Top 10 Tips
from the Property Experts Video Transcripts
www.maddisons.com.au
by Lisa Tremolada
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www.maddisons.com.au
Hi and welcome to MADDISONS Real Estate Mosman Mosman Real Estate Agents
M
y name is Lisa Tremolada and I'm the licensee of MADDISONS REAL ESTATE and together with my husband Eddie, we are directors of the company.
I am so excited about the information that we are able to provide for you today. We have interviews with property industry experts, giving you their ‘Top Ten Tips’ in their chosen field and I think it's going to be absolutely fantastic - there are some incredible nuggets of information for buyers and also that will help you achieve the best possible price when you sell your home. We have also given you a report called the “21 things real estate agents don't want you to know”. This is a free report about things that we know, from having been in the real estate industry a long time, which you probably won't know. With the videos and the report, I really believe you will be well-armed to get the best possible price when you sell. If you have any questions, please call us. Our phone number is 02 9960 3444 or if you have a property anywhere on the Lower North Shore, we would love to help you sell. Also, if you have a property anywhere else in Australia we can help you by putting you in touch with another agent and even help you interview that agent. There is of course no charge for this - that’s something we take care of with the other agents. So, if you would like to know more, please email me at sold@maddisons.com.au - we would love to help you. So, thank you very much for your time and I hope you enjoy the Videos and the Report. Thanks a lot and take care.
Lisa T
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Video transcripts
Top tips from
1. Agi Magyar - Top Snap Property Professionals 2. Gary Pittard - Pittard Training 3. Mike Cass - Design-It Landscapes 4. Mike O'Hagan - MiniMovers Removalists 5. Patrick Bright - EPS Property Search - Buyers Agents 6. Sarah Hargrave - Style To Sell 7. George Birdsall - Feng Shui Consultant 8. Stephen Ransley - Tyrrells Property Consultants 9. Michael Ryce - The Mortgage Professionals 10. Roger Jenkins - Matthews and Seversons Conveyancers BONUS: Patrick Bright - EPS Property Search - Property Management
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How to prepare your home to be photographed
Agi Magyar - Top Snap, the Property Photography Professionals
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Lisa: These days 95% of our enquiries come from the internet, that's why it's critical to have your property presented in its best light. That’s why I am so excited to have Agi here today, to let you know how to present your property in the best way using photography. Thank you Agi for coming. Agi: To get the most out of your Top Snap photo shoot, we recommend a few steps and if you follow these you can achieve the most interest in your property and the best price. Here are five tips I would like to share with you and if you follow these steps, it could help me to make the most out of your photo shoot. Tip number one is what you can do to all living areas which can help you make your buyers feel that they can make your home their own. One thing is to de-personalise all the areas, de-clutter everything, remove magazines, tidy up books, ensure that all lights are working and all exercise equipment and toys are packed away.
“ … help make the buyers feel that they can make your home their own.” Tip number two is what you can do with the kitchen. We all know we have lots of stuff around the kitchen, but it's important to de-clutter and clean surfaces. It's very important to empty the sink, remove the bins and neatly arrange flowers or fruit – that actually makes it look much nicer.
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www.maddisons.com.au Tip number three is your bathroom. What you can do here to make it better is remove all cosmetics and all toiletries. Place nice matching towels, clean the mirrors, shower screens and all surfaces. Tip number four is the bedroom. It's a good idea to put on a nice bed cover with some nice pillows and remove all personal items. Also, make sure that your bedside lamps are in good working order. The last tip relates to the outdoor areas. It's a good idea to fix up your garden, mow the lawn, clean the pool and remove all toys and all distracting items. If you can, it's a good idea to set up an outdoor table with some glasses and maybe a bottle of wine. It's also a good idea to remove your car from the driveway, so when we take the front shot, it's only of the house. Once you are done with all the tidying up of your property, it’s ready for professional photography. So what are those five tips that I can share with you, to make sure your property is showcased in its best light? The first and most important thing is that we use professional equipment. We use a high end digital camera with a wide-angle lens. The second tip is about the lighting. We use professional studio lighting which means we can easily light the whole house. This is especially important when we are photographing an open plan house and we can light the back rooms just as well as we can light the front of the room. (To get a better idea about what it means the video on MADDISONS Real Estate website has before and after shots – highlighting the difference of when we did and didn’t use the lighting.)
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www.maddisons.com.au Tips number three and four are all about composition. When a Top Snap photographer comes to your home, you can make sure that the photographer will take time to work out the best angles of all areas. We take multiple shots of each room which means we have an exposed shot for the inside and exposed shot for the outside which we then merge together. This way we can achieve an image that is exactly the same as you see with the naked eye. If it's needed, we can even remove things from the picture, if there is something that shouldn't be there. Also, if you have an empty property, we can place in furniture digitally, this helps all the people who look at your photos to imagine how it could look if it was furnished. (Again, to show you how the virtual furniture works the video on MADDISONS Real Estates website shows some before and after shots for you to see the difference.) The last tip is about receiving your photos. We have a purpose-built system which is called Photo Genie. It's an online system; the day after your photo shoot, you will receive an email with all of your login details and an explanation of how you can get all of your photos from our server. You can get the small files which are the web images which you can use on websites. You can also get the print version so you can send them to magazines, brochure or signboard companies. I specialise in the Lower North Shore and in the Northern Beaches area. So if you would like to contact me, you can call me on 0451 967 115. But if you are outside this area you can call 1300 TOP SNAP or you can jump on our website which is www.topsnap.com.
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Agi Magyar Lower North Shore and Northern Beaches agi.magyar@topsnap.com 0451 967 115 Nationally Phone 1300 TOP SNAP www.topsnap.com
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How to choose a real estate agent
Gary Pittard - Pittard Training
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Lisa: Today's industry expert is Gary Pittard. Gary owns Pittard Training Group and he trains thousands of real estate agents on the best practice way to sell and list property: the best way for the vendor (the seller); the best way for the buyer; and the best way for the real estate office. Gary knows a lot of real estate agents and knows inside real estate. He will be able to help you with the top ten tips on how to look for the best real estate agent for you. So I am really looking forward to what Gary has to say today.
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Gary: Ten things to consider when choosing a real estate agent. Tip number 1 is to think carefully about your reason for selling! You might think that this has nothing to do with selecting a real estate agent, but your chance of a successful sale, with a result that you are happy with, depends very much on the reason why you want to sell. Human beings are goal oriented creatures. So if we put our property on the market with such ideas like “Oh, if I get my price I'll sell” you will probably end up with a frustrating experience. Without a clear goal, you are wasting your time and your emotional energy and also a lot of money as well. So the best question you should ask yourself before you put your property on the market is “How will your life improve as a result of this move?” If you can't discern any improvement, then don't move; stay where you are.
“… find an agent you feel comfortable with. You are going to be working with the person you choose … for the time it takes to sell your property.”
