The different types of first home buyers

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

Today we’re going to talk about the different types of first home buyers.

In my opinion there are 5 types of first home buyers.

The first being the one who needs a property asap i.e. the timeline first home buyer.

These are often determined by a changing employment situation and borrowing capacity, ending rental leases, changing moving arrangements or an incentive such as a government grant.

The second being the investor. The one who wants to make the most prudent choice with their first property.

These buyers usually rent where they want to live and invest in locations they can afford in and also believe will provide solid long-term growth and limited rental vacancy.

The third buyer is the owner occupier.

Usually needing to upsize or downsize due to changing family numbers either growing or shrinking. Often times the amenity, lifestyle, work proximity and schooling will have a much more significant impact on decisions, resulting in a more emotional process.

The fourth buyer is the overseas Australian citizen or PR, who wants a base in Australia in the future whilst also providing a rental benefit until such time.

They are a mixture of investor and owner occupier.

The fifth type of first home buyer is the buyer who has never considered purchasing but may have just inherited a sum of money or had a sudden change of fortune to enable ownership.

These buyers will probably look to occupy their very own space for the first time, but some choose to let the money work for them in an investment capacity.

Sometimes first home buyers fuse multiple sections together such as purchasing with the desire to buy a property in a timely manner, whilst keeping an eye on future potential because of changing circumstances.

So we understand the 5 different types of first home buyers.

If I could give three pieces of advice for first home buyers.

These would be.

1) If you plan on living in the property for a long time, sometimes it may make more sense to buy something you love and will enhance your life, rather than just buy it because it makes financial sense. i.e. the happiness versus money debate.

2) A property can be changed internally, in an almost infinite amount of ways. The location cannot be changed.

3) If you are deciding to buy an investment now as your first home or save to buy your first residence, consider what you can get for both now and into the future and whether it will place yourself in a better position. i.e. trying to build up a greater deposit through investing or waiting 5 or 10 years to hopefully afford the dream property.”

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Willing buyer, willing seller

Transcript
“How do you explain what market value is?

Is it all about a chap named Spencer and the government 113 years ago in North Fremantle.

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

When we think of market value.

And by market value, I’m talking about what someone will pay for your property.

We have this conception of what it is.

Comparable sales.

Market sentiment.

The vibe?

But really, what is market value?

It’s simply two sides agreeing.

Shaking hands and saying yes sir or yes ma’am.

I agree with your price and you agree with my price.

‘Willing buyer and willing seller’.

What some might not know is this underlying theory, was developed in a legal case between our friend Spencer and the Commonwealth in 1907.

Here’s Spencer.
I don’t know much about Spencer, but let’s just say he was a good bloke.
I’m going to speculate he may have had a big bushy beard, a nice tie and suit with a top hat.

Here’s Spencer’s land.
This should set the scene.
It’s in North Fremantle. Approximately 10 miles from Perth.
It measured 6 acres 1 rood and 2 perches. In modern day standards I believe this is over 25,000m2.
The land didn’t even have grass on it. It had no improvements on it except a picket fence on the boundary. It wasn’t very glamorous land.

Our friend Spencer was one day happily minding his own business. When he was delivered a letter.

It looked very official.

“Dear Mr Spencer, 5/2/1905

On behalf of the Commonwealth Government of Australia.

We will be compulsory acquiring your land for the sum of £2,641.

Regards,

The Commonwealth Government of Australia“

Mr Spencer was shocked and saddened and rather insulted by this meagre sum offered by the Government.

What does someone do when they are insulted by the Government?

Court time.

Mr Spencer believed his land was worth £10,000.

A vast difference to the sum offered.


In todays standards $1.692m difference.

I can understand why he was angry.

He believed the sum offered was ‘unjust’.

How do you work out the land value back in 1905?

The court ordered 10 ‘expert witnesses’ to do so.

5 for Mr Spencer and 5 for the Commonwealth Government.

Values varied between £2,066 to £8,400 or a difference of over $1.475m.

The court decided based on these experts, Mr Spencer’s land was worth £2,250.

Even less than he was initially offered.

Mr Spencer was outraged now.

It was time for the High Court of Australia.

There may have been arguments and baton beatings.

But in the High Court.

Something very interesting happened.

A definition emerged by the Judge.

Which went something like:

‘Prudent, willing but not anxious buyer and seller’.

What does this mean?

Prudent, implying savvy and business like. Almost unemotional. Purely numbers focussed.

Willing, maybe that means they would do it, but only if it made sense logically.

Anxious, could mean they wouldn’t just do it to get out or get in, they will do it if its right.

If we put the 3 together.

It’s saying that the buyer and seller need to be business like in their approach and base their decisions on numbers and logic.

When that happens you will have a willing buyer and willing seller.

Once this principal was applied to Mr Spencer’s land.

He was awarded £3,082.

Or an extra $194k on the lowest offer.

We learn many lessons from Mr Spencer v The Commonwealth.

You can have asking prices.

Guide prices.

Offers.

But at the end of the day it’s about 2 parties agreeing in a business like and unemotional manner.

I will finish on one point.

Buying or selling property can be one of the most emotional processes a human will go through.”

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Can award winning design, translate for the masses?

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

Today we’re going to talk about whether expensive, award winning designs can translate for the masses?

To do this we will look into the 2020 Australian Interior Design Awards or AIDA.

These are some of the very best designs in the country for the year.

They provide the perfect comparison for us to try answer our question.

Some categories include sustainability, heritage, renovation or new builds.

I look through the website showcasing the designs and I feel there is a disconnect between these works of art and what a normal everyday person can achieve.

What I’m trying to say is it seems, the majority cannot afford to undertake the scope and scale of these ‘Grand Designs’.

