Suggestions from Building & Timber Pest Inspectors

1. Check and clear roof & gutters and silicone joins. If not regularly cleaned timber rot and water damage may have occurred to fascia and soffits.
2. Check silicone sealants to roof flashings have not been broken down by the sun.
3. Check for cracks to roof tiles and replace or seal them. All pointing to capping tiles should be maintained in good condition to prevent any leakage and stop the likelihood of water damage to internal ceilings.
4. Check your external / internal walls, ceilings and cornices for any cracks or moisture damage. This could be due to structural movement or water leaks.
5. Adjust and lubricate sliders (doors & windows) – silicone (non-oily). Check doors for binding, latching and locking problems. Repair / replace where necessary.
6. Check sealants and grouts to all “wet areas”. Tile glues can “crystallize” in a few years if incorrectly applied. Timber rot and decay can be concealed behind showers and other wet areas.
7. Treat (or paint) all exposed timbers including tops of open decks, floor joists and tops of open pergolas. Moisture will cause timber to decay (dry & wet rot). Avoid having timber posts, stairs, cladding etc in direct contact with the ground. This will help reduce the risk of termites and timber rot.
8. Check moisture around timber and steel stumps/supports and posts – moisture causes decay and rust and can attract termites. Clear soils away from bottom of posts and seal posts from any moisture.
9. Check all surface water drains away from house – 600mm wide paving around house is recommended. Water will swell ground clays and cause movement to foundations and crack brick and block walls. Divert all downpipes to curb where possible.
10. Check trees and gardens are away from foundations of house. Keep weep holes in brickwork clear. Covered weep holes can lead to rising damp and termite infestation.
11. If you have had a termite management system installed we recommend you check if it is due for renewal or an annual pest inspection.
12. Check all fences, retaining and landscaping timbers for decay, as decaying timbers promote termite activity.
    
    · To maximize your sale price, we recommend a pre-sale building & pest inspection.

Tips prior to a pest and building inspection.

These reports are the bane of a real estate agents life, no matter how good or how efficient they are, these days due to the Australian Standards the homeowner just cannot win. In most cases they take it very personally as renovations were done prior to new regulations being introduced, so while the building may have been legal 10 or 20 years ago, it is not to current specifications.

While I believe this fact should be told to the buyer, is it really necessary as one building bloke wrote last week “width between railings on the stair case are too wide and “little children can fall through these railings” really!! In the 40 years the house has been built not one child has fallen through these railings. Another Inspector (where do they get these licenses) is a Building Inspector, but wrote” Should have a licensed building contractor check!!”. Another real doozy last week who looked at a basic 3bed home recommended all the following experts:

• Pest Controller


• Plumber


• Licensed Drainer


• Water proofing expert


• Engineer


• Licensed roofing expert


• Qualified expert on sheeting that may contain asbestos.

I mean really what are they being paid to check a building for?. The whole thing is about protecting their backsides, in case they get it wrong. A building inspection once meant just that……a builder who could check what you cannot see with the naked eye. Surely as a buyer, if you can see it, you can make your own judgement on what you want to do with it.

One Company has provided a checklist prior to sale and I am now starting to recommend to my clients that they have their own pest and building inspections done prior to putting the property on the market. However, what one builder sees another doesn’t so there seems to be no sure way that you have brought your home up to scratch for sale. A great pity.

The following just might help:

Pre Sale Property Check List - Upload a Document to Scribd

Read this document on Scribd: Pre Sale Property Check List

Please note - This list covers only 12 of the most common defects.

For a detailed report we recommend a professional pre-sale building and pest inspection.

Still many reasons to buy a home

Yet homeownership still offers the same benefits and advantages it always has.


These include:

• The opportunity to build equity and create wealth over time.


• Protection from rent increases or eviction at the whim of a landlord.


• The pleasures of a relatively larger home, suitable for a family, and with a backyard, garage or other auxiliary space.


• The freedom -- design review boards notwithstanding -- to improve, remodel or redecorate to suit one's own style and budget.


• A variety of lucrative income-tax breaks.


• Pride of ownership and a greater sense of security and stability.

