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Spring is traditionally a busy season for real estate, with the warmer weather often seeing renewed vigour from prospective property buyers who held off from purchasing during the colder months, and vendors aiming to sell and relocate in time for Christmas. 
Given that rents are rising and vacancies are low, Century21 expects that much of the market activity this spring will be from first-home buyers looking to enter the property market. 
There will likely be a flurry of activity in New South Wales in particular, with first-time buyers moving to act before the removal of stamp duty exemptions (except on new properties) as of January 1, 2012.  
One of the best steps that these prospective buyers can take to prepare for a purchase will be to obtain mortgage pre-approval well in advance so that good opportunities can be acted upon swiftly. 
For sellers, it’s all about presentation. With spring typically seeing numerous properties listed, you want yours to stand out, giving it the best possible chance to sell for a good price. 
There are numerous, cost-effective ways to revitalise your property – a fresh coat of paint, updating your outside areas with some colourful plants and a thorough clean-up will do wonders to improve its appeal for buyers.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21.</a>
 
 
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How to prepare to sell a house in spring

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I think it is safe to say that the concept of seasonal activity has been nonexistent in real estate this year – any expectations we held based on historical trends have essentially been thrown out the window.  Thanks in large part to continued interest rate uncertainty and in more recent months heightened concerns for global financial markets, the residential property market has certainly experienced a slowdown over 2011 and based on the sales activity that took place over September, the well-known “spring selling season” doesn’t look to be any different. 
Around the country we are seeing that in general, properties are certainly on the market and although buyers are still out there looking, many continue to show reluctance to make a purchase.  According to internal Century 21 data collated from our offices around Australia, there were almost 60% more properties listed in September 2011 than in September 2010, however the number of properties sold was down by just over 20%.  Nationwide, our offices recorded a conversion ratio of approximately 58% for the month, as opposed to a ratio of around 85% seen in September last year. 
Despite the reduced buyer activity there continue to be areas where properties are selling successfully.  Not surprisingly, these include locations where there is little property available and no future land releases or subdivisions planned.  Homes within the $400,000 to $800,000 price range also continue to be in demand, particularly for first- and second-home buyers. 
In terms of the sales prices being achieved, values in the mainstream market seem to have settled, as this is where much of the buyer interest continues to be.  Having said this, the market still looks to be lacking the rush of buyers that we have seen in the past.  Vendor discounting continues for many properties at the top end of the market and in coastal regions, and in most cases is taking place when sellers are concerned about a lack of interested buyers.  Many of those are not selling out of necessity look to be pulling their properties from the market if the desired sales price is not achieved. 
The heavy discounting seen at the top end of the market may actually see properties in this range come back strongly – buyers can see the price reductions that have occurred and understand that if they wish to make a purchase now may be an ideal time to do it. 
Market activity over the one and a half remaining months of spring will depend largely on levels of consumer confidence and certainty surrounding interest rates.  With predictions that the Reserve Bank may move to cut the official cash rate at its November meeting, I’m sure that real estate agents and vendors across the country are hopeful that this news could be the push buyers need to make purchase decisions, with such movement potentially resulting in a pre-Christmas gain in momentum.
Charles Tarbey is chairman and owner of <a target="_blank" href="https://www.century21.com.au/">Century 21.</a>
 
 
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Spring selling season not what it used to be

