent at the market value. Due to it being significantly lower, this may cause financial problems for investors relying on a high cash flow. A further consideration is that guaranteed rental returns are rarely an extra – rather their cost is factored into the sale price.

Don’t rely on capital growth

Capital growth by definition is speculation. Many investors are attracted to off-the-plan developments as they get to purchase at today’s prices then not have to settle for an extended period of time – by which values may have increased. This is an appealing notion for investors – they gain capital growth before they’ve even settled. Despite this, it’s important to acknowledge that short term capital growth is not always guaranteed. Often it’s the opposite – an investor will pay a premium price only to find that it is valued considerably less at the time of completion.

More competition

With both Brisbane and the Gold Coast at risk of a unit oversupply, investors need to consider they may face vacancy issues or declining returns once projects are completed. It’s no secret that investors make up a huge portion of off-the-plan purchases, which means the competition to rent out your apartment will be high. There have already been reports of investors discounting rent or offering enticements to tenants in over-supplied inner city areas. 

As with any investment, it’s important to do your research and crunch the numbers prior to making a purchasing decision. Off-the-plan developments can be a risky investment for the inexperienced investor, especially if caution is not exercised. It’s important to consider all aspects and decide whether the development supports your investment strategy.

If the marketing brochures you've reviewed seem too good to be true, get in touch and have a chat to our experienced sales team today. 

 

Should You Renovate Before Selling?

should you renovate before selling

With TV shows such as The Block and Reno Rumble gaining immense popularity in the last few years, many homeowners have been inspired to carry out their own makeovers and add value to their homes.

A question our sales team at Pennisi Real Estate often get asked is should we renovate before we put our home on the market?

Sellers are often under the impression that if they extensively renovate their home, they’ll be able to make a tidy profit when it comes time to sell.

While renovating often does add value to a property, many sellers overcapitalise on their renovations. Improvements can add value; however, the outlay can often exceed the return.

For example, major renovations such as kitchens and bathrooms can cost anywhere between $10,000 to $30,000. While it may add some value to your home, you are unlikely to recuperate, let alone double, the costs and efforts that were involved with the improvements.

It’s important to acknowledge that lifestyle improvements are very different from pre-sale renovations. Adding renovations such as a pool or deck to be used throughout the years can be beneficial for your family’s lifestyle and therefore it is money well spent.

However, if you intend to add a pool or a deck with only the intention of making profit, you may be sorely disappointed. It’s also important to remember that everyone has different tastes – a buyer that loves everything else may have no use for the pool that you’ve spent thousands on installing.

While properties often need repair and maintenance to keep them looking their best, this should not be confused with large renovation projects. Your home should be presented well in order to achieve the best price possible – but there is no need to get carried away. The longer a property is kept, the greater chance there is of recuperating the value of the improvements. If a property is sold soon after a renovation, the likelihood of regaining the full financial costs are minimal. 

SIGNALS AND SIGNPOSTS: THE KEY INDICATORS THAT WILL DETERMINE THE 2017 MARKET

 

 

 

 

 

 

 

 

 

 

 

 

The 2017 property market could see a continuation of the boom. Predictions across a range of analysts predict growth anywhere between 5 and 15%. Conversely, the correction that many have felt was imminent for the past few years could occur.

 

The key to anticipating the market whether you are buying or selling is to follow the relevant signals and signposts that are likely to determine the market.

 

Interest rates – there are two interest rates to follow. Firstly, the Reserve Bank of Australia’s (RBA) cash rate, which is currently set at an all-time low. Make no mistake, the RBA cash rate is at a record low and house prices are at an all-time high. There is a direct correlation here. The second key interest rate setting is the retail banks rate movements. In the past few years, the retail banks have moved rates, up and down, independently of the RBA.

 

Rents – If property prices continue to rise as rents stagnate, investors will shun the market in favour of regional centres and interstate capitals. Newcastle and Hobart are just two examples of where investors have looked to in recent times in favour of Melbourne & Sydney. All stable property markets appeal to a broad range of buyers. Low yields that fall further will cause Sydney & Melbourne investors to focus solely on capital growth. After 5 years of strong growth, that’s a big call.

 

Time on market – how long does it take for a property to sell? In a strong market, sales occur in a rapid timeframe and vice versa. By anecdotally following time on market for properties in your immediate area, you will gain an insight into how easily (or not) buyers and sellers are coming together on price.

 

Apartments – for the first few years of the current boom cycle, apartments performed equally well as houses, in terms of price growth. As high rise after high rise came up for completion, apartments subtly begun to underperform houses. Sydney does not seem to have the apartment oversupply that Brisbane and Melbourne does. But if rampant oversupply of apartments were to occur, it could easily weigh on rental returns and house prices

 

The Black Swan event – Regardless of the apparent strength in the property market, its wise to be aware that Black Swan events occur. They are rare but they exist. A Black Swan event is usually rapid (like the collapse of Lehmans Brothers in 2008) and have dramatic knock on effects. Given the amount of debt swooshing around the world at present, systemic risk is real.

 

Bidders per property – the market depth is more accurately reflected in bidders per property as opposed to buyers at open inspections. It costs nothing to walk through an inspection. To place an unconditional bid on a property means the buyer is serious. The more bidders per property, the stronger the market and the deeper the buyer pool. Attend auctions and see for yourself the vigour in the bidding.

Why you should consider rentvesting




 

Eager to enter the property market but can’t afford to buy where you want to live? It might be time to consider rentvesting. With headlines in the media often touting rising living costs and housing unaffordability, it is no surprise that many young people feel like it is impossible to enter the property market. While entering the market has become more difficult in the last few years, it certainly isn’t impossible – you just have to think outside of the box. Enter rentvesting:

 

So what is rentvesting?

Rentvesting refers to purchasing an investment property while continuing to rent in your desired location. Young home buyers often do not want to give up their inner city lifestyles, yet they cannot afford to purchase in their desired area. Rentvesting is great option for young people to retain their lifestyle they have become accustomed to, while still having the opportunity to enter the market.

 

What are the benefits?

Rentvesting offers young people an option to enter the market sooner. Rather than waiting for years to afford your dream home, rentvesting gives you the option to break into the market faster, often with a smaller deposit and before price increases. It also gives young people the opportunity to start building wealth from an early age – the equity gained over time in the investment property will make it easier for you to purchase again in the future.

The type of investment properties that rentvestors tend to purchase often lie in the outerring suburbs. Properties in these areas tend to be more affordable while still producing healthy to strong yields. Generally speaking, this allows the property to be cash flow positive or close to it. This means little out-of-pocket expenses and less financial impact on your lifestyle. Rentvestors can also take advantage of tax benefits such as depreciation and negative gearing to help aggressively pay down debt in the first few years of ownership. Another benefit of rentvesting is that you are not limited to a certain location – the sky is the limit! For example, many young people that live in either Sydney or Melbourne choose to purchase interstate as they have been priced out of their local markets.

 

What should I consider?

As with any property purchase, it’s important to assess your individual circumstances and needs prior to becoming a rentvestor. Make sure to seek independent advice in regards to finances and conduct adequate research into an area that you are considering investing in.

 

If planned and executed correctly, rentvesting is a great option for young people to consider as a way to enter the market. If you're interested in the possibilities of rentvesting but unsure how to get started, contact Pennisi Real Estate and chat to one of our experienced team members who will talk you through your options.


Upcoming 2017 Relay for Life - Join the Pennisi Team!

Raising funds for cancer research has been a long-term passion for the Pennisi community and first up in 2017 is the Relay for Life.

Pennisi Real Estate enter a team into the Moonee Valley Relay each year and we are keen to enlist as many participants as possible.

Participants need not worry about training in advance - the Relay for Life is not a race, it is about having someone on the track all the time... A leisurely stroll can be all it takes!

Relay for Life will be held on 4pm Friday 17th of Feb until 7pm Sat 18th of Feb at Aberfeldie Athletics Track in Moonee Ponds.

Pennisi Real Estate is proud to be a part of Relay for Life and we are forever grateful to the support we receive during the relay each year.

We look forward to working as a team again this year. If you would like to ba apart of our team please contact sam@pennisi.com.

13 Victorian real estate agents to be prosecuted for underquoting - JONATHAN CHANCELLOR

Law

24 Victorian estate agents have been issued formal warnings following recent reviews that resulted in 13 ongoing investigations into underquoting in a handful of agencies state-wide. 

“Consumer Affairs Victoria is determined to level the playing field for Victorian home buyers,” Consumer Affairs Victoria director Simon Cohen said.

In October, a Melbourne-based Hocking Stuart agency was ordered to pay $330,000 for what was described as “serious” underquoting. 

The Victorian Parliament has passed legislation that forces agents to provide increased context around how they arrived at an estimated sale price, which includes giving a minimum of three comparable sales as a reference point for quoting the estimated price. 

A Consumer Affairs Victoria survey conducted as part of its year-long review into real estate underquoting revealed that a quarter of the properties sold for between 10-20% above their advertised estimated price. 

After reviewing 200 Victorian properties from first listing to sale over a 12-month period, Taskforce Vesta discovered that 63% sold for above the estimated price. 

Around 30% of properties sold for between 0.1 and 10% above the estimated price; 26% sold for between 10.1-19.9% above the estimated price; and 7% sold for 20% or more above the estimated price.

According to SmartCompany, it was these statistics that prompted the consumer watchdog to review 1400 files at 34 real estate agents Victoria-wide. 

Thanks to a legacy of strong moral standing and ethical agency practices, Pennisi Real Estate will never be involved in such a scandal and we send our sympathies to the trusting clients who were affected.

In line with current legislative practices, we ensure all our clients receive estimated sale prices based on recent market activity. 

Are you looking to sell your Victorian home and feeling confused about which Melbourne estate agent you can trust? 

Give us a call on (03) 9379 5616 and let us talk you through our GUARANTEE. 

What Donald Trump means for your money

Written by Scott Pape

My wife is a television producer so you’d expect her to have a refined viewing pallette. Not so. She watches The Bachelorette, the Real Housewives of Bendigo, and any program where everyday Aussies commentate on their own cooking: “I just knew I’d be going home when my caramel soufflé refused to rise …”

Seriously, her taste in TV is the equivalent of me dumping my AFIC shares and day-trading biotech stocks. Still, while I prefer CNBC and Bloomberg, there’s one show we’re both addicted to: House of Cards.

For those of you too old to work out Netflix, it’s a political thriller that follows the ruthless rise to the US Presidency of Frank Underwood, played by Kevin Spacey.

It’s wall-to-wall sex, drugs, murder and corruption. And apparently the scriptwriters have got it spot on.

Bill Clinton — the future First (Ladies) Man — reportedly told Spacey, “Kevin, 99 per cent of what you do on that show is real. The 1 per cent you get wrong is that you could never get an education bill passed that fast.”

Of course House of Cards has nothing on the real US election: penis jokes, pussy grabbing, private emails. People say they like that Trump says what he thinks. Yet so does my three-year-old, but that doesn’t mean I want to give him the code to the nuclear bomb.

And with our share market falling eight out of the last ten sessions, I’ve had a lot of questions about what will happen to the share market if Donald comes up Trumps.

So here are my thoughts.

What Would a Trump Presidency Do to the Share Market?

One leading Australian fund manager predicts that the Dow Jones will fall 1,000 points, or a 6 per cent drop, if Trump is elected next week. Another celebrated economist has forecast it will be 2,000 points, or a 12 per cent drop, if the comb-over king gets in.

Scary stuff.

Yet the fact that their predictions vary by 100 per cent tells you they may have plucked these figures out of their … Trumps.

Speaking of which, I’ve also tried to consult my favourite stock market sage — my golden retriever, Buffett. However, he was unavailable to comment on the outcome of the US election — and its effect on global markets — because he was sniffing another dog’s butt.

And before you think I’m being flippant, my mutt has form. A few years ago I put his prediction for the share market up against predictions by some of Australia’s leading economists, and he lifted his leg on the lot of them, winning by a surprisingly large margin.

All of which goes to show that I don’t have a lot of faith in predictions.

For all the scary stock market predictions, the truth is that Trump could actually be good for the US share market. After all, he’s pro-business (he’s just not a pro at business), and he plans to drop the tax rate for US corporations from 35 per cent to 15 per cent.

None of this has been costed, of course, and some economists are suggesting it could add $5.3 trillion to America’s national debt. Though if there’s anyone who knows how to go bankrupt, it’s The Donald.

These Are the Crazy Days.

The Economist magazine has suggested that a Trump presidency is one of the major risks facing the world. Yet let’s take a chill pill and put it in perspective.

Even if he does win, he still has to get his cra-cra plans — like whacking Chinese imports with a 45 per cent tariff — past Congress. And even if he does get a (watered-down, cobbled-together plan) past Congress, we then have to guess what effect that will have on China and, more importantly, how they’ll respond. Then we’ll have to guess what the fallout will be for Australia.

That’s a lot of guessing.

So let’s not guess. Instead, let’s look at some of the crazy stuff that has actually happened. Over the past 120 years or so we’ve had:

The First and Second World Wars

The Great Depression

The Vietnam War

The Gulf Wars

9/11

The GFC

Grexit and Brexit.

And over that same time if you’d invested a single dollar — $1 — in the Aussie share market, it would be worth a staggering $194,439 today. Also over that time we’ve had some shocking politicians … though I’ll leave it up to you to fill in the blanks on who they are. 

The takeout from all of this is simple. If the markets plummet on Thursday, be a buyer not a seller.

My investment decisions have nothing to do with politics, because history has proven that the effects of politics are impossible to predict. (President Obama is seen as a socialist in some camps, yet over his time as president the US share market has risen by an average annualised rate of 14.5 per cent. George W Bush, on the other hand, is a rabid Republican yet the share market dropped by an average 3.5 per cent per year over his two terms).

The key is not to get caught up in the soap opera. Remember, politics is show business for ugly people. It’s much more important what happens in your house than in the White House. 

Tread Your Own Path!

Scott Pape

www.barefootinvestor.com/

Coffee expected to fetch between $1.00 and 1.20

A small flat white is expected to fetch north of $1, a real estate agent was told at his local café this morning.

The coffee – which eventually changed hands for $3.80 – went well above the quoted price, but was a reflection of market conditions, the café’s owner said.

“We were surprised by the strong interest in this coffee. It certainly surpassed our expectations,” the owner said.  The real estate agent said he was caught unawares by the price, and was not able to secure the coffee.

“I only came in here with $1.50 to spend – which is a good 20% above the upper end of what they were quoting, so I’m pretty gutted that I’ve walked out of here today without a flat white,” he said.

The café’s owner said he was unaware of sales of similar coffees in the area, which all reached between $3.50 and $4.00.

This story originally appeared on The Shovel

For the record Pennisi real estate don't condone the practice of under quoting Coffee or Real Estate.

On a more serious note we are fully supportive of the proposed legislation to help stamp out the disgraceful practice of under quoting. Under the new laws agents will be required to provide an accurate quoted price range for every property or faces fines of up to $30,000 and lose their commissions. 

