HOW TO NEGOTIATE THE BEST PROPERTY PRICE

Negotiating the best property price isn’t a matter of swindling a seller. It’s about doing your homework, knowing what you want, knowing the market and making sensible offers.

When you are buying property, getting the best price can mean the difference between being able to afford it and having to settle for second best. And, of course, a purchaser is often negotiating with a seasoned professional, so any time spent brushing up on negotiating skills is well spent.

But we’re getting ahead of ourselves. For a first-class property price negotiation, the homework starts well before you even let the agent know you are interested.

The first thing to do, says buyers’ agent Shelley Horton, is get a good understanding of your requirements and circumstances. Aside from the location and type of house you are looking for, this understanding involves finance, of course.

“One of the first things I would be wanting to find out is whether a purchaser will be borrowing to finance the property, and how much they are looking to borrow,” Horton explains. “If someone is relying on finance as part of the property purchase process, I would always recommend they go and get preapproval, because if you don’t have preapproval, it doesn’t really put you in a strong position against the rest of your competition.”

Aside from meaning that when you do eventually make an offer it will be taken seriously by the seller or their agent, having finance sorted out means that you can be sure of what your stamp duty and associated costs are, and exactly what price range you can consider.

“We can start to work out what an offer range might be, and then it’s just a matter of ascertaining the market,” Horton says.

“This means doing lots and lots of research – seeing the prices other similar properties are listed on the market, checking recent sell prices for other properties that fit the criteria, comparing as much as we can like for like, so then you know that you’re not paying too much.”

Horton initially looks at online resources such as realestate.com.au or Domain. She also uses RP Data reports, but notes that the general public doesn’t usually have access to these (agents, valuers and credit advisers usually do).

“The reports give us a little more insight into properties that have sold, and background on the circumstances and situations leading up to a property coming on the market, how long they’ve been on the market and whether they have switched agents,” she says.

Above all, the best thing a buyer can do is get out and look at properties, and speak to the agents to build contacts.

“I inspect properties and go to auctio555ns just to keep in touch with the area, to see what the market is doing,” Horton says. “If you go to an auction and there was a lot of hype around the property, but then you find that there was really only one person interested in bidding, it tells a different story.”

Once you have your finance sorted and you’ve found that special property, get the building and pest inspections done as soon as you can so that if you do make an offer, you are prepared to move quickly. This can give you the edge on your competitors.

“If you have your homework done – your due diligence reports, your finance – you know exactly the position you’re in and you’re ready to go, and letting the agent and vendor know that is actually a good thing,” says Horton. “An agent wants to look for all those signs to see who is the most serous buyer. So being able to make an offer, possibly with no cooling off, will put you ahead of anyone else, because the agent knows that you’re going to start talking about dollars and, once you agree, it’s a done deal.”

Finally, it’s time to talk dollars, and you are well armed by the time you reach this point. Most agents will make buying guides available at inspections, so you will have a good idea of the vendor’s expectations; you will have a certain budget in mind because your finance is locked in; and you will have a good idea of the value of the property from all the preparation you have done (if you are still unsure here, you can have a professional run a valuation or engage a buyers’ agent).

So what should you offer? “I tend to not start too low because the agent won’t take you seriously,” Horton says. “You have to get that balance right. You might want to start five per cent below a realistic opinion of the value of the property, and go from there. It also depends on your budget. Certainly start below your maximum, and work up to that. Every dollar you get the property under your budget is a bonus for you.”

One exception to this is when a property has been on the market for a long time and there is not much interest in it. “That might be the case where you can get something at a heavily discounted price because the property is stale,” Horton says. The key to knowing whether this is the case, of course, is all that thorough research you’ve done.

At Tailored Lifetime Solutions our dedicated MFAA Approved Credit Advisor, Paul Bridges, can help get your finance sorted out so you are ready to make a deal. Call us on (03) 9851 0300 to arrange an appointment.

Article originally published by MFAA.