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For many Australians, the joy of Christmas time is generally accompanied by increased expenditure as people spend big on presents, socialising, travel and the like.  And for those borrowers already having difficulty meeting mortgage repayments, unfortunately Christmas brings little relief – instead it can be a time of increased financial hardship and stress. 
There are a number of ways that borrowers can look to avoid experiencing mortgage stress over the Christmas period, or at the very least, reduce it.  In my experience, planning ahead is key – the more you can anticipate costs in advance and allocate funds where necessary, the better positioned you will be to maintain your regular mortgage repayments. 
Carefully budget
It sounds obvious, but surprisingly many people do not stick to a budget at Christmas and get swept away with the various novelty items that can be purchased.  However when you overspend on unnecessary items it can be tempting to make up the shortfall by skipping an often sizeable mortgage repayment which can be expensive – both in terms of the fees incurred as well as the extra accrued interest that gets added to your overall amount owing. 
Budgeting doesn’t mean you have to be a scrooge, rather it involves considering everything that you will need to purchase over the season, including presents, food stuffs and beverages, decorations, cards and postage costs etc.  With all of your expenses laid out, it is easier to realistically see what you can afford and how your available capital can be best allocated.  This knowledge should put you in a better position to avoid skipping a mortgage repayment and can also help to reduce levels of anxiety.
 
Assess your mortgage options
While every mortgage package is different and each lender has varying conditions, there may be certain steps you can take to manage your mortgage at Christmas time. 
If you have been consistently paying an amount above the minimum repayment due then you could have a buffer that may allow you to reduce your repayments to the minimum level due over Christmas time, giving you somewhat of a reprieve over the costly period.  If you are not in such a position this year, it is certainly worth considering paying above the minimum amount over the course of next year, particularly as interest rates may move downwards, which should better prepare you to cope financially next Christmas. 
For those borrowers who will struggle to make the minimum repayment required due to increased Christmas expenses, various lenders may offer suitable options such as repayment holidays, which could see you able to put your repayments on hold for a specified period.  While convenient at the time, these options should be approached with care, as they will almost always incur a fee and interest will continue to accrue. 
Mortgage management over the expensive Christmas season is certainly possible but takes planning and careful budgeting.  For those people in serious mortgage stress, I would highly recommend sitting down with your lender to discuss your situation and to see the types of remedies that can be offered.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21.</a> 
 
 
 
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Avoid mortgage stress over Christmas

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As we move into a new year, it is my feeling that interesting times are ahead for both the Australian residential property and mortgage markets. 
There is no doubt that as uncertainty continues in global economies many Australian home owners will continue to hurt financially. 
However, the prevailing economic conditions are also heavily influenced by decisions made by the Reserve Bank of Australia, which moved to cut the official cash rate by 50 basis points over November and December – decisions that will no doubt help stimulate the property and mortgage markets. 
Recent labour force data released by the Australian Bureau of Statistics has certainly fuelled speculation that the Reserve Bank will move in February (at least), with many pundits predicting a potential cut of 25 basis points – bringing the official cash rate down to 4%. 
Such downwards movement in rates is helping to improve purchase conditions and levels of confidence for many of those Australians who are in a position to buy yet spent 2011 sitting on the fence. And with the rental market continuing to tighten across the country, many buyers, including both previous renters and investors, are moving to take advantage of fortuitous purchase opportunities and lending conditions. 
Therefore, circumstances that are highly concerning for many are also helping to improve prospects for others.  Interesting times ahead. 
So how can borrowers best approach mortgage management in 2012?
When to fix? 
Understandably, many of those people looking to obtain finance to purchase a property will be waiting for the possibility of further rate cuts so as to secure the lowest fixed-rate home loan package. 
While there is certainly the potential for fixed rates to come down with further rate cuts, it is my suspicion that the rates offered by lenders across the board will eventually bounce back up at some stage over the course of the year. 
If this happens, it will occur with little warning and could be quite substantial – with prospective borrowers missing out on good mortgage packages, resulting in larger monthly repayments. 
As such, I would advise that those borrowers who wish to fix do so, as rates are coming down – a mortgage professional will be able to provide guidance as to the best product and associated rate for your personal situation. 
Choose your lender wisely 
I would encourage those borrowers who may usually prefer to do their banking with the big four to contemplate the mortgage offerings of second-tier lenders. As the major banks ponder whether or not to pass on rate cuts in full, the mortgage products of many second-tier lenders generally present good propositions, and are certainly worthy of consideration if suitable for your personal situation. 
This goes for current mortgage holders as well – don’t discount the value that refinancing with a second-tier lender could have if your current lender declines to pass on any future rate cuts (be it one of the big four banks or another second-tier company). 
Take care with valuations when refinancing 
With some property values declining in various areas of the country across 2011, investors may find that when refinancing in order to expand a property portfolio, a valuation shows their position is not as strong as they had thought.  As such, it is essential that investors ensure they have adequate equity prior to making further purchases, and ideally should consult with a mortgage professional to ascertain their true financial position. 
Despite concerning conditions in global financial markets, the year to come should certainly present some attractive mortgage opportunities to those Australians who are financially positioned to make a property purchase.  I would urge buyers to seek the advice of a mortgage professional so as to be able to take advantage of attractive interest rates and to ensure that you end up with the best home loan for your circumstances.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21.</a>
 
