Daily Archives: November 23, 2020

Is That Included? What Stays And What Goes When You Buy A Property

Is everything you saw when you inspected the property included once you take possession?

Clearly not – some of the items in the property belong to the vendor, so let’s sort the hay from chaff when it comes to what stays and what goes.

There is a general legal principle that when you buy a property you get transfer of a title and that gives you a right to the land and anything affixed to it.

Obviously this includes a dwelling and this extends to anything that is affixed to the dwelling.

A simple way of looking at it is imagining you took the house and tipped it upside down. Whatever falls out doesn’t stay with the house when you take possession.

In legal terms there are generally two classes of items in a property: goods or chattels and fixtures or fittings.

Fixtures (the bit that doesn’t fall out when you tip it upside down) are part of the property and are sold with the property.

On the other hands goods are movable items which the vendor can take with them at settlement.

But it’s not always this cut and dry.

Say, the vendor bought a new dishwasher only a few months ago; it looks built in, but there really aren’t any screws holding it in place. Does it stay or does it go?

That’s why when you buy (or sell) a property it’s important to complete the section of the contract of sale concerning goods.

This is where you list items which as either staying or going.

Often this section will say the sale includes “all fixed floor covering, light fittings and window furnishing, excluding the garden shed in the back yard”.

If there is any doubt about an item ask the selling agent and ensure it is specified in the contract, as it is the different expectations between the buyer and seller that can cause disputes.

With regards to the dishwasher example, in general if the dishwasher is free standing it is a good, but if it’s mounted under a bench it’s a fixture and stays.

Using Your Home’s Equity To Purchase Your Next One

Equity is your borrowing power, the amount of money you have in your home or investment property that you can use to purchase further properties.

This is the tried-and-true formula of property investing across Australia; tapping into dormant equity.

Technically speaking, it is the difference between the market value of your property and the size of your current loan. The bigger the gap, the greater the equity.

Over time, as capital growth pushes the value of housing up and you steadily pay off your loan, the amount you owe compared to the value of the property will widen and your equity grows.

How to calculate your borrowable equity

Calculating how much money you can borrow is a relatively simple task.

Just say you own a home that is worth $600,000 and you have a $300,000 mortgage on it.

That means you have $300,000 in equity, right?

Well yes, but now we need to make a distinction between equity and usable (borrowable) equity.

Most banks will cap their lending at 80 per cent of the property’s value, although you can go higher if you don’t mind incurring lender’s mortgage insurance.

Assuming you stick to the 80 per cent ceiling, let’s do the sums to work out how much you can borrow:

Your home’s value x 0.80% = $480,000

Your debt is $300,000, so subtract this from the amount the bank will lend up to $480,000 and you are left with $180,000.

This means you have $180,000 in usable equity.

What can you do with this equity?

Some people draw down this equity by increasing their home loan and use it to fund their home renovation

Others use it to fund that expensive European holiday they’ve always been dreaming about.

And many smart Australians have taken an equity release loan and used this as the deposit to buy an investment property to help secure their financial future.

But please be careful!

If you’re going to draw down your equity done just increase your existing home loan otherwise the interest on the loan may not be tax deductible.

It’s important to structure your investment loan correctly as a separate loan against you home rather than an extension of your home loan.

If done correctly the interest on this loan will be tax deductible, even though the security for the loan is your home, because the purpose of this loan is for investment and income producing purposes.

Keep informed with our Finance and Mortgage related blogs

5 Things To Look For At A Home Open

The open for inspection can be a critical time for buyers, allowing you to chat to the real estate agent, turn on the taps to check for water pressure, open and close doors, and mentally move the furniture in to see if it fits.

It often helps if you approach a property inspection with a very clear set of questions in mind.

So what should you be on the lookout for?

1. Noise

There are a handful of obvious noise problems to consider such as if the home is on a main road or smack bang next to a railway station.

But some noises only become evident after you have moved in, by which stage it is too late.

Noisy neighbours, or a noisy party street, can dramatically impact on your home life.

You can listen for noise during the open for inspection, but this is really only a short period of time.

Take a drive past the property on a Friday or Saturday night for a true feel of the neighbourhood.

2. Location

Not only is it important to buy into a good location (ideally a quiet, tree-lined street within walking distance of public transport and shops) but you need to also buy the right house in the right street.

Homes in which the courtyard or back garden face north are prized because they receive sunlight all day long.

But don’t be fooled by those agents who advertise homes as “north-facing”.

This is not always a good thing, as it means the back garden faces south.

It’s also worth noting that homes situated in streets with similar style homes tend to do better.

If you can buy into a street renowned for its single-fronted Victorian cottages, then that home is likely to enjoy greater capital growth than those homes situated in streets with no clear architectural theme.

3. Structural problems

Water damage, pest infestations, electrical and plumbing problems and a poor roof are among the most common of structural housing flaws.

