Perhaps that’s because after having some downtime during Christmas and New Year people have been able to do all the necessary cleaning up, de-cluttering and squaring away of the legalities that need to be sorted before their property goes onto the market.

And that does take more time than you think – and more planning than you anticipated.

So as we now approach mid-March, regardless of whether you’re a buyer or a seller, now is a good time to keep watch on the market to see what sorts of prices are being achieved in the area that you live, or the area you’re planning to live in.

At the same time there is much speculation about what will actually happen to interest rates this year with some analysts predicting that rates won’t actually rise by as much as was forecasted at the beginning of the year.

A number of experts are now saying that the more likely scenario is that rates may rise 1% this year, rather than the previously predicted 2% and this is not only because of any impact that events such as floods may have had but because of various economic factors.

For this reason, March remains an interesting time to watch how that sentiment is affecting property prices and it could provide a decent barometer for the year ahead.

Stay tuned!

And at the moment (notwithstanding we’re coming into the Christmas season), it’s a challenging period to try and choose the right time to sell if that’s part of your game plan.

Auction clearance rates are down and although some properties are selling well above their reserve, others are struggling to even find a bidder.

I’ve heard too many stories over the last year about people who were told their property would sell quickly because it’s a ‘sure thing’ – only to find it still languishing on the market two months later.

And with several rate rises making many borrowers feel a bit cautious about what they are prepared to spend on a property, there are particular price brackets where properties are moving more quickly than others.

But apart from just price, what else do you take into account when you’re weighing up whether or not it’s the right time to sell?

There are three aspects you need to consider:

1. Don’t just look at what other properties have sold for in your suburb, but put into perspective their price bracket, size, proximity to schools and shops, the general style of the place as well as how much maintenance will be needed.
2. How desperate are you to move? If it’s simply a case of feeling you’ve outgrown your existing property, take your time – especially if you know you’ll be in your new home for the next twenty years.
3. Have you already bought elsewhere? If so, given you’ve already broken the cardinal rule of property i.e. try to sell before you buy, can you consider renting out your new property if the market for selling doesn’t seem to be in your favour at the moment.

Generally, there’s no-one twisting your arm to sell a property – so take a deep breath and consider whether its in your best interest to revise your plans.

RELATIONSHIP BREAK-UP 

The simplest solution here occurs when both parties agree to sell the property and share the expenses and any profits evenly.  If however, one person wants to keep the property, they will need to buy their partner out.  

Therefore as ownership of the property is theoretically changing, the details on the property title will need to be altered by a legal professional.  

And because the mortgage agreement was signed by both parties you should contact your lender about your change in circumstances. Then, if one person wants to take on the sole responsibility for the mortgage, they may need to refinance in order to raise the money to buy their partner out. 

This new status may alter how they will qualify for the new loan – so it’s helpful to seek advice from your lender to look at some new options.

A LIFESTYLE CHANGE

With more people choosing lifestyle options and moving from permanent jobs to become their own boss, they will not only experience a change to their working life but it’s also likely to alter their financial status. Consequently, they will be subject to different criteria by lenders when applying for a home loan. 

But thankfully, there are a range of loan options suited to the self-employed, freelance and contract workers – so by carrying out your research, such people are now more likely to obtain property finance packaged to suit their specific situation. 

BEING MADE REDUNDANT

Although it may be an unpleasant experience, by using the unexpected windfall of a redundancy payout wisely, you can improve your financial situation.  For instance, setting aside a portion of your payout to cover several mortgage repayments and household bills can allow you to concentrate more on looking for a new job.   

Alternatively, you may find a new job relatively quickly and be able to make a lump sum payment into your mortgage account to help decrease the term of your loan.

RELOCATING FOR WORK

Having to relocate to stay in your current employment or in order to take advantage of a better position, is likely to affect your current home loan and living situation. Either way, you may choose to rent your current property to help pay off the mortgage but unless you intend on staying with family or friends in your new location, you will also need to find somewhere to live near the new job.

You may view this as an opportunity to access any existing equity in your property to help buy a property closer to the new job.

Life will always be full of ups and downs, but if you can strap yourself in for the rollercoaster ride, you’ll be better prepared for the experience ahead.

