Advice

<html><body>
Today's ASIC submission to the 2014 Financial System Inquiry, released this morning, is filled with much discussion about the financial advice industry. However, it also takes a good look at consumers and the way that we seek out investment advice and information.
It explained that when it comes to investing and making financial decisions, there are five key points that affect our decision.
<blockquote>
"There is potential for effective marketing to target and, in some cases, exploit these biases".
</blockquote>
"Research from psychology indicates that the 'rational' investor that underpins traditional economic theory does not exist. Instead, people are simply 'normal', and their decisions are motivated and influened by a complex mix of cognitive, social and emotional factors," it notes.
The five factors they point out as heavily influencing investment choices, for better or worse, are the following:
<ol>
<li>
Behavioural biases 
</li>
<li>
Low levels of financial literacy 
</li>
<li>
Lack of access to good quality financial advice and factual information 
</li>
<li>
Information and choice overload 
</li>
<li>Length and complexity of disclosure</li>
</ol>
These five points might be opening you up to exploitation, but they can also cloud judgement when trying to look logically at comparing investment opportunities.
Behavioural biases
The first, behaviour biases, particularly when it comes to decision making biases, are claimed to be put into a number of groups:
<ul>
<li>Preferences - Often influenced by emotions e.g. immediate gratification often valued over future gain, choices made to avoid negative emotions, such as stress, or to promote positive emotions, such as security.</li>
</ul>
<ul>
<li>Beliefs - People approach decisions with pre-existing beliefs that are likely to influence those decisions e.g. over-extrapolating a small number of observations, or being over-confident about the likelihood of certain events occurring.</li>
</ul>
Property Observer likens this to investors who claim that an investment can only be good if it has a view, or is within walking distance to some-amenity-or-other. Sweeping statements can fall into this category.
<ul>
<li>Decision-making shortcuts - Decisions often made using heuristics or 'shortcuts' - for example, unconscious rules of thumb, which may lead people to choose options that appear familiar or unambiguous without weighing up all the options.</li>
</ul>
"Specific attributes of financial and credit products - such as their complexity, risk, uncertainty and long-term nature - can accentuate people's natural inclination to eschew difficult reasoning and fall back on these behavioural biases," explains the report.
<blockquote>
Behavioural biases can include:
PREFERENCES
BELIEFS
DECISION-MAKING SHORTCUTS
</blockquote>
Here, they warn, there is "potential for effective marketing to target and, in some cases, exploit these biases... As a consequence there is a risk that investors and financial consumers will acquire products and services that are not aligned with their financial situation, risk profile, objectives and needs."
Clearly, it's worth investors keeping an eye on their own ingrained biases.
Low levels of financial literacy
Financial literacy is the second mentioned point, and covers the "application of knowledge, understanding, skills and value in consumer and financial contexts and the related decisions."
At present there is no rigorous financial literacy teaching in schools, particularly around property, leaving many to their own devices and others' advice.
"For individual investors and financial consumers, knowing how to make sound money decisions is a crucial skill in today's world, regardless of age. It is a 'core life skill for participating in modern society.' It affects quality of life, opportunities people can pursure, their sense of security and the overall economic health of society," the report continues.
Past conversations with Smart Property Adviser's Kevin Lee has proven that there is a growing support, particularly in the real estate community, for these skills to be taught at school.
Lack of access to good quality financial advice and factual information
The next is access to financial advice. While ASIC is, clearly, discussing financial planners - noting that less than 40% of the Australian adult population has seen a financial planner - there are some interesting observations. Those over 50 or with a higher socioeconomic status are more likely to head to a financial planner, while those with a lower socioeconomic status or who are under 25, are less likely.
<blockquote>
At present there is no rigorous financial literacy teaching in schools, particularly around property.
</blockquote>
Despite this, "Industry studies have shown that investors and financial consumers who access financial advice benefit financially as a result of the advice, even after the cost of the advice is taken into account."
The reasons for not seeking out advice include the aforementioned lack of financial literacy, a perception of advice being out of reach, a lack of trust in advisors, the scale of advice (with some wanting it bit-by-bit rather than all at once), wide access to general advice, and the overall cost of advice itself.
Information and choice overload
Anyone who has spent 10 minutes on Twitter can attest to the abundance of material online, and it doesn't just stop with the ever-growing content available on the internet. Books, catalogues, seminars and even television shows boast huge amounts of information to sift through that can sometimes work out counterproductive, and paralytic.
"Regardless of their demographic characteristics or level of experience, many investors were overwhelmed both by the volume of information available, and the difficulty in assessing the validity of the available information," the report explained.
<blockquote>
Not only is there too much information, but it's not all trustworthy either.
</blockquote>
Not only is there too much information, but it's not all trustworthy either, and it can be difficult to tell the difference.
Length and complexity of disclosure
Lastly, disclosure is a huge issue. The more paperwork thrown at investors, with disclosure sheets and documentation, the safer that everyone is meant to feel. However, with the length of some contracts being almost outrageous, it's hardly surprising that the length and complexity if these documents has made the list.
While ASIC has attempted to help consumers in this respect, bringing in summarised home loans' key fact sheets in the past among other initiatives, it appears that there's still much confusion around this complex information.
Which of these is causing you to spin your wheels the most? What would you like to see the industry fix up?
 