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www.maddisons.com.au Tip number 2 is to insist on a guarantee. I mean an iron clad guarantee that binds the agent to give you an honest opinion of your property’s value. Now, the guarantee that the agents I train are happy to sign says that if the property sells below the agent’s figure at the time of quoting for the listing, then the agent will not be paid a commission. Shouldn't all agents be willing to sign such a guarantee? Tip number 3 is find an agent you feel comfortable with. You are going to be working with the person that you choose to be your agent for the time it takes to sell your property. So, you need to find someone that you feel comfortable with and someone that you can talk openly with. Tip number 4 is don't agree to pay advertising costs. You'd be forgiven to think that some real estate agents are advertising agents by the way that they act. Agents who are asking you for a large up-front payment are actually asking you for money to increase their agency’s profile. Don't pay to advertise somebody else's business; if they can't find you a buyer in a cost effective manner, then go and find an agent who can. Tip number 5 is be reasonable about advertising. Now fairness is important in any business arrangement. Just because I advise you not to pay the agent’s advertising costs, this doesn't mean that you should place unreasonable demands on the agent for costly advertising campaigns for weak or impotent media. These days agents who have a good database on their website and are active sales agents who have plenty of signage in the area should be able to find plenty of buyers in your area. Tip number 6 is choose skill, not opinions. Unless an agent is willing to buy your property, his or her opinion of the value of your property is totally irrelevant. Choose an agent who has undergone and continues to undergo intensive training in negotiating and marketing. Ask to see evidence of the seminars that the agent you choose has recently attended. A good agent knows how to market your property and negotiate the highest price for their home owners. Make sure you get one who's well trained.
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www.maddisons.com.au Tip number 7 is choose skill, not the cheapest. If you choose an agent based on who quotes you the highest price or who offers to charge you the lowest fee, you are going to certainly choose the lowest skilled agent. Think about it - if they can't negotiate a fair fee for themselves, how are they going to be able to negotiate a high price for you? Tip number 8 is choose an agent who has buyers waiting. The best agents have a list of buyers that contact their agency and they follow up those buyers on a regular basis. You don't need expensive marketing campaigns if your agent keeps in touch with active buyers who are looking to buy in your area. Tip number 9 is list exclusively. Pick an agent that you feel will do a good job for you and allow that agent to work for you on an exclusive basis. If you spread your property among several agents, none of them will be interested in you; furthermore no agent will have the luxury of holding out to get the highest price for you. It will become a matter of getting the property sold quickly, rather than getting it sold at the highest price, and certainly if you want the highest price you need somebody working for you, exclusively. Tip number 10 is quote the price you want or higher. Never allow an agent to quote a price that is less than you are willing to accept. Some agents use a strategy called bait pricing, which they argue brings in more enquiries from prospective purchasers. Now of course what they don't tell you is that this dodgy trick attracts buyers from a lower price bracket, who therefore make lower offers. I'm sure you'd agree with me if I say to you if you want to sell a property for say $2m, you need a buyer who can pay $2m, don't you? If an agent suggests lowering your price to attract more buyers, you should not under any circumstance sign with that agent. So there you are - ten things to consider when choosing a real estate agent. I do hope you find these suggestions helpful and good luck with your sale.
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Gary Pittard Pittard Training Group www.pittard.com.au 02 9894 8988
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How to present your backyard
Mike Cass - Design-It Landscapes
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Lisa: Today's industry expert is Mike Cass and Mike is from Design-It Landscapes. They do landscaping, pool design and also construction. So what Mike can help you with is when you are selling your property and you are not sure how to present your backyard, as far as pots, flowers, tables and chairs to make your backyard look the best. Whether your backyard needs a total revamp to get the ultimate price or just a tweak, Mike will be able to give you some really good tips. Now, Mike has written for various industry publications, such as Outdoor Design & Living and Backyard & Garden Design Ideas. He has appeared on Clive Robinson’s radio program 2UE so he knows what he is talking about and I am really looking forward to what Mike has to say.
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Mike: Tip number 1: Seek professional advice. Discuss your garden with a designer who can help you get the most out of your outdoor space. Utilise your space wisely to achieve its maximum potential without over-capitalising.
Tip number 2: Design. Design needs to compliment the architecture of your home. Your outdoor space should be an extension of your home’s interior design and architecture. Your garden should work in harmony with your home, not against it. Tip number 3: Privacy. Know where to be seen and where not to be seen from your garden. Your garden is your sanctuary, so privacy is a crucial element. Whether it is boundary planning, fences or a feature wall, good screening will provide the privacy you need to separate your garden from your neighbour’s.
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www.maddisons.com.au Tip number 4: Products and finishes. It’s important to choose products that complement the space and that won't date. With a large range of products available such as pavers, furniture and lighting, choosing the most appropriate products can be made easier with the help of your designer. Factors to consider during this process are the product’s durability and energy efficiency. Tip number 5: Buyers’ needs. The key needs of an individual buyer should be considered. Your landscape design is to enhance the style of your home, whether it’s family orientated and child friendly, or a smaller city style terrace, appealing to a different market. Tip number 6: Security and safety. Security is essential, so consider any swimming pools or high retaining walls you may wish to protect. Strict council regulations mean that this tip should be discussed with an expert as each project will have varying requirements. Tip number 7: Entertaining outdoors. Providing outdoor entertaining is a key factor for all gardens. As most family’s outdoor spaces are only enjoyed in the evenings or on the weekend, it is therefore important to create a space for the family to meet. Whether it’s a spot for children to sit and complete homework or an area to host a family BBQ, an outdoor area is paramount.
“Know where to be seen and where not to be seen from your garden. Your garden is your sanctuary so privacy is a crucial element.”
Tip number 8: Contrast, colours and textures. It’s important to choose colours that not only add depth and interest to your garden, but also provide contrast. Quite often this may not be the owner’s first choice, but when considering the sale of your home, a designer may be able to help you with this. Tip number 9: Garden styling and the “wow” factor. This is the last tip related specifically to design. Focal points and wow factors are a big plus when entering a garden for the first time. They provide an area of interest and something that grabs your eye. This is often achieved by using a combination of pots, water features or outdoor furniture, sculptures or outdoor lighting.
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www.maddisons.com.au Tip number 10: Maintenance. Many modern families have less time to care for their garden. For this reason, it is important to know ahead of time the garden’s requirements in order to maintain its design integrity. Discuss the upcoming requirements for your garden with your designer or landscaper. Here at Design-It we offer complete maintenance overhauls to prepare a home for an auction.
Mike Cass Design-It Landscapes www.designitlandscapes.com.au enquire@designitlandscapes.com.au 02 9477 7008
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How to prepare for moving day
Mike O'Hagan - MiniMovers Removalists
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Lisa: Today our industry expert is Mike O'Hagan from MiniMovers. MiniMovers are located in Brisbane, Gold Coast, Melbourne, Sydney, Adelaide and Perth and they have over 450 employees. They are quite famous for their staff; they provide a fully cooked breakfast every morning to every one of their staff members. They have won Telstra Business of the Year Award and they have also won Employer of the Year Award. Mike manages, and is the sole owner of, MiniMovers. Now when people sell their property, a lot of the time they get overwhelmed “How am I going to move from here to there with the least amount of stress and the least amount of cost?”. This is what Mike is going to help us with today.
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Mike: My first tip, and it's a big tip, should be done before you list your property for sale, and certainly after you get right into it - reduce things. You have got to reduce what has to be moved; the less that is moved, the less it's going to cost you. And besides, if you have been in your property a long time you will have lots of things you'll want to get rid of. Friends and family - time to give it away. Garage sales, eBay - time to sell it. 1800 GOTJUNK (a small junk removal service) - time to get rid of it. Reduce, reduce, reduce; the less you have got to move, the less it's going to cost you.