Housing's nightmare has been intense and its aftereffects will not be easy to cure, yet there is still hope for U.S. housing markets and the many businesses that depend on them. Real estate, as an industry, needs to explain those benefits of home ownership to a new generation of understandably skittish potential homeowners, bring back the sexiness of home ownership and recreate the Australia Dream in a way that's meaningful today.

Home builders, mortgage brokers and Realtors intuitively understand this argument. But that understanding must be translated into action if home ownership is to regain its footing and brighten its faded glory. Here are some suggestions:

• Build smaller homes and discourage mansionization to make home ownership more affordable for more people, not just at the time of sale, but until long after the mortgage has been paid in full. Super big houses may have been mildly irresponsible in the good ol' days, but today they're inexcusable.


• Support sustainable housing that incorporates green living and proximity to public transportation.


• Introduce basic home loans that are easy to understand and free of hidden "gotchas."


• Reduce the cost and complexity of buying and selling a home and make the process friendlier, easier and more efficient.


• Encourage home buyers to spend only as much as they can truly afford to buy a home.


• Support home buyer education and counseling programs that create lifelong homeowners, not just renters-with-mortgages.


• Think long term. Encourage home buyers and homeowners to adopt financial plans and set aside savings for expensive home repairs.


• Adopt ethical standards and practices that rise above the competitive fray and instill confidence in home buyers and sellers.


• Reinvigorate community involvement. Step up. Volunteer. Take part. Be seen. Set an example. Make a difference. Social networking may be an effective way to generate new business, but it's no substitute for showing up in person and helping out.

And lastly, if you work in real estate, but don't already own your own home, maybe it's time for you to go ahead and buy one.

Marcie Geffner is a freelance real estate reporter and former managing editor of Inman News.

WHERE IS PROPERTY HEADED BY 2010?

This report was prepared by BIS Shrapnel – Matthew Liddy.

Price growth in Brisbane is forecast to be strongest of the state capital cities covered by this report. House prices in most Australian capitals will continue to climb in the 2007/08 financial year due to strong economic growth and continuing demand, economic forecaster BSI Shrapnel predicts.

However, prices will not reach the rate of growth levels of 2006/07. Despite the impact of rising interest rates and a forecast easing in economic growth in later 2008/09, solid underlying demand and a deficiency of dwelling stock in all markets are expected to maintain upward pressure on prices, the Outlook for the Australian Property Market 2007-2010.

Supply and demand
First homebuyers entered the property market in increasing numbers during 2006/07 enticed by expanding first homebuyer’s benefits, the report says.

“Investors have also returned to the market in greater numbers in 2006/07 as tight vacancy rates have accelerated rental growth,” it notes. “Nevertheless, investor activity overall remains below previous peaks and performance.”

In the medium term, BIS Shrapnel expects business investment, especially in the resource sector, to begin to decline over 2009 and 2010, with a resulting dampening effect on purchaser demand. “However, with the underlying fundamentals expected to remain solid, underpinned by strong population growth and a continuing dwelling deficiency, we nevertheless expect further upward momentum to construction and prices.”

Underlying demand for new dwellings in Australia is expected to rise to 182,300 over the 2006/2007 to 2011/2012 period, mainly due to higher net overseas migration. BIS predicts that this, combined with a slump in dwelling construction in recent years, will create a significant deficiency of housing stock in coming years.

“Australia’s stock deficiency is estimated to have increased from 22,800 dwellings at June 2006 to 60,200 dwellings at June 2007, as underlying demand continued to accelerate during the year, while total dwelling completions showed a modest decline,” the report says.
“The majority of Australia’s stock deficiency at June 2007 is located in QUEENSLAND, New South Wales and Victoria with the three states accounting for 94 percent of the national total.”

Underlying demand should remain high in Queensland throughout the forecast period, with overseas migration to pay an increasing role in keeping demand high.

Rising dwelling deficiency and strong economic growth is expected to fuel housing demand and price growth of 9 percent is forecast for 2007/2008 the report says : Price growth is expected to slow slightly, although remain solid in 2008/2009 at around 6 percent in both years.”
Prices should continue to grow in the following two years, BIS Shrapnel adds.

