First home buyer FAQs: Buying your first home can be a daunting experience; after all it’s a big commitment and involves a lot of money. To help you on your journey, we answer some of the most common questions asked by first home buyers.
How much money will I need?
At a minimum, you will need a 10% deposit plus enough funds to cover legal fees, a building inspection and stamp duty.
If you buy a property with a deposit of less than 20% of the purchase price, most lenders will require you to take out mortgage insurance as well.
Is it better to save up more or buy now?
If interest rates are low and the market is rising, the growth in property prices will usually outstrip your ability to save.
That means it’s often better to purchase your home as soon as you can afford it. First home buyer FAQs.
Where should I buy?
The best location is different for every homebuyer, depending on their needs.
Start with the locations you would like to live in and where it’s convenient for you to travel to your work and to visit family and friends.
It is no secret the property market has been hot over the past year. Sydney and Melbourne are in “boom” territory and the sunshine state is also giving Brisbane investors a warm feeling.
No wonder then that many investors, upgraders and baby boomers are cashing in on their nest eggs and selling for a profit while the good times roll on. After all, it was one of the world’s most famous investors, Warren Buffett, who said: “Buy in gloom, sell in boom.” Selling now could be a beautiful reward for years of hard work and sacrifice.
However, capital gains tax (CGT) can quickly eat into that attractive figure on the contract and make your cash payout much smaller than you originally thought.
The 10 best ways to minimise your tax when it comes to selling property.
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Located a convenient eight kilometres from Brisbane city, Everton Park may well be worth a look-see for your next family home or investment property.
Brimming with residential homes, Everton Park’s average resident is a youthful 37 years young; which spells growing families. Its transport links are not-too-shabby either, with South Pine Road a major transport corridor that runs through the suburb towards Brisbane city.
Residents can take their pick when it comes to busses and trains. Several bus services are available or a quick drive, walk or cycle to nearby train stations at Enoggera, Gaythorne, Mitchelton or Oxford Park will get you on your way.
We all know life isn’t a ‘retail experience’ but having good facilities nearby helps, with the North-West Homemaker Centre – which includes the only Spotlight and Harvey Norman in the north-west district – and a shopping centre with a major supermarket and specialty stores located at the intersection of South Pine and Stafford Roads.
There’s also our great local, the Everton Park Hotel, which hosts the truly unique markets, The Mummy Tree Markets.
Bordering Everton Park is Mitchelton, home to the Jan Powers Farmers Market and Brookside Shopping Centre, the major retail centre of the area.
And if you want to get on your bike, there are also many local bikeways. Check out Google maps here to view trails, dedicated lanes and bike-friendly roads.
As for future infrastructure, The Qld Department of Transport and Main Roads plans to provide new transit lanes on Stafford Road between Everton Park and Kedron and a new bikeway that would provide a direct east-west route along Stafford Road, between Everton Park and Kedron, with the overall plan to improve east-west capacity.
Unlucky for some, but not Everton Park, the suburb has 13 great parks to choose from, with the star being Teralba Park which hosts (take a breath here): Everton Park Guide Hut, Mitchelton Sports Complex, activity space, barbecues, dog off leash area, fitness station, picnic area, playground and most importantly, a loo.
Its surrounding suburbs – Everton Hills, McDowall, Mitchelton, Gaythorne, Kedron, Stafford and Bunya – boast some pretty fine indoor and outdoor attractions, including State Forrest, aquatic centres and bike ways.
So, yes Everton Park is a place for families to survive and thrive but it is also a suburb that has seen property prices increase.
The average property sells for $508,000, rents for $420 per week and if supply and demand is anything to go by, Queensland averages 50 visits to each listed property with Everton Park averaging 85 visits to each property.
As of July 2014, long-term price growth for the suburb was 4.2 per cent, just behind Brisbane’s 4.8 per cent. But the interesting details lie in the average days on market at 49 days, versus Brisbane’s 69 days, and discounting at 5 per cent, versus Brisbane’s at 5.8 per cent.
So the take away here is that Everton Park is a suburb with much to offer. It has good transport links, many retail choices and it’s a suburb that because of its close proximity to the city of Brisbane offers owners and investors alike much bang for your buck, with city benefits at suburban prices.