My second tip is about finding a mover. It’s always a challenge regarding what to do with moving; traditionally removals were done with fixed price removals. That was more suitable for overseas international moves, but not for local moving. We have now evolved into hourly rates. Hourly rate moving is a lot, lot cheaper than fixed price moving. Page 13 of
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www.maddisons.com.au Of course the third alternative is to move yourself. When you move yourself, you will have all of the hassles of moving the fridge and the heavier items and consuming your own time. Most people use a mixture of both now days, but finding the right service to suit your move can be a challenge.
â€œâ€Ś start packing your small things early; it is probably the biggest part of your move...â€?
Traditional removalists use fixed prices - ideal for long distance interstate or overseas moving, but not really suitable for short distance moving. An hourly rate for short distance moving will normally cost you about half the price of a fixed price move. On top of that, if you want to get in and do some things yourself, you can even reduce the price further. How much you do is entirely up to you and you can dramatically change the cost of your move. We have a special website called www.helpyoumove.com.au full of handy hints that will help dramatically reduce the cost. My third hint is to start packing your small things early. It is probably the biggest part of your move; packing the small things and preparing them for the move and then unpacking. There is actually more work in that than there is in moving your furniture, yet everybody is really focused on how to move the furniture. The problem is in the small things and in fact the time and the cost of your move are related to the number of times we go from the truck and back into your house. We are going to go from the truck to the house a lot more times with the small things, so prepare the small things early and use proper removal cartons. If you use the wrong cartons it takes us a lot longer to move you and your risk of damage also goes up. The proper cartons will save you time, energy and money. So, go out and get the right boxes and use those for yourself when you make the move. If you're using MiniMovers, we buy our boxes back when you're finished with the move - we do that to save the environment and to help you. At MiniMovers we move about a 1,000 house loads a week. You will be amazed how many people don't get the simple fundamentals right, such as having the keys ready so that we can get into the house. Also, tell us about access issues before we arrive.
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www.maddisons.com.au You’ll be amazed at how many people get that wrong and that can be a really big problem. So, get yourself organised, make sure you've got the keys so we can get into the place, make sure you're there when we arrive ready to go, and make sure you've told your mover about any access issues you may have. There is no use hiding them; you’ve got to tell us about them, the more we know before we get there, the better off you are. My fifth tip is for when you’re hiring a mover on an hourly rate; remember what you're hiring. You’re hiring a proper removalist truck with all the right equipment, the right felt pads, straps, trolleys and everything else. And you’re also hiring probably two or three good, experienced removalists who are going to do whatever you ask them to do. So make sure you are clear on what you want them to do and what you want to do yourself and have all that organised and thought out before they arrive.
With your hourly rate and the ability to control the cost, one of the big secrets on the moving day is to get up early (a couple of hours before the movers arrive) and if you're going to have a couple of helpers, that is fine - get them in place early and maybe even get some of that small stuff outside and ready to go (don't block the passageways). Get it out and ready to go and that will dramatically reduce the cost of your move. One of the secrets to MiniMovers is that I have 450 young guys working for me that we train to move furniture. You know, we are all human, we all relate to each other and we all want to get on with each other. If you treat them like great guys when they get there, give them plenty of water and stop and have meal breaks, they will be nicely fuelled up. The move will go a lot, lot quicker and it will be a much more pleasant move - at the right price.
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www.maddisons.com.au When you're moving into your new place, make sure you've planned where most things are going to go. Stand near the truck and as it’s coming out, make a quick decision about where you want things to go. Try and move it once and once only, it’s much cheaper that way. And don't forget, if you’ve got a good removalist, like MiniMovers, we will help connect the washing machine and do all the handyman work as well. So make sure that the washing machine is connected and set up properly before they leave. In summary, reduce what you’ve got to move, prepare everything before the removalists arrive, get yourself organised on the day, have your keys ready and have everything organised and know where everything is going to go, and get in and help. The more you do, the less it's going to cost you. People say that moving is one of the most stressful things in life that you can do. We do it all the time; we do 1,000 moves a week. To us it’s easy. What we do is turn it into fun. Try and turn your move into fun, relax and have a joke with the crew and see the funny side of things, whilst getting the job done. Having fun is what it's all about. We’re a bit different at MiniMovers as we only do short distance direct door to door residential furniture moving. We specialise in that, we are very good at that and we go out of our way to lead the market in short distance moving. We have very large and small trucks, whatever you need to suit your move. But all we do is the short distance move, we don’t do long distance moving, no interstate moving, and no distractions from what we do and do really well. We also guarantee that if anything is damaged, we will fix it. This comes from our beliefs - we believe that you shouldn't have to pay insurance for our mistakes. We guarantee that if we damage anything, we fix it and in 25 years we have always stood by that guarantee.
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Mike O’Hagan MiniMovers www.minimovers.com 1300 366 000
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How to buy right – property search
Patrick Bright - EPS Property Search – Buyers’ Agents
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Lisa: Today's expert is Patrick Bright. Patrick is from EPS Property Search in Neutral Bay and Patrick is one of the leading buyers’ agents in Sydney. Patrick has also written three bestselling books on how to buy property, so what Patrick doesn’t know about buying property is not worth knowing. So thank you very much for joining us today Patrick - what are your top ten tips?
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Patrick: The first thing I think people have trouble with is developing a “needs and wants list”. So when people are searching for property, they go looking but they don't have a wish list and that is the most critical thing you can do - get a detailed list of everything you need and everything you want. Another thing you can do is set yourself up with buyer alerts on the internet. The most important thing is to build a database of all the sales agencies of influence in the area. So let's just say, for example, the Mosman/Cremorne/Neutral Bay area. There are roughly 60 agencies and over 300 sales agents. You need to build a database of those people to know of any properties coming onto the market. You want to have access to what they call 'silent sales' or properties that are quietly listed. Unless you are in touch with those agents, you won't know about them. Probably a third of the property we see is sold before it hits the public market. Some of that we buy, some of that we don't, but obviously if you want first choice, you have to be up with it.
“… get a detailed list of everything you need and everything you want.”
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www.maddisons.com.au The next thing is looking at valuing properties; assessing a price value - if you want to be as informed as the local real estate agents I think that the most important thing you could do is look at around 100 properties. Now you may think 'Oh 100 properties, that's a lot of property' and it is a lot of properties but let's break that down. If you look at 8 to 10 properties a week, which is easy to do on a Saturday if you're organised (we see up to 20, but if you look at say 8 to 10 properties a week over about 8 to 10 weeks you’ll be looking at about 100) you are going be really well informed about the current market and what prices are. With current market knowledge, you can treat every property as if it were going to auction. So many people get frustrated with auction, or 'offers above and ‘price ranges’. People just say, “Give me a price. What do you want for it?”. Don't get frustrated with that; if you get educated and become informed, you won’t be frustrated and you’ll be able to put a fair price on a property.
“Keep your emotions in check when you are looking at properties. Don’t disclose too much … Try to be fairly neutral ....”