The crackdown follows recent inspections of over 100 Melbourne estate agents and the prosecution of one for repeated underquoting offences. It is believed a further 10 estate agents are under investigation.

"Victoria is the underquoting capital of Australia, it's a cancer on the industry that must be fixed," said RealAs CEO Josh Rowe.

Under the proposed new rules, agents will be required to provide a 'fact sheet' for every property they sell that includes an estimated selling price, the prices of three recent comparable property sales, and the median house price for that suburb.

At Pennisi we will be implemented the proposed changes immediately.

 


Changes to Negative Gearing Will Impact Working Class

Plans to limit negative gearing to new housing will only have a negative impact on the working class.

Negative gearing allows investors to offset losses on investment properties against their taxable income to gain a tax break.

Limiting negative gearing to new housing will cause a multitude of problems, primarily - rental prices will increase to cover the costs of new housing rather than older established rental properties. The flow on effect becomes a depletion of affordable rental properties on the market.

We’re talking about properties on the outskirts of Brisbane in areas such as Inala, Logan and Ipswich, where your working class family can afford to live - not $700 per week units in the Brisbane CBD.

It’s not the wealthy that own these properties – it is your average mum and dad investor who provide either low or average rent housing to average working Australian families.

You don’t buy a new property and rent it out for $300 – you rent it out for $600 a week. Unfortunately that’s the only one you’ll be able to claim negative gearing on, encouraging investors to buy new properties, which doesn’t help your working class family.

Where will people who earn a low income go to rent if there are only new properties available on the market?

The Opposition says changes to negative gearing will aid with Australia’s housing affordability crisis, however the solution isn’t that easy.

If the changes are applied across all existing investment properties then prices will go down in the short-term, as there will be an oversupply of established properties on the market as investors are forced to sell.

Affordability will improve briefly, but when those properties sell prices will steadily return to current levels.

Even if the changes only apply once legislation is passed, the supply of affordable rental properties will fall over the next few years, driving rental prices higher, hurting the very people the changes are aimed at helping.

Such changes to negative gearing are designed to stop the wealthy getting an unfair tax advantage. If changes must be made, then capping the number of properties investors can claim negative gearing on seems to be a smarter option.

With the majority of mum and dad investors only owning one property they won’t be affected by such a change, allowing them to continue investing in affordable housing whilst endeavoring to secure their future through smart investment decisions.

The Leopard's New Spots - The Real Reason Behind Expensive Internet Ads...

Real estate agents love a ‘motivated vendor’. Why? Because a motivated vendor is far more likely to sell, even if the price is below their expectations. Unmotivated vendors are more likely to reject lower than expected offers. You may have heard the saying, ‘the best time to sell is when you don’t need to.’ It’s this lack of motivation in the seller that causes indifference, inadvertently creating an advantage of sorts for themselves, over the buyer. The buyer and/or agent need to pander to the seller’s demands when the vendor’s motivation to sell is low. Unmotivated vendors can be a nightmare for many real estate agents if they are ambivalent about selling, but the agent only gets paid if they do sell, which creates conflicting motives for the seller and their agent.
When a vendor signs with an agent, they are exclusively signed to that agent’s firm for the duration of the agreed listing period. This arrangement provides the real estate agent with a degree of control, particularly if they have a motivated vendor. A buyer is free to wander in and out of as many real estate agent’s offices as they choose to. Therefore during negotiations, real estate agents have a lot less influence on buyers than they do on sellers.

There are two types of motivated vendors. The first is the ‘pragmatically’ motivated vendor. They may have bought elsewhere or be in control of a deceased estate for example. Pragmatically motivated vendors accept the best market price and sell. They are motivated enough to sell so that the agent does not have a particularly difficult time ‘controlling the vendor’. This allows the agent to focus more on attaining each buyer’s best price, confident that the vendor will accept the highest offer.

The second type of vendor is an ‘artificially’ motivated one. They ‘were’ only motivated to sell if the price was right. Strangely enough, they can find themselves committed to thousands of dollars towards internet ads. Internet ads which cost several thousand dollars! When did that happen? How did that happen? And most importantly, why is that happening?

Real estate agents may have been weaned off newspaper ads (very, very reluctantly), but they are now embracing a new form of advertising like there is no tomorrow, expensive internet advertising. Expensive Internet ads ‘Bigger photos equal more buyers’, sellers are assured. ‘Make your property standout amongst the crowd. You cannot sell a secret’. The cheap lines that agents used to sell needless newspaper ads are now being used to sell unnecessarily expensive internet campaigns.

‘Vendors…If you are not on page 1 of the buyers search you have erected a signboard in the forest’ screams the real estate trainer hired to increase the amount of ‘Vendor Paid Advertising’ (VPA) sold by agents. Negotiators call it the ‘sunk cost syndrome’. If you can get someone to invest upfront – emotionally or financially – in an outcome, they are substantially more motivated to want a return on their investment. The sunk cost syndrome allows agents to sell unmotivated vendors a poison pill in the form of increased exposure. Once the vendor swallows that pill, they have unwittingly increased their motivation to sell, tenfold. Agents therefore now love expensive internet ads for exactly the same reason they loved expensive newspaper ads. The real estate industry still proudly spruiks the idea that campaigns which utilise print marketing have higher clearance rates than those that don’t. That’s a really weird conclusion to draw when you consider that home buyers rarely look at print ads now!

What is not said by the industry, is the fact that vendors cajoled into spending money on a print campaign have needlessly spent good money on bad advertising. While their agent has caused them to become more motivated to sell, they have also caused them to pay for advertising in a medium where buyers don’t look anymore! To ascertain whether expensive internet ads work, let’s look at them from the perspective of a buyer. As a buyer, would you accept or reject homes based on the size of the home’s respective ads or photographs? Do you like homes that are on page 1, more than homes listed on page 3? A few probing questions uncover some surprising answers! Agents now buy subscription packages from advertisers, which force them to run expensive web campaigns. The rules are simple. Either the consumer or the agent pays upfront for these ads, but pay upfront they must, regardless of the outcome of the sales campaign. It is easy to see then, where an agent’s passion for selling vendors this type of expensive internet advertising is derived from.

Stockbrokers love big real estate websites – they are ‘high margin businesses’. That is, they have low costs and high incomes. Their cost base has barely risen as their volume of business and income has exploded in recent years. ‘Zillow’, the number 1 real estate portal in the US, is attempting to replicate elements of the Australian model of VPA, amongst other strategies. Many of the major shareholders in Zillow are Australian. They appreciate the profitability of a dominant real estate portal where real estate agents act as unofficial advertising salespeople for the portal. In Australia, the real estate industry’s greatest fear is ‘digital disruption’.

Industry forums are full of agents who fear their ‘Uber’ moment is imminent. And it may well be if they continue to unnecessarily charge home sellers thousands of dollars for expensive internet campaigns, when inexpensive internet campaigns work just as well, if not better. The leopard may have changed his spots from newspaper ads to internet ads, but vendors should be aware, he is still a leopard.
2015 Pennisi Real Estate Footy Tipping Competition

The AFL Footy season is once again upon us and we would like to invite you to join our competition.

There are big prizes to be won (a total of over $3000) so we hope you will join us.

And it’s free to join. So please invite your family and friend to be part of the fun as well.

This year:
• Tips can be entered up to 10 minutes before the start of any game, even if you miss the first round.
• You will receive an email reminder every round to record your tips.
• You will also receive an email after each round is completed advising you of the weekly winner etc.

To register go click on the link below.

 Good luck and happy tipping from the Pennisi Team.

 http://www.pennisi.com.au/?pagecall=misc&pageMode=footyTips&MenuItemID=70714&subject=Football_Tipping&MenuItemID=70714&subject=Football_Tipping

Preparing your home for sale

Spring is the time of the year when the trees bloom and the home environment needs fresh and proper cleaning after a long cold winter. Spring, indeed, has always been by tradition the most appropriate time of the year to do a thorough "Spring Clean". However, as you can see, there is much more than just home cleaning that you can and should do in Spring.

This is the time when there is some warmth seeping back into the atmosphere. As such, it is the time to push back the shutters and welcome the fresh air and sunshine into your home. Here is a cross-section of services that you should consider when preparing your home for Spring.

Home Cleaning
There are various rooms that harbour dust and dirt and require proper cleaning after the cold season is over. The first thing to do is to open all windows in the bedrooms and living room and dust them. After this initial brushing, you can air the blankets, furnishings and draperies in the various rooms. This can suffice as preparation for a thorough cleaning using a vacuum cleaner.

Carpet Cleaning
Carpet cleaning is vital because carpets tend to accumulate a lot of contaminating agents, ranging from dust to stains and unsightly spots from spilled liquids and winter mud. You can use carpet cleaners to do this work. The machines can reach every part of the room. It is essential to use a good detergent that can disinfect the carpet and leave it spotless before the machine drains the moisture automatically. After this, you can activate the heating system to prevent humid conditions.

Window Cleaning
Windows are another important part of the spring cleaning. Unclean windows can hinder the entry of light into the room and can also result into foul air in your room. To prevent this from happening, you will have to reach out and clean between the shutters, especially the metallic ones using a soft brush. It is also essential to check whether any of the panes are broken so that you can have them replaced immediately by a glazier. You will be amazed with your gleaming windows in no time.

Painting Your Home
It is not advisable to take the task of painting a home entirely upon yourself. This is a complicated business that requires a painter with expertise at applying double or triple layers of paint that can last for a long time. Spring is usually the best season to do this since, for one, the windows do not remain closed like in winter and thus the strong smell of paint won't affect those living inside. Of course you don't have to be told that the house needs recoating: fading colours can tell tales about the need for repainting from miles away.

Gardening & Landscaping
Winter comes with one blunting effect for all lovers of landscapes; it stunts growth of flower beds, and blights out the live fence around the home. Spring is the time to change the situation by use of sickles to trim hedges, transplanting new flowers, and removing fallen leaves from the walkway. You should also use pressured water to thoroughly clean pavements and adjacent walls.

Cleaning Gutters
One of the most irritating signs to show that one has already passed three inactive months of winter is the debris that lines the interior of gutters. Only in spring can this be removed properly because the trees from which it falls are also experiencing fresh growth and you can sweep the matter away efficiently. You should use hosed water from the roof to pressure out the debris. A long-handled brush can also be great for getting rid of deep-seated dirt.

Build a Timber Deck for Outdoor Entertaining during spring and summer
The passage from winter to spring is a highlight of expansion. This is why you need to create ideal recreational areas that will help you enjoy the outdoors in the consecutive two seasons. The best thing you can do is to construct a timber deck in an open area in your yard overlooking the aquatic pool, the fish pond or the children's playground. You may need to hire the services of an exterior home designer to make a dynamic building that will stay in shape. It is also important to look for virgin wood that will not warp under the heat of summer months.

Article Source : www.servicecentral.com.au
Author: Service Central

WHO PAYS THE ADVERTISING COSTS?

The way typical real estate agents advertise is a waste of money. Make sure it is not your money.

Many agents advertise to promote themselves, and not your property. In the past twenty years, real estate advertising has increased as much as twenty times. In most areas, the number of sales being made today is the same as twenty years ago.

Home sellers are often pressured to pay thousands of dollars for advertising. This is a needless expense because very few properties are ever sold because of advertising.

Be reasonable about advertising.
Advertising will rarely sell your property. Too often home sellers make the mistake of demanding advertising for their properties.

The previous hint for selecting an agent advised you to not pay advertising costs, but this does not mean that you should make unreasonable demands upon your agent for needless advertising. Be reasonable about advertising.

Buyers who want to buy in your area know the area. It is the area that attracts them, not advertising. It is a waste of time, money and energy to place advertisements in publications that reach thousands of people who will not buy in your area.

The media your agent chooses to expose your property in is also important. Many buyers are now Generations X and Y, and these people do not read newspapers nearly as much as do 'Baby Boomers'. Agents who rely on newspaper advertising are quickly becoming old fashioned.

Your agent needs to be an expert in Internet Marketing, and should not necessarily 'follow the crowd' by advertising heavily on third-party websites, either.

Here is what your agent should be doing to find a buyer for you:

  • Your agent's office should be open7 days;
  • Your agent should be sending email Home Alerts to thousands of buyers every week;
  • Your agent should have large numbers of signs in the area;
  • Your agent should be an expert at directing enquiry to his or her agency's website.

This will bring the best buyers to your agent and your agent will then qualify the buyers and bring the right ones to your property. That's how most properties are sold.

If your property is not selling there are usually only two reasons: the agent is incompetent or the price is too high.

If you keep advertising your property, people may start wondering what is wrong with it.

Author: Gary Pittard

ROLL UP... ROLL UP!

Since the human race began, salespeople have had to live with an underlying label of being a bit "shonky". Some of this stems from the "good ol' days" of the "snake oil, cure all, love potion" travelling salesman coupled with the general naivety and gullibility of his encapsulated crowd of willing buyers, charmed by his silver tongue and clever banter. "How do you know a salesperson is lying to you?...their lips are moving" Fortunately stricter legislation and customer awareness has curbed the majority of this deceitful practice.

Specifically, in real estate, the Office of Fair Trading is forever keeping a watchful eye on our industry. The new legislation and licensing laws have helped "clean up" the business but like many, is not "squeaky clean". When you call a real estate agent out for a "market appraisal" you are basically interviewing them to potentially sell what may be your greatest asset.

I am all for competition and to a seller there is plenty out there to choose from and it can be a tough choice. Sadly, the property seller is still subject to the "silver tongue banter" as the agent states why they and not others should be employed to sell your home.

Don't get me wrong, there are many skilful, respectable and honest agents out there, it is the minority that tarnish this industry.

What does frustrate me the most is hearing feedback and some of the "untruths" stated to discredit or understate our companies (and others) results and reputation. "They don't sell much outside of this area"..."They don't sell the higher end properties"..."They don't advertise"..."They don't auction"..."We get the buyers who come to this area who will pay a higher price"...BLAH BLAH BLAH. If you are selling your home, sure, do your research. Find an agent with a reputation for excellence and honesty, an agent with a good track record. Look for skill and genuine likeability plus ability. An agent you feel you can trust.

Author: Jason Gower

MAINTAINING COMPOSURE - WHY DUE DILIGENCE STILL MATTERS

Good times can breed bad practices. You know the real estate market is strong when buyers submit unconditional contract offers whilst forgoing due diligence such as building inspections, or when un-renovated properties sell for comparable prices to renovated properties. Such displays of buyer aggression can be explained as taking a 'risk on' trading conditions.

Buyers have a higher appetite for risk given they believe the overall upside in the current market comfortably outweighs any risk of undetected property defects. Even though this buyer psychology is common in the current market, that's not to say it is wise behaviour.