The last thing you want to do is to buy a home only to move in and discover it needs re-stumping or there is an active termite infestation.

There are some ways of assessing whether the home is afflicted with any of these issues.

Doors and windows that do not open and close properly are often signs of a home that has structural problems, and it isn’t difficult to see the signs of rising damp on the exterior of the house.

But the naked eye will only get you so far and I cannot recommend enough hiring a reputable pest and building inspector to write up a report on the condition of the home.

Don’t be surprised if it has some flaws.

At least you will know what you are dealing with and you can factor those costs into your sale offer.

4. Points of difference

Try to track down a home that offers something a bit different.

Perhaps it is a view that cannot be built out or an architectural flourish that enhances the attractiveness of the home.

Space is a premium in the inner city so if the property you are interested in has a two-car garage then that is a bonus.

Don’t underestimate the selling power of solar panels either.

If you buy a home where solar has been installed then you get to reap the benefits of much lower energy bills without the installation costs.

While a fireplace is a warm and welcoming feature in many period homes, you should also look for other methods of heating and cooling.

5. Privacy

When you are inspecting a property, it is often difficult to tell exactly what it will be like to live in it, day to day.

And if there is one thing we all value deeply in our homes, it’s a bit of privacy.

When inspecting a potential buy, it is important to ask yourself how private the space is.

Are you overlooked by a giant block of apartments?

You may tell yourself this does not matter but that may change once you move in and want to spend hours relaxing in your backyard.

Has the zoning in the area changed recently to allow for higher-density apartments?

If so, there is a chance the house next door to you could be turned into an apartment block that not only casts a shadow but also takes away your sense of privacy.

It won’t do much for the value of the house either!

If it is an apartment you are buying make sure there is at least some kind of private (not communal) outdoor space, even if it’s a small courtyard in need of some decent gardening.

If you are buying a townhouse of terrace with shared walls it is worth assessing if you are likely to hear your neighbours excessively.

These considerations are by no means comprehensive, but are a good way of framing your thinking when you are walking through your next potential purchase.

If you are looking for a property to buy, check out what we have For Sale

Planning on Building? Consider These Costs

Planning on building? First consider these costs

Many first-time builders consider the land purchase price and construction costs, and even if you need to keep paying rent whilst building, but there are many other financial aspects to consider. These can include:

  • Council requirements.
  • Unexpected building and site works costs.
  • Taxes and bank fees.

Let’s take a look at the costs involved in a bit more details so that you can account for them adequately in your building plans and not get caught short!

Council requirements
Local councils require landowners to abide by different requirements and regulations, depending on the locale and the type of land in the area. For example, some councils will request a landowner to pay for and arrange a storm water assessment report due to the nature of the soil in the locality before they build.

Other council requirements that may induce a cost include:

  • Council contributions – fees to enhance public spaces and community infrastructure.
  • Traffic management – if realigning the sewer or if building very close to a set of traffic lights.
  • Council tree requirements – including if trees are near to powerlines, etc.
  • Geotechnical reports – costs pertaining to specialists who assess the land before some councils will allow building.

There could also be costs to meet building compliance standards for specific areas, including areas near airports or those prone to bushfires, which also needs to be considered.

Unexpected building and site works costs
Those looking to build a home should also consider civil works and engineering costs to prepare the block of land. These can include but are not limited to:

  • Retaining walls.
  • Compacting.
  • Sewer extensions and realignments.
  • Asbestos removal – post demolition.
  • Soil analysis.
  • Temporary fencing.
  • Unexpected design variations.
  • Build inclusions and upgrades.
  • Technological changes – for example, adding NBN connection where it does not originally exist on the land.
  • Delay costs – not just related to construction delays, but delays associated with ‘red tape’, including finance and council requirements. These factors may impede on your build time, costing you additional and unexpected amounts of money.

A builder or building consultant would be able to advise you as to what costs you can expect to pay when developing a block of land. A buyer needs to factor in these costs when assessing the profitability of a block they are interested in.

Taxes and bank fees
In addition to the actual purchase price of a block of land, those looking to buy should consider the additional costs involved as they can easily get out of hand. These can include:

  • GST and capital gains tax if you plan to sell after you build.
  • Bank charges.
  • Loan establishment fees.
  • Drawdown fees.
  • Interest payments on your loan while you build.

By factoring in these unexpected costs you can ensure your budget and expectations match, and further pave a smooth path to successfully buying and building on a block of land. Consider speaking to a buyer’s agent who is well versed in development sites in order to reduce your risk, avoid mistakes and achieve a positive outcome with as little stress as possible.

Anyone can buy a property to develop, but it’s easy to make mistakes throughout the process. An experienced buyer’s agent can not only identify suitable sites, but also build contingencies and safeguards into the contract to double check and investigate all potential development issues.