I’ve seen people look at asking prices and just take 10% or 20% off the asking price and think that might be what it’s worth. I have seen properties that have an asking price way over what they are worth, so taking a % off the asking price is not the answer. For example, say I get $50,000 off a million dollar asking price, then that doesn’t mean you’re actually getting a good deal, because it actually could be only worth $900K. If you get $50k off a million you've paid $950k you’ve paid too much, so getting out there and doing the research is the only way you are going to know about that.
Another good tip - building and pest inspections. Do not buy properties without them. I speak to solicitors all the time; they say our clients don’t get them. I have been gazumped a number of times by buyers who weren't getting a building and pest inspection. What you want to know with a building and pest inspection is whether the property is going to fall down or does it have termites or structural damage? The rest of the report is going to tell you things that you can probably see visually yourself, but those things are not visual all the time, so spend $500 or $600 and get the report done. A strata search as well, if you are buying an apartment, that’s important.
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www.maddisons.com.au Keep your emotions in check when you are looking at properties. Don't disclose too much to the sales agent about how much you like the property. Try to be fairly neutral, don’t walk in and if you fall in love with it, don't have that written all over your face, but don’t also at the same time be really negative about the property. Because if you show negativity towards it, the sales agent is going to assume you’re not interested and they are not going to follow you up. But if you say to them “Look, I am interested, I do like it”, just don’t be too gushing over it because that won't help when it comes to negotiation time. Researching on the internet. Now this one I’m finding more and more frustrating. I’m finding more and more people are buying properties “sight unseen”; they are relying on the photos on the internet. Now, let's be clear, there is a bit of poetic license with marketing of property and marketing any product that you’re buying. Photos with artificial lighting make the property look its best; they’re taking it from wide angles to make it look good and that’s the job of the sales agent so let’s not bash them up about it - they’re there to make the property look fantastic and show it in its best possible light. So, understand that. They are not going to have the property looking at its most average.
So do not buy a property sight unseen; it is critical that you go and look at the property. It does happen and it is madness. You can go and get someone to look at it for you if you can't go and look at it yourself. Often I get asked by people who are interstate or overseas to buy them a property. They send me a link, this one looks fantastic – I go, take my photos, send them the photos and they often say, “Did you go to the same property?” Buying at auction. A lot of property in the Lower North Shore is auctioned. If it’s going to auction and if you have never bid at an auction before, I suggest you go to probably a dozen auctions, even if you have bid at an auction before, go to about a dozen auctions to get the vibe, see what it’s like so you understand what goes on and what can happen.
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www.maddisons.com.au You probably won’t see the same thing happen at all of the auctions, because they have different parties involved and different auctioneers, different sales agents, different personalities. So you don’t get bullied at the auction, understand the rules of the auction; it is easy for you to be bullied and pushed around by the sales agents and the auctioneer, if you don’t understand what’s happening. It can be quite an intimidating process. Be very careful.
“Value isn’t just based on location. “ You can buy fantastically well at auction. I’m very happy to go to auctions and buy properties there, because you know you can really get good prices with people being put under pressure to sell on the day. It doesn’t necessarily always mean you get the best price. Sometimes they do get a great price, sometimes they don’t. So if you do your research, and you set a realistic limit, you will know whether you are buying well or not. Value isn’t just based on location. Just because you buy in a suburb, say I pick Mosman for a suburb, there is good and not so great parts to Mosman. Every suburb has A, B, C and D grade properties if you like in different locations and positions. When you are researching be very careful that you’re not paying an A grade price in a C grade position - that's very easy to do. Different sides of the street, for example, can be different. Pick Cowles Road for instance, that’s got a high and a low side to it and it’s got a south and a northern side of Military Rd to it. The prices vary 10% or 15 % on that street, just by which side of Military Rd you’re on and whether you’re on the high or the low side. That's a big price difference when you are talking a couple million dollars for the average home in the area. You’re talking a couple hundred thousand dollars difference. If you look at a property inspection report (which you can buy off the internet for $50), they are going to give you a very rough guide. Just because other properties in the street sold for $2m it doesn't mean this one is worth that. It could be worth $200,000 or $300,000 less very easily. The other thing that really influences price that people overlook when they are getting property inspection reports is the floor plan. Those reports don't give you the floor plan - they do not give you the position the house is situated on the block.
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www.maddisons.com.au Things to consider - If you have a block 400m2 or 500m2 in size, is the house situated at the front or the back of the block? This is important because we don’t use our front yard, we use our backyard and if the house is situated at the back of the block and there is a lot of front yard, that’s a lot of wasted land - you could be paying hundreds of thousands of dollars for 100sqm of dirt that you’re not even going to use. The other thing these property inspection reports don't tell you - is the property renovated or un-renovated? Layout and flow is also very important. These reports also don't tell you about the privacy. Is the backyard looked upon by two or three neighbours? Or is it a private tree lined street? Does it have a view? These are the things that these property reports don’t have. Google Earth is helpful, but once again it won’t tell you the aspect. Google Earth doesn’t put you in that physical position where you can look out of the bedroom window or look off the back deck. So a physical inspection is critical. When buying these reports be very careful about comparable sales reports that you buy for $50. That's why I recommend you look at 100 properties, because you will have seen some of the properties that have recently sold so you will know what value and weight to put on them. This is where I see people getting misled or hoodwinked on price very easily and overpaying a lot of money. Another thing people get worried about is - what is the street like? Is it going to be busy in the mornings, is there going to be ease of parking? If some of the areas don't have a lot of parking on the street, I suggest that you go to the property at peak hour and check it out, and also, sit there between 5pm and 7pm when everyone is coming home from work and see how quickly the spaces fill up. Then you will know if you’ve got off street parking or not. This is a good way to check that out. If you’ve got several properties on your inspection list that you’re looking at, there might be 3-4 properties all open between 10am and 11am and obviously you can’t get to all of them at once. Get up at 8am in the morning and go for a drive past them; that usually rules a few out.
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Patrick Bright EPS Property Search www.epspropertysearch.com.au enquiries@epspropertysearch.com.au 02 9904 4722
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6
How to style your home for sale
Sarah Hargrave, Style To Sell
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Lisa: Today's industry expert is Sarah Hargrave. Sarah is from Style To Sell. Sarah graduated in interior design in the UK and before moving to Sydney worked for a couple of different companies before starting her own business. She joined forces with Sherrie White back in 2009 and they are really taking off with their business. Their role is to help present your home at its best before putting it on the market and therefore achieving the best possible price. Sarah writes for different magazines such as Country Home Ideas and Sarah also has a Facebook page where she puts tips on how to get the best price when selling, so I am really looking forward to hearing what she has to say today. Thanks Sarah, so what would you say would be your top ten tips?
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Sarah: Most home buyers are attracted first and foremost by the appearance of your home. So it's important to remember, first impressions are lasting impressions.
My first tip would be to start with the street appeal of your home. This is where priceperception and positive and negative impressions are made. Ensure that your letterbox and fences are well maintained, lawns are mowed, and the house number is in good condition and easy to see.
Start with a checklist and work through your home, room by room. Deal with minor repairs; physical faults convey a message of neglect and can send alarm bells to buyers that the home hasn't been well maintained.