In contrast to 'risk on' behaviour, when confidence is slow and prices are stagnant or falling, buyers take a 'risk off' approach to purchases. The property market was operating just like this only 18 months ago in 2012. How quickly things can change. In hindsight, many buyers played it too cautiously back in 2012, passing up buying at great value. Anyone who was brave enough to have made a purchase then, effectively bought at the bottom of the cycle, whether by design or default.

Now there is a risk that some buyers may be too aggressive for their own good. Paying for due diligence on multiple properties that you will inevitably miss out on can cause you to question the value of doing due diligence. The temptation to pass up on due diligence also increases when reports are written up with multiple disclaimers and cautionary tales that do little to guide you in the right direction.

Getting the all clear on a pest and building inspection can sometimes feel as though the expenditure was wasted. The insurance in ensuring that you have not purchased a problem property makes due diligence the best money you will ever spend.

Even though the benefits and information gained from these reports may be minimal, they can act as safeguards against the discovery of post purchase structural defects, possibly saving you tens of thousands of dollars later. Therefore, they are a very worthwhile investment, particularly when their small cost is weighed up against the overall value of the transaction.

A Penny Saved is a Penny Earned
There are a few ways to ensure that money is not wasted doing due diligence on a property you may not ultimately secure.

Firstly, if the price guide seems too good to be true, it probably is. Everyone is fully aware that bait pricing is rampant. Maintain pragmatism when assessing what a property is likely to sell for. If it's likely to sell above your budget, don't spend thousands on inspections, strata reports and contracts being read etc. This will prove fruitless.

Secondly, ask the owner via the agent or the owner's lawyer what price they would be prepared to sell for today. If you can meet that price, then by all means, conduct some due diligence in a rapid time frame, knowing that it won't be a wasted effort.

Thirdly, see if other buyers have paid for a pest/building inspection. If so, ask the company that did the report if they will sell you a copy at a reduced rate, or offer you a rebate should you miss out on that property. Many companies are happy to do this at present.

Lastly, don't ignore the obvious. A building inspection report on an un-renovated and unliveable property is going to tell you that the property is unliveable. Don't pretend it's something it's not. If your budget is unable to oversee a total renovation project, don't engage in one to begin with.

If a property is newly built or just renovated, a building report should still be done prior to purchasing it. Making a profit from developing is hard work. Disregard what you think you saw on The Block. Many people who attempt to renovate for profit lose money or at best, merely break even. As this reality starts to dawn on them, they begin to cut costs to meet their budget. A trained building inspector will pick up on any issues this may cause, if any exist.

To get full value from a building report or inspector, turn up on site when they are doing the inspection and talk through any practical issues they raise. This often offers more value than just waiting for a written report. Some reports are full of disclaimers and alarmist language, yet tell you little about the true state of the home. A conversation with the inspector can add great context and value to their written report.

Strata reports are often a great source of information for apartment buyers. Projected works or increased fees, neighbour disputes and structural issues are all contained in strata minutes. Don't just read the minutes of the most recent meeting, go back several years to ensure that there are no festering issues.

An unexpected special levy shortly after purchasing an apartment for top dollar can set your finances back a long way. If you do this type of research, at least you will know if there are any impending levies prior to buying. They can then be factored into your offer/plans.

Paying for due diligence on multiple properties in a competitive market environment can be frustrating. If you are considering passing up on this pre-purchase research, please note that you may be taking an unjustified risk.

The only thing worse than missing out on the right property, is buying the wrong one.

Author: Peter O'Malley
Real Estate Uncovered

HOW TO INTERVIEW AGENTS

Always interview at least two agents. (The only exception is if one agent is highly recommended by people whose opinion you respect).

If you do not like either agent, call a third. Keep going until you find the best agent. If you have to interview a dozen agents, do so. Do not underestimate the importance of choosing the best agent. And do not do what many sellers do - select the agent you dislike the least. Good agents exist. When you know what to look for, you will find one.

When you meet agents, look at their personal presentation. Do they appeal to you? Do they seem like nice people? Listen to your instincts. Show each agent around your home. Watch their level of interest by seeing if they ask questions or make notes.

After agents have seen your home, make them feel comfortable and then ask the question: "What will you do to get the best price for my home?" Some agents will say, "How much do you want? or What figure did you have in mind?" Do not answer these questions. Not yet. You are conducting a job interview. Simply say, "Before we talk about a specific price, I would like you to tell me what your agency can do to get the best price for us."

Do not be intimidated or allow yourself to be pressured into doing anything that doesn't feel right. It is your home and you are in charge. You have two ways of dealing with agents. For agents you like, ask what they will do for you. For agents you don't like, just say, "I have another agent coming soon. So thank you for coming around. I will call you if I need you." And then move towards the front door. They will leave.

When you lack knowledge, agents can easily confuse or mislead you. But when you have a valuation and you have read this book, you can not be so easily confused or misled.

When the agent begins his or her presentation, you will soon know if you have the right agent. If the presentation is about auctions or open inspections or if you are asked to pay money in advance for advertising, show them this book and say, "Have you read this?" Watch their reaction.

If their answers do not satisfy you, you have not found the best agent. But when you find an agent who cares about you and demonstrates this - in proof, not words - and you feel comfortable, you are ready to make the most important decision in selling your home - choosing your agent.

The above is an extract from Neil Jenman's book "Real Estate Mistakes" for more information or to purchase a copy please contact Andrew Pennisi on 9379 5616.

Author: Neil Jenman

Source: jenman.com.au

MAKE YOUR INVESTMENT PROPERTY MORE TAX EFFECTIVE

Are you maximising your tax depreciation deductions?

It's that time of year again and many landlords are missing out on literally thousands of dollars in lost tax depreciation deductions.

What you should know:

  • Your investment property does not have to be new. Most properties, both new and old, will attract some depreciation deductions. A common myth is that older properties will attract no claim. ANY property is worth making an enquiry.
  • If you have been unaware of this tax deduction you can adjust previous years' tax returns. When a property owner has not been claiming or maximising tax depreciation deductions, usually the previous four financial years' tax returns can be amended easily.
  • You need a specialist to maximise your claim. Quantity Surveyors are recognised by the Australian Tax Office under TR 97/25 as appropriately qualified to estimate construction costs of a building for depreciation purposes.

Take the time to contact your Accountant to ensure that you are receiving the additional tax deductions to the maximum capabilities. You may also need to ensure that your Accountant is utilising the deductions from a Property Depreciation Report.

 

MAINTAINING YOUR INVESTMENT

Owning an investment property requires landlords to ensure that the property is safe for the tenant to reside in as well as focus on preventative maintenance.

Each year landlords should be undertaking the following checks on the property:
1. Building inspection
2. Pest inspection
3. Smoke alarm inspection (where applicable)
4. Safety switch inspection
5. Pool inspection (where applicable)

Are you up-to-date with your annual inspections? If you require assistance or further information regarding the inspections, please feel welcome to contact our property management team on (03) 9379 5616.

 

CONDUCT A MORTGAGE REVIEW

With interest rates and the property market at a low, but showing signs of turning, investing in property is a smart choice right now.

Like the turning of a property market, interest rates won't stay at this level for long. If you can afford to pay a little extra off your mortgage this could create a buffer for when the rates rise to their traditional level of about 7.8 per cent.

Alternatively, it may be the time to negotiate a lower mortgage rate. If you are on a standard variable rate then you have the ability to compare rates and save hundreds of thousands of dollars over the lifetime of the loan or thousands per year. The finance market is competitively seeking new business and will drop rates to gain it.

But don't forget to do your homework, read the fine print and ensure that you are getting a comparable rate inclusive of fees.

"COLLUSIVE BIDDING" COSTING VENDORS THOUSANDS

Unscrupulous buyers, with the help or encouragement of buyer's agents, are using dirty tricks to secure properties at auction as a record number of homes are sold under the hammer and prices hover near record levels.

The practice, known as "collusive bidding", involves two or more bidders who represent the same buyer, but creating the impression that there are multiple buyers bidding for the same property. One buyer's agent said the tactic worked "brilliantly" and recently saved their client more than $300,000 at auction.

The vendor would be furious, of course. "It's illegal, but very hard to police," said Rich Harvey, chief executive of Sydney buyer's agent, propertybuyer.com.au, who slammed the ploy.

There were 1425 auctions scheduled nationally for the Queen's Birthday long weekend -- 38 per cent higher than the same time last year. More than 15,000 homes have been auctioned so far in Sydney this year compared with just over 9000 for the same period last year, and values are up 16.6 per cent, according to RP Data. Auction numbers in Melbourne are well up on last year and values have risen 10 per cent in the past 12 months.

Mr Harvey said the idea behind the ploy was to create an expectation in the vendor's mind that there is good activity below the reserve, and so encouraging the vendor to put the property on the market, rather than pass it in. "It's also used to intimidate and scare off the competition," he said. Two Melbourne buyer's agents told AFR Weekend they used the tactic at auction. A Sydney buyer's agent said he knew of the practice.

The industry is already awash with the illegal practices of "dummy bidding", where non-genuine bids are made at the behest of the auctioneer or real estate agent, and "underquoting", where an agent deliberately misleads a prospective buyer about the likely selling price of a property.

Collusive bidding is another unethical ploy that raises questions about the oft-repeated claim by auctioneers and estate agents that buying under auction conditions is the best way to secure property. Collusive bidding is more of a problem in Victoria, where bidders are not required to register before auction, meaning anyone can raise their hand.

In NSW, only registered bidders can bid for a property. "The winning registered bidder is expected to sign the sales contract. If someone else signs the contract, that's illegal," said Real Estate Institute of NSW president Malcolm Gunning.

Open auctions are 'ridiculous'

But there are loopholes. If the property is bought by a company rather than an individual, multiple directors of that company could bid and would be entitled to sign the sales contract. Mr Gunning said prudent agents should be able to pick up on the practice by identifying and questioning bidders who did not inspect the property before auction. A spokeswoman for NSW Fair Trading said collusive bidding was illegal under NSW legislation. Penalties can be up to $55,000 for corporations. Real estate agents can lose their licences.

"Regulations state that a person must not induce another person to abstain from bidding or do anything in any way which may prevent free and open competition," she said. Fair Trading has received 55 complaints about auctions so far this year -- seven for alleged dummy or collusive bidding.

Paul Osborne from Melbourne buyer's agent, The Secret Agent, said he had seen instances where there were three people representing the same buyer bidding at auction. "Owners cop a lot of flak for under-quoting, but equally buyers use all kinds of theatrics that are not transparent," he said.

Consumer advocate Neil Jenman said open auctions were a "ridiculous way to sell property" and almost never got the vendor the best price. "When I bought my home at auction for $700,000 people mocked me for paying $50,000 above the reserve. The truth was I was prepared to pay up to $900,000. I had plenty left in the tank," he said.

Mr Jenman said an auction using sealed bids -- a method gaining traction in Britain -- made a lot more sense.

"You would not want to play poker and let other people see your cards," he said.

Source: The Australian Financial Review

PRESENTING BETTER VS. SELLING BETTER

Each year as winter sets in, many would-be home sellers put their plans on hold until the spring arrives. The house presents much better in spring so therefore it will sell better, goes the thinking.

Stock levels are very seasonal in the housing market. Interestingly, buying demand is not so - it is far more constant.

A buyer will buy the right property when they see it, regardless of season. This idiosyncrasy causes the market to be at its strongest in seasons of tight supply - such as winter. Each winter, many strong sales results are achieved due to tight supply with ready demand. These same results would not be attainable a few months later in the spring. The lack of stock creates temporary and artificial strength in the market.

Buying and Selling

It is best to sell in winter and buy in spring. Marry any disconnect in time with a long settlement. The reverse is a common and nasty trap though - buying in winter and selling in spring. Knowing how the season impacts on the market can help you to avoid making a costly real estate blunder.

If the market seems strong through winter as you secure a new home, that same market strength can disappear by spring. If you list your property onto the market as a "bought elsewhere, must sell" scenario in spring, the sudden softening in prices can catch you out.

Buying and selling in the same season (or economic environment) makes the sale and purchase "market relevant". Buy high, sell high and vice versa. It is when the market price ?ows in a different direction mid-stream that serves as the greatest risk.

Each year, ?uctuating stock levels cause many buyers and sellers to misread the market.

Source: www.jenman.com.au

Author: Peter O'Malley

FINDING A (GOOD) REAL ESTATE LAWYER

Like all trades, there are good lawyers and conveyancers and some not so good ones. Whether you are buying or selling, having the right legal advice can be crucial to ultimately securing your dream home. Whether buying or selling, reaching a verbal agreement and having a contractual agreement are two very different situations. A good real estate lawyer will ensure that you migrate seamlessly from your verbal agreement to exchanging contracts without incident.

Many people scrutinise multiple real estate firms when selling, yet simply go searching for the nearest or cheapest legal advice for the same transaction. This haphazard approach can sometimes turn the process of conveyancing into a world of drama and it usually occurs at the most crucial time of the transaction.

There are two errors people can fall into when appointing someone to do their conveyancing.

The first is that they don't know what to expect from a lawyer, so they look online until they find the cheapest one. Petrol and milk are products which should be purchased on the basis of price. Lawyers handling the transaction of your most valuable asset should be engaged on the basis of competence first and price second.

Buying real estate is a long way from a corporate takeover, so you don't need to pay excessive amounts for a high powered lawyer to guide you through the nuances of the Conveyancing Act. A lawyer with experience and a track record of success in conveyancing, at a fair price, will ensure that your legal position is protected.The second error many people fall into when hiring a lawyer is that they hire a lawyer who does not really want the job. The lawyer takes the brief out of loyalty to the client, even though they specialise in other areas of law.

As an example, a good corporate lawyer does not necessarily make a good real estate lawyer and vice versa. Yet if a client feels loyalty towards a solicitor who has helped them in the past, that solicitor may feel obligated to take the job on in return - even though they don't really want it. In extreme cases, the file is passed off to a paralegal or junior in the office and given little consideration by the lawyer who was engaged by the loyal client.

Conveyancing is generally a straightforward process for a lawyer. But about 1 in 20 transactions require the involvement of an attentive competent lawyer, when complications arise. Murphy's Law suggests that the transaction which has been delegated down the pecking order by the lawyer, is the one that will require the most skillset from the lawyer.

If your preferred lawyer does not do real estate work on a daily basis, it is a good idea to ask them straight out if they really want to do the job? Then, ask if they will be handling the matter personally? Candor like this ensures that everyone will be on the same page and that you won't be left floundering during negotiations.

Real estate agents and lawyers

A good working relationship between your lawyer and your agent is also crucial when negotiations begin.

Before a property can be listed for sale, the vendor's solicitor must prepare a contract of sale on behalf of the vendor. This contract is a legal requirement, which must then be given to the listing agent prior to the property being marketed.

Once a buyer or buyers express an interest in the property, they take a copy of that contract to their own lawyer for review and negotiation.

In a competitive market such as we have at present, there is every possibility that multiple buyers will be trying to secure the property. Whether you are buying or selling in such a situation, the agent and lawyer need to work closely together and in sync.