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You’ve decided to sell. Even before you put in the hard-yards to get your property to a standard you think might fetch you the price you want, a wise person hones in on a selling agent first.
Appointing the right – or wrong – real estate agent to sell your property can greatly influence the outcome. Or put another way, can result in more money in your pocket. Or not. And, really getting the best price possible is everyone’s goal.
You could choose the first agent you like – and often initial impressions are true – but it makes more sense to choose someone you like AND someone who you know will get you the best outcome.
Cut through the fluff (otherwise known as talk, talk, talk) and put the following five simple questions to work for you when hiring an agent:
This one’s obviously a no-brainer, but it’s the answer you should focus in on with your best possible listening ears. You see, many agents will tell you what they think you want to hear just to get your business. You are looking for an agent that deals in the currency of facts when it comes to setting the listing price for your home; too high and people will dismiss even viewing your property and too low, well … same. Property must be priced to attract those most likely to buy it.
We all know that with experience comes wisdom: or sometimes weariness. Don’t choose the longest serving agency in your local area because of that fact alone. Choose an agency based on how long it takes them to sell homes, not years in business. Choose an agent who has life-experience and is enthusiastic, motivated and has good local-area knowledge.
An indicator of the right agent for you is how many properties similar to yours they’ve sold recently. When backing up what they think your property may sell for, a good agent will provide you with recent, comparable sales data for your area. This is also a good indicator of how well they understand your area, your particular type of property and those most likely to buy it.
A good agent will happily supply you with a list of previous clients. Don’t be afraid to call these people. Many will find it flattering that you seek their opinion. Some good questions to ask are: What did you like about the agent? How long did the property take to sell? Was there anything you thought they could have done better? Did the agent get the sale price you wanted?
What makes you different to other agents?
Asking this question provides you a window into the agent’s selling style. It also allows them to demonstrate what stands them apart from their competition, both as an individual agent and as an agency.
Real estate agents are a critical part of the selling process. You’re choosing someone for a task that requires experience, skill and wisdom, not to mention, entrusting them with the sale of your biggest asset.
In the end, many would be loath to admit that it is the gut that rules the head in decisions great and small. But at least if you engage the head first and ask and listen, your gut decision about which agent to hire will serve in your best interest.
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Over and over again, we see the devastating impacts upon families of our storm and bushfire season. Especially upon those who have little or no insurance.
These are the families, who endure the misfortune of a freak-of-nature event, or in some cases, an intentionally lit bush fire, only to come out the other side with little or no insurance on their property and belongings.
We all know that thought – the odds of it happening to us are small – of not even conceiving that a freak storm could see that tree impaling your house; the neighbour’s pool overflowing from rainfall and ruining your backyard landscaping project; a house fire next door jumping ship to yours … On and on goes the list of unexpected bad things that do happen to good people.
The financial cost of repairing your home and life following one of these events is immense, but given that Insurance Council of Australia statistics show that across the country 3.8 per cent, or about 201,000, of all owner-occupied houses are not insured, the added emotional and mental costs of a loss can be amplified for some.
So, that’s the scary bit. Now to the good news: Insurance. Yeah, that’s the good news! We love to hate it – kind of like banks – but it is entirely necessary to any sound investment strategy: we’re talking to you owner-occupiers as well as landlords.
Whether you are an owner-occupier or landlord, most people view their property/properties as their primary investment vehicle. And it is investment lesson 101, that you insure your assets.
The problem with insurance often comes down to affordability. But that’s not the question you should be asking yourself. What you need to ask yourself is this: If I lose my home or investment property to storm or fire damage, how would I continue to repay that debt, given I no longer have a home or tenants to pay rent?
It’s true. The chances of these types of events happening to us are very small. But the impacts of these events would be – and are – devastating to many families who roll the dice and play the odds to not insure their property.
So dear property owners and landlords, consider the price you would pay if you didn’t insure your greatest asset and you lost it. It makes paying that annual, or better still, monthly premium cost seem so much more achievable.
