How to buy property under market value

How to buy property under market value

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

Today we’re going to talk about how to buy property under market value.

As we’ve previously discussed market value is determined by a willing buyer and a willing seller.


Therefore if you want to buy under market value.

Or the perceived market value in your mind.

It comes down to making an offer to the seller.

We become willing at a certain price and we are seeing if the seller will be willing at our price.

i.e. we are testing to see if they will sell.

In a nutshell, we are trying.

Like shopping at H&M or Uniqlo.

You try on the clothes and see which ones you like and which you don’t.

Making an offer is often like this.

Sometimes it fits well.

Sometimes it doesn’t.

Making an offer is one of the most important ways to find out what the seller is thinking.

It’s especially important for those on a fixed budget.

Or those on the border of being able to afford a specific suburb or property type.

Or just about anyone wanting to maximise their money.

I mean, who doesn’t want to pay less.

There’s no point focusing your time and energy on properties outside your budget.

Rather you could be focussing your time and energy on a property within budget.

Offers will be rejected.

Sometimes agents won’t even get back to you.

And you may have to chase them for a definitive answer.

But at least you know once you have made an offer.

You are in the game.

You are in the running.


Like those lottery adverts.

Making an offer is arguably the single most important part of the negotiation.

Because without an offer, properties will usually sell.


And it will be to the person who made the offer.”

The best performing waterfront property markets along the Eastern Seaboard of Australia

The best performing waterfront property markets along the Eastern Seaboard of Australia

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

Today we’re going to talk about waterfront suburbs.

With the virus easing restrictions and holiday destinations opening up.

It seems like a good time to talk about how many of these areas have performed.

We will look at 10 year growth rates.

We’ll also focus purely on houses for ease of comparison.

The Eastern seaboard will be our focus from Port Douglas in Northern Queensland, through NSW to Warrnambool in Western Victoria.

There has been some mixed results in North Queensland.

We can see Port Douglas and Cairns with average growth around 30%.

But not the greatest results in Townsville, Mackay and Gladstone with fairly negative figures.

Highs of 70% growth in Noosa Heads were some of the highlights in the Sunshine Coast.

And alright results in Mooloolaba and Shelly Beach, upwards of 40%.

In the Moreton Bay and Redland regions, results were average in areas like Deception Bay, Victoria Point and Redland Bay around 10% growth.

In the Brisbane region, results were mixed, but improved compared to the surrounding regions in areas like Bulimba, New Farm, St Lucia, Indooroopilly and Yeronga.

On the Gold Coast results were largely average in areas like Southport and Mermaid Beach around 30%.

As we enter NSW results start to pick up.

Strong results in Northern NSW like Byron Bay, Lennox Head with growth around 90% and 48% respectively.

Really strong results around Forster (48%) and Blueys Beach with growth over 153%.

The Sydney region and surrounds generally experienced strong growth.

Nelson Bay, Bar Beach, Terrigal, Umina Beach, Manly (87%), Mosman, Bondi (82%), Kurnell (82%), Austinmer, Shellharbour, Kiama and Huskisson (72%) all had growth above 50%.

Batemans Bay and Tura Beach performed averagely with ground above 35%.

We now enter Victoria with most suburbs surpassing 50% over the last 10 years.

Areas like Inverloch (49%), Mornington (67%), Frankston (64%), St Kilda (106%), Point Cook (47%), Geelong (67%) and Torquay (57%).

Many of these suburbs are in line with many of Sydney regions results.

We finish in Warrnambool with average growth just above 20%.

What can we learn from these figures?

Basically NSW and VIC have largely outperformed QLD in the past 10 years.

Each suburb will have differing factors personally affecting the performance, which is really down to supply and demand.

We can assume the poor performing North QLD suburbs have had impacts from various economic and demographic factors.

I would hypothesise industries like mining, agriculture and tourism to name a few have affected demand and subsequent supply.

It’s interesting to note that many of the best performing suburbs have a strong reputation and desirability factor.

Areas like Noosa Heads, Byron Bay, Bar Beach by Newcastle, Manly, Bondi, St Kilda and Torquay.”

Summary of locations on the map in the video.

Port Douglas 35.5%
Cairns North 29%
South Townsville -10.2%
Mackay -2.9%
Gladstone -5.8%
Rainbow Beach 11%
Noosa Heads 70.6%
Mooloolaba 40.7%
Buddina 34.8%
Shelly Beach 50.9%
Deception Bay 10.9%
Brighton 33.6%
Bulimba 56.7%
New Farm 50.6%
St Lucia 38.7%
Indooroopilly 39.3%
Yeronga 23.5%
Lota 28.3%
Victoria Point 10.8%
Redland Bay 11.7%
Southport 25.6%
Surfers Paradise 3.5%
Mermaid Beach 31.4%
Byron Bay 94.3%
Lennox Head 49.2%
Coffs Harbour 38.3%
Port Macquarie 41.4%
Forster 48%
Blueys Beach 158.5%
Nelson Bay 53.1%
Bar Beach 145.4%
Terrigal 55.4%
Umina Beach 72.1%
Manly 87.7%
Mosman 59.8%
Bondi 82.6%
Kurnell 82.2%
Austinmer 63.8%
Shellharbour 55.1%
Kiama 59.3%
Huskisson 72.6%
Batemans Bay 37.8%
Tura Beach 46.5%
Golden Beach 107.2%
Inverloch 49.5%
Mornington 67.1%
Frankston 64.4%
St Kilda 106.4%
Point Cook 47.2%
Geelong 67.2%
Torquay 57.6%
Warrnambool 23%

The different types of first home buyers

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.”

Willing buyer, willing seller

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.”

Can award winning design, translate for the masses?

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.”