Monthly Archives: September 2016
As your single largest investment, you’ll probably spend a great deal of time searching for or designing your perfect home. When house hunting, you’ll consider things like location, price, market trends, costs and the condition of the property. And you’ll probably have a list of things you absolutely have to have and those you’re prepared to forgo. Deciding whether to buy an existing home or build a new home is an important part of your decision. To help you make an informed choice, we’re taking a closer look at each option.
Buying An Existing Home
The primary advantages to buying an existing home are convenience and cost. Once you have pre-approval, you’re able to shop around, pick out the home you like and then make an offer. Working closely with your mortgage adviser and your real estate agent, you’ll already know how much you have to spend, and have a list of properties that fit your requirements.
Despite a number of steps involved – arranging finance, attending open homes and auctions, getting inspections done – once your offer is accepted, you’ll be able to move in within a month or two, all going well. Buying an existing home is ideal for those buyers on a tight schedule – relocating for a new job or whose children are starting school in the area
The Cost Factor
In many cases buying an existing home may be more cost effective, particularly if you’re looking to move into an established neighbourhood near your work, school, friends or family. You may find it hard to find available land in these areas, so buying an existing home will be your only option. It also means that your garden will already be established so you won’t need to worry about starting a lawn, planting shrubs or waiting for trees to grow.
On the other hand, buying an existing home means you may not get exactly what you want, and you may need to spend money remodelling, repairing or redecorating any outdated features of the home. These additional costs could make the difference in deciding whether to build or buy.
Building A Home
While building a new home is not as convenient as buying an existing home, it does mean you get the home you want. One of the biggest advantages to building a new home is the fact that everything is new. You’re also able to build in features that make your home more energy efficient, like heating, cooling, insulation or air filtration systems that are environmentally friendly, saving you money in the long term.
In fact, your home may quite literally be better for you as it’s less likely to have health concerns or toxic materials you may find in an older home – things like asbestos, lead paint or mould. And it can be built using materials that are better for the environment like Energy Star rated appliances and more efficient plumbing systems.
The Cost Factor
While the cost of building involves a number of upfront costs, it’s easier to recoup your investment long term. A newer home will require less repairs and lower ongoing maintenance, and is likely to fetch a higher resale price when you decide to sell.
The biggest drawback to building your own home is that it’s not immediately available for you to move in, and the costs may be higher. But money and time aside, building your own home can be emotionally satisfying in that you feel you’re achieving a dream and living in the home you created; a home that perfectly matches your style and personality.
Build Or Buy
Whatever you decide, it’s vital you seek professional advice before you commit to any decisions. Determine how much you can spend and obtain a pre-approval from your bank or lender. This will help frame any conversations with builders or sales agents should you buy.
Proud recipient of the Moreton electorate’s Australia Day Award 2016 – Principal and Director David Gowdie of Harcourts Graceville was recognised for his services to the community as the creator of a local magazine called Living in The Shires.
This magazine is hand-delivered by his sales agents to 12,000 homes and businesses in an area covering six suburbs of Brisbane, Australia – Tennyson, Chelmer, Graceville, Sherwood, Corinda and Oxley.
This magazine is David’s brainchild. The primary motivation of was to have a magazine that specifically catered for his community. It is not a newspaper in the traditional journalistic style, but more of a storytelling vehicle – ‘creative non-fiction’, if you like. It tells stories about local businesses, community events, some of the area’s incredible residents, and its history.
A deliberately small back section of the magazine is devoted to Harcourts Graceville, a break from the content marketing and storytelling . Even though David includes some advertising for his Harcourts business in the magazine, this is kept to a minimum.
Living in The Shires is a big investment for David. In terms of marketing opportunity costs, it is a ‘slow burn’, but increasingly the magazine is being associated with the Harcourts Graceville brand in a positive, feel-good, way. The beauty of this publication is that it has become the ‘glue’ for a community, engendering much pride in the area. And it gives the sales agents a fabulous entrée when engaging with local people – there is always something to talk about. The feedback to Harcourts Graceville is that the magazine gets read cover to cover, and its delivery is eagerly anticipated. It truly is a marketer’s dream.
The magazine has been so enthusiastically welcomed that print copies of back issues are now fast becoming collector’s items. The State Library of Queensland, at its request, now holds two print copies of each back issue. Electronic editions can be found on the dedicated Living in The Shires website, as well.
Susan Prior, a professional writer and editor, project manages the publication, which is printed on a quality recycled paper stock using environmentally friendly soy inks. David also uses professional graphic designers. Living in The Shires is rapidly becoming known for its very different and eye-catching cover art – a deliberate ploy to ensure it doesn’t get thrown in the bin.
David’s initiative with Living in The Shires reflects his oft-cited observation that ‘givers gain’. His staff and everyone associated with the publication are incredibly proud of it and David’s success.
Open for inspections give you a great first impression of a property and you’ll know almost immediately if it’s one you want to pursue. But that first visit can be much more than a “once over lightly” impression. How do you make sure you’re getting as much information from it as possible?
Use the time to perform a thorough first property inspection. Later on, you’ll want to engage professionals to inspect the building’s structure and health, but it’s a good idea to use your initial tour of the home to see some things for yourself.
When inspecting a property, chances are the current owners are going to present the interior of the property in the best possible light. They will have cleaned and tidied, perhaps added a new coat of paint, or even had the home styled with beautiful furniture. Whilst these things will help you to appreciate what the home could look like for you, at this stage, it’s more important to focus on the dwelling’s structure.