As a seller with multiple buyers in play, it's very much a case of the more buyers the merrier. Tactically, you want all buyers to be satisfied with the terms of the contract so that their respective offers become binding upon acceptance. There is nothing worse than declining a contract offer for a higher non-binding offer, which eventually crashes.

A good real estate lawyer acting on behalf of the seller will professionally and rapidly move all interested buyers past the contract review phase. The negotiation can then quickly go back to the agent for setting up closure.

As a buyer trying to secure a property in a buoyant market, speed can often be that crucial ingredient to success. Most sellers will take an offer on a signed contract far more seriously if the contract has been reviewed and negotiated by the purchaser's lawyer. The lawyer then provides a 66W certificate authorising the vendor's agent or conveyancer to exchange contracts without a cooling off period - pending agreement on price.

Presenting an offer with such certainty can often be the difference between securing your dream home quickly or continuing to compete with buyers who have cooling off periods in their contracts.

A good real estate lawyer won't be able to ensure you buy or sell at the right price, but they will be able to put you in the best possible position to do so, with minimal fuss at a fair price.

AGENT SELECTION

The selection of an agent can hinge on many factors but for the unprepared it will often come down to one of two criteria: the price the agent suggests your property will sell for and the fee they will charge you.

Informed sellers know there is a far more important criterion to consider: the agent's selling strategy.

Once your home hits the market, the price the agent quoted you initially become totally and utterly irrelevant. Their sales strategy then becomes everything.

Given enough time to think it through most people would agree that agent selection should be based around the agent's proposed selling strategy. You don't pay an agent commission to value your home. You pay an agent commission to sell your property for the maximum price they can get at the time you choose to sell.

An agent's opinion on the value of your home is only relevant if they intent to buy your home. It is the buyer's opinion of what your property is worth that really counts because they are the ones who will be paying you money, not the agent.

Clearly, it's they agent's proposed sales strategy that should be the subject of close scrutiny.

However, when selling your home, the logical criteria we should use is often replaced with the emotional criteria we default to. Agents will often take full advantage of this, so beware.

We all love being told what we want to hear. Comments such as 'you look like you have lost weight' or 'your children are so well behaved' make us feel good, regardless of whether they reflect the facts or not.

A real estate agent telling us our home should sell for exactly what we hoped it would suddenly makes selecting that agent an appealing option.

Many people will call in three agents and ask them two questions:

  • What is our home worth?
  • How much do you charge?

In many cases, if the agent is still in the running after deducting their fees from the selling price they estimate, only then is their sales strategy discussed (but not normally scrutinised). So the most crucial determinant of a successful marketing campaign (that is, the selling strategy) becomes a mere afterthought. It is this type of simplistic and dangerous thinking that often reduces a home seller's chances of success.

In this instance, Harvey Mackay's oft-quoted adage could apply to some slick agents:

'When a person with money meets a person with experience, the person with the experience winds up with the money and the person with the money winds up with the experience.'

So what should you do?

One option would be to conduct a surreptitious job interview when selecting your agent.

It is rarely done this way but home sellers would often get a better perspective on the merits of each agent if they selected their agent before discussing price.

A series of questions that help you understand how each agent proposes to sell your property should be put to the agent in an interview so that you can gauge how the agent handles themselves in a pressure situation.

Selecting an agent on the basis of a written sales proposal will most likely lead you to choose the best graphic designer or writer. When you are selling a prized asset like real estate you want the best salesperson in town, not the best proposal presenter. You need the best negotiator to protect your interests and maximise the sale price you will get on the open market.

Don't get caught up in the 'this is how we find buyers' debate. Agents don't want you to know that 80 percent of buyers are on realestate.com.au or domain.com.au.

The best agents will already have some buyers in their database who may be interested in purchasing your home.

Focus on these agents first. An agent who can rattle off the names of genuine active buyers in your area is far more impressive than the agent who asks you for advertising money to find buyers.

Focus on the skill level of the agent. Can the agent hold their own when you try to cut their commission? If they cannot sell the value of their commission, how will they sell the value of your home? If they are quick to reduce their commission, guess what they will also be quick to do when buyers ask them to get you to reduce the price of your home?

Focus on an agent who can best sell the advantageous features of your home and who will act as a gatekeeper in anticipation of buyers asking what your bottom line is.

Avoid the agent who wants to know what you, as the seller, believe the property is worth. Furthermore, avoid the agent who tries to extract a deadline or bottom line figure from you.

These are important clues as to what might be around the corner if you hire that agent.

Remember, clues such as these cannot be identified in a written sales proposal. These clues will become more apparent over a simple cup of tea. If you can't handle the thought of having a cup of tea with your prospective agent, don't hire them under any circumstances.

Ultimately, you are going to have to trust the agent you hire but you need to be able to trust them on two levels. First, you need to trust their integrity. How will this agent act and talk about you to buyers when you are not there? Will their word be their bond or will you need your lawyer to read the fine print on their agency agreement?

Second, you need to be able to trust in their ability to do the job you are asking them to do, that is, their level of competence. Do they have the skill, character and nous to deal with the savvy buyers who will aim to put low offers to you in an attempt to force you to lower your asking price? Will this agent be able to discover just how much each buyer is prepared to pay for your home without frightening them off?

The skill level of an agent will be reflected in the final selling price they achieve for your property. Don't fall for the trap of thinking that all agents will deliver the same price. They won't.

Key questions

Asking the right questions is your insurance against having a bad experience.

Below are a few sample questions which may flush out whether an agent is a skilled operator or a rookie with training wheels on:

  • What sales evidence did you use in making your price assessment?
  • How will you justify the expected sale price to a buyer?
  • If the final selling price is below the price quoted by you, will there be a reduction in your commission?
  • If you already have buyers, why do you need advertising money to be paid in advance, to find a buyer?
  • If you already know of interested buyers, why do you need a 90-day agency agreement? Will you accept a 30-day agreement?
  • Please explain how your proposed selling strategy will maximise the selling price?
  • How can you have an auction if there is only one buyer?
  • Can you give me the names and phone numbers of your recent clients?

The more questions you ask an agent, the more you will be able to identify which is the right agent for you. There is little point in asking hard questions after you have signed up with them for 90 days. If you ask the hard questions in advance, you won't need to be sorry you didn't ask them before.

The moment an agent exaggerates the possible selling price, it becomes difficult to separate the price and the merit of their strategy. If you can separate price from strategy, you are less likely to be seduced by an excessive appraisal price.

The campaign usually hits trouble the moment you decide to list with an agent who pushes the most desirable price with the least desirable strategy.

Your reward

The right sales strategy will deliver you the right price. It will also make the sale of your property an enjoyable and rewarding experience. This will be a reward you have earned because you focused more on the agent's marketing strategy than the price they quoted you.

If you can happily pay your agent's fee upon completion of the sale and know that they were worth every dollar you paid them, then you have succeeded in your agent selection.

Source from www.realestateuncovered.com.au

THE OFFER - WHEN TO DECLINE AND WHEN TO ACCEPT

Deciding whether to accept or decline an offer can be the most challenging of times for owners. There is no rule book to follow on how to play the offer scenario when it arises.

Receiving an offer is good news when selling as it means there is interest in your home. But no one wants to undersell either.

It leads back to a simple question with a complicated answer - how do we extract the best price without losing the buyer?

Whilst there are no certainties in a real estate negotiation, there are some principles that will help guide you through the process.

Market Price

What does the recent sales evidence suggest? As the seller, you may have a target number in mind, however how does that number compare with comparable recent sales? Does the offer seem fair, high or low?

Once you have established this very simple rating on the offer at hand, you will have a clearer view on how to handle the negotiation. Never base your response to an offer on the asking prices/price guides of other unsold listings. Always use recent comparable sales on which to base your response to an offer.

The most painful offer to accept is the one that is lower than the offer you previously rejected. Remaining calm, logical and unemotional during a negotiation is crucial to making the right call.

Context

Many sellers ask hypothetical questions prior to the home going on the market.

Questions such as 'What should we do if someone offers $1,000,000?' or 'What do we do if we get an offer in the first week?'

It's natural that the seller poses these questions, but they can only be answered in context of the campaign.

An offer should rarely be judged against time on market. The digital age has made marketing real estate an almost instant process. An offer should be judged against the feedback of other potential buyer's feedback and interest. If the first buyer on the first day makes an offer on your home, yes, this can be a very tricky situation. Make no mistake, it quite often happens this way.

The bottom line is, you cannot plan in advance on how to play the actual offer. The offer needs to be handled in the context of the campaign. This is where the success of the campaign will often rise or fall on the agent's negotiation ability.

Format

There are three basic formats in which an offer can be made. Verbal, written and contractual. By law, real estate agents must disclose all offers to the sellers. Whenever an offer is made, it's worth remembering that verbal and written offers are non-binding. Only a signed contract with a deposit cheque can be considered truly genuine.

If you accept a verbal or written offer that crashes, it's best to consider it a non-offer going forward to avoid making mistakes when assessing future offers. Be wary of the high verbal offer - easy come, easy go!

Competition

If you are fortunate enough to have multiple buyers for your property, the whole equation becomes easier. Before you become complacent about having multiple buyers though, you must satisfy yourself that they are genuine buyers.

To decline a contract offer in favour of non-binding verbal offer can put your campaign into a tailspin, quite literally.

Once a contract offer has been made, it's best that all competing offers are submitted on a contract as a sign of genuineness. Any buyer that promises to pay more without signing a contract should be played cautiously.

Competition makes getting the sale easier, however, if you make the bidding process transparent such as a public auction or Dutch auction, you can easily undersell. Competing bids must never be disclosed as the buyers then focus on trying to beat the competition by $1,000. Use competition and confidentiality to extract every genuine buyers highest offer in a rapid time frame.

Non-price Agreements

Value for both parties can be created away from price. These potential agreements that add value for both parties are worth exploring if the offer is close to being acceptable. Issues such as delayed (or early) settlement, release of deposit, lease back, reduced deposit, inclusions or even some vendor finance on the difference can bring a negotiation together.

The more a real estate negotiation becomes about price, the less goodwill remains in place. If you are horse trading on such matters, always remember to take a concession if you give one.

Pre or Post Due Diligence

The pre-due diligence offer catches many sellers unaware. They accept the verbal or written offer and mistakenly think the property has sold. Suddenly, the building inspection brings up a raft of issues that causes the buyer to reconsider, or the buyer's bank values the property for 10% lower than the agreed amount, scuttling the deal. Any offer that is made pre-due diligence must be considered an expression of interest rather than a formal offer. Take offers pre-due diligence seriously, but cautiously.

There Are No Rules

There are no rules around the governance of making, accepting and/ or rejecting an offer. The property is not sold or purchased until contracts have exchanged unconditionally. It's common for the seller to ask the agent 'How long do we have to consider the offer?' An offer is an offer until the owner countersigns a buyer's unconditional contract or the buyer withdraws from the negotiation.

It's a mistake to think that a buyer will leave the offer on the table for a prolonged period whilst the owner chases a better offer. Complacency can bite during a negotiation, even in a boom.

If you do reject an offer, it's worth noting that declining an offer does not guarantee a higher offer being made in the future. If you accept an offer, you will never know if a better offer was going to turn up next week, so don't think about it.

Author: Peter O'Malley - Real Estate Uncovered

DON'T PAY ANYTHING

It's probably real estate's biggest con. And it's affecting thousands of property sellers every month.

It's the advertising stitch-up and here's how it works.

You decide to sell your property and you call the agent. The agent tells you that you've got a fine home and it's likely to fetch a top price. All very plausible.

But then the agent starts to talk about the M word - "marketing". In effect, the agent is not talking about 'marketing', he's talking about 'advertising'. And you are about to be conned into coughing up several thousand dollars, most, if not all of which, will be totally wasted.

Now, let's get one thing straight. The pitch you are about to be given will be very polished. It will be full of powerful sales 'closing lines' all designed to get you to hand over fistfuls of money.

The agent will talk about a marketing 'campaign' and how important it is that your property be 'exposed' to a wide audience. The theory will go like this: the more you spend on advertising your home, the bigger the price you are likely to get for it. There's only one thing wrong with this theory - it's bunkum.

Consider this: A real estate agent has been in business for many years; that agent has got dozens of homes for sale; each month hundreds of buyers make enquiries to that agency. And yet, every time a seller talks about selling, the real estate agency wants hundreds, often thousands, of dollars to go and find buyers. Real estate agents are supposed to already have lists of buyers. Real estate agents are supposed to be in contact with many buyers who are looking for homes.

It's well known, behind-the-scenes in real estate, that the main purpose of advertising is not to promote the sellers' homes, it's to promote the real estate agents' offices - all at the expense of the sellers.

Today, with the aid of the Internet, advertising costs should have fallen. But no, thousands of agents still want to spend thousands of dollars (of your money) in newspapers. It makes no sense.

Why spend several thousand dollars on a newspaper advertisement which lasts for just one day when, for a few hundred dollars you can advertise on the Internet for months? What's amazing is not that agents are still collectively spending millions of dollars in newspapers, but that they are still conning the property sellers into paying for it. Wake up, sellers!

If you've got a property that's worth, say, around $2 million, the agent is going to be getting around $50,000 in commission when it sells. That's more than enough. Don't add to that cost by agreeing to fork out twenty or thirty thousand dollars in wasted advertising money. Here's a three word message for sellers - Don't Pay Anything! At least not until your property is sold and you are satisfied. And don't pay money for advertising.

Think about this: If advertising money really does find the buyer for your property, why do you also need the agent? And, worse, why should you also pay the agent another $50,000 in commission? If the advertising finds the buyer, then do your own advertising and get rid of the agent. The money spent on advertising is almost all completely wasted. And the agents know it. Again, behind-the-scenes, most of them are having a big laugh at the expense of the sellers.

So, sellers, when you are interviewing agents about the sale of your home tell them that you are not going to pay anything for advertising money. The agent can deduct any advertising costs from the massive commission payment they are going to receive when your property sells.

There are two main ways that buyers look for homes these days: first, the Internet and, second, the For Sale sign. Newspapers are old hat. Their cost cannot be justified when compared with the great value of the Internet. So if the agents want to advertise in the newspapers, let them spend their own money, not yours. Guess what'll happen if you ask the agents to spend their own money? It won't get spent. But your home will still be sold. And for just as good a price.

Trust me, advertising does not have to cost you thousands. You do not have to pay for advertising in advance of your sale. The amount of the commission should include the cost of the advertising.
So, remember, until your home is sold and you're satisfied with the price: DON'T PAY ANYTHING!

Opinion by Neil Jenman.

CHOOSING A REAL ESTATE AGENCY THAT RESPONDS TO 'HOT CALLERS'

Most homes for sale are easy to spot because they have a 'For Sale' sign out the front. This is because - even in the days of Internet in their pockets - prospective home sellers often like to drive around an area to get a feel for it as part of preparing themselves to buy.

