Posts Tagged ‘Raine & Horne’

This real estate market update is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Watch Raine & Horne SA CEO; Kevin Magee’s latest video of South Australian residential housing figures for August.

See what happened to property values in South Australia last month…

This video is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Mangement Experts.

Adelaide property sales and rental growth is lagging in the last quarter, watch this video to see the national trends;

This post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

It’s every vendor’s dream to sell their property in a sellers’ market.

“But while catch phrases like sellers’ market are easy to bandy around, people don’t always understand what makes a market work in a seller’s favour,” Monika Bonet, Principal of Raine & Horne Glenelg said. “Media headlines heralding surges, explosions and booms can be misleading. Like any other market property is subject to supply and demand and the market that makes life more predictable for a seller is one where there is a greater number of purchasers than properties for sale.”

According to Ms Bonet when there are more buyers than sellers, buyers are forced to compete for what’s available. Conversely, when there are more properties for sale, purchasers can pick and choose and drive a harder bargain.

“The most obvious result of increased competition is that vendors are in a stronger negotiating position and can often hold out for a higher price,” Ms Bonet said. “But there are also many side benefits like getting more inspections over a shorter period of time thereby avoiding the stress of wondering where the purchasers are and whether the property is likely to sell or not. A buyers’ market is very stressful for vendors because the selling process drags out over a longer period of time.”

Ms Bonet said that in a buyers’ market purchasers are more likely to quibble over building reports and be picky about decors when even easily changed qualities like colour schemes don’t live up to their wish list.

“They procrastinate for longer and crucial psychological momentum is often lost ultimately decreasing the chance of a sale occurring,” Ms Bonet said. “Whereas in a sellers’ market purchasers are more likely to be grateful to have found something that meets their bottom line criteria.”

Ms Bonet said that another benefit of selling in a sellers’ market is that fewer sales fall through because purchasers may have already missed out on one or more other properties and are aware of the difficulty of locating then securing the home they want.”

“Here in Adelaide we are currently experiencing a classic buyers’ market with sellers outnumbering purchasers,” Ms Bonet said. “It’s a scenario that proves that the majority is not always right. If you wait to sell your property when everyone else is selling, chances are the cycle will have turned to favour buyers rather than sellers.”

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Non Conforming Loans: Also called ‘Sub-Prime Lending’. Non-conforming loans cater for people who do not meet the standard criteria mainstream lenders use for ordinary borrowers. Examples include people who are self-employed, have a poor credit record or who have recently arrived in Australia. Non-conforming loans usually incur higher interest rates.

Portable Loans: A portable loan allows you to sell your house and move to a new one without having to re-finance. This saves application and legal fees, but the loan amount usually has to be the same or lower than the one for your current property.

Redraw Facility: A redraw facility allows you to make additional repayments on your mortgage.

Reverse Mortgage: These loans are good for people who later in their life find themselves to be asset-rich in that they own their own home but income-poor, requiring cash for living costs, travel, etc. A reverse mortgage allows such a person to borrow against the value of their home and access the equity without having to sell the property. No repayments are required during the life of the loan, with the total interest, fees and charges being recuperated from the value of the estate at the borrower’s death.

Service Fee: Usually a monthly fee covering bank cost of administering and maintaining a loan account.

Switching Fee: The lender may impose a switching fee where an existing borrower changes from one loan product to another with the same lender.

Uniform Consumer Credit Code (UCCC): The Uniform Consumer Credit Code legislation regulates credit provided to customers and strata corporations and provides uniform standards for all forms of customer lending in all states and territories of Australia. The UCCC consists of a set of rules regulating the conduct of the lender throughout the duration of the loan. It enforces the Truth in Lending principle, so that borrowers are provided with clear and factual information to assist them in choosing a home loan product.

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agent and Glenelg Property Management Expert.

Earth Hour 2012 – Saturday 31st March 2012, 8.30 pm

Hundreds of millions of people, businesses and governments around the world unite each year to support the largest environmental event in history – Earth Hour.

More than 5,200 cities and towns in 135 countries worldwide switched off their lights for Earth Hour 2011 alone, sending a powerful message for action on climate change. It also ushered in a new era with members going Beyond the Hour to commit to lasting action for the planet. Without a doubt, it’s shown how great things can be achieved when people come together for a common cause.