- Damage from pests. Recent termite damage in wooden structures is a huge red flag. Have a look for bores through wooden frames, or dirt tubes in the foundation or exterior walls that hint to borer infestation.
- Poor construction. Windows and doors that jar, or cracks in the walls around doors and windows are both signs of poor construction.
- Wet spots on walls or ceilings. Condensation within the home can lead to mould build-up, timber decay, leaks, corrosion and even loss of structural integrity.
- Cracks in the foundation. Some small cracks in a home’s foundation can be harmless, but large cracks either running down the foundation or across could mean a home is shifting, which can cause significant structural damage over time.
If you see anything through this process make a note of it, and make sure to mention it when you have a professional building inspector go through the property.
Location means more than the general neighbourhood. You may be attracted to the area, but take a look at the property’s exact location for things that may bother you over the long-term, hurt re-sale value, or cause lifestyle issues.
Things to consider are:
- Is it on a busy main road? Houses on main roads can attract lower prices than those on quieter, private and less congested roads. You’ll also have to get used to the noise of heavy traffic.
- Is it next to a retail or commercial space. This can create high levels of traffic and additional noise, depending on the type of business and its operating hours. Also be mindful of properties next to land that may be zoned as retail or commercial. Talk to your sales consultant about what zoning around the property means for potential development.
- Is the property near railway lines? A home close to public transport is always convenient, but a home that shares a border with a train line, for example can cause a lot of excess noise, potentially hurt re-sale value, and cause safety issues for young family members depending on fencing around the property.
- Are there power lines over the land/property? Sometimes found on larger parcels of land, power lines have been known to drop property prices.
- Is the property on a flood plain? Depending on the city, the climate and the proximity to dams, lakes and watercourses, the potential of flooding on the property will be different. Be aware that houses within the same street can be impacted differently by flood waters. If you have concerns talk to you sales consultant, property inspector and the local council.
- Take note of the neighbouring properties on each adjoining border for any clues you might not be comfortable long term.
- Are the neighbours’ yards neat and tidy? It might not directly impact on the property you’re considering, but what about when it comes time to sell the property? Would untidy yards next to yours reflect poorly on the area?
- Do they have pets? It might not be an issue, particularly if you have pets of your own. But look for problem pets. Is a neighbour’s dog barking non-stop during the inspection? Are animals loose or roaming? Is there evidence of pet damage to shared fences or common areas?
- Do you have a comfortable level of privacy? Take a look at different angles around the home, particularly on smaller blocks or apartments. Are you too close to neighbours? Can you easily hear them through the walls? Are certain windows placed directly opposite a neighbour’s window? Is the property fenced off from neighbours?
It’s important to remember that none of these things always have to be immediate deal breakers on a property you’re interested in. It’s about arming yourself with as much information as possible so you can make an informed decision and end up with a property you are happy with, for an amount you feel is reasonable.
Once you have made your first visit and if you decide you wish to proceed in making an offer, seek good legal, building and financial advice from the experts.
As the price of property continues to rise, many parents are stepping in to help their children buy their first home. For some first home buyers, without that help, securing a home would be simply impossible. Whether it’s through gifting the deposit, lending them the money, providing a guarantee, or being a joint borrower, there are a number of considerations to take into account. We take a closer look at just what you need to think about when deciding to help your kids buy a home.
Sort your own finances out
Helping your children buy their own home will largely depend on the state of your own finances. There’s no point lending them the money if it’s going to leave you short in your retirement. Talk to a financial adviser before you make any decisions, to determine whether or not you can actually afford to help out.
A work ethic
It’s widely believed that people who haven’t had to work for their deposit are more likely to fall behind in mortgage payments. Consider how your kind-heartedness could impact on your children’s work ethic and responsibility towards repaying their loan. Learning to budget and placing value in the effort required to secure their own home are valuable life lessons.
A breakdown in relationships
Consult with a lawyer to properly document the loan you’re providing. In the case of a relationship split, your child’s partner may be entitled to half of your gift. Consider adding in a clause that says the loan is repayable on demand, or register a caveat over the property if you feel this is appropriate. That way your loan can be called up if your child separates. By carefully documenting all transactions, you’ll help avoid family disputes at a later stage.
Can they afford it?
If you are helping out with a gift or a loan of the deposit towards a new home, check that your kids can actually afford the mortgage repayments. While the property you help buy could be rented out or sold at a later stage if repayments become difficult, not every parent wants to be a landlord and the property market may shift leaving you with a property you’re unable to sell.
Before making any decisions, it’s important you carefully weigh up where your children are headed in their professional and personal life. How secure is their job and how do their future prospects look? Are they living beyond their means already, and will they have enough to cover the repayments each month? Are they likely to move in the next year or two, which may not be enough time for the property’s value to grow in order to recover purchase costs?
Are their expectations too high?
If you are providing the deposit to help your kids purchase their first home, they would still be responsible for all of the mortgage repayments. That may mean they’ll need to lower their expectations; that four-bedroom villa in a top suburb is out of reach, and a more modest two-bedroom home is an adequate first step on the property ladder.
How you can help
Helping your children buy their own home can be rewarding for both parents and children. But it’s not something that should be done lightly. It’s vital you seek advice around the legal, tax, family and financial side of helping out. If you are considering helping your kids buy their own home, either with a gift, a loan, as guarantor, or by extending your own mortgage, talk to our mortgage advisers first about your options.
Post originally written by Mortgage Express New Zealand – Would you help your kids buy?