Some are specifically looking for streets or houses in which they would like to live. It is usual for the sign to have a phone number so prospective buyers can call and get information about the property. But this is only useful if the agent is ready to strike while the purchaser is hot.

If you are thinking of selecting an agent, try ringing a phone number from a signboard as if you were about to organise an inspection. Signs are great at generating such phone calls, and while many of these calls never result in a 'sold' sign it is worth being sure that the agent you are about to choose can respond to an eager caller wanting to look at the property 'now'.

While no agent can be expected to drop tools and come and show the property on the spot every time, it is worth knowing how your potential buyers will be treated when they make the call; does a live person answer the phone or does the call go to a voice mail or recorder? It is important that someone answers the phone while the caller is “hot”, especially if they are ringing from outside the house. Many buyers are put off a property altogether if their enthusiasm turns to frustration when they are faced with 'on hold' messages and prompts to press numbers.

RELAY FOR LIFE

The 15th Annual Moonee Valley “Relay for Life” was completed last weekend at the Aberfeldie Running Track and once again proved to be not only enjoyable but also a great success. It is anticipated that the event will raise over $200,000 for Cancer research, when the final count is completed.

Since its inception the event has raised over $1,000,000. This year's event attracted 55 teams from local schools, community groups and individuals who have been affected by Cancer. It was the 12th time that Pennisi Real Estate had a team in the Relay.

The Pennisi Real Estate Team has contributed over $15,000 to that amount this year.

We were supported by staff members, family and friends who walked and we also received donations from those who were unavailable to walk as well as clients and suppliers.

I would like to thank everyone who participated in the event. I particularly want to thank David Barnes for his valuable support in helping set up the tent site on Friday afternoon and coming back to the track on Saturday afternoon to help pack up.

Thank you for helping make the Relay a great success.

SELLERS - DON'T BUY FIRST

Keep control and keep thousands of dollars.

Many home-owners face a similar dilemma. When it's time to make a move, they don't know whether to buy first or sell first.

If they sell first, it may be hard to find another suitable property at an affordable price. If they buy first, it may put them under pressure when selling their current home.

And, high pressure often means a lower price. Just see what's happening at auctions at the moment. Financially pressured and bleeding sellers mean bargains for buyers.

In recent years, buying first has become common. A healthy economic environment has meant that sellers can usually sell for a good price in a short time. Easy-to-get financial products (such as bridging finance) almost encouraged people to buy first.

Although buying first has always been risky, the risk for is now extreme.

Property stock levels have swelled and sales volumes are well down. Almost every real estate market in the country is struggling. It's volatile and unpredictable.

The family home is an emotional asset. This is why many sellers tend to overprice their homes. They often make it worse by rejecting early offers, without realising that these offers may be better offers than they'll ever see again.

When an agent offers an appraisal of a home, the price the agent quotes is simply that agent's opinion of market value. It's not a fact. Unless the agent intends to buy the home, the appraisal is financially irrelevant.

The only opinion that matters to sellers is the opinion of buyers who are cashed up and ready to sign on the dotted line. Cash is king these days.

The easiest way to impress someone is tell them what they want to hear. This is why a lot of home sellers place their property for sale with the agent who quotes them the highest price.

But, once sellers sign with an agent, their home then has to compete with other homes on the market. Now that stock levels have risen and sales are down, buyers are shopping on price.

The best buyers come early. They chase the fresh stock not wanting to miss out on the right home for them. If the pricing strategy is wrong, they'll reject your home and move on.

If you sell before buying, you are under no pressure if the buyers don't agree with the asking price for your home. However, if you have bought first, you are locked in. You own two properties in a falling market. This can place you in a terrible situation.

As the urgency goes up, the price often comes down.

The buyers don't care that you need a certain price to make the move. They want to buy as cheap as they can. They don't care that your neighbour's house may have sold for a higher price last year. They are only interested in paying today's price, which they know is often cheaper.

What should you do in this market if you are thinking of selling?

Don't buy a property before you sell your current property. It's far too risky.

Sell first. You will then be a cash buyer in a buyers' market instead of a desperate seller in a buyers' market. You will have control in a market where many sellers are losing control - and losing thousands of dollars.

When you sell first, you do so on your terms and in your time. In a market like today's, you're likely to be thousands of dollars in front if you resist the urge to buy before you sell.

So, in summary, here's the success formula for selling in today's market.

Sell first, get the cash and then go and bag yourself a bargain

Author: Peter O'Malley

Source: www.realestatemonitors.com.au

WHAT MAKES A GOOD REAL ESTATE AGENT?

A good agent can make a stressful situation tolerable, even enjoyable.

As a seller and a buyer
Knowing what constitutes a good agent, as both a vendor and purchaser, will assist you in achieving the best outcome for your sale or purchase of real estate in a stress free manner. Make no mistake; the wrong agent can turn a stressful situation into a downright dreadful situation. But a good agent can make a stressful situation tolerable and sometimes even enjoyable.

What constitutes a good agent for a seller may not necessarily mean that they would be a good agent for a buyer and vice versa. For example, if an agent is incapable of achieving a buyer's highest price for a property, the seller's loss becomes the buyer's gain. It is therefore very worthwhile identifying separately, what makes a good agent for a seller and what makes a good agent for a buyer.

From a seller's point of view
A good agent will always tell you what you need to know and not what you want to hear. Often, this will include the absolute truth about your property and its market value. Whether you do or don't like what the agent has to say, they possess the courage and fortitude to level with you about the facts.

In some circumstances such as a falling market, the worst thing an agent can do is hold back from telling you the truth. The longer it takes you to move in a falling market the bigger the price drop you need to make in order to catch up to a falling market price.

If you have lots of agents groveling for your business, it can be easy to overlook that 'matter of fact, plain talking salesperson' as not being a good agent. Don't be fooled by slick talking salespeople because buyers often pull back from them. They think that they are being 'sold' a property rather than choosing to 'buy' it and this puts them off.

Many people mistakenly think that a good salesperson is a good talker. In reality, a good sales person is a good listener and a great negotiator. The very best agents are great communicators as well. Their communication skills are clear and succinct and they are able to empathise with the home owner when selling their most prized asset. They respond to emails and phone messages promptly. They keep the seller informed about what is happening with buyers at all times.

Unsolicited sales calls from people selling products and services you don't need or want are annoying. Direct marketing is hard work for a salesperson. There is abundant rejection and abuse to deal with, along the path to finding that elusive prospect who responds, 'it's funny that you have just called. Yes. I am interested.' A good real estate salesperson looks past all these difficulties and is not afraid to contact any buyer on their data base who may be interested in buying your house.

The best salespeople don't wait for business to walk in the front door. They walk out of the door themselves to look for business. A proactive agent who vigorously prospects and follows up on all prospective buyers is more likely to engage the right buyer for your home than an agent who solely relies upon prospects walking in or phoning up from their advertising.

A good agent is your eyes and ears in the market place when you are selling. You rely upon their experience, intelligence, knowledge and enthusiasm to drive your campaign. Sometimes things can go wrong, such as a buyer withdrawing because of an adverse pest and building inspection report. But the best agents are not rattled by such setbacks. They remain calm in the face of adverse situations. If you feel that your agent is losing control of the campaign, you need to take action quickly.

By the same token, if your campaign has experienced some setbacks which are not the fault of your agent, then continue to support them and work together to foster your best interests. The last thing you want to do as a seller is put panic into the mind of an agent. It will only work to a buyer's advantage.

Finally, the best agents are skilled negotiators and adept at obtaining the best possible price and terms for their clients. As a seller of real estate, it's imperative that you accept that the best possible price and terms may not always be the price and terms that you want. But so long as your agent delivers you the best possible price and terms that the market currently offers, then they have done the job you engaged them to do well.

From a buyer's point of view
Both buyers and sellers desire the same things in an agent - constant feedback, professionalism, integrity, honesty and competence. Where buyers and sellers fundamentally differ, is usually on price. Naturally, a seller wants top dollar for their home, but a genuine buyer will want to purchase the house for the lowest possible price that they can.

The kindest thing an agent can do for a buyer is to point out when the buyer is being unreasonable in what they are proposing to offer the vendor. The owners are not going to take a silly offer seriously, so why would you risk damaging any good relationship you may have with the seller by making one? Good agents will let buyers know if the seller is likely to be insulted by a low offer and take a personal mindset against them. However, if you are the only buyer putting in an offer on the property, the seller would be sensible to negotiate with you if they want to sell now.

But, if you are insulting the owner with low offers in a competitive situation, the owners may look upon other fair minded buyers more favourably. This could then impact negatively upon you if and when you raise your offer to more realistic levels later, should you really want to buy the house.

The best agents won't let you know details relating to how many other buyers there are and what their offers have been. They will negotiate with each respective buyer on their merits, without disclosing the owner's hand in the negotiation process. This can make it difficult to find out if you are the only buyer for the property.

If you are negotiating the purchase of a good piece of real estate with a long term plan in mind, it will reward you both financially and emotionally if you are successful in buying it. To risk losing the right home in order to try and save $10,000 or even $20,000 through negotiation is just silly. In fact, if the price you are being asked to pay is the fair market price and you can afford it, you should pay that price. A good agent will tell you this, but if you still continue to negotiate the seller down in price then you may miss out on the home.

A good agent should always have a pretty good idea about what the fair market price for a property is. If you are negotiating a sale with someone who is asking an above market price for their property, a good agent will help you negotiate a fair compromise for both parties. An inexperienced or incompetent agent will give up and simply walk away from the negotiation. This then leaves the buyer needlessly looking for another suitable home, whilst the seller is possibly damaging the price of their through over exposure to the market. A good agent will always have the best interests of both the buyer and seller in mind when negotiating the sale of a property, with the focus being on achieving a fair transaction.

Author: Peter O'Malley

Source: www.realestatemonitors.com.au

AUCTION BUNNY

Reading the play when buying at auction.
 
Auction bunnies are home-buyers duped into bidding at auctions when they have no chance of being a successful buyer. The auction bunny reaches their maximum price at the auction before the price even hits the seller's reserve.

Not only do these poor bunnies often get their hearts broken, they also lose thousands of dollars in 'due diligence' expenses - such as building reports, pest reports, strata reports and legal expenses.

Here's what happens: An auction bunny asks the auction agent, "How much will this property sell for?" The agent gives the standard bunny-trap reply - they quote a price around 10 to 15% below the seller's reserve price. For example, if the sellers want a million dollars, the auction agent will say, "We're expecting bidding to start from around $850,000."

If the auction bunny pushes the agent, saying something like, "Are you sure? Do you really think it will sell for such a low price?" the agent will say something like, "The sellers are keen and will meet the market on the day. The market sets the price."

It beggars belief that business is done this way. It's heartbreaking to witness someone go through the bunny process. It's downright infuriating. But, welcome to the auction system as practiced by thousands of agents.

Protection Points
As a genuine buyer, you must do your best to protect yourself against the bunny tactic rather than having to complain about it later. When it comes to misleading prices quoted by agents, believe nothing and check everything. The agents are right on one point - the market will ultimately set the price. If you are lured to an auction by what seems like a low price quote, be assured, you won't be the only buyer looking for a bargain.

You and the other hopeful bidders have been hooked by 'bait pricing'.
The more you inspect, research and follow the sales results in your chosen area, the more knowledge you acquire. And knowledge really is power. If your opinion of value is higher than the agent's quote, you have probably stumbled on a bait price. At least you know before you waste thousands of dollars on reports, checks and searches.

Ask other agents for their thoughts. These agents will have a fair idea of true value. Many times, other agents will tell you the truth about their competitor's properties - they've got nothing to lose or gain. Be careful, though, some agents will run down any property that is not with their office, however this is an easy tactic to detect and you'll rarely be fooled by it.

Attend other auctions. Ensure you understand the bluff and bullying tactics commonly used at auctions. Don't be frightened. Decide what the property is worth (to you) and stay calm at the auction, or find a friend or relative who can bid on your behalf.

You can also make an offer before the auction. By law, all agents must pass on all offers to all owners.

Follow these simple yet powerful points and you'll rarely be an auction bunny. Good luck!

Author: Peter O'Malley

Source: www.realestatemonitors.com.au

AN HONEST PRICE ESTIMATE

Quite often when home sellers ask an agent to give them a price estimate on their home, the expectations they have are usually higher than the price the agent is thinking. Some real estate agents, unlike valuers who are objective, may be tempted to raise their estimate price in order to get the listing.

So how does, or better still, how should a real estate agent determine the estimated sale price of your home? Real Estate agents should be familiar with recent sales of homes in your area that are similar to yours. This is the best guide an agent can use to determine what a home is worth, by looking at what buyers are paying for similar properties. The agent will generally give you a range, which by law should be within ten percent (10%), for example $500-550,000.  This is not a valuation, simply an estimate, so how accurate is it and can you trust it?

Despite the introduction of new legislation there are still some agents that over-quote the price of homes and then, when marketing the home, they are misleading buyers with bait pricing. To comply with the Fair Trading Act 1999(FTA) one must not engage in conduct which may be misleading or deceptive. Yet its common to see agents advertising properties for far less than the vendor is willing to accept. For example, you may see a home advertised for $450,000plus, then passed in at auction for $475,000 with a reserve price of $500,000. So shouldn't this be advertised as $500,000plus since that is the vendors minimum? 

So how do you know whether an agent is telling you the truth or just telling you the price you want to hear? Some agents will go along with whatever you think your home is worth in order to get your business. Once you have signed up and committed to an advertising budget they will then start to give you market feedback which will inevitably condition you down on your price.

One way to prevent this from happening is to ask the agent to support their price estimate with recent comparable sales. Look at these examples closely and objectively and make sure you really are comparing similar properties. To be able to identify which agent is being honest with you it would be a good idea to be prepared by doing a little research of your own so that you are better informed and less likely to be fooled.

For most homes there are many comparable properties an agent can use, however occasionally there are some very unusual and unique properties in our area which can be a little more difficult to put a price estimate on, but a good agent should nevertheless be able to price any home.

Most importantly the market price of a home will not be determined by what price the agent gives you or by what you want. It will be determined by the ones who will be paying for it, the buyers. So the market will determine the selling price of a property provided you have selected the agent who has the negotiation skills to get the best price from the buyers.

Source: Pittard.com.au

Author: Paul Kounnas

DON'T PAY ANYTHING

It's probably real estate's biggest con. And it's affecting thousands of property sellers every month.

It's the advertising stitch-up and here's how it works.

You decide to sell your property and you call the agent. The agent tells you that you've got a fine home and it's likely to fetch a top price. All very plausible.

But then the agent starts to talk about the M word - "marketing". In effect, the agent is not talking about 'marketing', he's talking about 'advertising'. And you are about to be conned into coughing up several thousand dollars, most, if not all of which, will be totally wasted.

Now, let's get one thing straight. The pitch you are about to be given will be very polished. It will be full of powerful sales 'closing lines' all designed to get you to hand over fistfuls of money.

