Take Advantage of a Government Incentive


NRAS, or the National Rental Affordability Scheme. Don’t be bamboozled by the big words, the scheme is easy to understand and provides benefits to a wide demographic of people in Australia. Not only do investors benefit from NRAS but so do tenants and those looking to get a step up on the property ladder. So what is it? Why did it come about? And how does it work?

NRAS is a Federal Government initiative introduced in 2008. It was designed to encourage investment in residential housing to assist people on low to moderate incomes with an opportunity to rent homes at 20% below market rent values. It is not social housing; rather, it is a scheme to provide affordable private rental homes to individuals and families who meet the income threshold. To attract investors, tax-free incentives are provided to those who invest in and own approved NRAS properties.

NRAS was designed to assist in addressing housing supply and affordability. Pressure on the private rental sector, increased rents, the difficulty of low to middle income households to access affordable private rental homes, plus the reduced supply of public housing contributed to the NRAS initiative being created.

NRAS provides benefits to both investors and tenants:

Tenants: Eligible tenants can access private rental accommodation at 20% below the market rate. Tenants’ income may increase up to 25% before their eligibility is affected. Current income eligibility rates are available here: https://goo.gl/vHuAtF

If you are interested in renting an NRAS property and meet the eligibility criteria, it can be an affordable housing solution, to assist you in meeting your financial goals.

Investors: Approved investors are eligible to receive the NRAS incentive for up to 10 years for each approved dwelling where the conditions of allocation for the dwelling are met including renting the property at least 20% below market value rent.

The NRAS incentive for the 2017/2018 year is as follows:

Federal Contribution:          $8,335.75

State Contribution:               $2,778.58

Total Incentive:                    $11,114.33

The NRAS incentive comprises two components: the Federal Government contribution is a tax offset and the State Government contribution is a direct cash payment.

The benefits for investors can be significant. For example: If Jane invests in an NRAS property where the market rent is $300, she must rent the property out at $240 per week to be eligible for the NRAS incentive. Jane effectively receives $3,120 less in rent per annum for her property. However this is more than compensated by the above annual NRAS incentive she receives from the Federal and State Government. To understand the full benefit of the NRAS incentive and what it means to you financially, it is best to speak with a qualified Accountant or Financial Planner before purchasing an NRAS property.

SA Listings has a strong understanding of NRAS and works closely with relevant providers in South Australia. SA Listings currently has a NRAS property available in Evanston, South Australia. To find out more about NRAS either as an investor or as a tenant, please contact SA Listings for more information.

Justine Thomson

What Price to Offer?


As an Agent I am often asked the same question from each and every potential purchaser, “How much should I offer?” The answer to this question is: there is no answer! As the Agent selling the home I work for the Vendor and my role is to achieve the best possible price for them – but I’m unable to advise you, the purchaser, of what price you should offer for the property.

However, to give you some insight into ways to determine the offer price to secure the home of your dreams, SA Listings suggests you think about the following points:

  • Do your own research on the area and current market sale prices for similar properties. To assist you with this, a good Agent should be able to provide you with a list of recent sales of comparable properties in the area.
  • A good Agent should always consider current market prices for similar properties sold in the area and should price the property accordingly. Your own research, plus the agent’s comparable price list, should give you an indication of where you believe the property price sits. Remember, the price advertised will be the Vendors expectation so your offer should, as a minimum, be in this range.
  • Have you missed out on previous properties you were interested in? If so, the reason may be is you are low-balling your offer in the hope of securing a property below current market conditions or you may be seeking a property outside your budget. I can tell you, the chances of securing a property using this approach is slim. A good Agent prices the property in accord with current market conditions and if you low-ball an offer the Agent will likely recommend the Vendor reject it. The likelihood of securing a property using this tactic is as probable as daily rain in Dubai. Do not low-ball, go in with your best offer from the start.
  • Consider carefully any conditions you include with the offer. An Agent may recommend a Vendor accept a lower offer if no conditions are attached, for example, a cash unconditional may be more attractive than subject to sale. So be prepared: have finance pre-approvals in place, offer an appropriate deposit and know what you are prepared to do regarding settlement timeframes. Being prepared here provides confidence to the Vendor of your ability to pay for the property and shows you are serious about the property and your offer.
  • Remember, each property is unique and if you have been searching for some time and this property ticks most of your boxes then don’t miss out, put your best foot forward from the start. Too many people miss out by trying to snag “that bargain” when in reality, had they put in a realistic offer initially they would have secured the property.

contractOne final note, don’t bother asking the Agent where your offer sits compared to others. A good Agent will not disclose this as it is against South Australian legislation. The agent is unable to tell you any details of other offers, other than the fact there are other offers. If you wish, you can ask for this in writing.