MORE ARTICLES ABOUT INVESTMENT PSYCHOLOGY:
<a href="/news/26128-flicker-1-sept-12-psychology-of-hotspotting-ben-kingsley" target="_blank">The psychology of hotspotting, exclusive interview with Ben Kingsley</a>
<a href="/expert-insights/investing/27636-the-psychology-of-achievement-do-you-have-what-it-takes" target="_blank">Mark Bouris: The psychology of achievement: Do you have what it takes?</a>
<a href="/news/nsw/25781-august-28-observer-the-property-market-psychology-behind-the-sydney-property-boom-pete-wargent-?start=3" target="_blank">The market psychology behind the Sydney property boom: Pete Wargent</a>
</body></html>

jduke-EHk3XBmHkn

The five factors inhibiting every investor in today's advice-laden world

<html><body>
Nila Sweeney, who has been editing Your Investment Property  magazine for the last eight years, is cautioning against buying this spring.
While she doesn't buy into the bubble claims, she has concluded there are simply way too many motivated and desperate buyers out there. 
"Too many people are blinded by their fear of missing out," observes Sweeney. 
"You will be competing with these buyers who are likely to over-pay and over-leverage just to get their desired property.
<div id="articlebody" class="topgradation_box article_default">"Now is not the time to over-stretch yourself, especially with the ongoing economic uncertainties here in Australia and in the international markets.</div>
<div class="topgradation_box article_default">
 "Buying now at the top of the market means you’re limiting your future gains and exposing yourself to losses when the market eventually consolidates."</div>
<div class="topgradation_box article_default"> </div>
<div class="topgradation_box article_default">She adds if you want to buy your investment property, opt for the more affordable option instead and avoid all that stress that comes with big mortgage repayments.</div>
<div class="topgradation_box article_default"> </div>
<div class="topgradation_box article_default">She says there will be opportunities in 2015 once the market moves into a consolidation phase.</div>
</body></html>