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www.maddisons.com.au Declutter. Clutter can make rooms look small and pokey and distract from the good features of the property. Hire storage space if necessary to store excess furniture and clutter. De-personalise your home. Tone down items that give the home strong personal identity and pack away personal photographs, religious items, trophies and certificates. Clean, clean, clean. It’s the cheapest most effective way to give your property a face lift. Kitchens and bathrooms should be absolutely sparkling. Let the light shine in. Open up blinds to increase the natural light as much as possible. Pleasant smells create pleasant moods. Allow fresh air to flow through your home where possible. Remove pet beds and food bowls and having the carpet cleaned can help to eradicate odours. Fresh flowers and a clean home do wonders for the senses. Furniture layout is crucial. It is important that you clearly define each area as this will create a feeling of space and harmony. Accessorise. Your home should look tidy but not sterile. Accessories are a fantastic way to inject interest using contemporary colours and textures, such as cushions, throws and artwork without being overpowering.
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Sarah Hargrave Style To Sell www.styletosell.com.au info@styletosell.com.au 0450 180018
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7
How to create harmonious energy in your home
George Birdsall, Feng Shui Companion
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Lisa: Today's industry expert is George Birdsall and George has an engineering degree, majoring in construction management and he has also written two books on Feng Shui and one on home decorating. So George is the perfect person to help us today talk about Feng Shui and how it's going to affect your property. It could be a property that you are selling, or a property that you’re buying; in fact any home where you would like to create a more harmonious feel and a beautiful energy. So I am really looking forward to speaking with George today.
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George: I first got involved in Feng Shui when I was building a large building in Sydney’s China Town in the mid 80's and found out that if you have escalators facing straight out of the door, all the money would flow out and things like that, so I became very interested in the whole concept over the years. So over the last 20 years I have been able to apply Feng Shui in ways that make a difference to my life and also to people around me and people I have done consultations for. One of the first tips that I have in Feng Shui terms is when you’re buying or selling a house or just living in a house generally, is to look at the clutter in the house and how that affects things. Clutter is not a mess that is left by kids and things like that, it’s more things that are left lying around that have been there for six months or a year that haven't been moved, and they then start to block things up. So it's really good not to have year-old Vogue magazines on your dining table or your coffee table. It's more important to have more up to date things and things that are always moving. You will notice when you look around a place whether things are being 'blocked' and the flow is not going well in a place in Feng Shui terms if there is too much clutter.
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www.maddisons.com.au The second tip I’d like to talk about in terms of Feng Shui when you are buying or selling a house or just living generally, is about the impact colour can have in Feng Shui terms on you and the people who live in that place. The idea of colour has been integrated with Feng Shui for thousands of years and the different colours mean different things. For example if you go into a Chinese restaurant and you notice it’s all painted red, they do that on purpose - to try and generate more energy so that people will eat the food fast and get out and they can get more people in. In a house, it’s not appropriate to use the colour red, say in a bedroom, because it will generate too much energy and you won't be able to sleep. So it’s important to look at how you use colour within a place and do something that feels good to you, don’t go painting lots of red rooms everywhere. I tend to recommend you use a very neutral palate and add colour as you go along.
“… don’t mix the energy of your work and relaxation … try to keep the location of work and relaxation separate, so away from the lounge, dining, kitchen and bedroom.” The third tip I want to talk about in terms of Feng Shui is the idea of how you use mirrors within a space. A lot of the time it’s really important to be able to put a mirror somewhere near the front door to bring the chi and energy into the place because otherwise it can be a little bit blocked. So a mirror can help to bring that in and it could also be used to amplify a view from outside. I have seen one house where they put it near a balcony and reflected the view of the water back into the house and that was a lovely thing to do. One of the things to watch in terms of mirrors, if you use big mirror wardrobes in bedrooms and you're not sleeping very well it could be because the mirror is generating too much chi. It’s really good to find a way of covering those mirrors up if it’s causing you not to sleep very well.
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www.maddisons.com.au The fourth tip I would like to talk about in terms of Feng Shui when you’re buying and selling a house, is to look where the bathrooms are located. There is a concept within Feng Shui that if you have a bathroom in the far left hand corner (which is known as the wealth corner) it is seen as you flushing your wealth away. It’s very important that you understand that you can correct that - it doesn’t mean you don’t buy the house, it means you just have to keep the toilet lid down, put a little crystal in the window, put a bagua mirror over the face of the door and keep the door closed and that symbolically encloses the energy. I first came across this during a consultation when one of my clients was telling me how he’d had a house like this and gone bankrupt while he was living in that house. He now realises what had happened. So, consider where the bathroom is, stand at your front door, and if the bathroom is at the back far left side, make some Feng Shui corrections and that could save you from going bankrupt. The fifth tip in terms of Feng Shui is to look at the plants that you have inside and outside of the house. In particular, in terms of Feng Shui, if you have plants that have leaves that are very spiky, it’s symbolic of daggers of chi or energy coming in, which disturbs energy and it’s preferable to have round leaf plants. I discovered this one day on a consultation I was doing - I arrived and came up the driveway instead of the front path. When I looked back, the front entry path to the house had a line of rose bushes each side and the lady who owned the house told me everyone came up the drive way, no one came up the front path. So when you’re looking to sell a house, consider how people come to your house and come to the front door. If you’ve got lots of spiky plants you will get less people coming to look at the house and you’ll be less likely to sell it. So, look at spiky leaves, look at round leaves and make sure the house is in a way that the energy can flow and people are open to come to that place.
Tip number six is to consider the maintenance of your house and the impact that can have on people who are looking to buy it, if you are selling. Look at the house from the buyers’ point of view.
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www.maddisons.com.au And consider the things that they might view: is it open, is it welcoming, is there any paint peeling off a sideboard or a gutter or anything like that, is there anything that needs a little touch up? First impressions are really important. Then when you get inside the house, it's the same sorts of things. It's funny when you step inside someone's house and even from a subconscious level, if it is something as small as a light bulb blown, it can turn them off very quickly, in very subtle ways. So, make sure all the small maintenance items are attended to. That way, people will have the best first impressions. Tip number seven is the location of your home office. Many of us today have a home office. It is really important that the home office is away from all the regular activities and that you don't mix the energy of your work and your relaxation time in the home. So try to keep your home office located away from your relaxation area in the home, away from the lounge rooms, dining rooms and kitchen. Particularly don’t have a home office located in a bedroom. It disturbs the energy when you want to sleep. The other thing is, if you do have a home office where you sit at your desk facing the wall and your back is facing the door way to come into the office, this is not ideal. In Feng Shui terms it’s symbolic of being stabbed in the back and this will disturb your work and you won't work as efficiently. So just consider where the home office is located and if you can have a separate entrance to it then that will be much better for the energy as well. My eighth Feng Shui tip would be to use your common sense and use your intuition of what makes you feel good. Usually when you walk into someone's house you can tell if it has been loved and really well looked after and if it’s worth going further with it. Other times when you walk into a house and you have that inner voice that tells you that something is not right - you should listen to that voice and move on; it's obviously not the property for you. So don't disregard those intuitive feelings that you have about a house, because those feelings are usually right. Look for a place that makes you feel happy and good and you will live a long and happy life there.