This year Earth hour has launched “I Will If You Will” on YouTube to showcase how everyone has the power to change the world we live in, bringing together the world’s biggest social video platform with the ‘world’s largest action for the environment’. The ask is simple, head to YouTube to tell us what you are willing to do to save the planet or accept one the challenges we’ve already received from our supporters.

To find out more visit EathOrg.com

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Many home owners who extend or renovate their homes make money when they sell, while others wonder why they have trouble getting their money back.

“Location is crucial,” Monika Bonet, Principal of Raine & Horne Glenelg said.

“But location aside, there are many factors that minimise the risk of over-capitalising. Home owners should consider consulting an estate agent before making improvements. In many instances agents aren’t called until the work is completed and it’s too late to put the genie back in the box.”

Ms Bonet said that some alterations don’t improve the standard of the property enough to compensate for their cost.

“Some owners sacrifice one feature to gain another thereby adding cost but not value,” Ms Bonet said. “Frequently reported examples of this sort of expenditure include turning a bedroom into a dining room or a garage into a rumpus room. Another common oversight is failing to take proper account of the scale or age of the property when adding on. It is important to make sure extensions are seamlessly integrated with the original home. Many three bedroom homes don’t “work” once a fourth bedroom and family room are added – the original rooms may be too small to balance the extensions and the original property, though in good condition, may look out-of-date beside the new. Furthermore, bad design resulting in poor natural light, an inconvenient floor plan such as a living area that ends up a long way from the kitchen, or a badly positioned bathroom will be reflected in the sale price of the property.”

Ms Bonet said that some renovators over-capitalise by deviating from their budget along the way. “Many homes and locations don’t justify top-of-the-range appliances and fittings. And if renovators run out of money before completing the work or have to skimp on the finishing touches, the overall effect can be disappointing and limit the ultimate selling price.” According to Ms Bonet home owners concerned first and foremost about investment potential need to think twice before making changes for their own unique needs.

“But quality of life is also important and if people stay in a property long term the cost of idiosyncratic changes will usually be absorbed in most locations,” Ms Bonet said. “Those considering making major changes should seek advice from an estate agent with whom they have a good relationship. Builders can tell you what your renovations will cost but only a real estate agent can tell you whether the expenditure is justified.”

This blog post is brought to you be Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts

Fixtures: Items that are fixed or part of the property, for example, carpets, down lights and built in robes. Sometimes sellers specify fixtures they may wish to keep (say, an antique light fitting that belonged to their grandparents). To avoid confusion about what stays and what goes, fixtures can be identified as a special condition in the offer and acceptance document.

Foreclosure: The process by which a lender sells a property given as security for a mortgage, usually as a result of the borrower’s failure to repay the loan.

General Conditions: These deal with important contractual obligations for both buyer and seller including such matters as the paying and holding of a deposit, settlement, adjustment of any outgoings and any other payment responsibilities. It is possible to vary the contractual obligations. You can for instance, delete or amend existing contractual obligations that form the General Conditions, but the seller would have to agree with the changes if the contract is to be binding.

Home Equity Loan: A home equity account gives you a revolving line of credit secured by the value of your house. This allows you to use the funds for other purposes such as the purchase of a second property, shares or other investments. The interest rate is generally higher than a standard variable rate, and these loans should be treated with caution.

‘Honeymoon’ Rates: “Honeymoon” or introductory rates are offered to entice borrowers with a low advertised rate for the first six to twelve months of the loan. After this the loan automatically reverts to the Standard Variable Rate offered by that lender. Use the ‘Comparison Rate’ to better understand the costs associated with such loans.

Joint Form of General Conditions for the Sale of Land: (the General Conditions) are a standard part of any contract to sell a property and deal with many issues that arise between a buyer and seller entering into a contract. When an offer is made, a printed set of General Conditions is presented to both the buyer and seller.
Joint Tenancy: The ownership of property by two or more persons where there is a right of survivorship, that is, where on the death of one joint owner, the share of the interest of the deceased goes to the surviving owner(s).

‘Low Doc’ Loans: ‘Low-Doc’ or Low Documentation Loans are designed for the self-employed who don’t have the documentation required to get traditional home loans. The interest rate is higher than the Standard Variable Rate and Low-Doc loans usually require mortgage insurance, adding to their cost.