jchancellor-FAypfDUnLy

YIP editor cautions on spring property market exuberance 

<html><body>
It’s already close to the end of the year, and undoubtedly those looking to sell are getting a little anxious as the market starts to slow.
The seasonal slowdown of the real estate market over this period is just that, seasonal. However, it does mean sellers need to carefully consider their timing.
Certified Practicing Real Estate Agents chairman Geoff Baldwin explains that the Christmas period presents an opportunity for savvy investors to get in while other buyers turn their back on purchasing – but where does this leave our sellers?
"Historically our real estate markets slowdown from early November through mid to late January with the result that keen sellers become considerably more negotiable to the benefit of those few savvy buyers who are active during this period,” said Baldwin.
Stock is also set to increase due to this buyer inactivity, meaning your property will face more competition on the market with fewer buyers looking.
"While sellers who are not under pressure for a result will wait out this short term slowdown it is also not unusual to see others who are keen for a result, to drop their price expectations at this time of year,” he said.
“Sellers who are upgrading understand that they may accept less on their current property but they will also benefit when negotiating their next home.”
If you’re looking to buy and sell quickly, then there is perhaps an opportunity. However, if you can wait it out until 2015, then knuckle down, have a Christmas break from selling your home and get back into the market next year.
Baldwin points to the third week of January as when buying activity starts to heat up again – with 2015’s January to be no different.
{mijopolls 69}
</body></html>

Should you wait until 2015 to sell your home?

<html><body>
Christmas is coming, our homes (and soon our bellies) are filled with egg nog and mince pies. But that’s no reason to forget about your property portfolio.
With some time away from work to reflect on the year and the important things in life, it’s worth considering how you can improve your property portfolio. If you haven’t yet built your property portfolio, then <a href="sponsored/frasers-property/29371-how-to-build-a-property-portfolio-in-seven-easy-steps" target="_blank">here are some steps to bear in mind</a>.
Here are seven questions to ask yourself over the break:
<img src="data:image/png;base64,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" alt="">Do I have any underperformers in my portfolio?
First things first, it’s time to identify the properties that just aren’t pulling their weight. Perhaps this is through lacklustre capital growth with few future prospects, or even high vacancy rates and subsequently poor cash flow that’s draining your bank account dry.
Taking a critical look at your worst performers will quickly alert you to what needs to be done. Perhaps selling the property is an option, or maybe you’re willing to ride it out a little longer. Do your calculations around what your bottom line looks like with both your underperformers included and the money redirected elsewhere.
<img src="data:image/png;base64,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" alt="">Am I hitting my goals?
Part of investing in property is setting achievable, measurable goals that you can keep tabs on. If you haven’t set any goals, then now is the time to do so. If you had goals already, ensure that you are on track to meet them. If not, why not? What went wrong or changed? Perhaps your underperforming properties are holding you back from achieving what you had said out to do, or maybe your goals were too bullish.
<img src="data:image/png;base64,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" alt=""> Has my lifestyle changed, or is likely to change in the future?
Over the past year, you may have changed jobs, had a windfall or joint finances with another person. Revisit your portfolio with this in mind and consider your altered savings and discretionary income capacity.
You may find that you are now able to do more things with your money if you wanted, or to pay down debt more quickly. On the other hand, you might discover that your financial comfort is heading south.
Consider any upcoming changes over the next year that may impact on your finances. Obviously, not everything is predictable. However, if you’re actively looking into a job change or are trying for a baby, be aware of the financial pressures.
<img src="data:image/png;base64,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" alt=""> Can I move my portfolio ahead more quickly?
With a year behind you to reflect on the properties, you may find that you have an increased level of equity in the homes – especially given some of the recent strong rises in the market. If this is the case, it may be worth exploring your options around refinancing and buying another property, renovating with the equity and a number of other options that could help you reach your goals.
<img src="data:image/png;base64,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" alt=""> Do any of my properties need updating?
If you haven’t kept up to date with maintenance, repairs and even moderate renovations where possible then it’s time to start planning this. If any of your tenants are moving out soon then it’s the perfect opportunity to do a refresh.
Remember, keeping your homes in good working order is not only beneficial for the tenants who live there but also for protecting your assets.
<img src="data:image/png;base64,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" alt=""> Have I built in some risk mitigation?
Consider your insurances, savings and financial buffers and make sure you’ve considered the risks of property investing. Property prices can and do drop, so do consider how to protect yourself in the event of a falling property market or any of the aforementioned changes in your financial and personal circumstances.
In some cases, this risk mitigation will be leaving a certain amount of equity in the property, or paying it down a little more quickly, to avoid the possibility of negative equity. In other instances, you may want life insurance or another form of protection. Consider your own comfort levels with risk.
<img src="data:image/png;base64,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" alt=""> What is the plan looking ahead?
With all of the above information in mind, now it’s time to look towards the plan for the next year and in the future.
Noting down practical things to do (such as to get a valuation on a property or to sort out Landlord’s Insurance), as well as general comments around goals for the rest of the year, should put you on the right track.
</body></html>