These projects are like what you see on the TV show.

Alluring to look and marvel at, yet largely out of reach.

Often times at the end of the episode the owner will hesitantly outline how the project went over budget and into the millions.


This type of budget wouldn’t be a possibility for the vast majority.

It’s like saying you want Leonardo DiCaprio or Charlize Theron to star in your home movie.

When you have no budget.

So for the majority who can’t afford this grandeur.

Is an award night like AIDA just for the minority?

The 1% who can achieve this.

A place where the lucky few can showcase and glorify there artists.

And where the artists can get credit for their lifelong craft and artistry for everyone to see.

Are these types of shows simply a golden beacon of possibility, if you simply work hard enough?

A future image of the lifestyle you could have.

Is design meant to make us want more?

Or be happy and content with what we have?

The majority won’t undertake a ‘Grand Design’.


However, the majority might do a kitchen.

They may paint.

Or change furniture.

They may plant in the garden.

Or add bi-fold doors.

They might be short on space.

Or want sleek finishes on handrails.

Or incorporate more colour.

They may like wood.

Or brick.

Or concrete.

They might change a layout.

Add new materials.

Or want plants inside.

Or swim inside.

Or lounge by the window.

Or use affordable materials.

To me an award show like this isn’t about the designs.

It isn’t even about the awards.

This show is about possibility.

No matter if you’re the majority, or the minority.

You both are the same.

It’s inspiring and exciting at the same time.”

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Homelessness and the virus

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

Today we’re going to talk about homelessness and the virus.

Most of us are dame lucky that we have shelter and a place of refuge.

A place where we can relax in.

A place we can be safe in.

In these times, a place where we can self quarantine.

Our fortresses. Our fortresses of solitude.

There is a part of our society who don’t have this.

They don’t have a place to stay.

A place to call home.

No four walls and roof.

No keys to open the door.

They don’t have shelter.

As we try our best to stay safe.

What are they doing?

How can someone possibly stay safe in this environment when they don’t have shelter?

The answer is shelter.

See, as of the last Census there were 116,000 homeless in Australia.

What many don’t realise is this doesn’t mean 116,000 sleep outside on the street every night.

It means that most of the 116,000 people are basically living in some sort of temporary accomodation.

The crucial part that we are talking about today, are the ones sleeping rough.

The ones living in ‘improvised dwellings, tents or sleeping out’.

These people are literally exposed to all the elements.

This makes up 8,200 of the 116,000 figure.

These are the most at risk.

NSW has almost 2,600, QLD has over 1,700, VIC has over 1,100, NT and WA has over 1,000.

Thankfully Governments around the country are doing something.

Generally in all states and territories Governments are paying for temporary accomodation for the homeless.

These range from hotel and motel rooms to self-contained apartments.

To me this is a win-win-win situation.

The people who really need help are getting it.

Accomodation providers who would be empty, have paying customers.

The Government is doing what they should be doing.

This brings us to an interesting debate.

Why has it taken an epidemic to shelter the unsheltered?

Yes, it costs taxpayer money.

But shelter, is a basic need.
People’s lives are literally being saved because of the spending.

In my opinion it’s worth every cent.

The NSW Government has allocated $34m, QLD Government $24.7m, VIC Government $8.8m and the SA Government has stated they will place rough sleepers in motels. There is a one month trial underway at a Perth hotel called ‘Hotels for hearts’.

Why can’t our Governments use this situation as a springboard as the NSW minister for families Gareth Wood’s vision is:

‘For temporary housing to become stable housing’.

We should look to Adelaide’s Zero Project as the gold standard in the country.

A program whose community knows its homeless by name.

This is a vital point.

If you don’t know who the people are, how can you help them?

This is a small city, that is setting the benchmark on how to treat the homeless.

A city that foresaw what was happening.

A Government who pre-empted the virus and who since February have provided accomodation to all the reported 150-250 rough sleepers.

They have shown amazing foresight to end street homelessness.

Let’s see the bigger states stepping up and achieving this outcome.

An outcome that could continue once this virus eases.

Maybe a springboard for positivity to end street homelessness in Australia?”

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The process to buy your very own property

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

Today we’re going to talk about the process to buy your very own property.

It can be a very confusing process, like solving a rubik’s cube to some, so today I’m gonna explain the process from start to finish for you.

The first step is simply setting your goal. Like I want to buy a house for my family within 6 months or I want a property that can pay for itself or I want a property that I can build equity from. There are a few points which affect the goal such as your buying timeframe, which type of property, amenities, lifestyle, beds and baths etc…

Second, is working out your budget with a mortgage broker or bank. How much can you afford and how much can you repay. Will it be your place to live or an investment?

Third, is researching what is possible. Can you afford a grand mansion on the water or a studio apartment? Will it be in a prime location or a developing area? Near the city or away from the city?

Fourthly, the search. This is looking on the main online portals and through offline channels to come up with as many options as possible.

Five, is selecting an option or options you like. I generally recommend focussing on a select few options at once to limit confusion.

Step six. You will generally either like or dislike the property. Remember you can generally change things in the property such as the cabinets or bench top.

Seventh day of the week, is almost metaphoric, as the negotiation can often come to a conclusion over a number of days or can happen relatively quickly. Depending on the strategy. The ultimate goal is securing the property.

8th part of the process is exchanging. After the solicitor/conveyancer has ensured the contract is fine, the pest and building inspector has made sure the structure is fine and the lender has made sure the finance is fine and any family or other professionals have made sure they think it’s fine. Then you can sign and pay the deposit!

The final step 9 is when the property settles. You will be given the keys once the settlement period has passed (usually around 42 days), the final inspection goes well, final deposit has been paid and mortgage has formally come through.

Now you know, how to buy your very own property.”

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