And if cost is an issue, shop around. Spend a couple of hours of your life getting a better deal and rest-well each night, knowing you would recover if a bad thing happened to your good family.
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Australia’s growing stamp duty tax is taking its toll on Aussie home buyers – leaving them in more debt and eating away at potential retirement funds.
A report by the Housing Industry Association (HIA) has revealed that the average Australian home buyer is forking out upwards of $15,000 in stamp duty alone – and that doesn’t factor in home loan costs, removalists, conveyancing or bank fees.
“In all but two of the eight jurisdictions, stamp duty will set buyers back at least $15,000 on the median-priced home. This form of taxation makes household indebtedness worse by increasing required borrowings,” Shane Garrett, HIA Senior Economist, said.
How much is stamp duty costing buyers?
One of the biggest one-off, upfront costs of buying a property is stamp duty. You are obliged to pay it when buying a home, and new research suggests the costs are remarkably high for some Australians taking out home loans.
Stamp duty costs in Victoria are the greatest of the entire nation — a home buyer in this eastern state will fork out an average $24,100 to meet this tax.
In Western Australia and New South Wales, the average stamp duty bill is $20,000, which is still behind the likes of Victoria but nothing to sneeze at.
“Stamp duty results in total mortgage repayments increasing by $46,400 in Victoria and by $37,100 in NSW. In WA, additional mortgage repayments will total $33,800,” Garrett reported.
Stamp duty burns buyers’ wallets
For Australian home buyers, who in some cases are already struggling to save a 20 percent home loan deposit, the added stress of high stamp duty taxes is impacting their long-term financial circumstances.
“The burden of stamp duty is significant in all states and territories. With the exception of Queensland, the tax adds at least three percent to the cost of the dwelling. In Victoria, the typical stamp duty bill comes to some five percent of the dwelling price,” Garrett said.
“A better alternative for stamp duty would be to have it placed in buyers’ superannuation funds,” he suggested.
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Buying property off-the-plan, if done well, can be the beginning of a profitable journey for investors and owner-occupiers alike. And that means you too, first-home owner.
If executed well, buying off-the-plan can reap substantial rewards. And by ‘executed well’ we mean: consider market timing, do your research, make peace with your nerves and get a really good lawyer to help navigate the complex contract you’re about to cradle.
Increasingly, it’s not just investors who buy off-the-plan, with owner occupiers also seeing the up-side of buying tomorrow’s investment at today’s price.
So, let’s look at some of the factors that influence an off-the-plan purchase:
1. Market timing
There’s no shortage of data showing that people are increasingly moving away from rural areas and concentrating in big cities. With land prices what they are and undeveloped land a scarcity in city areas, the only way is up. Literally. People are increasingly living in medium density housing (shop-talk for apartments). And it’s these types of more dense living options that are often marketed off-the plan, as well as being the residence of choice for inner-city dwellers. Of course, no discussion on market timing would be complete without looking at the how the real estate market is performing too. This will obviously influence your decision greatly.
2. Do your research
The risks associated with off-the-plan purchases going pear-shaped are there. Google it, you’re sure to find some horror stories. But with thorough research you can buy from a trusted developer with a proven track record. In short, reputable developers tend to make fewer mistakes. And where possible, try to inspect properties that the developer has completed so you can gauge the quality of the workmanship.
3. Make peace with your nerves
At the end of the day, the logic of buying an off the plan property is similar to other investments. You need to weigh the pros and cons as they apply to your life and circumstances. You will also need to understand your level of appetite for taking risks and your ability to mitigate them; because buying off the plan means that you are buying something you can neither see nor touch. You are essentially buying a promise.
4. Get a good lawyer, But …
Get intimate with the contract. Seriously. If you’re going to do this right, and your research is showing up mostly green lights, then the contract is king (or queen). And it’s possibly your back door if things go wrong. Don’t hand this responsibility to your lawyer – a good property lawyer is still vital to this process – but you are the one making the transaction. And you are the one that needs to fully understand all possible areas of risk and what your next move might be in all given circumstances.
Buying off-the-plan is not for the faint-hearted. It’s not for the impulsive type. And nor is it for those who think ‘due diligence’ would make a great name for a character in a romance novel.