Brisbane’s forecast median house price of $460,000 by June 2010 represents a total rise of 26 per cent over the 2007 to 2010 period. Price growth in Brisbane is forecast to be strongest of the state capital areas covered by this report.

WHAT THE ANALYSTS CURRENTLY SAY ABOUT BRISBANE REAL ESTATE

ANZ’s Property Outlook report: “The lure of the sun and surf of Queensland is once again drawing inhabitants of southern states. House prices have risen by 22 percent in the year to March and maintain considerable momentum for further gains remains, with our affordability measures suggesting that six percent over the next two years could be sustained.”

Access Economics Business Outlook report: “Overall Queensland’s prospects remain good … Queensland’s very healthy job growth is abundant, output growth is strong, retailers are ringing up robust sales and consumer investment is surging (and is at its highest share of the national total since detailed results began in the min 1980’s). Importantly, forward indicators such as housing finance have fallen less than elsewhere since recent peaks. Even underlying demographic swing back towards Queensland, with the net annual population inflow nearly double or extended period of weakness stretching back to mid 1996.”

Macquarie Bank: “Over the next few years, we expect southeast Queensland to benefit from the strongest interstate and overseas migration inflows since 1989. While the southeast Queensland market is likely to take a breather as interest rates rise but once home buyers and investors realize the rises will be relatively moderate, further growth can be expected.”

FIVE HOT TIPS TO REDUCE YOUR INITIAL AND ONGOING MORTGAGE COSTS

1. Investigate a portable load
Portability means simply that you can pick up your loan and carry it with you when you move houses. In the past, a housing loan was secured by a particular property and if you wanted to sell that property and move, you had to take out a new loan for the new property. A portable loan now allows you to sell your old property and buy a new one while keeping the same loan. Naturally, the new property would have to be valued at the same loan-to-value ratios (LVR) of your existing loan. However, shopping around for a loan that’s portable will save you the hassle and extra costs involved in finalizing an old loan and starting afresh.

2. Avoid mortgage insurance
It’s no secret that the higher the LVR you borrow at (usually greater than 80 percent), the more likely you will be required to cough up the lenders mortgage insurance (LMI). The cost of LMI varies from bank to bank, depending on the underwriter’s view of the level of risk associated with the loan.

Ideally, of course, a 20 percent deposit sees you avoiding LMI completely. But that’s easier said than done. For a property worth $300,000 you would need to save up a $60,000 deposit which is a tall order.

However, borrowing in excess of 80 percent LVR would mean an addition cost of up to $5000 as LMI. The market is now recognizing this difficulty, particularly for property investors and we are seeing variations on product offers that help overcome this, in particular the “Guarantor Option”.

It is now possible for a guarantor to help with the purchase by contributing the 20 per cent deposit. Around 70 per cent of the 374 variables on the CANNEX data base allow for this flexibility.

Even though the guarantor option seems attractive because it eliminates the cost of LMI, it is not without its pitfalls. As the name suggests a guarantor puts up part of the equity in their home as a security for the new loan. In the event that the borrowers are unable to make repayments, the lender has the ability to call up the debt, so make sure you read the fine print first.

Another way of avoiding LMI is to look for bans and non-bank lenders who offer a maximum LVR of 85 percent before the borrower is forced to pay LMI. In recent times banks like Westpac have begun to offer loans with a higher than average LVR of 85 percent without attracting the additional coast of LMI.

3. Shop around and negotiate
Upfront fees such as the application fee, settlement fee and valuation fee could cost you between $100 and $1500 depending on who the lender is.

The best way to pay the lowest price possible is to negotiate. Some banks are happy to waive the application fee, but add it as a deferred establishment fee which they will charge should you pay out the loan in the first three to five years (which is the average exit fee period).

The average application fee is $625 so it is a worthwhile saving but you need to be sure you are staying with your current lender beyond the timeframe when the deferred establishment fee applies.

Remember that the lending institution wants to retain your business, as competition these days is fierce.

A great place to research and compare rates is the internet. Before deciding on a loan, hop around and do your homework on all products available by logging on to http://www.ratecity.com.au/. Or call Leah Blackford of the Loan Market on 0406 429 041.