If this home is THE ONE, your inner Zen, your sanctuary, the right floor plan, the right location and within budget then don’t be influenced by other offers, just focus on what you want, what you can afford and put forward your best and final offer. You may not get a second chance. If your best offer is not good enough, be prepared to walk away, another one will come along.

If after reading this blog, you are unsure on how to go about the negotiation process you can always engage a Buyers Agent to act on your behalf. SA Listings offers this service – for more information contact SA Listings at info@salistings.com.au

Justine Thomson

Staging a Home for Sale


The whole world is a stage – but should your home be?

What is it buyers look at when visiting an open home? Frankly, ask three different people and you may get four different answers! While one may step back and take in the larger picture of the home as a whole, another may look at the same house through the eyes of the furniture, the art, or even the family photos on the wall, and yet another will simply cast a critical eye over the structural integrity of the home. It may even be that it is easier to answer what is it buyers look at by first ensuring there is nothing in the home that will turn them off as soon as they walk in.

Some examples? Tired, ratty old furniture that has seen better days, magazines or books in the loo, and whilst you may simply love your collection of every set of commemorative babushka dolls from the twentieth century – it may be many buyers will not.

Now of course, most people have some idea that in order to correctly present your home for sale you need to “de-clutter” and “de-personalise,” but what about the styling through out the home? This is where the services of a home styling or staging professional can help – with interior designing skills to make your home stand out that extra mile.

A home stylist will cast a critical eye over the home, and will be able to provide appropriately styled furniture and accessories to suit. For example, large furniture pieces may be comfortable, but they may be cramping the space available, making it look smaller than it really is. Changing them over for smaller, less intrusive pieces that match and compliment other pieces in other rooms creates a sense of space and style. Styling gives potential purchasers an idea of what the home could be for them, not what it currently is for the vendor.

A home stylist may also remove items that stand out and draw the attention of buyers, such as loud artwork or rugs. Again, a flowing sense of style throughout the home will help ensure the home appeals to as broad an audience as possible.

Remember, first impressions count. You want buyers to walk into your home and imagine living there with their family, inviting their friends over to a home they are proud of, a home that is up to date and on trend.

Not every home will require the expense of a stylist or staging. But in some cases, the outlay of a moderate expense may mean a greater return come settlement day.

master_bedroom_before_and_after_long_distance_interior_design_online_grande1

Should you be interested in property staging, during the appraisal of your home the SA Listings’ team is able to discuss options that best fit your property and budget.

Justine Thomson

Selling Yourself

If you are considering selling your home in 2017 there are many paths you can take:

  • Sell it yourself
  • Engage a traditional real estate agent on commission with a full agent service
  • Engage a real estate agent at a fixed price with a full agent service

Selling an $800,000 home could cost as little as $2,610 if you sell yourself or up to $17,675 if you utilise a traditional commission agent.

If you are considering selling on your own, think carefully about the following:

  • Appraise the property correctly by using publicly available information about local sale prices and consider an independent valuation to assist
  • Ensure you present the home well for photography
  • Prepare relevant marketing material
  • Ensure all relevant documentation is available to a potential purchaser to enable an informed decision to be made, example: council rates, water rates, copy of title etc
  • Be prepared to arrange inspections by appointments and opens at various hours of the day
  • Be prepared to meet potential purchasers and take on board any negative feedback
  • Follow up with those people interested in your home and be prepared to take the emotion out of the sale negotiation
  • Engage a Solicitor or Conveyancer to prepare the Contract and Form 1

People often underestimate the work involved in selling a home and the level of professionalism required to negotiate the best conditions and price. Selling a property is an emotional and intense experience. It can be easy for a seller who decides to sell it on their own to run into trouble with incorrect information provided to a prospective purchaser or the inability to remove the emotion from the sale. A real estate agents market knowledge and negotiating skills can be particularly useful when it comes to listing a property for sale. Following is an indicative table of costs under each model.

