How to spot a bargain

http://www.realestate.com.au/doc/Resources/Buy/fhbg/how-to-spot-a-bargain.htm?rsf=newsletter_rea

Everybody likes to get a bargain. Whether it is everyday goods, such as food and clothing, or more expensive items, such as cars and real estate, there are bargains to be had.

It is relatively simple to spot a bargain when shopping for food, clothing or even cars as all you need to do is compare prices and brands. It is not so easy when looking at real estate, but the rewards when you do find a good deal can be tremendous.

There are five tips to consider when looking for real estate bargains:

Keep your eye on properties for sale
Search the public trustee, deceased estates and mortgagee sale websites
Recognise any renovation potential
Understand the development potential
Ask the right questions

Keep an eye on the properties for sale in your area You need to keep an eye on the properties for sale in your area and, in particular, the time they spend on the market. The longer a property has been for sale, the more chance you have of picking up a bargain.

However, this is not always the case. A property that has been on the market for a long time but whose asking price has not changed is unlikely to be a bargain. This indicates that the vendor is not willing to budge on their price. On the other hand, if you see that the asking price has continually dropped over a period of time, your eyes should start to light up as this is a sign that the vendor is flexible and could be willing to negotiate as they have to sell.

Search the public trustee, deceased estates and mortgagee sale websites When people are forced to sell, due to a death or mortgagee sale, the property can often sell for less than it would under normal circumstances.

A deceased estate can be off putting to many potential buyers. The property is often not presented in its best state as it may have been vacant for a period of time and the house has a musty smell, the garden is overgrown and the faults of the house are very evident. In the end, the sale price will be determined by how quickly the beneficiaries are keen to receive their money.

In a mortgagee sale, the bank has a duty to try and achieve the best price they can. This is so that it can recoup its money and then the vendor can keep any funds that are left after all debts have been paid. However, in a buyer’s market, which is what we are currently experiencing, it is the buyer that will determine the final sale price, not the seller.

As mentioned earlier, forced sales will often result in properties selling at lower than expected prices. However, low prices don’t always mean that it is a good buy. For example, buying bruised fruit at half the normal cost doesn’t represent a bargain. Nor does buying imitation top brand names at a fraction of the real cost. Buying something cheaply doesn’t always represent good value.

Recognise any renovation potential Bargains are often bought because other people don’t see the potential of the property. Most people will walk through an old house and only see the peeling wallpaper, ugly carpet and an old fashioned kitchen. Renovators will see an opportunity to paint the walls, rip up the carpets, polish the floorboards, expose the authentic fireplaces and put in a modern kitchen. Many people choose not to see the opportunity as they don’t know how to renovate and think that the costs of a makeover are too prohibitive.

Understand the development potential Most people will drive by a property and see a run-down house on a large block of land. Those who are familiar with property development and know the rules and regulations of the local council will see a unit site. To the novice it may seem daunting at first to contemplate building units, but it is just a matter of confidence. Knowledge will build your confidence. You only need to know a little more than the rest to be able to pick up a bargain.

Ask the right questions “Why are they selling?” is the best question you can ask. If they don’t give you an answer, continue to ask open-ended questions. An open-ended question will force the sales person to give you more than just a “yes” or “no” answer.

For example, you will gain a better insight into what price the vendor will accept if you ask: “If I make a cash unconditional offer with a short settlement, what figure do you think they will accept?” Rather than: “Will they accept $350,000?”

The first answer may reveal the lowest offer they are willing to take, whereas the second question will only provide you with a “yes” or “no” reply.

Peter Koulizos is a university lecturer and author of The Property Professor’s Top Australian Suburbs. You can buy Peter’s book at our online bookshop.

To read Peter’s other columns, visit Peter’s property pep talks

website to check vacancy rate

This is a great tool from SQM research.

1. To check vacancy rate by region or postcode:

http://www.sqmresearch.com.au/graphs/terms_vacancy.php

or

2. go to the following link directly to check by postcode:

http://www.sqmresearch.com.au/graphs/graph_vacancy.php?postcode=3000&t=1

Just put in the postcode or the name of the suburb.

If the % result doesn't mean much to you, check out a few suburbs you know and compare the result, it will make more sense.

3. You can check out other data too by going to the home link:

http://www.sqmresearch.com.au/graphs/

Choose the postcode and the type of graph at the bottom. Things you could check out include

• count of established properties: house, semi-detached, unit
• % of mortgage repayment to total household income before tax
• median rents
• weekly family income
• Occupant type (comparison by Owner Occupiers, Mortgage Holders and Renters)

You can check here other things too, such as:

What needs to be in an agreement

source: http://investinginproperties.com.au/

Any partnership, no matter how small or large, and no matter who it is between, must have an agreement that covers the interest of both parties.

It is best to have a solicitor draw up an agreement for you. When considering what needs to be in the agreement, work out the absolute worst case scenarios for all parties, and make sure those issues are covered.
Some partnerships are between friends or family. Regardless, remember that your relationship with your partner may be in jeopardy if something goes wrong, so it is important to cover everything you possibly can in the agreement.

Here are some of the areas that need to be covered.

Firstly, the agreement needs to state clearly who is involved – this could be individuals, or entities such as trusts or companies.

Make sure the agreement is dated, and beginning and end dates are clearly stated. If you are unsure of how long the partnership will take, cover this so that all partners are clear.

Remember that circumstances can change very quickly, so cover the possibility of someone needing to end the agreement quickly. How will this happen, what period of notice needs to be given, how will the partner be compensated.

The agreement needs to clearly state the terms of the partnership. If the partnership involves money, profit shares, bonuses or interest payments, make sure these are clearly stated with no room for misunderstanding.

You may be part of a partnership that involves something other than money – for example, knowledge, skills or time. Again, make sure that the terms of this agreement is clearly stated.

The agreement is a legal document, and therefore must be executed in a legal format. It will need to be witnessed and signed by all parties. Depending on the law, you may need to have a Justice of the Peace certify the document, and, in some cases, you may need to lodge the documents with some authority.

Agreements also need to be in place for when the partnership is dissolved. Make sure that all parties are released in writing from the partnership, and that all obligations of the partnership are met. Have each party sign off on the partnership.

There are many other areas that could be added to an agreement. The main consideration, however, is to make sure that you have covered all possible scenarios, and that you have a legal document drawn up for you covering all parties.

Early access clause

"In order to allow the buyer before settlement to take measurements and obtain quotes for renovations and building work which they propose to carry out following completion, the seller agrees to allow the buyer access during business hours to the property upon reasonble notice to the seller or its agent. The buyer will also have the right to have access to the property during business hours before settlement upon giveing reasonable notice to the seller or its agent for the purpose of showing the property to prospective tenants or the buyer's rental manager."

Structural engineers

Soil Test / Footing Inspection

David / Geologist, crack specialist 9722 2611
Does not do prepurchase work
Most of the time underpinning is not recommended and it might cause further problem.

Mark Dishon
Rock Solid Pty Ltd
Ph:(+61) 3 9335 6122
Fax: (+61) 3 9335 6733
www.rocksolidgroup.com.au
mdishon@rocksolidgroup.com.au

Rental Manager

Wes Davidson / Horsham 53820000
Property Manager: Kerry
4 people in rental, manages 450 properties with 8 vacancies currently
leasing fee: 1weeks rent + GST
8.8% management fee

Gerry Smith First National /Horsham 5382 6655
Rental manager: Pathy


Bell R.E Sydenham
Senior rental manager: Michelle
9 years in office
320 properties
280-300/w rent for hillside ppty