Pointing way to survival

PROPERTY News

The Reserve Bank's recent shock interest rate rise and continuing sky rocketing energy and water prices has prompted Archicentre, the building advisory service of the Australian Institute of Architects, to released a “Home Buyers and Investors’ Eight Point Plan for Survival.”

Ian Agnew, Queensland state manager of Archicentre said: “With rising interest rates the financial risk increases, and massive increases in power and water bills, household budgets are being cut to the core and there is little margin for people to make a mistake when purchasing a property.
“An estimated 75 per cent of property transactions take place without a property inspection, placing buyers at risk of purchasing a lemon.”

1. Scout out the ideal neighbourhood setting. Find somewhere that is convenient to work and school and appeals to lifestyle interests. Areas convenient to schools, shopping centres, beaches, parks and clean air tend to appreciate rapidly.
2. Before commencing the house hunt, make sure finances are worked out. Most lending institutions require at least a 5 per cent deposit. Also keep in mind the multitude of hidden costs that include loan applications, establishment fees, legal and inspection expenses, government charges including stamp duty and insurance. These hidden costs can equate to 5 per cent of the property value.
3. Once you have succeeded with loan pre-approval, it’s time to get serious. Allocate plenty of time and patience in finding the right house. Rarely do people acquire the first house they fall in love with. If you have difficulty setting aside a few hours over the weekend, or perhaps during the week, consider using a buyer's agent, who will do the house-hunting for you.
4. Prior to offer, arrange a pre-purchase property inspection to ensure the house is safe and sound. According to Archicentre, health and safety risks exist in about one quarter of older Australian homes.
5. Most importantly, find out if any controls exist that could influence future renovations to the property. These might be planning scheme provisions or covenants.
6. If the property goes to auction, keep a fixed price in mind and try to control your emotions.
7. During private sales, try to hold your enthusiasm back in order to avoid subsequent heartbreak. A private seller might use your enthusiasm against you and resist negotiating. For a private sale be persistent and gradually increase your offer over time.
8. Upon settlement, seek out quality professional advice on any renovations or repair work you expect to undertake, particularly health and safety items identified in the inspection report before signing.
Mr Agnew said: “A professional inspection of the home will assist buyers in determining the condition of the property, the value of the property and the cost of repairs providing them with a bargaining tool to factor in repair or maintenance costs into their budgets.”