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www.maddisons.com.au The ninth tip in terms of Feng Shui - can you see the back door standing from the front door? It symbolically means that the energy is flowing through the house too quickly. And it can be that the energy in these houses is represented by money. So houses like that tend to have the money flow out much quicker than it’s coming in. They might get $100 worth of income and then the next day get a bill of $100. But in terms of Feng Shui, it always has a solution for these kinds of things, so there are things you can do which will slow the energy down between the front door and the back door. It can be a wind chime, a piece of furniture, a mirror or anything symbolic. You can make changes so it shouldn’t stop you from buying that house, it just means that you can make some Feng Shui energetic corrections, and then you will be able to hold on to your money longer. You can look for that in any house whether you are buying or selling. My tenth and final tip has to do with the whole concept of the esoteric view on things from when you are moving house and buying a property - all of these sorts of things - it can be quite a stressful time. Even though you don't see it around you in a physical sort of sense, you feel it inside you that the stresses are there. This tends to leave an imprint on other people as they are coming to look at the property - they can feel there is something not right. Some of the things you can do in terms of Feng Shui is start shifting that energy by lighting a candle and asking for your connection of the house to be cut it's like cutting the cord of a baby - because if you are still connected to the house, the house won't sell. It is important to remember that with Feng Shui, it is mostly energy. It’s not always visible and often it’s the invisible things that will come in as well. You will get a feeling as though you need to make a change. It's called sacred clearing and sacred space and people have done it for thousands of years. So in terms of Feng Shui, it’s always good to put a little bit of Feng Shui into your life, not your life into Feng Shui.
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George Birdsall Feng Shui Companion www.fengshuicompanion.com George@fengshuicompanion.com 0411 420006
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8
How to get the most out of your pre-purchase inspection
Stephen Ransley, Tyrrell’s Property Inspections
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Lisa: Today our industry expert is Stephen Ransley, and Stephen is the general manager of Tyrrell's Property Inspections. Tyrrell's Property Inspections have been in NSW for over 30 years and they are actually the largest building consultancy firm in NSW. They provide a full range of building advice, including dispute resolution, fire safety in buildings and of course pre-purchase advice and inspections. Stephen is going to help us today with the top ten tips, and how to get the most out of your building and pest report and also, as an owner, how to present your property the best way to have a building and pest inspection. I am really looking forward to what Stephen has to say today.
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Stephen: I would like to give you the top ten tips for getting the most out of your pre-purchase inspection.
Firstly, I want to clarify that vendors and sellers, or home owners and purchasers have different priorities in the selling process, so I want to offer my tips to home owners first, followed by my tips to purchasers. Firstly to home owners - fix and repair obvious defects in the home, particularly water leaks and lighting, anything that is going to be seen by purchasers when they come through. My second tip to home owners is to avoid “band aid” solutions when fixing defects; my mantra is “do it once, and do it properly”. My third tip for home owners is to make sub floors, roof voids, and detached garages or sheds easily accessible for the building consultant to get in.
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www.maddisons.com.au So now, my top ten tips for purchasers are, firstly, select a reputable building consultant. There is a wide discrepancy in services out there. It is important to ask about details like licenses, insurance and experience before you go ahead and pay for a report that you find may not meet up to your expectations.
“When thinking about building defects, ask yourself: 1) can I live with it and 2) is it reflected in the selling price.� My second tip for purchasers is to meet your consultant on site if possible. Have another look around and get the consultants feedback while physically looking at the problem, can prove invaluable. Building consultants will be more than happy to talk to you, right after the inspection. My third top tip for purchasers is to ensure that you select the right service. Many building consultants, don't have timber pest qualifications, and won't offer a combined timber and building inspection as standard. Tip four - check their environmental credentials. Most good building inspectors will offer information about building orientation, solar hot water, photovoltaics, insulation, heating and cooling systems contained within the building. Tip five - read the entire report. Don't just rely on a conversation with your building consultant to form an opinion. Tip six - further information can prove invaluable. Remember the inspection is visual only, and there are many reasons why your building inspector may not be able to pick up on a subtle or hidden defect. Ask the vendor to clarify your questions so you understand the story of the property. Get a strata records inspection if it's a strata property. Get an engineer’s advice, follow up the timber pest-related advice. All this is very important.
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www.maddisons.com.au Tip seven - always check with the council about certificates relating to building work on the property. Especially if there has been owner-builder work. Tip eight - we think vendors and purchasers want the same thing out of this process; in the main, a vendor wants to sell a property that shows him or her in a good light. A successful sale depends on open, accurate and clear advice, and depends on all parties acting on that information accordingly. Tip nine - when thinking about building defects, ask yourself 1) can I live with it and 2) is it reflected in the selling price? My final tip - there will always be defects found in properties; many are age-related or just poor building work. The building consultant is not there to say how good the house is, he is there to report on the problems found in the property, so keep it in perspective.
Stephen Ransley Tyrrell’s Property Inspections www.tyrrells.com sransley@tyrrells.com 0423 233595
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1800 1870 08
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9
How to finance your house purchase
Michael Ryce, The Mortgage Professionals
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Lisa: This week's industry expert is Michael Ryce. Michael is from The Mortgage Professionals. Michael has had a very long and successful career in dealing with people in the Lower North Shore in lending. Michael is the person to see, whether you are a first home buyer looking for somebody to guide you through the process, or somebody who has a business, who is looking to extend their portfolio and looking for somebody to deal with the complexities of it; Michael is really the person to see. OK Michael, so when our buyers are looking to obtain a loan, what are the top ten tips that you could give them?
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Michael: My first tip is understanding your short and long term investment goals as far as the property you are getting involved in is concerned. For example, you will require a totally different financial structure for a short term renovation as opposed to looking at a long term investment property that you are planning on holding for a longer period of time. Or perhaps you are upgrading into a new principal residence that you may be looking to move into for a longer period of time. That brings me to my second tip, which is to budget and set limits on what you are looking to spend. Once you have done that, you can obviously fit the household budget around that home loan repayment and be more particular when you are looking for a home to purchase. The third tip is to start simulating your home loan repayment, so in terms of the deposit accumulation process, start paying into your savings account at the rate you would pay your home loan. That will get you comfortable with that and help you to work around your household budget. In doing that you should also allow for increases in interest rates. That's actually quite topical at the moment, so it's a good idea to budget for a 1% to a 1.5% increase.
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www.maddisons.com.au Organising a solicitor or a conveyancer in advance is my next tip. There may be a situation where you actually find a particular property that you really like. The chances are a lot of other people are going to really like it too, in which case, you might be in a competitive situation and need to move quite quickly. Already having a conveyancer or solicitor ready to review the contract before you have moved forward (after you have organised your home loan) is obviously going to save you some time and energy as far as the whole process is concerned. The next one is to actually have a home loan approval pre-approved before you go out into the marketplace to look, because once again, if you do happen to find a property that you really like, you will be ahead of the crowd if you have already got your finance in place. What I mean by that is, rather than discussing it casually with your mortgage broker or any other lender, it's about sitting down with them, discussing the alternatives, coming up with the best solution and actually submitting the paperwork so you actually get a written pre-approval from your lender. That allows you to go out into the market with a lot more confidence for properties being sold by private treaty or for putting your hand up at an auction as well. On to tip six, which is to obtain a copy of your credit file. You can do this for free from www.mycreditfile.com.au. There are a couple of advantages in doing this, the first one is to see any small blemishes on your credit file that you may have potentially forgotten about. Because underwriting criteria with the lenders has increased since the GFC, this may make it more difficult for you to obtain the home loan that you are looking for. So it's best to be on top of that before you lodge your home loan application. Tip seven is to be ready with your supporting documentation. This is relevant for first home buyers as far as the accumulation for their deposit is concerned. Lenders just don't want to see large amounts just dropping into the bank account in the last couple of weeks. What they would like to see is an accumulation of the deposit over a number of months. So demonstrating that is really important for a first home buyer in terms of having their home loan approved as quickly and smoothly as possible.