The agent will talk about a marketing 'campaign' and how important it is that your property be 'exposed' to a wide audience. The theory will go like this: the more you spend on advertising your home, the bigger the price you are likely to get for it. There's only one thing wrong with this theory - it's bunkum.

Consider this: A real estate agent has been in business for many years; that agent has got dozens of homes for sale; each month hundreds of buyers make enquiries to that agency. And yet, every time a seller talks about selling, the real estate agency wants hundreds, often thousands, of dollars to go and find buyers. Real estate agents are supposed to already have lists of buyers. Real estate agents are supposed to be in contact with many buyers who are looking for homes.

It's well known, behind-the-scenes in real estate, that the main purpose of advertising is not to promote the sellers' homes, it's to promote the real estate agents' offices - all at the expense of the sellers.

Today, with the aid of the Internet, advertising costs should have fallen. But no, thousands of agents still want to spend thousands of dollars (of your money) in newspapers. It makes no sense.

Why spend several thousand dollars on a newspaper advertisement which lasts for just one day when, for a few hundred dollars you can advertise on the Internet for months? What's amazing is not that agents are still collectively spending millions of dollars in newspapers, but that they are still conning the property sellers into paying for it. Wake up, sellers!

If you've got a property that's worth, say, around $2 million, the agent is going to be getting around $50,000 in commission when it sells. That's more than enough. Don't add to that cost by agreeing to fork out twenty or thirty thousand dollars in wasted advertising money. Here's a three word message for sellers - Don't Pay Anything! At least not until your property is sold and you are satisfied. And don't pay money for advertising.

Think about this: If advertising money really does find the buyer for your property, why do you also need the agent? And, worse, why should you also pay the agent another $50,000 in commission? If the advertising finds the buyer, then do your own advertising and get rid of the agent. The money spent on advertising is almost all completely wasted. And the agents know it. Again, behind-the-scenes, most of them are having a big laugh at the expense of the sellers.

So, sellers, when you are interviewing agents about the sale of your home tell them that you are not going to pay anything for advertising money. The agent can deduct any advertising costs from the massive commission payment they are going to receive when your property sells.

There are two main ways that buyers look for homes these days: first, the Internet and, second, the For Sale sign. Newspapers are old hat. Their cost cannot be justified when compared with the great value of the Internet. So if the agents want to advertise in the newspapers, let them spend their own money, not yours. Guess what'll happen if you ask the agents to spend their own money? It won't get spent. But your home will still be sold. And for just as good a price.

Trust me, advertising does not have to cost you thousands. You do not have to pay for advertising in advance of your sale. The amount of the commission should include the cost of the advertising.
So, remember, until your home is sold and you're satisfied with the price: DON'T PAY ANYTHING!

Opinion by Neil Jenman.

UNDERSTANDING YOUR CREDIT HISTORY

New research from Veda has revealed that 80% of Australians have never checked their credit history, while 93% of Australians don't know how to do so, according to RateCity.

When signing up for a home loan, or other financial commitment, a credit history can often be the make or break factor and new changes mean that it's now crucial for you to keep this record clean.

Alex Parsons, RateCity's CEO, said that the updated credit reporting scheme has access to the date credit accounts have been opened and closed, the current limit on each account and the repayment history. It also allows consumers to take steps to remove flaws.

“In the past, a late payment on a phone bill or loan could put a 'black mark' on a consumer's record for years to come,” said Parsons.

“But with the new 'positive' changes to credit reporting, consumers will have a chance to redeem themselves and effectively add 'green ticks' to their file as they do so."

New changes to credit reporting, coming into effect on March 12 this year, will have additional data backdated to December 2012.

“That means staying on top of all your bills and paying on time, which is the only way to ensure a problem-free credit history,” he said.

If you have a black mark on your credit from the past, and you're now working to rectify this, you stand to benefit most from the new reporting, he noted.

“That's because banks will have more insight into their credit file. But this consumer will need to be diligent in making an effort to improve, because the banks will be watching.”

Those with good credit and who pay the bills on time, there shouldn't be an impact, and they may even see rates offered by the bank.

If you haven't got a black mark but you haven't always paid bills on time, you'll want to be aware that these issues do not show up in the future as late payments each month will now show up on file.

Credit tips:

-    Set up automatic direct debits from your transaction accounts to pay bills on or before the due date

-    Use electronic banking to your advantage

-    Reduce any unnecessarily large credit limits you may have

-    Get organised! Set reminders - It doesn't matter whether you use an app on your phone or the traditional post-it on the calendar, whichever system works best for you will help keep you on top of your bills. It may even help to set the reminder a few days before, so, if you do forget, you still have time to make the payment.

Source: RateCity

By Jennifer Duke 
Wednesday, 08 January 2014

6 STEPS TO FINDING GOOD TENANTS

Every landlord wants 'perfect' tenants. But how do you go about finding long-term renters who will treat your property with respect?

Selecting a good tenant is the first step in a comprehensive risk management strategy for property investors.  Following are some simple tips for how to find the right tenant:

Ensure the property is 'presented' in good condition, inside and out.

You need to sell your property to potential tenants. This includes paying attention to the appearance of the home and making sure it's clean, tidy and low maintenance. The easier it is for the tenant to maintain, the better condition they're likely to keep it in.

Choose a realistic asking rent

Keep an eye on other properties in your area and the level of rent that is being asked.  This is so much easier to do now with access to property sites on the Internet. If you set your rent too high you may deter quality tenants and reduce the number of applicants to choose from.

Take  advice from your property manager

Property managers know the local market and conduct expensive CMA reports to analyse the achievable rent.

Be tough on reference checking

Property managers have exclusive access to tenant default databases that list tenants who have absconded without paying rent or have damaged property. This service is a vital part of the reference checking process.

Stay patient

The first application is not always the right tenant. While most landlords want tenants in their property as soon as possible, it may be worth waiting a bit longer to find the right tenant.

Get insured

There are no guarantees that a well-screened tenant will turn out to be a perfect tenant, so landlord protection insurance is a must.

IT IS SIMPLY NOT TRUE!

Some people say that there are no buyers around during the Christmas holidays. This is simply not true.

There are many buyers that will happily purchase the right property over the Christmas, New Year period, if the agent opens his or her office and has plenty of properties to sell at fair market prices. These two conditions attract buyers all year round.

After fifteen years of trading during holidays, these are my observations:

  • Investors have a good look around during their holidays. Open the agency and you will attract them. There are plenty of investors entering the market right now.
  • Often sellers that come onto the market towards the end of the year - when most sellers are saying “We'll wait until after Christmas”, sell for great prices
  • The most wonderful thing about Christmas is the time we have with our family and friends. This also presents an opportunity for planning, thinking and setting goals. January is often the month where motivated buyers hit the streets looking to achieve their newly-set goals.

There are always buyers, no matter what others may tell you.

If you are thinking of selling, we have dozens of motivated buyers, and we are motivated to stay open and serve them! Give us a call - we are open 7 days, holiday or no holiday.

Written by John Vumbaca

THE ASKING PRICE DELUSION

How some property sellers lose thousands.

When it comes to the value of our properties most of us tend to be over-optimistic. Our place is better than similar properties. It's got better features, it's better constructed and, of course, it's in a better location.

And then, when it comes time to sell, the price we want for our own properties is almost always more than it should be. Nothing wrong with this, you might think. We're all entitled to get the best price possible when we sell.

The only trouble is, however, that by placing too high a price on their properties, many property sellers are unwittingly costing themselves thousands of dollars.

Here's what happens in thousands of cases. A property is placed on the market with an asking price well above its true value. Consequently the buyers that should see it never get to see it.

For example, let's say the true value of a property is $750,000. Most owners seem to have an initial tendency to over-price their properties by at least ten per cent. That means that a $750,000 property could be placed on the market for well over $800,000, perhaps as much as $850,000.

So, obviously, the buyers who are looking in the $750,000 range just ignore the property when it's priced above $800,000.

But what about the buyers who are looking in the $800,000 and above range, surely they'll see the property?

Yes, of course, they will. But this is the point that many sellers overlook, especially these days - they don't realise that most buyers aren't stupid. Buyers shop around, they spend hours scouring the Internet; they soon get to know the true property values. Buyers know an over-priced property when they see it. Consequently, buyers who are looking in the $800,000 range just laugh at over-priced properties. And guess what this means? No one buys the over-priced properties.

A few weeks later, when the sellers realise they have priced their properties too highly, they usually start to see sense and reduce their asking prices. But, by then, it's often too late. The damage has been done. The property has been on the market for too long, it has become stale and people, generally, are starting to wonder what's wrong with it. Now, instead of reducing the asking price to its former true value of, say, $750,000, the sellers may have to reduce the price even lower to attract a serious buyer. Consequently, a home that should have sold for around $750,000 may often sell for closer to $700,000 - and all because the owners priced it too high to begin with.

When it comes to the value of our own homes, most of us live in some sort of fantasy land. Indeed, a recent study (conducted in the United States) revealed that, when most owners think of the value of the their own homes, they are "bordering on delusional".

And it's this delusion factor that can do so much financial damage when we sell our homes. There's no denying the fact that the longer a home remains on the market for sale, the lower the price it's likely to attract. And when homes are placed on the market at over-priced asking rates, they have a tendency to sit on the market for weeks on end. First, the buyers ignore them and then, second, the buyers laugh at them.

It's a fact, over-priced properties often become under-priced sales.

So, if you're selling your property in today's market don't fall for the asking price delusion. Price it right and get the best price for it.

How do you know the right price to ask? Well, first of all, you should consider getting a registered valuation. It could be a few hundred dollars well spent.

And, second, when you are speaking to agents, tell them to tell you the truth. Say to the agent, "What's the minimum price you reckon my home will fetch? Is there a price below which you will agree not to be paid a commission?" This will let the agent know that you are a serious seller who is not interested in being fed a delusional price to try and win your business.

There will never be more buyers for your property than when you first place your property for sale. And that's the time to be sure you are asking a fair price for it, not a delusional high price that will cause your property to be rejected, to perhaps becoming the laughing stock of the area.

If you're serious about selling, one of the best favours you can do for yourself - to make sure you get the very best price possible - is to price your property fairly and correctly. If you get too greedy or you let your emotional attachment to your home cause you to place too high a price on it, then you are going to fall for the delusion trap.

And you can be sure of one thing - inflated asking prices almost always lead to deflated selling prices.

Price your property at the right price. And sell it for the best price.

Opinion by Neil Jenman.

ARE YOU MAXIMISING YOUR TAX DEPRECIATION DEDUCTIONS?

Pay less tax by make your investment property more tax effective!

Are you maximising your tax depreciation deductions? Many landlords are missing out on literally thousands of dollars in lost tax depreciation deductions. 

What you should know:

  • Your investment property does not have to be new.  Most properties, both new and old, will attract some depreciation deductions.  A common myth is that older properties will attract no claim.  ANY property is worth making an enquiry.
  • If you have been unaware of this tax deduction you can adjust previous years' tax returns. When a property owner has not been claiming or maximising tax depreciation deductions, usually the previous four financial years' tax returns can be amended easily.  
  • You need a specialist to maximise your claim.  Quantity Surveyors are recognised by the Australian Tax Office under TR 97/25 as appropriately qualified to estimate construction costs of a building for depreciation purposes.  

Take the time to contact your Accountant to ensure that you are receiving the additional tax deductions to the maximum capabilities. You may also need to ensure that your Accountant is utilising the deductions from a Property Depreciation Report.

Owning an investment property requires landlords to ensure that the property is safe for the tenant to reside in as well as focus on preventative maintenance. Each year landlords should be undertaking the following checks on the property:

  1. Building inspection
  2. Pest inspection
  3. Smoke alarm inspection (where applicable)
  4. Safety switch inspection
  5. Pool inspection (where applicable)

Are you up-to-date with your annual inspections?

If you require assistance or further information regarding the inspections, please feel welcome to contact our property management team.

DON'T BE AFRAID TO ASK FOR A LOWER RATE

With interest rates at a low and the property market at a low, but showing signs of turning, investing in property is a smart choice right now.

Like the turning of a property market, interest rates won't stay at this level for long.  If you can afford to pay a little extra off your mortgage this could create a buffer for when the rates rise to their traditional level of about 7.8 per cent.

Alternatively, it may be the time to negotiate a lower mortgage rate.  If you are on a standard variable rate then you have the ability to compare rates and save hundreds of thousands of dollars over the lifetime of the loan or thousands per year. The finance market is competitively seeking new business and will drop rates to gain it.

But don't forget to do your homework, read the fine print and ensure that you are getting a comparable rate inclusive of fees

Real Estate Uncovered by Peter O'Malley
BOOK REVIEW - REAL ESTATE UNCOVERED

Australia's real estate world is a multi-billion dollar industry. Every week, tens of millions of dollars' worth of property changes hands. The people who control this industry are the nation's real estate agents.

In this ground breaking new book, real estate agent Peter O'Malley breaks ranks with industry spin and uncovers exactly what goes on beneath the slick promises, the fancy advertising and the craftily worded press-releases that are made to entice sellers and buyers into the arms of real estate agents.

In a candid and forthright manner, Peter lays bare the tricks and traps that await consumers in the real estate world. But he doesn't just reveal the dodgy methods, he also reveals how consumers can protect themselves and how they can turn-the-tables on the agents.

This book is essential reading for anyone who's thinking of going within a hundred metres of a real estate agency.

To purchase your copy of Real Estate Uncovered contact Andrew Pennisi on 03 9379 5616 or email reception@pennisi.com.au

BOOK REVIEW - HELP FOR HOME SELLERS

184 hints to get you more money and give you less stress

Neil Jenman

This is a terrific little pocket book. There is a tip per page. And each tip has been crafted like a Twitter message - just a few words. Very simple; very clear.

More importantly, it may save you a lot of money when you're selling what is probably your biggest financial asset - your family home. It can also save you a bit of stress. And, if you handle it wisely, it might also make the selling process a bit of fun. Over the years I've seen people throw away thousands of dollars when selling their homes because they don't realise what they are doing. The reason is simple: they have no experience in selling houses.

Take it from me, this little gem gives very simple and practical tips on how to maximise the value of your home when selling.

To help you to get the best price for your home - and save money - we are offering free copies - phone our office 9379 5616. - Andrew Pennisi

CREATING WIN/WIN SITUATIONS IN TENANCY DISPUTES

When owning, renting and managing investment properties you are dealing with people's emotions, finances, housing security and general life situations. Owners require peace of mind that the property is being cared for and that the rent is being paid on time and tenants require a home to reside.

 

In these tough economic times we are finding that pressures and emotions are increasing for everyone. Tenants who have previously been great rental payers are finding themselves in financial hardship due to employment losses or increased expenses, and owners are feeling the financial pressures, which impact on the day-to-day management of the property.

 

As a result of managing tenant and landlord relationships, there is always going to be the possibility of disputes arising and tricky situations to manage.

