FHB Process

FHB Process

“Hello and welcome back to daily buying tips, I’m Dean Berman from Berman Buys.

Today were going to talk about what to do when buying a house for the first time.

Your a first home buyer and no doubt want to get your first purchase right.

However you are finding it hard to work out exactly what the process actually looks like.

To start you need to know how much you can borrow.

To do this, speak to your bank or mortgage broker and they will be able to collect a bunch of information from you to better understand your capacity.

Once you have your borrowing capacity and are ready to purchase, get your pre-approval which generally lasts for 3 months.

I would usually research which areas would will be right for your requirements. You may already have a specific area you want to focus on, which is great.

Start searching for properties that match your budget and areas of choice.

If you did your research correctly you will start finding a few potential options within a few weeks.

If your finding it impossible to find anything which is remotely suitable, your budget maybe too low for the area and may have to re-visit your research.

Once you have a property or properties, you should inspect them to make sure you like them. I would look out for structural issues, signs of pest or water damage and anything else which is not quit right.

It can even be worthwhile asking the agent representing the seller if there are any issues.

If you like one of the properties and want to put forward an offer, I would also request the contract at this stage for your solicitor or conveyancer to review.

You now enter the negotiation.

This is a time where money can be saved or spent very quickly.

It’s important you don’t give too much away if possible. As the saying goes, keep your cards close to you.

You will want to set a maximum price you will go to. Generally starting from a lower point that is reasonable and is in line with the current market.

Terms will also affect the purchase of the property. Strong terms such as a cash offer with limited cooling off period and settlement period or the period the sellers most want would be attractive to the sellers. Usually first home buyers won’t have this cash option.

The deposit is another negotiation hot point either 5% or 10%. Try go for the lower the better.

If the offer and terms are accepted it would be wise to get a pest and building inspection for a house and or strata report on a strata development.

If that all comes back positive, then proceed to go through the conveyance with your legal representative. If there are some points of concern, then re-negotiate the terms and or price if there could be significant cost to rectify the issues.

You will most likely now pay 0.25% deposit and sign the contract to exchange and go into a 5 day cooling off period, after which the balance of the deposit agreed would be paid.

Sometimes the sellers would want a 66W which is an unconditional exchange, in which case you would pay the full deposit amount straight away that was agreed during the negotiation.

It’s important to keep your bank and or mortgage broker up to date during the whole process so they are in a position to get your approval formalised as soon as possible.

Once this has occurred you will have gone unconditional.

Now you will wait for the settlement period to occur, usually around 42 days. Once this has happened your mortgage will come through and you will formally take ownership of the property.

Congratulations! You just bought your first home.”

How to build a great property portfolio

How to build a great property portfolio

“Hello and welcome back to Berman Buys, daily buying tips from Dean Berman.

Today I want to discuss what makes a great property portfolio.

I will start of by providing a simple analogy to help you understand my point.

You’re in a restaurant, and hungry.

It’s a degustation menu (which basically means a bunch of courses designed to flow from one to the next), well known restaurants like Testuyas do it.

I haven’t eaten there though, so can’t say from experience!

What I’m getting at is each course builds on the last one.

Which is where my analogy comes together.

A great property portfolio is much like this dining experience.

Each property compliments the last.

Each property builds on the last.

One has great land content, the other may be in a more prime location, while the next one may be a knock down rebuild and the next could be very high yielding.

You can simply repeat the one process over and over again, which works great, such as knock down rebuilds or renovations.

But to have a truly diversified buy and hold portfolio you want to purchase in a variety of locations to take advantage of the various growth cycles.

I like houses.

I also like great land content

In my opinion, the more you can do with the properties inside the portfolio the better, as they lend themselves to multiple options to potentially profit from into the future.

So you want your portfolio to have the process of the degustation menu, but the choice of a la carte.”

Important advice for first home buyers

Important advice for first home buyers

“Hello and welcome back to Berman Buys, daily buying tips from Dean Berman.

Today I’m going to talk about some important advice for first home buyers.

Buying a property can be really scary, in fact many people regard this process as being one of the biggest decisions they will ever have to make in their lives.

I can understand this as it’s a lot of money we’re talking about!

It’s not everyday you get to spend 10-20 years of income on one item!

As much money as it is and as much as you want to get it 100% correct, I can assure you, there never will be a perfect property.

The best you can do is get near to perfection, but you will never get perfection.

There is no such thing.

My advice to all you first home buyers is to:

1. Understand your borrowing capacity.

2. Understand how much you can realistically afford to spend per year on mortgage repayments.

3. Work out for yourself and or with your partner if you are ready to purchase.

4. Understand why you want to purchase i.e. to live in or to make money by investing.

5. Understand your buying timeframe i.e. how quickly you want to buy a property.

6. Understand the areas which meet your goals the most, whether locally or interstate (particularly for investors).

7. If your living in the property understand how the property will relate to your lifestyle and potential future lifestyle.

8. If you are an investor further analyse things like vacancy rates, population demographics, incomes, infrastructure, amenities, demand and supply, public transport, flooding, leisure activities, employment etc…

It’s very easy to overanalyse your first purchase and then a few years down the track you look back and say what if.

If the purchase makes sense to your requirements, you don’t need to fear as you know it’s the logical and right thing to do.

Go for it!”

What makes prices rise and 3 ways to make money in property in 2019

What makes prices rise and 3 ways to make money in property in 2019

“Today I’m going to discuss 2 things with you.

Why property prices grow and the 3 ways you can make money in property.

What makes prices grow?

1. Supply – too few new dwellings built and Demand – are there factors making the area really desirable such as zoned schooling, convenient work and public transport and lifestyle factors like cafes, beaches and the bush.

2. Interest rates – are they low, as this means the cost of money to borrow is less than when they are high. A lower cost of money means more people can afford to borrow.

3. Unemployment – low unemployment generally means a larger percentage of the working age population have jobs and usually a more stable workforce.

4. Incomes – rising incomes generally means more disposable income and more disposable income means more money to spend on things like property or lifestyle activities.

5. Sentiment – what does the general population feel about the market and forecast will happen in the future, this can often be influenced by media and industry experts.

6. Economic wide factors – royal commission and APRA affecting lending standards, borrowing capacities and deposit limits.

How can you make money in property?

There are 3 ways in my opinion.

Hope and wait – hope that the market will increase and increase the underlying value of your property.

Zoning – changes by local council can cause the highest and best use to increase for example, if your property goes from being low density to high density. You suddenly have more options to profit from the property.

Actively control – increase the value of the property yourself through renovations, additions, subdivisions and low, medium and high-density developments.”

The future potential

The future potential

“When inspecting a property, it is often better to think about the potential of the property and what can be done into the future, rather than what it currently is like.”