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www.maddisons.com.au For self employed people, having their tax returns prepared as soon as the financial year ends is the easiest way for them to present the correct documentation and be able to have their home loan approved as smoothly and as quickly as possible. If the lenders are looking at old information, they may not be able to approve your home loan as quickly as if you are able to give them your current information. Tip eight is to pay out your credit cards and reduce your credit limit. We have all had letters from the bank offering additional credit cards and increasing the limit on our existing cards. What people forget though, is that when the lenders are looking to approve your loan, they add everything up together, and then they assume that the whole amount is outstanding. So potentially if you have 3 credit cards and each has a $10,000 limit (and you may not have any credit on those) and the lender will assume that you have $30,000 outstanding on those, because potentially, that is what can happen today if you go out and start spending on them.
“Two quick and easy strategies that are going to help you … pay fortnightly … and pay a little extra.” So what I do recommend is that if you do have any credit card debts, you pay them off. Because you potentially have to pay 16, 17 or 18% on that money and that is obviously a lot more expensive than on the home loan. The second thing is consolidate those cards, and bring them down to something you are able to live with. Tip nine is to research your loan options whilst seeking professional and knowledgeable support from a mortgage broker. The big benefit about working with a mortgage professional is that rather than having to tell your story three or four times to three or four different lenders, the mortgage broker (an agent for up to 20 different lenders) can explain the different options for you from each of those lenders, as well as customising your different situation to each lender as well.
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www.maddisons.com.au There are some lenders who, for example, won't support non-resident borrowers. Mortgage brokers know which ones they are, so we don't spend or waste anyone’s time in taking borrowers to a lender who's not going to support them. Saving time is what working with a mortgage broker is all about, as well as cutting through a lot of the clutter, as far as the home loan industry is concerned and working through which home loan is going to work for you. My last tip is actually more relevant to when you have the home loan up and running. What we are trying to do is get that home loan paid off as quickly as possible. Two quick and easy strategies that are going to help you with that - the first one: pay fortnightly. That's because there are 26 fortnights in a year and only 12 months, so effectively you end up making extra payments that you wouldn't actually notice. The second one is to make whatever opportunities you can to pay a little bit extra. Obviously the minimum payment is all the banks are looking for, and they are trying to keep that loan outstanding as long as possible, because that is going to be the period in which they receive interest. But if you can pay even a couple of hundred dollars a month more, then that is going to be a big difference and bring years off the term of the loan.
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Michael Ryce The Mortgage Professionals www.mortgageprofessionals.com.au mryce@tmps.com.au 0416 240 092
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10
How to be informed regarding conveyancing
Roger Jenkins, Matthews & Seversons Conveyancers
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Lisa: This week's industry expert is Roger Jenkins. Roger is from Matthews & Seversons Conveyancers. They were established in 1967 and they must be doing something right because 90 - 95% of their clients are repeat and referral business. So thank you for joining us Roger, what are your top ten tips? Roger: My first tip would be that legislation requires that a contract is prepared and is ready before an agent markets the property. This includes title searches, in particular a 149 zoning certificate is needed from the council, so contract first. It is very frustrating for agents who are waiting for a contract to advertise a property. Tip number 2 - we provide our clients with an information or instruction sheet. It's very important that clients fill this out accurately and get it out to us nice and early. In particular, have a think about things like releasing deposits – it’s a very popular request these days. If you are looking to purchase a property in the future or provide a settlement, it may involve a 5% deposit, so have a think about that. Your mortgage - will the sale cover the discharge of the mortgage? In particular anything that adversely affects the property that a purchaser should really know, please tell us up front. It's something that if we could get on top of that right away, it will make things nice and easy down the track. There is nothing worse than having a problem popping up just before exchange and having to deal with it then. Tip number 3. When you have completed the information sheet, start the discharge process. That is the discharge of your loan from your bank. Even if you haven't found a buyer yet, it's a good idea to touch base with your bank, get the necessary documentation, fill it out, and have it all ready to go. The slowest part of the process is discharging the loan - and the most frustrating.
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www.maddisons.com.au Tip number 4. When the contract is prepared, have a really good read of it, the special conditions, the front page especially and in particular all of your personal details. Make sure all the spelling is correct and read the special conditions. If you have any questions, ask up front so that when things get heated, towards exchange or settlement, everything gets sorted. So read that contract. Tip number 5. When you find a buyer, we will receive a sales advice from the agent. We'll fill out the buyer’s details, we'll fill out the buyer’s solicitor’s details, and we’ll fill out the purchase price. So there will be some amendments, we will issue that to the solicitor of the purchaser, so please again have a really good read of that contract and make sure you are happy with it. Then get in nice and early to sign that contract. Most negotiations take place on the weekend so we can get it in on the Monday. There is nothing worse than at 4.50pm on a Friday receiving a contract from the purchaser’s solicitors, and not being ready to go on the vendor’s side. So get that contract signed nice and early.
“… if anything is going to delay settlement, it’s going to be the bank. Get that disclosure form, keep on top of your bank … ” Tip number 6. You've found a buyer, they have committed to the property, it’s exchanged; the most important part of selling your property between exchange and settlement is the bank. Bank, bank, bank - if anything is going to delay settlement, it's going to be the bank. Get the discharge form, keep on top of your bank, and provide us with the details with a direct contact at the bank (a private banker/a personal banker, something along those lines). Keep everyone in the loop and let’s get everyone to work together. Banks are bureaucratic at the best of times - with loans that are going out the back door, they are worse than ever. Tip number 7. You need to keep paying your bills, even though you have exchanged on the property, especially your mortgage payments. Provide us with a copy of any bills, any rates notices, council notices and any strata levies.
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www.maddisons.com.au You have to be careful of these – any bills due close to the settlement date, make us aware of those and we'll keep an eye on it, so that you don't double pay at settlement. Tip number 8. Sign your transfer nice and early. A classic example is when we have a client due to settle today and the transfer hasn't come back signed by them. The vendors are overseas, so it has now become very difficult and the settlement is in jeopardy. For all the parties that are aligned, when something is not done, their plans are also thrown into disarray, so you need to sign that transfer nice and early. Tip number 9. If you are selling a property with vacant possession, the law requires that it be cleared. The law is not going to come down on you if you leave odd bits and pieces behind, but we strongly recommend that you do clear the property and clean the property as well as a courtesy. Tip number 10. After settlement, don't pay anything. You will find that you may get bills from council, water, electricity or whatever it may be, but don't pay anything - please clear it with us first. If it’s a bill that is the purchaser’s liability, we will forward it on to the purchaser’s solicitor. A good practice at the moment (especially as the banks who are registering the transfer can take months to do so) is to maybe do a title search about a month after settlement just to ensure that you are no longer the owner of the property. What we can do then is get onto the other side and put pressure on the banks to get it registered. So don't pay anything after settlement.