4. Don’t pay for what you don’t need
If you don’t need branch access or face-to-face financial service, consider online mortgages as this offer the best savings.

It may sound daunting for first home buyers, but it may be an attractive option for experienced borrowers who understand mortgage products quite well and are able to make decisions without advice.

Homeopath, a subsidiary of the Commonwealth Bank, has been offering online mortgages since 2001. It was followed recently by Virgin Money, One Direct (a subsidiary of ANZ Bank) and My Rate.

How do online mortgages stack up against bank branch mortgages? The nominal interest rates available on the four online products are considerably lower than comparable products offered through traditional banking channels.

The average online rate of 7.5% is 0.2 per cent lower than the average basic variable product offered by six major banks.

By maintaining the minimum monthly repayment on an average $250,000 basic variable loan in an online mortgage, you could achieve an interest saving of roughly $14,800 over the life of the loan, or cut more than one year off the life of your mortgage.

5. Plan Ahead
In your eagerness to get your home loan “up and away” you may tend to ignore the bigger picture. In order to avoid paying certain bank fees, including switching fees (fees charged to change to a different loan or interest rate within the one organization) and deferred establishment fees, ask yourself these questions before jumping in:

Am I comfortable with my level of borrowings? Am I stretching the budget just a bit or am I being realistic about my situation? Banks charge fees for being late in making periodic payments. This may be added onto your loan amount. You don’t want to pay an average fee of $20 every month on top of penalty interest rates as high as 2 per cent over your nominal interest rate payments.

Do I intend to stay in this property for long? The shorter toe period, the more likely you’ll pay the exit penalties associated with the loan. From the lender’s perspective, the longer you take to service the loan the more interest it earns. In a traditional mortgage a large part of the interest cost is recovered in the early years of the loan. As interest is calculated daily on a minimizing balance, naturally, the early years of the loan bear more of the interest cost burden.
If you think you might exit or refinance to move to a better property in the first four years it might be worthwhile shopping for a loan that has no or low exit-period penalties, as these fees could be as high as 2 per cent of the original loan amount. Am I happy with a basic variable product or do I really need the offset and transactional account? Am I likely to make extra payments and need the redraw facility? Redraw facilities may be available with a basis product; however there may be a limit to the number of free redraws. Choosing a product that suits your needs to start with may well avoid paying switching fees later.

There are a few factors to consider such as: Can I live off a credit card and use my extra repayments to cover the cost once a month? Do I need unlimited free withdrawals to pay other debts or living costs?

If you start off with a basic variable product with limited redraw facilities and then buy an investment property which requires payments fortnightly rather than monthly, you may end up paying extra for each additional redraw you make. It would be wise to put all your salary into your principal mortgage and make fortnightly withdrawals for the investment load and monthly ones to pay off your credit card.

You may think of switching your basic variable loan to a standard variable which has more flexibility in terms of an offset transaction account and redraw facilities. Be aware that this will cost you an average switching fee of $300.
Acknowledgement: Mamta Grewal the author of the secret to living without mortgage fees is a financial analyst with financial services research group CANNEX and is a regular contributor to Australian Property Investor

Tax Time is Approaching

HERE ARE SOME TIPS FOR YOUR INVESTMENT PROPERTY

Under Division 40/42 Plant and Equipment you are able to claim a number of items within a building at an accelerated rate of depreciation that is in excess of the flat rate provided by the Division 43 allowance. Items of a building than can be claimed at accelerated rate include carpet, air conditioning, appliances, curtains, hot water units and a multitude of other items that the tax office considered have a lesser life span than the overall bricks and mortar components of the building.

Plant and Equipment items can be claimed even if the property was constructed prior to 17th July 1985.

The total deductions for a residential property are in the order of $2000 to $8000 per annum. Even if you own an older property, it will still be eligible to claim a worthwhile depreciation.

There are some excellent Tax Depreciation Experts around that appear to charge around $500.00. Call me if you would like their names. Please do not use these tips as "gospel". They are just to give you an idea of what you may be able to claim.

Personal Tax: If you are doing your tax yourself, I find a call to the Taxation Department very helpful, they will guide you through the maze of items, especially those on Child Care Rebates and they are most helpful.

