March 28, 2022

#146: The U to Z of Property success - "Unconditional" offers, contracts & finance applications, obtaining a positive "Valuation" outcome, "

54 minutes

Got a question for the trio? - https://zfrmz.com/uLtjhyBskV96PY6eJfaI https://propertyplanning.com.au/propertyplannerbuyerprofessor/ In this week's episode Dave, Cate and Pete take you through: Market updates 1. The 20 most unaffordable cities in the world Pete shares with our listeners a report that states Adelaide and Brisbane are more unaffordable than New York. How can that be? The devil is in the detail when it comes to how affordability is calculated, which in this case, did not take into account interest rates and repayments. The trio discuss how reports can be skewed by the methodology used and the angle that the journalist is instructed to pursue. The trio point out that the debt-to-income ratio is a commonly used measure, however it is fundamentally flawed because interest rate (and cost of servicing the debt) is not always taken into account. They all concur that debt to repayment ratio is a more prudent measure to follow when assessing affordability. 2. Number of sales shows long-term trend of decline Continuing on the data theme, Dave shares sales data which indicates that 2021 had the highest number of sales on record with 650,000 property sales recorded. However, upon further examination, this made up just 6% of all properties in Australia. In 2003, although there was a lower volume of sales recorded, the sales for the year accounted for 7.8% of all properties in Australia. The population has been growing since, but the number of people selling has been declining and reached as low as 3.7% in 2018 and 2019, before being bumped up in 2021. This is another reminder that if there are less properties being sold, relative to the total number of properties and population growth, supply is reduced and prices will go up. 3. Underquoting - but what are we going to do about it? Cate shares her weekend auction experience, where the agent price guide was set at $800,000-$880,000 and the property sold (as Cate expected), at $1.351M. This was a clear case where the agent underquoted the property despite recent sales supporting a likely selling figure closer to the actual result than the documented quote range suggested. Underquoting reforms are being considered by Victorian Consumer Affairs, and everybody has an opportunity to submit their thoughts. U to Z of Property Success U - Unconditional: what does it mean for offers, contracts and mortgage applications? The trio discuss unconditional contracts, when is it appropriate to add conditions and share their hot tips on how to manage the vendor in the event of looming deadlines that are likely to be missed. Dave takes our listeners through the necessary steps before a lender will unconditionally approve a loan application. V - Valuations: how can you get the best outcome? The trio discuss the difference between valuations conducted by a licensed valuer, appraisals conducted by real estate agents and lender valuations arranged as part of the finance approval process. Listen in for the trio's expert insights on how to prepare for a valuation in order to get the best results. For further education on valuations, listen to episode #17 "Valuations 101". W - Waiver: cooling off period When purchasing a property, the most common right waived by purchasers is the right to a cooling off period. Buyers who are purchasing interstate, beware! Legislation on cooling off differs from state to state and in many states, cooling off does not apply for auctions. For further insights on cooling off periods, listen to episode #132 "Purchasing laws in each state - Part 1". X - eXtra Careful: when ...

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