Cost to sell an $800,000 Home by Private Treaty Sell On Your Own Sell with SA Listings Sell with a Traditional Agent @ 2%
Base Price $1,295.00 $7,888.00 $16,000.00
Professional Photography Inc Inc $200.00
Sign Board Inc Inc $150.00
Listing on realestate.com Inc Inc $500.00
Brochures Inc Inc $110.00
Open For Inspection Manage Yourself Inc Inc
Form 1 $330.00 Inc $330.00
Government Searches $385.00 Inc $385.00
Contract Preparation $600.00 Inc Inc
Total $2,610.00 $7,888.00 $17,675.00

In 2017 there is choice and the flexibility to now sell your home with a full agent service at a lower cost to a traditional commission agent. So why create a headache for yourself and embark on selling alone when you can engage the service of a real estate professional at a transparent fixed fee. Whilst you think you will save thousands by selling yourself, it could in fact cost you thousands in the final negotiated price!

Justine Thomson

 

SA Homes Top Ten Wish List

I thought with 2016 recently ending and the New Year ringing in, it is an apt time to review the most common search words buyers use when seeking a property in SA, to assist any would be seller in 2017.

Many will be surprised pool is the number one search word when seeking properties in SA. For all those lucky enough to have a pool, the cost to run, maintenance and amount of times utilised often outweigh the benefits a pool can bring but at sale time this can be a bonus. A pool can be an attractive garden feature and for families a must have in our dry, hot summers. If your kids have flown the coop and you are thinking of ditching the pool, think twice, especially if you have plans to one day sell your home and downsize.

The old fashion granny flat is back in vogue! Statistics prove our kids are staying at home much longer these days and often do not consider leaving the family abode until in their late twenties or early thirties, sigh…. Grandparents are also becoming a part of the extended family, assuming a carers role for children when both parents work. To give extended adult families breathing space it is little wonder the granny flat is a highly sought after commodity. If you are fortunate enough to have a granny flat and are considering taking your home to market, it would be worth spending some coin on reinvigorating life into this space. If used as storage, clear out the boxes, de-clutter and style as you would a second home.

The corner block has always been a sought after find in SA but even more so since the State Government zoning changes. If you fall into the new zoning categories for higher density living, the corner block can be correlated to the golden goose who lays the golden eggs. Make sure you check with your council for current zoning requirements before putting your home on the market. The right zoning can add tens of thousands to your sale price. A good agent should be aware of the possibilities in your area when it comes to potential development or subdivision and should factor this into the market price.

Top Ten Property Search Words in SA

  1. Pool
  2. Granny Flat
  3. Corner
  4. Views
  5. Beach
  6. Shed
  7. Esplanade
  8. Cottage
  9. Character
  10. Investment

To maximise the return on your property consider the top ten search words and ensure your Agent takes full advantage of known characteristics your home has in meeting buyer needs.

If considering selling your home in 2017, we would love to hear from you and assist you in making the most of your properties attributes: salistings.com.au

Justine Thomson

Pinpoint the Perfect Agent


Deciding to sell your property can be one of the biggest decisions you make in your life. Along with your savings for retirement, the property you own would be one of the highest valued assets in your portfolio. The decision to sell and who to appoint to sell your property should be done with utmost care.

How do you know who is the right agent for you?

From experience, I would suggest interviewing a minimum of three Agents before appointing one right for you. If you are an employer looking for the right employee to fill a job role, you do your due diligence first before deciding on the right candidate. You don’t want someone who turns up late, cannot do the task at hand or is disrespectful. The same decision making process should be applied when reviewing Agents.

To sell or not to sell? A good Agent will consider whether now is the right time for you to sell your property taking into account market conditions, reason for selling and your needs. Securing the listing should not be their number one focus. The number one focus should be what is best for you.

The biggest brand or most popular Agent by size may not necessarily be the right Agent for you. Flashy cars, the largest billboards or designer suits does not make for a good Agent. A popular Agent can be working with many clients and may be spread too thinly. Professionalism, knowledge of real estate and the ability to negotiate are critical skills of an Agent. My partner and I many years ago had a number one Agent come to appraise one of our properties and all the person did was talk about themselves. No questions were asked about us and our needs. Once the Agent left the property, my partner made the comment, “Elvis has now left the building!” We looked at each other, laughed and agreed this was not the person we wanted to represent our property and us.

Referrals are important. A good Agent will have a list of positive client testimonials and with prior approval from their past clients, be willing to provide you with their contact details. It is always a good idea to call one of their past clients to get an understanding on how they perceived the service they received.