Whatever the reason you decide you want to up sticks and move houses, you would do well to remind yourself that the cost to move homes doesn’t simply start and finish with the difference it may have cost you to upgrade to new digs.

That’s because the cost of moving can be surprising, unless you’re well prepared for it. Of course, this will vary depending on your individual situation, but costs can add up to around five per cent of the actual purchase price of a new home.

So if you are moving, consider the following potential costs in your budget:

Real estate agents fees

When you sell your old home the agents fees can vary greatly and can range from anything between 1% and up to 5%. And in some instances you can also expect to have additional advertising costs on top – which is why it pays to shop around for agents who can genuinely offer you the best all-round deal.

Stamp duty

If you’re moving to a new home you’re unlikely to be eligible for first home buyer stamp duty concessions, so the cost of stamp duty can be hefty. The amount will vary from state to state and on the cost of the new property and is usually the second biggest cost in buying a new home, after the purchase price.

Solicitors or Conveyancing fees.

Unless you do it yourself you will need to account for these for both selling your old property and buying the new one. Again the fees can vary greatly.

Removalists costs

Hunt around and compare costs between companies as these can fluctuate markedly depending on the size of the move and the kind of service you use. Some companies provide you with a choice between a flat fee or an hourly rate when quoting. Either way, it can be as high as $5,000 for a big move or less than $500 if you hire a truck and do it yourself.

Loan costs

If your loan is portable you may be able to take it with you, but there’s still likely to be valuation and legal fees for the new property. Likewise if you’re refinancing or taking out a new loan, you may be liable for application fees, legal fees and valuation fees – as well as any costs for discharging your previous loan. Finally, depending on your circumstances you may also have to pay for lenders mortgage insurance, if you’re borrowing more than 80 per cent of the value of the new property.

Bridging Finance

If you buy your new home before you sell your old and there is a period in between where you are technically in ownership of both properties – you may need to apply for and pay for bridging finance until your old property is sold.

Building and pest inspections

Seen by many as an essential cost where costs can vary depending on the inspector and the size of the home.

Property Improvements

This is an open chequebook situation and will vary according to whether you think you’re going to get a return on your investment in terms of a higher sale price from the work you put in. You may also need to make essential changes to your new home as well – if there are major maintenance issues.

So with a few words of caution and in the wise words of my mother – remember to remove your rose-coloured glasses when you’re looking at any property as the emotional connection you create, may end up costing you serious money. 

This is because there are properties with good potential and potentially good properties – but it’s working out the difference between the two that can help save you time and money. 

I deem properties with good potential as ones that may need some work but currently come across like someone who needs a cosmetic makeover and some TLC. 

And as for potentially good properties – I categorise them as ones that could be ‘potentially good ‘– were it not for that wall that’s falling down, or that kitchen that reminds you of the war or those floorboards you just put your foot through.

 That’s because these items, as well as bathrooms, electricals and roofs are the sorts of features on a property that unless you are confident in your building and renovation experience, are not items that are simple and cheap to fix up or replace.

 So while DIY shows can happily show us the way to achieve the look-for-less, you do still need to remember that there are some aspects to fixing up a property that are best left to the professionals.

 And if you’re heading out now to look at properties that you think may fit into your dream home category – make sure you leave your rose coloured glasses at home and enlist the advice of trusted friends and professionals.

 Better still – invest in that highly recommended building inspection so you can get a professional opinion from someone who may have clearer vision than you.

 And finally, whether you intend living in the property yourself or renting it out – if you do find yourself falling head over heels in love with it, do what you would with any prospective suitor and look as what else it has to offer!

 Look at features such as rental yields, the population growth for the area, the quality of local infrastructure and what the property can deliver you in terms of price growth, because the lure of property, like beauty, can also be skin deep – and consequently may not stand the test of time.

It may sound odd while we’re in the midst of an unseasonably cold winter, but now’s the perfect time to start think about getting your property ready for a Spring Sale – if that’s in your game plan.

Because while the home fires may literally be burning to keep you warm for the moment, in the property market they’re starting to get all hot and bothered about the upcoming peak season of Spring – because it’s such a popular time for many people to put their place on the market.