Seven questions to ask yourself about your portfolio

<html><body>
Guest observation
Losing a close relative or friend is a difficult time for anyone, and dealing with the deceased’s estate — although a necessity — can add to your suffering. Whether you have been bequeathed a property or made responsible for its sale, there are a few simple but vital steps you can take to ensure the process is as smooth as possible.
Change the locks 
It’s a good idea to change all the locks in the house as soon as possible. It’s likely that your relative has given spare keys to friends, neighbours, cleaners or repairmen, and it’s important that you know who has access to the property. This way you can take charge of who has a key, including home staging professionals and your real estate agent.
Have mail forwarded 
Even if you have access to the deceased’s property, you should still arrange for mail to be forwarded to your own address for the foreseeable future. This means you will be able to tie up any outstanding matters relating to the property, such as water charges, council rates and mortgage repayments. Forwarding mail also means you can let friends and family know of the death when their mail arrives.
Arranging to forward mail should be done in-person at a post-office, using a Mail Redirection application form. More info can be accessed <a href="https://auspost.com.au/parcels-mail/redirecting-your-mail">here</a>.
Gather important documentation
If you’ve been left in charge of the deceased’s estate, there are financial matters that you will need to attend to as quickly as possible. You should attempt to collect all of the following documents and ensure they are dealt with accordingly. All of these documents may already be with a solicitor that you can contact directly, but the responsibility to attend to any outstanding issues may fall upon you.
<ul>
<li>Rates notices and statements</li>
<li>Creditor letters</li>
<li>Bank account information</li>
<li>Home insurance — contact the provider to inform them of the death and arrange cover accordingly</li>
<li>Any documentation relating to ownership or maintenance of the home</li>
<li>Mortgage statements</li>
</ul>
Maintain payments 
Many mortgages are issued with the condition that adequate life insurance is in place, which will pay off the mortgage upon death. However, this doesn’t always happen automatically and you may need to contact the bank or mortgage company to inform them of the change in ownership status. You may also need to maintain repayments until the matter is resolved. If you are the legal owner of the property, you will need to keep up to date with council and water rates. These issues can be time-consuming, stressful and costly, so if you don’t intend to keep the house, securing a quick sale can be important.
Hire a real estate agent  
Given that the deceased relative may not have lived nearby to you, you will need a real estate agent who you trust and who you know will take a proactive approach when selling the property. For the best results, you should look for an agent who has specific experience selling homes quickly — and remotely, if that is your case. Particularly if you are in a different state, you should do your research to compare several agents in the area to get a good idea of their sales history and what their previous customers have to say about them.
Prepare the house for sale 
If you don’t intend to keep the property, achieving a quick sale at a fair market price is essential. Holding onto the house for too long could cost you money, so you and your real estate agent should select a listing price that represents value and attracts buyers. If you sell the property via the private treaty route, the original listing price just acts as a guide and if you can instil competition between buyers, you can drive up the price. You can ensure real certainty in terms of timescale by selling at auction. This decision can be made with the help of your agent.
If you’re looking to sell quickly, you should ensure to the best of your ability that it is ready to move into. This may require some quick repairs and alterations.
<ul>
<li>Remove old and tired furniture, and possibly temporarily furnish with some simple, modern items (you may consider hiring a professional staging company)</li>
<li>Remove personalised photos</li>
<li>Give the walls a lick of paint, and stick to neutral shades to appeal to broadest range of buyers</li>
<li>Make the rooms look as light and spacious as possible by removing unnecessary drapes and curtains.</li>
<li>Repair leaky taps, wobbly doors, and replace light bulbs.</li>
<li>Spruce up the garden as it’s often the first thing people see</li>
<li>Ensure your agent has access to the property at all times, especially if you don’t live close by</li>
</ul>
Selling the property of a deceased relative isn’t something most people are prepared for, and can often be someone’s first experience selling. Following the tips above will hopefully take some of the stress out of the process, so it’s important to surround yourself with people that you can trust have your best interests at heart.
Marta Higuera is the co-founder and co-CEO of real-estate startup <a href="https://www.openagent.com.au/" target="_blank">OpenAgent</a>.
 