SUPPORT FOR CARERS

In Australia, we rely heavily on carers to care for our aged and disabled community. According to Australian Bureau of Statistics and other sources, there are approximately 2.7 million unpaid carers providing over 1 billion hours of care. So what support is available of those carers? Here are some suggestions:

  1. Financial support is available through Centrelink either as a Carer Payment which is asset and income tested or a Carer Allowance which is not asset and income tested. These are available to carers who provide more than 20 hours per week of care;
  2. The National Respite for Carers Program is a federal government program that provides respite for carers either in the home, in day programs or in a residential facility;
  3. Carers Australia is a not for profit organisation which provides specialist services across Australia for carers. These services include advice, counselling and information. You can also contact your State based Carer organisation such as Carers Victoria for local assistance and information;
  4. There are numerous illness specific organisations which provide information, support and assistance to carers of people suffering from that illness; for example, Alzheimers Australia.

The carer needs to ensure that they take a break and take care of themselves because if they are not caring for themselves, they cannot care for others.

At Tailored Lifetime Solutions we work with other professional partners and specialists who can help with accessing care and support for you and your loved ones. Contact us on (03) 9851 0300 to arrange a meeting.

ACCESSING YOU SUPER

 

For the average Australian, Superannuation will be the largest asset they have besides their own home. But do you know what your options are when accessing your superannuation? At Tailored Lifetime Solutions our Financial Planners specialise in helping people make the most out of their superannuation by guiding them through the ins and outs of super. To help you get started, AMP has put together a short video outlining some of the options available when accessing your superannuation. If you want to know more about superannuation or if you want help building a plan to achieve your goals, call us today on (03) 9851 0300 to arrange a meeting with one of our Financial Planners.

NO JOB, NO LIFE INSURANCE, NO PROBLEM?

The importance of financial protection for stay at home parents.

There is a misconception that life insurance and income protection are only for those with real or paid jobs. But if you ask any stay at home parent, they will probably tell you their unpaid graft feels very much like ‘real work’. And the research backs this up. A study has shown that stay at home parents work longer and harder than their gainfully employed and better paid partners.

STAY AT HOME PARENTS WORK LONGER THAN AVERAGE PAID WORKER

The research conducted by TAL found that the national army of stay at home mums and dads wash, clean, cook, shop, and taxi their families around for an estimated 39.7 hours a week. This is seven hours longer than the average paid worker. To be exact, stay at home mums and dads cook for an estimated 7 hours and 30 minutes, wash and iron clothes for 4 hours and 24 minutes and clean for 8 hours and 42 minutes a week in addition to the 4 hours and 24 minutes spent walking, washing and caring the four legged family members.

Applying basic economics for a moment and using the minimum wage of $18.70 an hour, if a stay at home mum parent was paid a salary, they would earn $38,604 a year. Looking at it another way, paying someone to work the hours that a stay at home mum or dad works would cost a family a minimum of $38,604 a year. If it were possible to even find home help at minimum wage rate. This is highly unlikely in Australia’s big cities.

So if the stay at home parent falls ill, has an accident or even dies, what are the options available to help families? The good news is that families with unlimited savings or extraordinarily generous relatives will be fine. And of course some families are lucky enough to have the support of grandparents to help raise their children so they will also be OK providing Grandma and Grandpa have a spare 40 hours a week. But what if the illness is extensive or the parent, sadly, has passed away?

If the primary earner took time off work because their stay at home partner fell ill, or even died, this would probably leave families seriously out of pocket, particularly in circumstances where workers do not receive an income whilst taking time out to care for their partner and children.

HOW TO INSURE THE VALUE OF A STAY AT HOME PARENT

So what are the other options? What most people don’t realise is that they can insure the value of a stay at home parent should they become unable to do their normal duties due to accident, illness or even death. These policies, income protection and life insurance, are just as worthwhile considering for the stay at home parent. In the case of income protection, a policy will pay out a certain amount for a period of up to three months whilst mum or dad is unable to cook, clean and care. Life insurance is even simpler, providing a lump sum pay-out in the event of death.

Whilst no one likes to think about facing the trauma and upset of a major illness or death in their family, having a life insurance policy or income protection policy in place can provide real peace of mind and ensure that the whole family is looked after should something unforeseen happen to the stay at home parent.

At Tailored Lifetime Solutions, our Financial Planners specialise in helping people find the right kind of insurance to protect themselves and their family. Call us on 03 9851 0300 to arrange a meeting.

Article originally published by TAL Services Limited.

WHERE ARE WE IN THE INVESTMENT CYCLE?

It is now six years since the global financial crisis ended. From their 2009 lows US shares are up 212%, global shares are up 159% and Australian shares are up 91% (held back by higher interest rates, the commodity collapse & the high $A).