 
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What's in store for borrowers in 2012

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After a year of keeping interest rates on hold, the Reserve Bank’s decision to cut the official cash rate not once, but twice at its final two meetings for 2011 is certainly a nice Christmas present for many property investors and home owners with a mortgage.  But a question that I seem to often get asked, as do many brokers in the Century 21 Home Loans network, surrounds how borrowers and potential buyers can ensure they are able to maximise the rate cut, beyond simply the immediate reduction passed on by their lender. 
In addressing this concern I would say that the relationship you have with your mortgage broker is probably more important than ever before, and now may present a good time to sit down with a professional to revisit your options.  A proficient mortgage professional will have a thorough understanding of a wide range of products currently available and should be able to advise you on the best course of action for your specific situation. 
Rate cuts – has your lender passed them on? 
With the recent spate of rate cuts and potentially more in the pipeline, first and foremost, it’s worth checking to ensure your lender is passing on the cuts or at to what extent.  Don’t be the borrower who is missing out on cuts. 
Reassess your mortgage 
With constantly varying lending criteria, fees and the like, mortgage holders may find that a combination of lowered interest rates and changing conditions have made alternative products more appropriate for their circumstances.  Your mortgage broker should be able to take you through a wide range of product options and clearly explain how the refinancing process works – ensuring you have the right information to make an informed mortgage decision. 
Increase the frequency of repayments
It is certainly tempting to capture monetary savings immediately by reducing your monthly repayments in line with the rate cuts, and for many people struggling with affordability concerns, this will be a necessity.  However, if possible, I would advise people to consider the option of maintaining current repayment levels and potentially even increasing the frequency of repayments (e.g. fortnightly rather than monthly).  This will most probably allow you to get your mortgage principal paid off more quickly, which will also likely reduce the interest you must pay over the long term. 
For many borrowers, alongside the prospect of making immediate savings, rate cuts can present an ideal opportunity to reassess your mortgage situation and identify how further savings can be made in the future.  Working with a professional mortgage broker who has a thorough understanding of your personal situation should position you to be able to make an informed decision and take full advantage of recent (and future potential) rate reductions.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21.</a>
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Rate cuts an opportunity to reassess your mortgage