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Roger Jenkins Matthews & Seversons Conveyancers www.msconveyancing.com.au roger.jenkins@msconveyancing.com.au 02 9953 9930
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Bonus video
H
ow to choose a property manager
Patrick Bright - EPS Property Search – Property Management
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Lisa: Patrick has written 3 books on real estate so Patrick knows a lot about real estate and his books are on the best sellers list as well. Patrick: Thank you Lisa, well, I have brought along my list of notes to make sure I run through all the good points when selecting a property manager and what you should get from your property manager and I will run through those with you.
First thing I would say is hire an experienced property manager; it sounds obvious, but a lot of people aren't very experienced in property management. As it's your most valuable asset, make sure you hire an experienced property manager. A lot of agencies run with juniors because of the cost of the salaries and the wages. Inexperienced people and juniors have to learn - just not on my property! Be careful of an office where you are reliant solely on one person. There are a lot of boutique agencies out there running property management. Boutique is good, but micro-boutique is not so good. If you have only got one property manager there and something goes wrong and they’re off sick or they are away or they leave, there is no continuity of information and history of what’s going on with the property. The management, the owners, the tenant, it's pretty important, so having at least two property managers in an office would be pretty important to pick. The same goes with the big ones. You can also go the other way; when agencies get too big, then people get lost and your management can just be a number. So, from my experience, having somewhere between two to six property managers for an agency is probably a good number. You've still got some personalised service, they know who you are and your historical information isn't lost if one person leaves.
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www.maddisons.com.au Regular rent reviews - it’s very important that that's done. I'll give you a quick story; actually it was only a couple of weeks ago. We bought a property down in Cremorne Point. It’s in Milsons Road, it's an apartment building (I won't give the apartment number for privacy reasons). We purchased the property for $1.8million, It's a three bedroom apartment, two bathrooms, with knock-out views of the Harbour as you'd expect for that money, and two parking spaces. I went in there with the agent and asked the agent what the property was rented for, and he said “I don't know'” - not really good to start with. So I asked the tenant who was there and they said “We are paying $750 a week”. I nearly fell over, because that property probably should have been around maybe the $1250 or maybe even the $1300 to $1400 mark with that kind of value and view. I then asked them how long they had been paying that, and they said “about the 4½ years that we have been here”. They had never had a rent review, in 4½ years! In fact I asked them when the last time the property manager had inspected the apartment was and he said “We haven't seen them since we moved in”. How much money has the owner lost? Well, you think about that, $750 when it should have been no less than $1250, that's $500 a week; you are talking about $25,000 a year under rented. So that's a lot of money, which brings me to my next point. Inspections: make sure your property manager is doing property inspections. The only way you are going to know is if they send you a copy of the property inspection report that they actually did. So it's important to get that done and have them booked in.
A great way to pick a property manager is to mystery shop them; I think it’s great that people do that. The reason I got that idea is because it has happened to us. The people who mystery shopped us turned around and said “We'd like you to manage our property.” We said “Didn't you apply to be a tenant?” They said “Yes, we were just checking out what you were like.” So I think that's a great idea. Page 40 of
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www.maddisons.com.au We have had a few clients do that (property owners) over the years, which I think is a great “… they will have a bit idea. I think that if we haven't earned the of empathy with you business, then we shouldn't have it. These guys, and a bit more of a they went through the whole process. So if they detailed understanding treat your tenants well, they are going to treat of what is required …” your property just as well, so it's important to have a relationship. It's not all about respecting the landlord and not worrying about the tenant, there are a lot of professional people that rent and we have found out over the years that a lot of our tenants have investment properties. They are just choosing to rent because it suits their lifestyle at the time and then later we have picked up their management. When we found that out, we wrote to our tenants and said does anyone have a management you would like us to look after? And we have actually picked up business from that, so it's a good way to do it - treat your tenants well. Is your property manager an investor? This isn't critical, but I think it’s important though. Find out if the property manager who is looking after your property actually owns property as well and do they rent it out. Because that way, they will have a bit of empathy with you and a bit more of a detailed understanding of what is required and what you expect. So I think that is a good thing to have, they'll have a much better understanding. Financial reporting: you should be able to get your financial reports monthly, or annually whatever you prefer. Some owners want it monthly, some just prefer it quarterly or annually, so make sure they are prepared to give you the information when you need it. Can they assist with renovation? We are a bit unique as we do that. It's not critical, but if you want to add value to your property, it's good to have a property manager that actually does renovations. We do a lot of project management renovations so I'll give you an example: we just did up a one bedroom apartment for a client. We spent $50,000 gutting it and doing it all up. The rent before we got the property was $350 a week rent and after the renovation, the rent went up $520 a week.
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www.maddisons.com.au If you think about that from an investment point of view, that's an extra, let’s just say $150 a week (it's a bit more than that, but let's say $150 a week) and that's $7,500 a year. Remember, it’s a $50,000 outlay, so if you borrowed that $50,000 at 7%, that's $3,500 a year in interest, yet you’re getting an extra $7,500 a year in rent. So your $4,000 better in cash flow and the property’s asset value has jumped, we know, by more than $100,000 by doing that renovation. So, for an outlay of $50,000 you have increased the cash flow by about $4,000 a year; it could be a really good idea to do that to your property. So if you are sitting out there with a property that's tired, it's worth having a look at renovating it and adding value and increasing your rent return. I guess the other thing that people will talk about is fees. What do you pay a property manager? They vary, some of them are quite flexible and some of them will negotiate on fees just to get the business. Like anything you get what you pay for. If you are choosing a sales agent to sell your property, or a buyer's agent to buy a property or a property manager, you know in any industry you are going to get some flexibility. Just be careful of people that are happy to give away part of their income, they would probably be just as happy to give away part of yours renting a property out.
As one owner said to me, we recently got a new management in Cammeray. He was renting that property out for $1,000 a week, we looked at it, and he wasn't happy with his property manager so he called us in. He hadn't given it to us at this point, and I said I think we can get $1,100 a week for you. Not knowing that he had been renting it for $1,000, he said “Really? I have only been renting it for $1,000”. So I said “Well, I reckon we could - if we can't I'll hand you the management back and not worry about taking the management on”. He said he’d give us a go, so he gave it to us and we did. Page 42 of
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www.maddisons.com.au He turned around and said to me “Pat, I was paying the other property management 6% of the rent collected and I am paying you 7%, but it's an extra $10 to you of the $1,100 a week, but I have $90 a week more in my pocket”. So, he said “I'm happy to give you a little extra as I am getting $90 more than the other one”. You are going to get what you pay for in any industry; pick the person you are most comfortable with. Someone that you think will do a good job, and care about your property and manage it. That would be the number one thing of picking a property manager, someone you are comfortable with. Referral is a good way to go to. So they’re my tips with selecting a property manager and making sure that your property is well looked after.
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Patrick Bright EPS Property Search www.epspropertysearch.com.au enquiries@epspropertysearch.com.au 02 9904 4722
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