When your property won't sell
John and Rebecca have been trying to sell their home for a couple of years. While they have received several offers, none has met their expectations and they are unwilling to reduce their asking price. They would like to buy a new home, but have been waiting for their current home to sell. What are their options? They could keep waiting for the right offer. Their second option is to take the property off the market and wait for conditions to improve. This may take some time. However, John and Rebecca don't want to wait any longer, so their third option is to buy a new home and rent out their old home.
New House Old house
"Many people assume that you need to sell your old property before the bank will lend you money for a new one," said Vicki Dick of LoanCom Australia. “If you intend to sell the old property fairly quickly you may consider using bridging finance, but if a quick sale is unlikely you may be able to use the equity in the home to finance the loan for a new property. “Everyone‟s financial situation is different, and this option may not work in all cases. The amount of equity you have in the old home, plus the rent you will receive, plus your income all combine to determine the amount you will be able to borrow. “You also need to be aware that when you eventually sell the old property the lender is likely to insist that the proceeds be used to reduce the new loan as the old property can no longer be used for security on the new loan.” Before making any decisions, Ms Dick suggests you speak to an accountant or financial advisor. “You will need to understand the tax implications of using your old residence as an investment property. For example as the property is now earning income and will no longer be your „main residence‟ it will be subject to capital gains tax when you sell.
“Therefore you should get a valuation done on the property so that capital gains commitments start from when it became an investment, rather than when you actually bought it.” If John and Rebecca are unable to borrow enough to buy a new home, their fourth option is to rent out their old home and rent a home in the area they would like to live in. This would allow them to live in their preferred area, while keeping their old home as an asset. They will then be able to sell it in more favourable conditions. A benefit of renting is that they will be able to keep their old property as their „main residence‟ for up to six years and avoid paying capital gains tax if they sell in this time frame. To be on the safe side they should still get a valuation done when they move out and also at the six year mark if they still haven‟t sold the property and decide to keep it as an investment. For more information about finance contact LoanCom Australia on 9386 9211
ACTON opens in Success ACTON‟s expansion continues with the opening of a second office in its Southern Suburb region. Directors Ryan Thompson and Darren Berley say their new branch in Success will allow them to continue to provide a superior level of service in a rapidly expanding area. “Our area of influence is quite large, running from Kardinya down to Hammond Park and Aubin Grove. We needed more salespeople to adequately cover all the suburbs in the region and we felt it was better to have a base in the more southern suburbs, rather than just increase the sales team at our Kardinya office.” Ryan and Darren have purchased a prominent office in Success, owned by local agents Peter and Heather Sampson. They both will continue to work in the business, with Heather focussing on sales and Peter taking on the role of Office Manager. “We‟ve wanted to move into the area for some time, but have just been waiting for the right opportunity,” said Ryan and Darren. “Peter and Heather share our goals and aspirations for real estate in the southern corridor. They have been working in Success and the surrounding suburbs since 2003 and they know the area well. They have built a strong, successful team and we feel they will be a great asset to ACTON.” Success, Atwell, Beeliar, Hammond Park and Aubin Grove make up a fast growing region, with room for more expansion. The area is very attractive to families, with a range of schools, good transport to major locations, and constant improvements to infrastructure – such as the Cockburn Gateway Shopping City complex. “These are reasonably affordable areas, and the train and freeway make them very accessible. They have a high appeal to young families, and as a result there is a high turnover of properties when people upgrade as their family grows,” said Ryan and Darren. The new ACTON Southern Suburbs - Success Branch is located at Unit 9 Cockburn Gateway Shopping Centre, 824 Beeliar Drive, Success. Disclaimer: This newsletter has been prepared by ACTON. Every effort has been made to ensure the contents are accurate at the time of publication. ACTON takes no responsibility for any subsequent action that may arise from the use of this newsletter.
Right price vital for sale It‟s time to take a good hard look at property prices. Buyers are extremely price sensitive; they shop around looking for the best value for money and ignore those properties that they think are overpriced. While the market appears to be picking up and there have been a few reports suggesting WA could see reasonable price growth in the second half of the year, sellers shouldn‟t set a high price now and hope for a turnaround. You should price for today‟s conditions. The big benefit of buying and selling in the same market is that you might sell for a lower price, but you will also buy for a lower price. If you wait for prices to rise, the price of your new home will also have risen. When you get appraisals from agents, don‟t automatically choose the one that quotes the highest price. Ask the agents to justify their price, based on what similar properties have recently sold for – not what they were listed for, what they sold for. While it is tempting to set a price based on the profit you‟d like to get, price needs to be based on what the market will pay. And once the property is on the market listen to feedback from your agent, they are your link to buyers. If people are not looking at your property, or are commenting that the price is too high, you may need to reduce the price to attract buyers.
Disclaimer: This newsletter has been prepared by LJ Hooker. Every effort has been made to ensure the contents are accurate at the time of publication. LJ Hooker takes no responsibility for any subsequent action that may arise from the use of this newsletter ©2009 Hooker Corporation Limited 12/09