 
</body></html>

po-LsXgBTHBmX

How to cope with selling the home of a deceased relative

<html><body>
Property, just like any other investment class, generally follows a cycle where prices rise and fall followed by a recovery. By nature, property is a long-term investment, so tracking these cycles can pay dividends in the long run. 
An often heard property investment mantra is that Australian property values double every decade, especially across the capital cities. But is this really the case?
CoreLogic's senior researcher Cameron Kusher put this theory to the test in a blog earlier this year, analysing home values in the 10 years to 2016 and the 10 years preceding that.  
“Over the 10 years to January 2016, home values across the combined capital cities have increased by a total 72%,” wrote Kusher, which is well short of the doubling theory. Melbourne was the only capital city housing market in which home values doubled over the past decade.  
<img src="/images/2016/09/27/Propertycycle3.png" alt="">
<img src="/images/2016/09/26/CoreLogicCapitalcity1.png" alt="">
In contrast, between January 1996 and January 2006 combined capital city home values rose by 151.7%, more than double the latest figures.
The data is a good example of the property growth cycle, and that despite common belief, growth is not guaranteed or consistent and is tied to economic factors.
<img src="/images/2016/09/27/Screen%20Shot%202016-09-27%20at%203.32.02%20PM.png" alt="" width="548" height="275">
Property cycle at a micro level
LJ Hooker’s national research manager Mathew Tiller says that to get a clear idea of how a market is performing, you need to approach it at a micro level.
"From a national perspective, you could say the real estate market has continual growth," Tiller says. "But, if you look at each individual state and market, than you can see that property fluctuates quite significantly, at different times as well."
The fact is borne out with a comparison between Western Australia and New South Wales. 
Between 2004 and 2008, the mining and resources boom fuelled a rapid growth in WA’s population, around 250,000. More jobs and a low unemployment rate also translated to a rise in property prices. The increase in demand resulted in fierce competition, which pushed the median house price up 93% during this period, according to research by LJ Hooker.
Meanwhile, the NSW property market was experiencing a contraction due to a relatively high unemployment rate, flat population growth and an increase in listings on the market.
"If employment opportunities decrease then demand for housing in those areas can also decrease as the population moves out," says Tiller. 
Fast-forward to 2015, with the mining boom over, Perth's home prices dropped 0.9% over the 12 months to September 2015 while Sydney's dwelling values skyrocketed 16.7%. 
The ups and downs can be explained through the classic economic theory of supply and demand, says Tiller.
"If demand (the number of buyers) exceeds supply (the number of listings), prices will rise, whether that's in terms of house sales or rent prices," he says. "If new supply comes into the market and exceeds demand then prices will fall."
When to invest
CoreLogic RP Data’s Pain and Gain report found that homes that resold at a profit over the June 2015 quarter were held on average 9.9 years. 
Approaching property as a long-term investment logically means that buying at the bottom increases the chances of maximising profit from property.
How to pick the best time to make a shrewd investment is another matter. Tiller recommends doing your research thoroughly and speaking with your local real estate agents to find out about where the area sits in the property cycle.
"There are a number of sources available where you can view the property charts and where the median price of a suburb or an area sits in relation to where it was 12 months ago or two years ago," he says.
Knowing where your area is in the property cycle is one of the keys to a successful investment.
</body></html>