 

In property management we are constantly working towards a balanced relationship to ensure that the tenant and landlord are happy and that their needs are being met.

Types of Disputes

 

-         Complaints over excessive noise or dogs barking

-         Lawns and gardens not being maintained

-         Final bond payouts

-         Property not being maintained

-         Failure to provide quiet enjoyment

-         Cleaning required

-         Unauthorised pets

-         Non-approved occupants

 

If a dispute arises it is important to look at the facts; refer to what legislation states; put yourself in both people's shoes and try to reach a win/win situation.

 

Our first step is to work with the landlord and the tenant to come to an amicable resolution. Fingers crossed the dispute will be resolved quickly, saving time and money.

 

If all parties are unable to come to a resolution the matter will need to be referred to VCAT for the referee to determine the outcome. In this event there is no guarantee as to who will win.

 

The orders are determined on the evidence presented and can come down to a personal perspective of the Referee.

 

It is therefore best for all parties to try and come to a resolution to create a win/win situation.

 

Home Safety Tip

 

Do you have a fire extinguisher?

By Peter Lees

 

There has been much talk about ensuring that your property is adequately fitted with smoke alarms (and is law in many states) but what would you do if a fi re did occur?

 

Investing in a fire extinguisher can help protect your property in the event of a fire.

 

Following are some tips to help with the placement of the extinguisher:

  1. Do not place the extinguisher in the kitchen area, as a stove fi re (one of the most common sources of house fire) can prevent you from accessing it.
  2. Secure the extinguisher to a medium height on a wall to ensure that the elderly or children can reach it.
  3. Position the extinguisher near an exit door. This will give you the option to decide which is best - fight the fire or flee the property.
  4. Ensure that the extinguisher is regularly checked to ensure that it is in a working order.

Discuss with your family what you would do or what they should do in the event of a fire.

 

Don't leave it until it's too late!

12 PITFALLS OF LANDLORD INSURANCE

The 12 most common landlord insurance pitfalls

Common pitfalls could leave landlords hundreds of thousands of dollars out of pocket thanks to sub-standard insurance, according to the new e-book 12 Most Common Pitfalls When Insuring Your Rental Property.
 
The book was written by Brett Clarke, who has more than 20 years experience in landlord insurance.
 
“The simple fact that not all insurance is the same makes it extremely difficult to weigh up the benefits of one policy versus another, and so often the glossiest brochure or cheapest price wins out,” says Brett, EBM's National Marketing & Development Manager.
 
“I wanted to set down some of the key mistakes landlords make all too often when buying - or failing to buy insurance. Of course, I favour EBM, but this book can help landlords sort effective from inadequate insurance whether they end up choosing RentCover or another policy.”
 
To receive a free copy of the full e-book, contact the Pennisi Team today.


In brief, the 12 pitfalls are:
1.Buying on price alone - look for “value” not “cheap”.
2.Deliberate fire by tenants - some policies exclude this.
3.Excess - how much, and can the bond be used as payment?
4.Underinsurance - insuring for less than true replacement value.
5.Malicious damage by the tenant - is it covered?
6.Accidental damage - some insurers limit cover to the contents not the building.
7.Check the qualifying (or disqualifying rules) - beware the fine print.
8.Check for complete cover - some combined house and landlord policies offer less cover than specialist landlord policies.
9.Court orders - do you need a court order to claim for rent default?
10.The Body Corporate already insures my property - not for liability if someone hurts themselves inside.
11.Periodic tenancies or lease continuation - some won't pay out for claims if the written lease has expired.
12.When you figure out “you don't need insurance” - a reliable tenant and a good property manager is not enough to protect you.

AN OPEN LETTER TO OUR DISTRICT

My name is Sam Pennisi. I hope you don't mind, but I've got some things to share with you.

It's hard to believe, but it's true. Forty years have passed since I opened Pennisi Real Estate in Essendon. It was 1973, the year that both Cathy Freeman and Kieren Perkins were born. Gough Whitlam was Prime Minister. Rupert Hamer was our Premier. The Commonwealth Government had just lowered the voting age from 21 to 18; despite that hundreds of 18 to 21 year-old diggers had died in Vietnam. 1973 was also the year that we got out of that heart-breaking conflict. Back then Australia's population was a mere 13.3 million. Today we have grown by around 70 per cent to more than 22 million.

How things have changed since the day that I (nervously, I admit) opened my little real estate office. Back then it was just me and a secretary. That's all I could afford. Until that is, something began to happen. The local community began to support me. My business started to pick up. I had a simple philosophy - I believed in working hard and I believed in taking really good care of customers. I also wanted to be innovative. I was always looking for new and improved ways of serving clients. There was someone I most wanted to help - you, the residents of my area.

As the years rolled on business kept improving. I was lucky. Or, perhaps, as the saying goes: 'the harder I worked, the luckier I got'. I quickly learned the importance of two words to say to my customers. They are two words that I'd like to say now - to all the people of this district (including the more than 30,000 families who have graced us with their business over the past 40 years). Those two words are important and they need to be said. THANK YOU!

Thank you for sticking by us for so many years. Thank you for being with us in boom times and gloom times. Thank you for being there after disaster struck at 5am one Saturday morning in 1990. There was a terrible fire. Our office burned to the ground. But, thanks to the support of our staff and the community, we were re-located and back in business in 48 hours. People cared, they really cared. Thank you.

It has been almost 20 years now since my son, Andrew Pennisi, and I made one of the biggest and, as it turns out, one of the most popular decisions in the history of Pennisi Real Estate. We decided to embrace the 'ethics in real estate' philosophy of consumer advocate, Neil Jenman.

All my life, my business practices have been built on the principle of integrity. I believe that 'your word is your bond'. The Jenman 'Approved' business systems are perfect for Pennisi Real Estate and our clients. We conduct our business on what's best for our clients. The interests of our clients come before our own interests. You, our customers, have loved this approach. The bunches of flowers, the bottles of wine and the boxes of chocolates that arrive regularly in our office from our happy clients are testament that we are on the right track.

Yes, we are proud to have been serving our community for 40 years. But, as my son Andrew rightly told me the other night, 'We wouldn't be here if it wasn't for you, our customers.' Thank you.

Andrew Pennisi was only three when I opened Pennisi Real Estate. Today he has taken over the reins. I am proud to say that he's taking great care of our customers. He's an innovator who's leading the way in the real estate world. With his effort and your support, I think Pennisi Real Estate will be around for another 40 years - at least.

Thank you again. Thanks for your years of support. And thank you to the dozens of people who work so hard at Pennisi Real Estate. Without you we couldn't make any customers smile!

My best wishes to you all,

Sam Pennisi

P.S. Back in 1973, the Bombers finished fourth on the VFL ladder.



An Open Letter To Our District
HIGHER RENT NOT ALWAYS HIGHER INCOME

Most experienced investors understand that $500 a week for fifty two weeks a year means more money in their pocket than $550 a week with several weeks vacancy during the year. So if maximising income from rental property investment comes from keeping their properties occupied, why do some landlords charge such high rents that their tenants move on whenever they get the chance and new tenants are slow to move in?

It is a fact of life that some investors fail to see the big picture and only look at the money in their pocket 'right now'. They are blind to the possibility of rent loss down the track and don't see that they might create dissatisfied tenants who move on when they find a better value option, thereby creating a cycle of high turnover and increased vacancy.

The problems don't stop there. Investors whose properties are 'good value' get more enquiry and can afford to be more selective when deciding who will rent their property, while those asking over priced rents get fewer and less well-referenced applicants. Furthermore, if a property stays empty because the rent is too high, owners can get desperate enough to overlook a tenant's patchy references; in the effort to get the highest income, they make themselves more likely to get less because poor references could mean greater likelihood of getting behind with the rent.

New investors can avoid a lot of common errors by making use of the expertise of their managing agent. Many novice investors don't think of asking their managing agent's advice until something goes wrong. Investors who do their homework and tell their agent up front what their needs are find it much easier to keep abreast of what's happening and avoid confusion.

Most experienced investors ask their agent to provide a monthly statement of all income and expenses with cheques banked directly into the owner's account. Most also ask for an annual written report of state of repair (internal and external) and cleanliness as well as a mid-year written kerbside report of state of repair and cleanliness. They should also receive a six-monthly written report of the current rental value and the local area vacancy rate and an annual written report of the current reasonable selling price of the property.

Owners should carry out an internal inspection of the property themselves once every two years so that they can visualise its state of wear and tear when maintenance and repairs are discussed. Most investors say it takes three to six months to get to know a managing agent and their way of working. Until then it is best to require all expense items to be referred to the owner (other than emergencies) prior to the agent spending any money.

After the initial period, set a limit on the amount the agent can spend (usually about the equivalent of one week's rent) without reference to the owner. Naturally, as with any contractual arrangement, investors should always have their agreement with their agent evidenced in writing.

HOUSING AFFORDABILITY ON THE RISE

Housing affordability has improved to its highest level in three years, the latest HIA-CBA Housing Affordability Index reveals.

The index increased 5.3% to 65.8% over the September quarter - the seventh consecutive quarter that affordability has improved.

Affordability was said to improve as a result of a falling median housing price and a 0.4% drop in the mortgage rate, to 6%, during the quarter. Hobart (78.3), the ACT (71.3) and Adelaide (71.1), were ranked as the most affordable housing markets in Australia. Sydney improved its affordability rating to 54.2% but still remains the least affordable market in the country, followed by Melbourne (63.6), Perth (64.1) and Brisbane (68.5).

Our National Top 10 Cheapies with Prospects Report: City Edition recognises that affordability is the market's biggest issue, placing increasing focus on the cheaper areas of our major cities.
SHARES OR PROPERTY - WHAT'S THE BETTER PERFORMER?

Ahh, that old chestnut... It's a question that is often asked. What performs better? Shares or property?

On a capital appreciation measure over the past decade, the past half-decade, and over the past three years, residential property has well and truly outperformed shares. Over the most recent twelve month period shares have outperformed the housing market.

It's important to note that the share market has shown periods where capital gains have been substantially higher than what has been achieved in the housing market. As can be seen in the 'rolling annual change' graph below, the annual growth rate in the ASX 200 has been has high as 39% over a twelve month period (the year ending February 2010); share prices have also fallen by more than 40% in the space of a year, which is what happened during the GFC (the ASX 200 fell by 42.7% over the year ending November 2008).

Capital city dwelling values haven't shown anywhere near the same level of volatility. The largest rise over any twelve month period, based on the RP Data-Rismark eight city aggregate index, was 21.0% over the year to May 2002, and the biggest fall was recorded just recently when dwelling values fell -5.3% over the year to May 2012.

While the volatility of the share markets may appeal to some, it is the stability and resilience of residential housing that is likely to be one of the key reasons why investing in the housing market is a popular choice for mum & dad investors.

How Sellers Can Save THOUSANDS of Dollars

Opinion by Neil Jenman.

It's probably real estate's biggest con and it's affecting thousands of property sellers every month. It's the advertising stitch-up and here's how it works.

You decide to sell your property and you call the agent. The agent tells you that you've got a fine home and it's likely to fetch a top price. All very plausible. But then the agent starts to talk about the M word - “marketing”. In effect, the agent is not talking about 'marketing', he's talking about 'advertising' and you are about to be conned into coughing up several thousand dollars, most, if not all of which, will be totally wasted.

Now, let's get one thing straight. The pitch you are about to be given will be very polished. It will be full of powerful sales 'closing lines' all designed to get you to hand over fistfuls of money. The agent will talk about a marketing 'campaign' and how important it is that your property be 'exposed' to a wide audience.

The theory will go like this:

"the more you spend on advertising your home, the bigger the price you are likely to get for it."

There's only one thing wrong with this theory - it's bunkum.

Consider this: A real estate agent has been in business for many years with dozens of homes for sale and each month hundreds of buyers make enquiries to that agency. And yet, every time a seller talks about selling, the real estate agency wants hundreds, often thousands, of dollars to go and find buyers. Real estate agents are supposed to already have lists of buyers. Real estate agents are supposed to be in contact with many buyers who are looking for homes.

It's well known, behind-the-scenes in real estate, that the main purpose of advertising is not to promote the sellers' homes, it's to promote the real estate agents' offices - all at the expense of the sellers.

Today, with the aid of the Internet, advertising costs should have fallen. But no, thousands of agents still want to spend thousands of dollars (of your money) in newspapers. It makes no sense. Why spend several thousand dollars on a newspaper advertisement which lasts for just one day when, for a few hundred dollars you can advertise on the Internet for months?

What's amazing is not that agents are still collectively spending millions of dollars in newspapers, but that they are still conning the property sellers into paying for it. Wake up, sellers! If you've got a property that's worth, say, around $2 million, the agent is going to be getting around $50,000 in commission when it sells. That's more than enough. Don't add to that cost by agreeing to fork out twenty or thirty thousand dollars in wasted advertising money.

Here's a three word message for sellers - Don't Pay Anything! At least not until your property is sold and you are satisfied. And don't pay money for advertising. Think about this: If advertising money really does find the buyer for your property, why do you also need the agent? And, worse, why should you also pay the agent another $50,000 in commission?

If the advertising finds the buyer, then do your own advertising and get rid of the agent. The money spent on advertising is almost all completely wasted. And the agents know it. Again, behind-the-scenes, most of them are having a big laugh at the expense of the sellers. So, sellers, when you are interviewing agents about the sale of your home tell them that you are not going to pay anything for advertising money. The agent can deduct any advertising costs from the massive commission payment they are going to receive when your property sells.

There are two main ways that buyers look for homes these days: first, the Internet and, second, the For Sale sign. Newspapers are old hat. Their cost cannot be justified when compared with the great value of the Internet. So if the agents want to advertise in the newspapers, let them spend their own money, not yours. Guess what'll happen if you ask the agents to spend their own money? It won't get spent. But your home will still be sold. And for just as good a price. Trust me, advertising does not have to cost you thousands. You do not have to pay for advertising in advance of your sale. The amount of the commission should include the cost of the advertising.

So, remember, until your home is sold and you're satisfied with the price: DON'T PAY ANYTHING! Footnote: If you need to discuss the costs of an advertising or marketing campaign, feel welcome to call Pennisi Real Estate for assistance at any time on 3979 5616. We'll be more than happy to speak to you.

AUCTION BIDDERS CARRIED AWAY BY BIZARRE ANTICS

MELBOURNE'S auction market slump has vendors, bidders and even agents out of practice - with some bizarre antics at recent auctions.