GREYING, WORKING AND CONTRIBUTING

More of us a working longer and taking a less traditional approach to retirement. Continuing to build up super or spend less of it as we get older can make a big difference for you in retirement. The ageing of the population – as outlined in the latest intergenerational report – together with a growing trend to work past traditional retirement ages inevitably means more of us will want to contribute to super for longer. At Tailored Lifetime Solutions our financial planners specialise in helping people reach their retirement goals

Perhaps you are among the many choosing to extend their working lives into older ages by winding-down their working hours as employees or becoming owner/operators of small businesses.

Certainly, numerous people decide to keep working into their sixties and beyond for the satisfaction that work may give them. Then, of course, there are the financial benefits.

More years in the workforce provides an opportunity to save more for what will be a shorter and therefore less costly retirement. And obviously, there will be more money to meet day-to-day living expenses.

Australia’s changing demographics means more people will need to understand the rules about contributing to super beyond 65 and about whether their personal super contributions are deductible.

As simply explained in the Australian Superannuation Handbook, published by Thomson Reuters, a super fund can accept:

  • Compulsory contributions from an employer regardless of an employee’s age.
  • Personal and salary-sacrificed contributions from members up to 74 years of age. (Beyond 65 years, members must have paid work for at least 40 hours over 30 consecutive days during a financial year. This is known as the “work test”.)

A key question for someone who is winding-down their working life by operating a small business in their own name is whether their personal contributions are deductible.

Superannuation commentator Trish Power has written a valuable article – Who can make tax-deductible contributions? – in the latest issue of online investment newsletter Cuffelinks. (Power publishes the SuperGuide online newsletter.)

As Power explains, a person can usually claim a deduction for personal contributions up to the concessional contributions cap if they are self-employed or an employee who earns less than 10 per cent of their assessable income (salary-sacrificed super and reportable fringe benefits) as an employee.

A plan to extend your working life can be made more attractive if your super contributions are deductible.

If you would like to talk to one of our Financial Planners about your retirement goals call us on 03 9851 0300 to arrange a meeting.

Article originally published by Vanguard Investments Australia.

AUSTRALIAN HOME PRICES AND INTEREST RATES

The case for the RBA resuming interest rate cuts this year has been fairly clear: commodity prices have fallen more than expected; the $A has remained relatively high; while residential construction and consumer spending are okay the outlook for business investment has deteriorated pointing to overall growth remaining sub-par; and inflation is low. This has seen the cash rate fall to 2.25%. While the RBA left rates on hold at its April meeting, it retains an easing bias pointing to further cuts ahead.

However, the main argument against further rate cuts has been that the housing market is too hot and further rate cuts risk pushing home prices to more unsustainable levels resulting in a more damaging eventual collapse. But how real is this concern?

WHAT IS RISK IN INVESTING?

What is risk? Surely that is a stupid question as everyone knows what risk is when it comes to investing. Investopedia (www.investopedia.com) defines risk as “the chance that an investment’s actual return will be different than expected”. It’s actually quite a complex concept because it could mean different things to different people depending on their circumstances and tolerance to it. And it can be highly perverse often being very different to what backward looking statistical measures and common sense might suggest. But it’s worth thinking about because it can impact how you invest.

 

INVESTING – THE BASICS

 

Investing can sometimes seem complicated. At Tailored Lifetime Solutions, our Financial Planners talk to clients about investing every single day. Their goal is to demystify the subject and help people make some pretty big decisions about their personal goals and how they’re going to achieve them. AMP has put together an introduction video that will help you understand some basics about investing and explain who really is an investor. If you want to know more about investing or if you want help building a plan to achieve your goals, call us today on (03) 9851 0300 to arrange a meeting with one of our Financial Planners.

 

 

 

PROTECTING WHAT MATTERS MOST

Have you ever wondered what would happen to you and your family if you became ill? Trauma insurance provides a lump sum benefit in the event of being diagnosed with a serious medical condition. It can provide financial relief and certainty at a stressful time, giving you peace of mind so you can focus on recovering. At Tailored Lifetime Solutions we specialise in helping people find the right type and amount of insurance for their individual circumstances. If you would like to discuss your personal insurance needs, call us on (03) 9851 0300 to arrange a meeting with one of our Financial Planners.