So what can you do and what should you do over the next six weeks to improve the chances of selling your property for what you want, without breaking the budget?

Even if you don’t have much money to splash around, there’s some simple things you can do to give your place some extra shhoosshh come sale time:

1. PAINT: Don’t ever underestimate the power of the paintbrush. It can transform the too much to the too cool and has the power to elevate the senses to think about how fresh and clean that potential new pad can be. So for a couple of hundred dollars, even if you DIY – why wouldn’t you put on a painting shirt and go for it!
2. ACCESSORISE: If you’ve watched the plethora of lifestyle shows which have popped up over the last 5-10 years you don’t need to be told about the importance of making a place feel stylish, co-ordinated and above all appealing and saleable to a wide demographic. So if you’re feeling like you’re place is in need of a makeover, invest in some low cost but smart furnishings to tie all the rooms together – and if home decorating is simply not your forte, enquire with your intended real estate agent. Many agents have links with reputable stylists who can give your property the look it needs by hiring furniture and accessories for the duration of the sales campaign – with the aim of getting you a decent return on your investment.
3. FIX: Dooknobs that fall off when you use them, a leaking tap or toilet, a broken doorbell, lights that won’t turn on…..the list goes on and needless to say these are exactly the sort of things that turn potential buyers off. So if you or your partner is not a Fix-It type, call someone who is and invest in a few hours of their time to ensure your place is in decent working order when prospective buyers come poking their nose into places. It can be a guaranteed turn off if there are too many broken or faulty items in a house – buyers will wonder what else is not working in places they can’t see!
4. GARDEN. Look at your backyard and front-yard and think about how it may appear to a first time viewer. If there are weeds, grass that’s too long, trees and shrubs that need a good trim or if there’s too many items left hanging around because you’ve been too busy to have a decent clean up – now’s the time to put your green-thumb to work.  And remember that green is good – because there’s not too many people that won’t appreciate any space where they can either tread barefoot or doesn’t require them to spend their time vacuuming or mopping.
5. THE X-TRA FACTOR. You’ve often heard about the value that freshly cut flowers, the aroma of home baking and other touches can have on a property…. use your common sense and think about what appeals to you when you visit someone’s house. What draws you to a particular place and what repels you? Make your place distinct from similarly priced properties on the market by putting on your thinking cap and speaking to your agent about what you can do to differentiate your place from the pack.

 We hear too much about winter being the time to sit back and become a bit complacent about ourselves and what’s happening around us, but for those who want to be moving forward by the New Year into the next phase of their property plans, there’s no better time than now to make hay than while the winter sun shines.

While auctions account for less than a quarter of all dwelling transactions nationally, Cameron Kusher, senior research analyst at Rpdata.com says, “auction clearance rates provide an excellent indication of current market sentiment; the results are more timely than private treaty results which are subject to time lags.”

RP Data is leading the way in collecting and recording capital city auction results. While competitors collect on average 65% of auction results, RP Data dominate at 80%. 

The latest figures from RP Data show that the recent number of properties sold in auctions have significantly dropped the last few weeks.

The fall in auction clearance rates has been led by Sydney and Melbourne which are the two largest markets and also the two best performing markets. Eight weeks ago, Melbourne recorded a strong clearance rate of 85.3%, last week that had dropped to 69.4%.  Similarly Sydney, recorded 73.7% clearance rate eight weeks ago, and dropped to 63%. At their peak, clearance rates hit 45.6% in Brisbane, 77.8% in Adelaide and 65% in Perth. Last week, these cities achieved 32.5%, 51.4% and 14.3% auction clearance rates, respectively.
 
Kusher says, “We’ve been suggesting for some time that the rate of property value growth will slow in 2010. It seems as if the recent weakness across auction clearance rates, along with a number of other less buoyant housing sector figures, may be providing the first signs of a residential market slowdown.”
 
Despite auction clearance rates easing, the total number of auctions taking place has remained very strong. Kusher points out that there is “obviously, no shortage of willing sellers in the market.”

Source: Rpdata.com and Your Mortgage

Mr Graham believes the coming year will see upgraders stepping up to fill the demand gap created by the decline in first home buyer activity since the federal government’s boosted first home buyer stimulus was withdrawn. 