Article source: www.theage.com.au

Date: September 10th 2012

Business Day article written by Marika Dobbin

MORE MONEY IN YOUR BACK POCKET

There is no questioning that one of the largest expenses that many of us face on a monthly basis is the payment of our mortgage - whether it is your principal place of residence or your investment portfolio.
To take a moment to sit down and actually reflect on how much money we pay to the banks in interest can be overwhelming.
But there are ways that you can reduce your interest payments and put more money in your back pocket.
Have you taken the time to strategise how you can save money on your mortgage payments?
There are a number of ways that you can achieve this, which can result in $1000s in savings each year:
1. Increase the number of mortgage payments within the month. This is one of the easiest ways to reduce your interest payments and fast track you owning the property sooner.
2. Pay a little extra than the minimum requirement. It doesn't have to be a large additional sum. Maybe consider paying $600 instead of $575.
3. Paying your wage into your mortgage. Interest is calculated on a daily basis so any additional payments for any short-term period assist in reducing your interest.
4. Make lump sum payments to your mortgage. As much as going on that spending spree sounds enticing, allocating tax returns, bonuses and extra commissions to your mortgage can also have a positive impact and put more money in your back pocket in the long term.
THE LYING GAME - HOW TO SURVIVE IT!

Anyone who gets involved in the property market - whether as a seller, a buyer, (and even an agent), has probably wondered why so many people tell so many lies.
As one buyer recently (and typically) remarked, "Why do all agents lie to me?". The feeling is often mutual. There's a well-known saying among agents, "All buyers are liars."

As for sellers, well, agents have a variety of common labels they pin on sellers which range from the derisive "greedy", "unrealistic" or "stupid" to the more polite, but no less common, "They are not prepared to meet the market. They're bloody time-wasters."
As for sellers' opinions of agents, many think "all agents are nothing but a pack of liars." These are the sellers who have usually experienced the trauma of having agents quote a high selling price and then, once the sellers sign-up with the agents, things take a sudden and dramatic change. Good news becomes bad news. Positive features of the home are seldom mentioned any more; instead, the negatives are highlighted, all dressed up in what agents call "market feedback".

Yes, agents tell the lies and then use "the market" like a criminal uses an alibi.
So, first of all, let's ask the truth about all these lies.

Do agents lie to buyers?
Yes, every day. How else can agents get buyers interested enough to inspect properties or turn up at auctions? The truth, to buyers, can be a real turn-off. Here's another common saying among agents, "Quote 'em low and watch 'em go; quote 'em high and watch 'em die."

Do buyers lie to agents?
Yes, of course they do, especially when it comes to making offers. The buyers want to buy for the lowest price possible. They often say to agents, "This is my best offer," when they know darned well that they are willing to pay more.

Do agents lie to sellers?

All the time; if agents didn't lie, they wouldn't be able to get properties for sale. Sellers often call three or four agents and fire a question at them, "What's my property worth?" The agent who tells the biggest lie often wins the business. The agent who tells the truth is shown the door.

Agents know - the truth can send them broke. Tell the lie, sign-up the sellers and then start telling the truth. Once the sellers are signed-up, they are effectively locked-up. No matter how badly agents treat them, signed-up sellers can't sack the agents. It's easier to get out of a marriage than to get out of most real estate contracts.
And, finally,

Do sellers lie to agents?
Yes, definitely. If sellers tell the agents the lowest price they're prepared to accept, that's the highest price they'll probably get. Most sellers "load up" the asking price of their homes. And why shouldn't they? They're about to face a full frontal assault from both agents and buyers determined to talk them down in price. Lying is a matter of survival.
So, in summary, what generally happens in the property world is this: Agents are lying to sellers and buyers in order to win their business. Buyers are lying to agents in order to buy at a lower price and sellers are lying to agents and buyers in order to protect the value of their properties.

Everybody's lying to everybody. The property game is a game of lies.

So, how do you survive the lying game?
Well, understandably, the first instinct when everyone else is lying is to lie yourself. It's easy to think that the biggest liar gets the best deal.
But, no, that's not necessarily so. Indeed, the more straight you play the property game, the more chance you have of coming out a winner.

So how do you play a straight game if everyone else is crooked?
What you should realise is that, in most cases, you are not dealing with crooks. Usually, you are dealing with good people who feel there is no option other than to play it crooked; or, at the very least, to bend the truth slightly, to be a little bit, shall we say, shifty.

The buyers who give agents low-ball offers - and pretend it's their "highest price" - are only trying to get the best deal for their families. And if this means telling a white lie, so be it.

The trouble is that these "white lies" often backfire badly on buyers.
For example, a buyer inspects a home with an asking price of $700,000. The buyer loves the home (but tries hard not to display too much interest) and makes an offer of $650,000. Now, the buyer may be quite capable of paying more than $650,000, perhaps even of paying the asking price of $700,000.
But, no, the buyer plays the lying game and says, "I'll give you $650,000 - that's the most I can afford."

A few days go past and, having heard nothing from the agent, the frustrated buyer calls the agent to find out what's going on.
"Oh, that place was sold yesterday," says the agent.
"For how much?" asks the buyer.
"Another buyer offered them $655,000 and they accepted," says the agent, barely able to conceal the smugness.
"But why didn't you call me before you sold it?" shrieks the buyer.
"Because you told me that $650,000 was your maximum," says the agent.
Now, yes, in situations such as this, the agent has been incompetent but it doesn't help the buyer.

The above scenario happens hundreds, perhaps thousands, of times every month in the property world. Bluffing (lying) buyers often lose out on the home they love because they told a lie about their maximum price.

So, what should buyers do? How should they play the lying game?

Answer: they shouldn't. If the buyers are in love with the home, they have to ask themselves the question: What's more important to them - the home or their wallet.

If the answer is "the home", then tell the truth. Give the agent your best price as your first offer. Indeed, give them an offer in writing stating something such as, "This is the highest price I am able to pay and if it is not accepted, there is no need to contact me again." That'll get attention.

Be truthful: Give your best price and then walk away knowing that, no matter what happens, you have told the truth and done your best.

Yes, perhaps, if you tell a lie you might save a few thousand, but do you want to risk it? If you are buying with your heart, then work out the maximum you can afford, tell the truth and then hope for the best. It's better to pay a few extra thousand to win the home you love than to lose the home because you bluffed yourself out of the deal.

And, what about the sellers? How should they play the lying game.

Remember: The agent who quotes you the biggest price is possibly the biggest liar. And you'll never really know if the agent is lying unless you hire the agent. And then, once you hire the agent, you are stuck with the agent.
No, you are not. You just have to know how to play the game.
And here's what you do.

When an agent quotes you a big price for your home and you are tempted to sign-up, ask the agent to put the quote in writing.
And then say to the agent, "Well, you have told me the highest price you think you can get for my home, now please tell me the lowest price you think you can get for my home."

You must insist that the agent answers this [lowest price] question.
And then you say to the agent, "If you ever ask me to sell my property for less than the lowest price you quoted me, you must also be prepared to lower your commission - at least by the amount you will be asking me to lower my selling price. If not, then I am sorry, but I will not hire you as my agent."

Now, you are about to hear the four most important words about selling your property. You must burn these words into your brain. These are the words that decide whether you get a good deal or a bad deal. They are the words that decide whether or not you will beat the lying game or whether you will allow the lying game to beat you.
The four most important words when selling are these - You are the boss!
And don't you ever forget it, not for a moment. It's your property. The agent must do what you say - not the other way around.

Do not be bluffed. If the agent says to you, "But this is our policy," then you reply, "Well, we also have a policy and that policy is that we require the people with whom we do business to be truthful. If you are truthful, you have nothing to worry about."

And, also, be sure that when you first sign-up with an agent, you do NOT sign-up for a long period of time. Repeat: You are the boss. You do not have to give the agent a three or four month contract. You can give the agent a three or four day contract if you like.
Generally, you should sign-up with an agent for no more than six weeks. That's plenty of time.

As for the price, don't make the mistake of being too greedy. Everyone thinks their property is better than other properties. Lots of sellers make the awful mistake of asking too much in the beginning which means they usually get too little in the end.
Do you want to know what your property is really worth? With no lies, no games?
Then don't ask an agent. Ask a valuer.

Yes, before you call an agent, pay a few hundred dollars and make one of the best of all property investments - hire an independent valuer.
Tell the valuer, "I am thinking of selling my property and I want to know the truth about its real value."

Less than one in 50 (probably a hundred!) sellers make this wonderful investment. It's one of the best ways to beat the agents and the buyers in the lying game. Do it.
You have a property worth several hundred thousand dollars, you are probably going to pay an agent several thousand dollars, so, at the very least, spend a few hundred dollars on a valuer.

And, finally, for you agents, how do you win the lying game? Yes, it can be tough for you. You are dealing with sellers and buyers who don't trust you, who will usually think nothing of twisting the truth, of hiding important facts from you. So often, you will be the 'piggy in the middle' getting blamed by both the sellers and the buyers for the sins of the others.
The best thing you can do, agents, is to start spending more time with both sellers and buyers before you do business with them. Sit down and tell the truth, the whole truth and nothing but the truth.

When you go to the sellers' home to give them a price quote, tell them that you are in a dreadful position. Tell them that, by calling in three or four agents and asking for a "quote", they are giving all the agents, yourself included, an incentive to lie.
Agents, why not recommend to sellers that they hire an independent valuer?
Agents, why not offer to lower your commission if you ask the sellers to lower their price below the amount you quote them?

Here's a final tip for all agents, all sellers and all buyers - from someone who has been watching the property industry for almost four decades: By far, the best way to win in the lying game of real estate is to refuse to have anything to do with it. Play it straight. Before you do business take time to understand the situation of other people - and then ask them to do the same for you.

If you are a seller, understand that the agent wants (needs!) your business and that if you ask the agent to give you a quote, you are inviting the agent to lie to you.
If you are a buyer, understand that the agent wants (needs!) you to get hooked on the home and that by hinting that you may get a lower price, the agent is going to get you interested.

If you are an agent, then remember this: If you want sellers and buyers to treat you well, to give you their business, then start showing some genuine care for them. Be the friend they need - and, for sure, you'll make a lot more sales.

Everyone can survive the lying game if everyone takes just a little bit of time to think about why the property game is riddled with lies.

Once you understand the system, you'll know how to play it - straight and safe.

By Neil Jenman.

THE AWFUL TRUTH - REAL ESTATE MAGAZINES

Real Estate magazines that promote one or two homes in each suburb across an entire metropolitan area are the ultimate example of hit and miss advertising.  A buyer that wants to buy in Moonee Ponds is not considering Sunshine as an alternative and vice versa.

Whenever you see mass wastage taking place, it is always good to examine the motive and identify the person who carries the burden of the waste.

Agents will tell you that their in house marketing is all powerful and has massive reach.  Printing 15,000 copies of the magazine each week gives the magazine a potential circulation (mainly via cafes and shops) of 15,000.  Paying hard earned money to advertise in one of these magazines does not give you access to a database of 15,000 buyers as is often claimed.  A database is where the agent has the full contact details of the potential buyer on file.

Trying to advertise your home to Joe Nobody in a cafe whilst he drinks coffee is not marketing your home to a home buyer.  It's all about advertising the agent's brand with the client's money.

The agents have so little conviction in their own magazine that they need the home seller to carry the cost and risk of advertising in the agents magazine.

An agent asking for advertising money to find a buyer is an admission that they don't have a buyer.  If they really had a database of buyers, why do they need $5000 to fund an advertising campaign looking for a buyer?

Who really believes that the breakeven cost of a page in the magazine is $350?

No, it's $350 per page because there is profit built into the magazine for the agent.  Nothing wrong with profit if it adds genuine value to the customer.

But to spend thousands of dollars advertising a Moonee Valley home to a Northcote home buyer adds no value to the home seller forking out good money (after bad) to be in the magazine.  To spend thousands advertising in print when buyers look on the internet defies logic.

Sorry, but in-house property magazines are nothing but a profit centre for the agent.

ATTRACTING THE RIGHT BUYERS

The first purpose of real estate advertising should be to attract all buyers to the office. It does not mean advertising all homes listed by the agency because this will attract the same buyers and increase costs. It is more important that the agent attracts every buyer rather than advertise every home. Then the agent will bring the most suitable buyers to your home.

Sorting Buyers
Once the buyers contact the office, they are sorted by their requirements. This is the qualifying stage.
The agent then matches each buyer with homes which may be suitable. It is simple, it saves time and it delights the buyers to have an agent who listens to them.


It's one of the biggest marketing points in real estate: buyers who want to buy in an area always come into the area before they buy. This statement should be mounted on the wall of every real estate office.

The Buyers' Road
The best agents use a “buyer attracting strategy”, described by one agent this way: “We look at our area as if it is an ancient town. All buyers who want to buy in our town must come down one road. When they get to the town gates, we ask a question - 'Are you coming here to buy a house?' Those who say 'Yes', we speak with. The others we wave on with a smile. Meanwhile, the other agents are running all over the countryside - in other towns and villages looking for buyers.” It's a nice analogy which explains why this agent, from southern Victoria, has quadrupled his agency's sales since he switched to 'smart marketing' three years ago.

Information
Too many agents give too much information too early about homes for sale. Not only does this show a lack of marketing skill, it shows a lack of negotiation skill.
One of the principles of negotiation is that you should never tell too much too soon. If an advertisement is packed with information there is no need for the buyer to contact the agent. And no contact means, no sale. The purpose of any form of marketing is to attract enquiries, not to do the selling.
For Sale signs, which attract the most genuine of all enquiry, are a prime example of how some agents have not idea about smart marketing.


In addition to the words, “For Sale,” some agents write many details on the sign. And here's what happens. Instead of receiving a phone call and having an opportunity to speak with the buyers, the buyers make a decision from the information on the sign. The agent loses the contact.

Too Much Information
The more a genuine buyer talks with your agent, the more chance the agent has of selling your home. But many agents rely too much on sales aids and gimmicks to do the selling for them. Sellers are paying an agent to SELL their homes, not to rely on brochures or floor plans to do the selling.
Here's how you could lose a sale by allowing the brochures to do the selling: If the buyers are wondering about the size of your rooms and they have a floor plan, they don't need to speak to the agent. If the rooms are too small, the floor plan can't talk to them. It can't say, “They might be small rooms but aren't you forgetting the large built in wardrobes?”

Talking Signs and Windows
Some agents have 'talking signs'. The sign displays an FM radio frequency which the buyers, outside the home, tune in to and hear a detailed description of the home.
Other agents have 'talking windows', where the buyers stand outside the real estate office and look at photos in the window and push buttons. A loud-speaker gives them information about the home. If they are interested they can talk into a little microphone and leave their details.
What- ever happened to “Hello, How may I help you?” One of the most pleasant experiences for any customer is to speak with a human.


Be wary of any agent who relies too much on technology for giving out information. Ask agents what they know about marketing and negotiation, not technology.

Simplicity
Real estate marketing is very simple. Don't let any agent convince you otherwise. Marketing means finding the right buyer - without spending more dollars than is necessary. This is Smart Marketing.
Once the buyer is found, that buyer must be qualified. If there is a chance that the buyer may be interested in your home, the agent will arrange an inspection.
With the right agent, you will soon have the best buyer at the best price, without wasting thousands of dollars on unnecessary advertising.


Excerpt from 'Real Estate Mistakes' book written by Neil Jenman