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I think it is fair to assume that for many borrowers, gone are the days when a 20-year mortgage is kept for the full term without some kind of alternation or refinancing taking place. 
A lot can happen over the life of a loan – in the last 20 years for instance changes have occurred including market reform, fluctuating interest rates, changing regulations, the emergence of new lenders and both the tightening and weakening of lending criteria, to name just a few. 
Thus, for many borrowers, the environment in which their mortgage was first acquired no longer exists or is vastly different, and it is likely that the original loan product obtained may not be appropriate nor the most cost-effective option for current conditions and personal circumstances. 
It is for this reason that it can be incredibly valuable for borrowers to establish an ongoing, working relationship with a mortgage broker, similar to that which may be enjoyed with a financial advisor or other professional consultant. 
By keeping in touch with a trusted mortgage expert borrowers can position themselves to ensure that they remain abreast of developments in the home loans market, and can act on fortuitous opportunities, such as to refinance or expand a portfolio, as they arise. 
I have seen many borrowers discount or even disregard the value that working to maintain such a relationship with a broker can achieve for them.  As a result these people will only have contact with their mortgage consultant periodically when their broker contacts them to make sure all is well. 
It is true that most professional brokers, if they are doing their job properly, will certainly be keeping an eye on their clients’ situations and those who are proactive will let their clients know about new opportunities to refinance or add value. 
However, if these interactions were not being initiated on the part of the broker, I am inclined to suspect that many borrowers would sit on their current mortgage without periodically investigating the newly available options – and potentially miss out on valuable cost savings as a result. 
In my experience, borrowers who maintain a working relationship with their mortgage brokers are at a big advantage, particularly as to do so doesn’t necessarily require a great deal of time.  While yes, it is reasonable to expect that your broker contacts you when attractive opportunities arise, don’t discount the value in taking steps to keep yourself front of mind for the broker so that you are the first client contacted when, for example, lenders release new packages, regulations change, or lending criteria alters in your favour. 
Often this requires only a coffee or lunch every now and then to catch up with your mortgage broker and have a chat about general market conditions and happenings, as well as your personal objectives and plans. 
The information that can be gained from such meetings is often invaluable, as you might find yourself privy to your broker’s concerns and insights into the current mortgage market – which could lead to further opportunities to invest or expand your portfolio. 
In addition, with more of an idea as to your property intentions and what you are comfortable with, your broker will be better placed to evaluate new mortgage options on your behalf. 
As a natural by-product of your effort and hospitality, you may just find that a working relationship with your broker is formed, whereby he or she is naturally more inclined to look out for your interests and alert you to valuable new opportunities as (or even before) they arise – putting you well ahead of other players and potentially saving you precious funds that can be directed to paying off your mortgage more quickly. 
There is no doubt that the home loans market can be a complex place to navigate, particularly for those property buyers who have not had a great deal of experience.  Dedicating some time to developing a relationship with a trusted mortgage broker can help you to make sure that you have an experienced professional watching out for your best interests – ensuring you make valuable savings where possible and have the most effective mortgage package available.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21.</a> 
 
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Maximise your relationship with your mortgage broker