Expert buyer’s agents will also keep up-to-date with the latest building costs, and how these fluctuate with market demand and supply, as well as changing fees and charges.

If you are looking for land to build on, call us on 08 6254 6333 or, check out what we have available here.

Important First Homebuyer Lessons to Teach Your Children

Important first homebuyer lessons to teach your children

If 2018 is the year for your kids to hop onto the property ladder, first take a look at these ten valuable lessons you can teach your children to get them off on the right foot.

1. Be realistic as to what you can afford

Many young people have grand ambitions when it comes to their first house, far above what they can (and should) borrow to purchase.

Help your child by teaching them how to budget effectively, so they know exactly what they can afford.

Their budget should include all monthly expenses, including insurances, entertainment and of course, things like maintenance costs and rates that come with the responsibility of homeownership.

Once they have a realistic handle on their expenses, this can be subtracted from their income, leaving them with the amount they can afford to outlay on a monthly mortgage repayment.

The trick is then to only shop within your budget and avoid the temptation of looking at properties that are simply unattainable at this stage.

2. Make sure you capture all the expenses

Following on from the above point; when it comes to creating a realistic budget, you have to consider the additional costs that come with owning a home of your own.

First there are the purchasing costs, such as legal and mortgage fees, as well as furniture and whitegoods. Not to mention rates, insurances, repairs and maintenance that you don’t have to worry about when you live with mum and dad or rent from your landlord.

And if your first home is in an apartment complex, there will be annual strata fees payable.

It all adds up so make sure your child is aware of these hidden extras.

3. Get pre-approved

Before they start pounding the pavements, it’s important that first homebuyers find out exactly what type of mortgage the bank is likely to approve.

Knowing how much you have to spend means avoiding disappointment and importantly, being prepared when the right property presents itself.

This is particularly critical if your child wants to purchase in an area where auctions are the preferred method of treaty, such as in most inner suburbs of our major capital cities.

It also makes putting in an offer a smoother process, once you find the ideal property.

4. Don’t overcommit

While our first home might not be the palatial residence we dream of one day owning, it is the first step up the property ladder that can have a significant life long impact on the rest of your child’s journey.

It’s great to have a wish list, but it is important that your children understand compromises will have to be made if they are to remain in the realms of financial reality and not overcommit from the very beginning.

Remember, most of us will upgrade every seven to ten years, so remind them that this is not necessarily going to be their forever home.

5. Look past the little flaws

If your child were to purchase something that needs a little cosmetic work, they can add value and increase their equity, putting them in good stead to continue climbing onwards and upwards and potentially invest in further properties for their future retirement fund.

This requires a bit of vision and a willingness to do some manual labour, but is a worthwhile strategy for first homebuyers to adopt.

Aside from the economic gains to be made in acquiring a fixer upper, there’s also less chance they will pay a premium for the high spec finish achieved by the previous vendors.

You’re far better off paying less at point of purchase and having to put in some elbow grease, than paying for someone else’s hard work.

6. Agree on your compromises

Some things are non-negotiable when it comes to shopping for a first home.

What those specifics are will depend on the stage of life your child is at and their immediate plans for the future.

If they have recently gotten married and are planning on starting a family, a one-bedroom apartment is obviously not ideal.

Make sure they have a clear distinction between their ‘must-haves’ and those features that are more cosmetic than practical.

7. Future-proof as much as possible

When it comes to buying their first home specifically, future planning should include not only their personal needs and desires, but also what the market they are buying into will look like in ten years time when they might be thinking of moving on and selling, or using the equity in their home to purchase another property.

Does that particular property in that particular location represent a good long-term investment, as well as a cozy first home?

This will no doubt require some legwork and research into things like local school zones, future zoning council changes or planning policies from local and state government that might change the aesthetics or value of the property.

8. Suss it out before signing

It’s important that your child inspects the property carefully and more than once to really assess its suitability.

This means visiting during the day, as well as at nights and on weekends when different factors might impact the noise levels and general environment.

They want to see the home in different lights and take in the aspect of different rooms to get a better idea as to how much it will cost to heat and cool, which can really impact the affordability and livability of a property.

Advise them to talk to neighbours if possible and if the home is tenanted, to the current residents to get their take on living in the premises.

9. Get it checked out

It’s advisable that first homebuyers (or any purchaser for that matter) obtain building and pest inspections from properly qualified professionals.

If the previous owners have made any improvements or extensions, you need to qualify that the correct permits were in place for the completed works.

10. Don’t be scared to negotiate or walk away

Teach your child the necessary skills to negotiate effectively and importantly, give them the confidence to know when to walk away from a deal that’s simply not going to tick all of their necessary boxes.


Are you thinking about buying your first home? We can help! With experienced agents, great properties available, and a wealth of knowledge to guide you through the process, make Naked Edge Real Estate your first call.
View our currently available listings here.