In the case of those in the market to upgrade, many have equity from selling their previous property in the first-home buyer frenzy or turning their current home into an investment property to fund the upgrade purchase. 

This along with the decreased encouragement of low rates and government grants have contributed to knocking first home buyers out of the market because of a lack of property affordability. On top of this, recent rate rises and the expectation to get a loan with less than 10% deposit are also contributing to market entry discouragement and lack of affordability for first home buyers.

According to JP Morgan and Fujitsu, Current first home buyers are committing 34 per cent of their after-tax incomes to servicing interest payments on mortgages, compared to 24 per cent for typical borrowers. They are borrowing about the same as other borrowers (around $280,000) but their loan to valuation ratio is higher.

So if interest rates increased, which is the case in some interest forecasts, first home buyers will be committing 39 per cent of after-tax income to loan servicing.

Nonetheless, it is predicted that the first home buyer sector will remain strong throughout 2011 despite of the withdrawal of the first home owner grant boost and recent rate rises.

According to QBE LMI’s mortgage update report, compiled in partnership with BIS Shrapnel, more than 110,000 loans will be written for first home buyers in 2010 – a healthy 27 per cent above the low point of loans to first home buyers in 2003/04.

“The research by BIS Shrapnel shows strong population growth in the first home buyer cohort (25 to 39 year olds) totalling 3.2 per cent over the three years to June 2012. The solid growth in this age group will result in a bigger pool of first home buyers in the market which will support demand in the future,” Mr Graham said.

Have a read through and cast your vote on the blog poll or comment your thoughts below – we want to know:  Would you rent as a lifestyle choice or would you prefer to live in a home that you own?

There is a common tendency for many first home owners to want many of the things that go with a home, without having the patience to wait until they can comfortably afford to buy them.

The issue at stake here is that our modern spending behaviour has evolved in line with the increasing availability and ready accessibility of credit.

Where our parents generation would diligently save up for big ticket items, subsequent generations have learnt they can purchase these items now and pay for them later – and for first home buyers freshly dealing with the financial commitment of a home loan, this behaviour can be very dangerous.

The ‘spend now, pay later’ attitude is commonly seen in retailing where the buyer is encouraged to have not just the outfit, but the accessories as well – and is an unfortunate mentality that has now crept into the home buying process, but with far more significant financial repercussions.

Blowouts in discretionary spending on things such as new furniture to go in the new home and upgrading their lifestyle to suit their new digs are common traps for first homeowners to get caught up in, amid the euphoria of buying their first home. 

But the reality is, that euphoria will be short lived when they struggle to cope with paying back that recently accrued debt on top of their regular mortgage repayments – particularly given it can so easily be avoided,

The warning for first home owners then is simple: Don’t let your new home purchase be a house of cards.

First home buyers need to continue to apply the discipline they used to get them into their home in the first place and not succumb to feeling they need to have it all – and have it now. Property is a long term investment and only reaps rewards through ongoing diligence and by exercising restraint.

But most importantly they need to remember that interest rates are going up, therefore keeping financially disciplined is the best habit to have.  Even though many first home owners do take out low rate introductory loans, they will have to budget ahead for the inevitability of higher repayments when they do eventually come off that initial rate.

First home owners adopt the following principles:

1. Keep loan and credit arrangements to a minimum and refuse new offers of additional credit.
2. Try to use cash for all discretionary spending.
3. Keep a rainy-day buffer in your budget for any unforeseen expenses, as well as the time when your mortgage repayments may increase.
4. Spend money only on essential repairs to your new home and use the relevant skills of friends and family if necessary where you can to fix a problem.
5. New furniture is not essential in a new home. Look instead at second-hand furniture you can often find at charity shops or council throw outs or opt instead for a minimalist look and acquire things as you can afford them.
6. Holidays are not a holiday from financial obligations. Stay-at-home vacations are becoming increasingly popular in achieving down time without the financial burden of having to travel anywhere to get it.
7. When you plan to catch up socially with your friends, entertain at your own restaurant i.e. your home – and keep the rules simple by asking everyone to bring a plate.

The great Australian dream of home ownership is still alive and well, but like any dream, needs to include a dose of healthy realism to ensure the end goal is achieved.