LVR stands for ‘Loan to Value Ratio’: LVR refers to the maximum amount you can borrow against the value of the property used as security for your home loan. For example a lender may approve a loan for 85% of the property value, while you will be expected to provide the remaining 15% plus costs and insurance.

Mortgagee: The lender in a mortgage agreement

Mortgage Offset Account: Offset accounts can help reduce your tax by offsetting taxable income from deposit accounts against interest paid in after tax dollars on mortgage repayments.

Mortgagor: The borrower in a mortgage agreement

In next week’s blog see Part 3 of the A- Z Jargon for Home Buyers…

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agent and Glenelg Property Management Expert.

Sometimes new investors make the decision to manage their own investment property. After all, its seems obvious…why pay an agent to do something so simple as banking a rent cheque?

“It’s only when they start doing it on a day to day basis that they realise the level of expertise required to maximise income and minimise expenses,” Monika Bonet, Principal of Raine & Horne Glenelg said. “And when they hand over to an agent it’s an enormous relief. Their net income increases, they have a lot more leisure time and they can sleep at night.”

Ms. Bonet said that professional managing agents have the experience, expertise and up to date legal knowledge to prevent problems developing.

“Mistakes can be costly and many do-it-yourself investors find themselves in crisis management mode,” Ms. Bonet said. “They end up trying to lock the stable door after the horse has bolted.”

Ms. Bonet said that fortunately most people hand over to an agent before things go wrong.
“They realise that they’re re-inventing the wheel and that it’s simply not cost-effective. Property investment managers need to be legal experts and do-it-yourselfers end up spending a lot of time familiarising themselves with tenancy legislation. Even then they worry that they haven’t thought of everything.”

According to Ms. Bonet investors can have difficulty staying up-to-date with week-to-week fluctuations in the rental market.

“It takes a lot longer for trends to become apparent to people who are looking after just one or two properties,” Ms. Bonet said. “They do all that work and it may still cost them money in higher vacancies. It’s also very hard to keep a distance from demanding tenants if you don’t have a third party to liaise.”

Ms. Bonet said that another area people find difficult is communication and arbitration.
“A managing agent can be more objective and less emotional,” Ms. Bonet said. “Dialogue via a disinterested third party minimises income reducing anger and personality conflicts. Even negotiating rent is difficult for a landlord, both because of the emotional involvement and because of lack of experience.”

According to Ms. Bonet things like knowing what rent to set and what are fair and reasonable repairs can be difficult decisions for the inexperienced.

“The lease is the bottom line. If it’s not done correctly tenants could end up squatting,” Ms. Bonet concluded. “Utilising the services of a professional managing agent is an investor’s Slip Slop Slap. It saves time, maximises rental income and minimises risk.”

This blog post is brought to you by Raine & Horne Glenelg, your Glenelg Real Estate Agents and Glenelg Property Management Experts.

Real estate buffs use the term “vacancy rate” with knowledgeable flair when talking about rental trends.

“But closer analysis reveals that many people do not know how to calculate vacancy rates,” Monika Bonet, Principal of Raine & Horne Glenelg said. “In fact, many people don’t even know what information the percentages actually convey.”

According to Ms. Bonet there is a very simple formula for working out the level of vacancy in your area.

“The easiest way is to use a calculator,” Ms. Bonet said. “Just enter the total number of properties actually vacant and express it as a percentage of the total number of properties available to rent. If the figure you arrive at is 2.75% or less, you can give your area the thumbs up as far as investment potential is concerned.”

Ms. Bonet said that in practical terms a vacancy rate of 2.75% means investors should allow for their property to be vacant for ten days every year.

“This is considered a reasonable number of days to allow for tenant mobility,” Ms. Bonet said. “However, when vacancy rates rise above 2.75% investors have difficulty locating tenants and downward pressure is placed on rent levels.”

According to Ms. Bonet the reverse is also true: when vacancy rates fall below 2.75% tenants experience difficulties in finding properties to rent and upward pressure is placed on rents.

“Knowledge of vacancy factors over a period of time is an important tool in maximising security and minimising risk when purchasing investment property,” Ms. Bonet concluded.

This blog post is brought to you by Raine & Horne Glenelg your Glenelg Real Estate Agennts and Glenelg Property Management Experts.