Ways to Know You Have Found the Right House

You’re finally ready to buy a new house!

Maybe it’s the first home you’re ever going to purchase yourself, or perhaps it’s a crucial upgrade that you’ve decided to invest in now that your family is getting bigger. Either way, choosing the ideal home is a big decision. In fact, is one of the most significant financial decisions you’re ever going to make.
With so much pressure riding on the right choice, it’s no wonder that so many buyers end up biting their nails over whether a purchase is right for them or not. Move too quickly, and you risk wasting all your budget on a home that’s just not right for you. Sit on the fence for too long, and you could lose your chance of getting the property of your dreams.
So, how do you know whether you’ve really found the right house? Look for the following signs.










  1. It Suits your Budget Perfectly

Ultimately, we’re all limited by how much house we can reasonably afford to buy. You’ll need to sit down with a real estate agent or a mortgage broker before you start looking for homes, and sort through your finances to determine how much you can afford to offer as a down payment, and how much debt you’re comfortable being in and can realistically afford to pay back.
If you’re struggling to figure out what you can afford, there are plenty of great mortgage calculators out there who can help you to do the math. Perhaps the most important thing to remember is that you should never put yourself in a position where you’re going to struggle to make ends meet every month.
Your home is a place of comfort – it shouldn’t be something that fills you with dread every time you see the mortgage payment. If the price of your ideal home leaves you breathing a sigh of relief, then that’s a good sign you’re on the right path.

  1. It Meets Your Must-Have List

With your budget in mind, you’ll probably find that you need to do some prioritising. After all, you might not be able to afford three bathrooms, four bedrooms, and a giant garden. With that in mind, you’re going to need to decide what your “must have” items are, and what your “nice to have” preferences might be.
The perfect home will be the one that checks off all the deal-breakers on your list while covering a few of the nice to have options too. While everyone’s list is different, a few of the things you might consider include:
– A location that’s close to work
– Enough bedrooms for the whole family
– A kitchen that’s large enough to entertain in
– An extra bathroom
– A theatre room

While you should always be willing to compromise when your house-hunting, remember that a property that doesn’t fit your basic needs might not be the right fit.





  1. You No Longer Care about Seeing Other Homes

When you start house hunting, with a little luck you’ll find that there are plenty of homes out there that meet your budget. However, while there might be countless fish in the sea within your local area, once you find the perfect place for you, you’ll no longer be interested in seeing the other options. Ultimately, once you find the one, all the excitement of house hunting goes through the window, and all you can think about is getting your hands on that dream property.
Even if you do decide to look at the other homes in your area, then there’s a good chance that the “one” will be on your mind throughout the entire viewing. You might even find yourself comparing other houses to the property you love – telling yourself that the other garden was bigger, or that there was more “light” in the living room.

If the thrill of the hunt has gone, you might have already found your perfect home!

  1. The Area or Neighbourhood is Perfect

While it’s great to fall in love with a house for its structure or the number of spacious bedrooms it has, it’s also important to remember that you’re not buying a home in a vacuum. In other words, when you invest in a house, you’re also investing in the neighbourhood. Before you even consider making an offer somewhere, you should look at the surrounding area and see if you’re happy with it.
Is there a school nearby that would be great for the kids? Can you access plenty of public transportation if you don’t want to rely on a car? What about the neighbours? Can you consider knocking on a few doors and finding out whether you’re going to get along with the people you live beside? Ask about the nitty gritty like the crime rate in the area and if there is a lot of noise in the evenings when you would rather be relaxing in peace.
It’s a good idea to explore an area thoroughly before you submit an offer. Make sure you’re on the lookout for essential amenities like a grocery store, or bank. It’s also worth looking for fun hotspots like restaurants and parks too.

  1. Is It Right for Today and Tomorrow?

An important point to keep in mind when you’re buying a house is that you’re not just purchasing the property to live in for the next year or so. Most people spend at least a few years in their home, so it’s worth making sure that your house is going to meet all your expectations for today and tomorrow.
Real estate is a solid investment, and you’ll want to make sure that any home you’re thinking of purchasing is a good fit for the life you envision having. Is there are a spare room for any kids you’re thinking of having? If you’re planning to launch your own business or spend more time working from home, is there somewhere you can turn into an office space?

Looking for the Perfect Property Vibes
Ultimately, finding the right house is a lot like falling in love. For many people, you simply know when you’ve found the right one. From the moment you see the property, you’ll be dying to get inside, and every new room will create an even deeper love affair. Even if the house isn’t perfect, the home that’s right for you won’t put you off because you don’t like the paint colour, or you know the kitchen needs a refresh. Just make sure that you don’t let your heart rule your head too much, or you could end up spending more money thanyou realistically have.

Ready to start looking? To see our currently available properties, please click here.