Licensed and professional memberships of the relevant State Government body and real estate organisations in their State. In SA, a Real Estate Agent must be licensed by the Office of Consumer and Business Affairs and carry their license on them at all times. A good Agent in SA would also be a member of the Real Estate Institute of SA or the Society of Auctioneers and Appraisers. Membership of professional organisations means they are interested in their own professional development. Be wary, if an Agent cannot show you their license, consider them to be Frank Abagnale, the guy who before his 19th birthday successfully performed cons worth millions of dollars by posing as a pilot, doctor then prosecutor. We recommend no license, no appointment!

Knowledge is often underestimated and can be difficult to determine from an interview. However, if you ask the right questions, their knowledge should be evident. Questions like:

What do you consider to be the market appraisal for this property?

What areas of improvement to the property will assist us in maximising price?

What is the current market like for property in our area?

What would be the best way to market this property?

How do you qualify a buyer?

What qualifications do you have?

A good Agent should not need to be prompted by you, they will impart their knowledge throughout the initial meeting. Use your intuition and watch their body language. A lot can be garnered by body language. Beware of dominant body language, this is when a person makes the rules by interrupting you, using inappropriate language and standing over you. We are not looking for a round with Muhammad Ali, we are looking for someone who can build rapport and knows their profession.

Fees are also an important consideration. At SA Listings we are of the belief a good Agent does not need to be incentivised to obtain the best price for your property, for this reason we charge a fixed fee, no matter the value of the property. The role of a good Agent is to negotiate the very best price and conditions for you. When comparing fees ensure you have information not only on commission but also marketing costs, Government searches and Form 1 preparation. To compare apples with apples you need the entire fee structure. For more on fees, please refer to SA Listings earlier blog: “Real Estate Fees – Friend or Foe?”

We hope this article has been informative and assists in ensuring your property journey is a successful one.

Justine Thomson

Real Estate Fees – Friend or Foe?


My partner and I have sold many properties over the years and have used a myriad of different Real Estate Agents. Each Agent came to our home with similar style: walk through the property, appraise the property and then with much persuasion from us would disclose the cost of selling with their Agency. It was not a simple exercise. The fee conversation would go something like this:

Agent:  

“Our commission is 2% excluding GST.”

Us:   

“Is there room to negotiate because according to our calculations that is a $17,600 fee to sell an $800,000 home and does this include marketing?”

Agent:

“Our commission structure is based on the premium service we offer and whilst you may pay an additional premium compared to another Agent we will provide you more money in your pocket from the additional sale price we will achieve”.

Pretty much without fail, each Agent would say the same line. Then to complicate matters further, there would be the administration fee, marketing fee, form 1 fee and Government searches. These additional charges usually totalled another 1% of the property price. On $800,000 this equates to an extra $8,000.

None of this was provided in a simple to understand table. Figures were distributed in the same orderly fashion as people trying to board an EasyJet flight. We have been in the situation whereby some of these figures have not even been provided until it was time to sign the Sales Agency Agreement. For the last property we sold, valued at $800,000 the total cost from three Agents ranged from $20,000 to $36,000!

My partner and I would always wait before choosing an Agent to give us time to interpret the labyrinth of different fee structures. Often during this period, an Agent would call us back and suddenly be in a position to negotiate their commission. My brain is now rethinking the conversation in the living room: “Does this mean the more money on sale will now be out the window because they have reduced their commission?”

shutterstock_325157468None of this made sense. It got me thinking; if a Real Estate Agent is a true professional, no matter what they are paid, their job is to get you the best price for your property. In my simple world this is their job description.

For many years I was employed in finance as a CPA, specialising in superannuation. The company I worked for charged a fixed fee for service, it didn’t matter if you had $10,000 in super or $2 million dollars in super. The fee for service was based on the time spent to do the work. It got me thinking, “Why is this not the same for Real Estate?” I spent some years studying Conveyancing, to ensure I really understood property law and then obtained my Land Agents License with a view to making life simple for anyone looking to sell. Over the last few years I have been employed by large property developers and sold many properties. I wanted to be sure I understood all there is to know about selling real estate before launching the business model for SA Listings.

The business model is simple. We provide a full real estate agent service at an easy to understand, all-inclusive fee from $3,888 for land and $7,888 for house and land. We are Real Estate professionals not driven by incentives.

Eight years in the making, salistings.com.au now provides a simple fixed fee model in South Australia for anyone looking to sell.

Justine Thomson