Remember tax is our money and it is our responsibility to claim ever cent that they allow, as they are not going to say "Oh, look here Mr and Mrs so and so, you should have claimed so much more". Good luck with it!

Insuring your property

Something the Insurance Company Won't Tell You!

Remember when you are getting a quote or transferring you Insurance from one home to the next you NEVER need to insure the LAND as it will never need to be replaced. If your property is worth $360,000 and the land is worth $180,000 than your Insurance should be $180,000 not $360,000 or an amount you think you will need to replace it if misfortune befalls your property. If you want to get an idea what your property is worth call us and we will call in and give you a free appraisal.

Real Estate Tips & Secrets

Okay, so now you have decided to sell, who will you choose to market and get the ultimate price for you? Your son wants the "good looking chick" from another suburb, your partner wants the local lass who just started and needs the money and you want someone who knows what they are doing. Who is right? Here are some tips to help you choose the right agent.

Look for experience: Be sure they are seasoned in the business - several years or more is best. After all why would you want someone learning on your time and money.

Look for Honesty: Many agents promise unrealistically high sales prices. In our trade it is called "buying the listing". A good agent suggest a fair and reasonable price based on the facts: Condition of the property, location, current market value supported by actual recent sales in the area, preferably that they have personally sold.

Look for References: A good agent will gladly provide you with names and phone numbers of past clients and you can speak to them if you wish. Also you can ask to look at their referrals from local Clubs and previous happy sellers or others willing to recommend them as excellent communicators and achievers.

Look for Compatability: Don't pick an aggressive smooth talking agent especially if you think they are "over the top" then the odds are they will be just that. There is no magic personality type that succeeds in selling homes. When you have looked at all the above, choose someone you are comfortable with and feel you can trust.

The benefits of professional real estate photography

There was a great article in the New York Times last year which is worth reading:

“Good photos will grab people’s attention and help you sell a home,” said Jacky Teplitzky, an executive vice president of Prudential Douglas Elliman Real Estate in New York. “Bad pictures will absolutely give you trouble, because you won’t have any calls on it, and nobody will come to see it.”

The article goes on to quote a survey by America’s National Association of Realtors, which found that 80 per cent of people across the country who bought a new home in 2006 used the Internet while house hunting, and they rated photographs as the most useful tool in their search. In fact, for people looking to buy a home, the photographs are more important than anything else you can throw at them.

I see these stats mirrored every day in my conversations with home owners. They’ve all seen the poor photos taken by some real estate agents, where everything looks dark, and the Corn Flakes are left on the table. And they all know that bad photos put them off checking out a home, and that good photos make a home more enticing.

Can the use of great photos also help you as an agent? Absolutely!

“If things look shoddy or unprofessional, not only are buyers going to find the property unappealing, they’re going to associate you with being shoddy and unprofessional.”
- Rosalind Clarke, a senior sales associate with the Corcoran Group in Palm Beach, Florida

Potential buyers are also potential sellers, and if they associate poor quality images with agents that are unprofessional, they're hardly going to be knocking on your door to sell their own home. A number of our clients have found that in regularly using Highshots to shoot their properties, they see an increase in the number of listings they get, and that's always good.

preparation2008 - Upload a Document to Scribd

Read this document on Scribd: preparation2008

Questions and Answers Segment

Question: Can a seller ask buyers who claim their finance was rejected to provide proof?

Answer: Only if it is in the contract.

When a seller is presented with a contract of sale on their property and it is subject to finance, the seller will often ask "If they don't get the finance, can we ask to see the proof from the Bank?".

The answer to this is unfortunately is "no". While all contracts rely to a certain extent on "good faith" there is no obligation on the buyer to produce evidence that they have made an application for finance or what the outcome of that application was. What we can do however is add a special condition to the contract that will at least give you some protection from the buyer who simply "changes his mind" or "find something better" and that clause should read:

Should this contract be subject to finance and such application is declined by the financier or approved on terms not satisfactory to the buyer, further to the terms.

Seller's solicitor the seller shall be under no obligation to refund the deposit monies to the buyer.