jonathanchancellor-7SQnKwU6yx

When to invest in property? Understanding the market cycle

<html><body>
GUEST OBSERVATION
Buying a house is probably one of the most important purchases a person will make. Many people think the vendor is required to disclose matters that affect the property value, particularly if the buyer has no other means of finding out the full history of the house. For instance, if someone was murdered in the house, do the buyers have a right to be told?
The solicitor or conveyancer who acts for a buyer will probably tell them the law is “buyer beware”. It is up to buyers to satisfy themselves that the property is not affected by any defects in title, that it can be used for the purposes the buyer intends, and that any building on the property is sound.
If a vendor actively conceals a known defect, then that might amount to fraud. Examples include painting to conceal serious termite damage, or giving a deliberately false answer to a question from a buyer about the property.
A purchaser would need to show, though, that the vendor was deliberately dishonest or at least reckless. That’s a high standard of proof to meet.
The law requires vendors in some states, including New South Wales and Victoria, to disclose the title documents and any registered encumbrances such as easements and covenants. The vendor’s mortgages will be discharged on settlement.
In NSW and some other states, vendors must attach to the contract a certificate from the local council that sets out whether the land is affected by administrative or regulatory matters. This includes issues like zoning, subdivision, contaminated land or identified bushfire or flood hazards. These council certificates can give buyers a good idea of whether they will be able to use the property as they wish.
Where certain statutory requirements have not been disclosed, the buyer can rescind the contract and get their deposit back if the matter was so important that they would not have entered into the contract had they known about it.
In many states, though, there is no duty to disclose matters relating to the title or the use of the land. If the property is a commercial or investment property, the Australian Consumer Law gives remedies to buyers who are induced to enter into contracts by misleading or deceptive conduct in trade or commerce by the vendor or the vendor’s agent. Even if the vendor is selling privately, an agent might still be liable if they misrepresent the property, or tell half-truths that give a misleading impression.
But there is still no general duty on vendors or their agents to disclose matters that affect the property value and may be significant to buyers, but which do not amount to defects in title that can’t be discovered by reasonable inspection.
How far should disclosure go?
Should vendors be obliged to disclose all matters that might influence a buyer? There is probably a good case for all state and territory governments to follow NSW with a requirement to disclose council information. But, beyond that, just how far should a duty of disclosure go?
For instance, if something terrible, such as murder or other violent and upsetting events, has happened at a property, should a vendor be required to tell potential buyers about this? In some US states, courts have held that a vendor should disclose the history of the house where a murder has been committed. US brokers call these “stigmatised properties”.
In a case in NSW, a house where three members of a family were murdered was sold to unsuspecting buyers, who later found out about this history. They refused to proceed, but as the vendors were not required to disclose the history, the buyers lost their deposit. The estate agent who handled the sale was ultimately fined for glossing over the history of the house. The agent also met the cost of the forfeited deposit, but that depended on the particular facts involved.
Such horrible events are rare, but buyers might be very distressed by that kind of history. Shouldn’t buyers have complete information?
One problem is just how far any duty of disclosure would reach. Should any matter at all that affects the value of the property be disclosed?
Some buyers might be particularly sensitive and consider that they should be given comprehensive information about the history of the property. Would it be necessary to disclose that a person had died at the property, even if of old age or natural causes?
Just as vendors might not know about any structural defects in the property, they might not know much about the history of the property. A landlord vendor, for example, might not have information about what went on in the house while tenants were living in it. It might be unfair, then, to shift to the vendor the risk of any decline in value caused by sensitive buyers.
Estate agents are usually responsible for marketing the property. So, if any duty is to exist for making statements about it, perhaps this should lie on the agent, and not the vendors, and should be confined to compensation rather than the ability to get out of the sale. Purchasers can always on-sell a bad bargain, but vendors might be stuck with the property through no fault of their own if they have to bear the responsibility of disclosing everything about its history.
Patricia Lane, Senior Lecturer, University of Sydney
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/what-should-buyers-of-a-house-be-told-about-it-102196" target="_blank">original article</a>.
</body></html>

Advice

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Advice

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News