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When you are thinking about selling a property, securing the best real estate agent is a vital consideration – agent choice is often the key difference between a great or mediocre result. So how can you ensure that you not only pick the right agent, but also get the most out of their services?  
Here are my top tips for selecting, and maximising the value of, a real estate agent.    
<ul>
<li>Don’t go with the cheapest agent</li>
</ul>
It is critical that you don’t make finding the cheapest agent, or the agent that offers you the least amount of advertising, your first priority. Why? Because if an agent can’t negotiate an effective fee for service with you, it’s unlikely they’ll be able to negotiate an effective sale price for your property.  
<ul>
<li>Find a performance-based agent</li>
</ul>
There is a tendency to believe that agents with many ‘for sale’ signs are the most effective and capable of selling property. However, in this particular context, when perception meets reality, reality often comes off second best. 
The reason for this is that ‘for sale’ signs are predominantly an indicator of an agent’s activity, not their results – an agent may have a large amount of listings, but they might not actually be selling anything.  
Try to keep in mind that a ‘for sale’ sign is initially a sign of success, but after four weeks, it becomes a sign of an agent’s failure to get the job done.  
I would recommend searching for agents that have the most ‘sold’ signs in your area, as these agents will most likely be performance-based as opposed to activity-based.  
Once you’ve identified an agent with a large number of ‘sold’ signs, you may want to consider knocking on the front doors of some their sold properties to ask the owner-occupiers how the selling process went. Doing so will allow you to gain some first-hand insights into the agent’s previous performance, which may help you to decide whether or not the agent is right for you.    
<ul>
<li>
Find an agent that treats you like their only client  
</li>
</ul>
It is reasonable to expect that your agent will meet with you on a weekly basis to give updates on all developments relating to your property’s sale – not just in person, but in writing as well.  
Remember – if it’s not in writing, it didn’t happen, so make sure that your agent commits up-front to giving you regular written updates.  
If your agent is prepared to document updates, it will not only show that they are serious about the transaction, it will also give you a tangible reference point to make them accountable should they fail to deliver on their undertakings.  
As an extension of this point, I would advise to look for an agent that speaks to you only about your property, and not about how busy they are with everybody else’s. It is relatively safe to assume that if an agent doesn’t give your property adequate attention in your presence, they’ll struggle to do so when you’re not around – so aim to find an agent that treats you like their only client.  
This article continues on the next page. Please click below.
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<ul>
<li>Build an open and honest relationship with your agent</li>
</ul>
Building an open and honest relationship with your agent is one of the best things you can do in terms of ensuring that the agent’s advice is aligned with your best interests.  
Real estate practitioners are generally very sociable people who want to achieve the best possible outcomes for their clients. The best agents, however, are the ones that give honest and open advice – even when their clients don’t necessarily want to hear it.  
Of course, as a vendor, you want to achieve the best sale price for your property with the minimum outlay possible. However, the worst thing you can do is make your agent feel uncomfortable about managing your price expectations or giving you bad news.  
Your agent needs to feel at liberty to give you honest and accurate information on buyer feedback, market conditions and the like so that you can make a fully informed decision about when to sell, and at what price.    
<ul>
<li>Be flexible with your marketing</li>
</ul>
There are usually two reasons as to why a property doesn’t sell – either the vendor’s price expectations are too high or the marketing of the property is poor. If you agree to and sign off on a marketing strategy with your selling agent, it is important to hold the agent to delivering that strategy in full.  
In saying that, it is also important to be flexible with your marketing and to adjust your strategy if need be.  
In order to know when flexibility is required, you will need to be able to properly assess whether or not your existing strategy is working. As such, you should aim to meet with your agent during the first one to two weeks of open for inspections to discuss buyer feedback and interest in the property.  
If buyer feedback is poor and interest is low, the agent may recommend that you increase your marketing budget. Though this may not be what you originally agreed upon, I would suggest being open to increasing your marketing spend if your original strategy has proven ineffective. Doing so will likely increase your chances of not only selling, but achieving a strong sale price.  
Charles Tarbey is the chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>, one of Australasia’s largest and most diverse property groups.  
Charles has been actively involved in the property industry since 1972, and has trained and given advice to thousands of real estate agents, vendors and purchasers. He is also the author of two real estate books, Profit Driven Real Estate and Listing Rich.
This article first appeared on Property Observer in September 2013.
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Five tips to get the most out of your real estate agent

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GUEST OBSERVATION
In its September meeting, the Reserve Bank decided to leave interest rates on hold at 2.5%. I believe this is positive news for Australians seeking to purchase their first home, as a low interest rate environment lowers the cost of financing this purchase.
In other good news for first home buyers, recently the HIA-CBA Housing Affordability Index posted its most favourable result in 12 years. 
In combination, these factors are likely to motivate any first home buyers who may have been sitting on the fence to enter the market and start looking for a suitable property to purchase.
I also encourage all property owners to take advantage of the borrowing environment at present, as any loan containing an interest rate with the number four or five in front of it should help a buyer over the next five to six years. It's also wise for property owners to <a href="https://www.urban.com.au/expert-insights/finance/35208-unprecedented-low-interest-rates-won-t-last-forever&amp;sa=U&amp;ei=rYQPVPKjBcm_uASF5oHAAQ&amp;ved=0CAYQFjAA&amp;client=internal-uds-cse&amp;usg=AFQjCNEKK_J6AfDl7jnjb2buTvy9MN7FSw" target="_blank">budget for the possibility of any future rate movements in advance</a>, so that they’re adequately prepared for movements if and when they occur.
Additionally, recent price movement is also a positive indicator for the Australian property market, as value growth has started to slow after a period which saw rapid and sustained value growth across many of our capital cities.
Importantly, conditions have shifted from a sellers' market, where buyers have been willing to meet the high expectations of sellers, to a negotiators' market wherein real estate agents may need to seek to negotiate a lower price with vendors in order to close sales.
Banks and valuers are also starting to become more conservative after last year's strong house price growth, acting as two more mechanisms which will help to ensure future price growth in the property market is steady and sustainable.
Overall, I believe that the outlook for the property market continues to be positive and should present many opportunities for buyers and sellers in the Australian property market.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>.
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Low interest rates are good news for first home buyers