There’s a lot of good procedural-type information out there. Information that will help you to understand the process and pros and cons of buying off-the-plan. Get online and educate yourself.
Still, with all that said, buying off-the-plan can be a complex and a sometimes risky path to financial nirvana, but clearly you’d be out of your mind not to consider it an option if you’re looking for property, when so many have gone before you and come out the other end satisfied.
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PROPERTY prices have ended the financial year on a high with the latest figures revealing a 10.1 per cent increase compared to 12 months ago.
The RP Data-Rismark June Hedonic Home Value Index results reveal that values went up another 1.4 per cent during June.
Values increased in most capital cities with Sydney and Melbourne leading the charge.
Adelaide and Darwin were the only capital cities to experience a drop in values during the past month.
RP Data research director Tim Lawless said the increase in June made up some of the ground lost in a 1.9 per cent drop in May.
Sydney dwelling values increased by 15.4 per cent for the year, while in Melbourne values rose by 9.4 per cent.
Mr Lawless said the Brisbane housing market was starting to gather some pace, with its values up 7 per cent for the year.
Values in Adelaide and Canberra went up by 2.9 per cent, while in Hobart they increased by 2.5 per cent for the year.
Darwin values went up by 5.7 per cent for the year, but dropped by 3 per cent in June. In Adelaide values dropped by 0.7 per cent in June.
Mr Lawless said it was properties in the middle price range of the market which had experienced the highest level of price growth for the year.
“Dwelling values at the most affordable end of the capital city housing markets have moved 8.8 per cent higher over the past year compared with a 10.3 per cent capital gain across the most expensive suburbs and a 10.6 per cent increase across the broad middle fifty per cent of the capital city market,’’ he said.
Mr Lawless does not predict any drop in housing values for as long as interest rates remain low.
He said affordability would likely have more affect on buyer demand.
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Buying or selling or a new home or investment property is often an emotional decision. But you should also balance this with clear, logical, rational investigation and information.
When partnering with a real estate agency, ask the tough questions. We welcome tough questions, because we can back up our claims with happy clients for the following reasons:
1. We’re your real estate partner
The team at Madeleine Hicks Real Estate make it our mission to put transparency back into every transaction. We understand that selling your property is a major life decision. We never assume. We communicate… actually, we’re human… we chat and share and inform and ask questions. We’re honest and direct, and above all, we listen; that’s what a partnership is about. And you should expect this of your real estate partner.
2. We’re independent, our reputation is built one sale at a time
Independent agencies are agile and in control of every detail, large and small. And this is a good thing. We have the freedom to do all that you ask of us.
With half of all real estate agencies in Australia now independently owned, independent doesn’t mean obscure, small or less effective, independent agencies are about doing things better, more efficiently and more effectively.
3. We care. Ask our clients…
We view our relationship with you as a partnership. We love what we do – helping people achieve their real estate goals – and our team works with your every step of the way. Check out our latest testimonials here.
4. We’re great marketers and negotiators
A good agent will sell your home. A great agent will sell your home for the best possible price by generating maximum buyer interest coupled with astute negotiating: in partnership with you.
Buyers find the home they want because of good marketing through signage, print or online resources. And this is what we focus on: quality photography, clear and compelling property descriptions, scrutinising all buyer interest, and tough but fair negotiation. In addition, we manage an ever-growing database of pre-qualified buyers and increasingly are selling properties prior to listings.
5. We consistently achieve outstanding results
Track record speaks loudly, when partnering with an agent.
Never hire the real estate agent who tells you your property will sell for the highest price. Hire a real estate agent based on their consistent track record of satisfied clients (they’ll be the clients who got the result they expected – or better).
6. We love a good system
Tidy, functioning office; tidy mind. You know how the saying goes… Here at Madeleine Hicks Real Estate we love a good system. We appreciate order, work-flow, and systemising, and that frees us up to do what we do best: be your real estate partner.
It might seem obvious, or even boring to rate so highly a systemised office, but unless we have our house in order, how can we prioritise yours?
So there you have it, our top six signs of a great agency, i.e. us. We’d love to hear what you think makes a great agency?
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