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GUEST OBSERVATION
These days everyone has an opinion on the state of the Australian property market – and the louder and more panic-inducing, the more attention their comments are likely to receive.
In early 2012, those already invested in the Australian property market may have been made to feel slightly uneasy by commentary predicting prices would fall by up to 60% in 2013. Individuals focusing on other investment markets may have breathed a sigh of relief, happy to now wait until the decline had passed before entering the market at a better time.
As we now know, 2013 actually saw a strong recovery in the Australian property market, with values finishing the calendar year 9.8% higher and property values in Australia currently sitting 16.1% higher than the start of the current growth cycle which started in June 2012.
The important thing to remember is that if you predict a market collapse every single year, one year you are bound to be right. This can encourage people to continually try to predict movements in markets they may not have relevant insight into; to one day be able to say ‘I told you so’.
Another thing to consider is the context and timing of when data appears and to remember that data is often historical and doesn’t necessarily represent a picture of where the market will go.
This is not at all to say that informative websites such as the Australian Bureau of Statistics or RP Data are providing incorrect statistics. These sites are hugely useful and credible resources for looking at pricing information and property trends, which might then be used in guiding more informed purchasing and selling decisions.
Another limitation of the data is that it is affected by a range of operational factors in addition to the movement of the market. For example, Christmas is a period of downtime for many Australian businesses – and the analytics industry is not immune to this. This is why traditionally the January/February periods often records low levels of activity, while March can appear to experience a slight uptick. Such fluctuations are not necessarily caused by what’s happening in the market but are rather impacted by the low levels of data provided during quieter periods.
Instead of paying too close attention to these often conflicting opinions and data points, it’s best to focus on doing your own research, talking to agents and listening to reliable commentators and forming your own thoughts about events in the property market.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>.
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Take property market doomsday predictions with a grain of salt, do your own research

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GUEST OBSERVATION
Infrastructure has an incredible impact on property prices.
Take for example, the M7 motorway in Sydney.
There are now some fantastic areas that you can get to quickly on the M7, meaning people can buy a brand new or high quality home in an area with very easy access to all the necessary amenities.
As a result of this infrastructure being built, many people who would have previously described these areas as too remote or hard to get to are now considering them to be desirable locations to live.
It’s important not to forget that both new and established infrastructure has an impact upon property prices.
While there’s been a lot of speculation in the media about the impact of major infrastructure projects in capital cities such as Melbourne and Sydney, many other regions in Australia already have infrastructure in place to rival that planned by these respective state governments.
In my experience, many speculators miss out on capital growth as they’re effectively placing a bet that planned infrastructure will cause a short-term price movement.
The reality is that infrastructure is often the first step in the gentrification of an area and the resulting price movement in the suburb may take months or even years to be fully felt.
Regardless of your intentions when entering the property market, I believe every buyer should be focused on the long-term capital growth they’re able to achieve from their property purchase.
Too often I see short-term speculators abandoning a purchase which is likely to experience strong growth over the next ten years, because the price dropped slightly over the past two months.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>.
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Charles Tarbey

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