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GUEST OBSERVATION

I recently had a friend who went to auction, underprepared, and who had neglected to thoroughly review the contract prior. 

She was a little under the pump, given her partner had only seen the house 30 minutes prior to the auction commencing. Meanwhile her solicitor/friend was doing her a favour trying to review the contract copy over his iPhone, in a rushed five minute window over a family lunch.

Needless to say, the environment wasn’t exactly conducive to a trouble-free sale and a few items were overlooked in the lack of due diligence, one of them being a land tax adjustment for a whopping $7,000!

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This insidious tax that most investors overlook in their haste to rack up their property portfolio can creep up quickly, adding significantly to your costs as a land owner. This tax differs from state to state here in Australia. What some home buyers fail to realise is that you can also be up for the previous owner’s land tax costs if you aren’t careful, even if you are purchasing the home as a principal place of residence (PPOR).

On the NSW sales contract, if the 'yes' box is marked on the front page next to the checkbox that asks “Is land tax adjustable?”, be aware that you may be up for unwanted land tax costs. You will have to reimburse the vendor for land tax based on the proportion of the year you each own the property.

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For more information on land tax and ramifications here visit the<a href="https://www.osr.nsw.gov.au" target="_blank"> NSW Office of State Revenue website</a> and for other states, also ensure you read the fine print on contracts.  

Otherwise, as with my friend, you may well find yourself paying the price for lack of knowledge and preparation.

Jacque Parker is director of <a href="https://www.housesearchaustralia.com.au">House Search Australia</a> and the president of the <a href="https://rebaa.com.au/" target="_blank">Real Estate Buyers Agents Association of Australia</a> (REBAA).
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JacqueParker-uBQkZrvXSL

How you could end up paying someone else's land tax bill

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Guest observation
As a buyer's agent, when talking to potential clients, we engage in a series of qualifying questions to ensure that we aren't wasting time by taking on buyers who are unrealistic or unprepared.
Though some buyers may believe they're ready and committed to purchase, this can be far from the truth. As part of our initial interview, one of our questions is: "How long have you been searching?"
If the response is more than 12 months, the warning bell sounds and I dig a little deeper. In most cases, buyers have been looking "on and off" over a period a time, or their definition of "looking" has only been restricted to surfing Domain and RealEstate.com.au - hardly definitive research to build up knowledge of an area and its values.
At least wearing out some shoe leather to attend opens and auctions is a start and a necessary part of any serious property search.
However, every now and then a buyer who has been searching for a longer period of time approaches us, hoping that we can find something that they haven't been able to. Unfortunately, some buyers simply cannot make a decision as the "ideal property" is an unrealistic utopia, especially for those buyers on limited budgets or searching in restricted areas.
We call this analysis paralysis. 
It can be a very frustrating process if you are inflexible or unrealistic, unwilling to make simple modifications or allowances for the perfect home.
Most of us enjoy putting our own "stamp" on our home, no matter how small, so it's important to remain open when searching, and view alternative possibilities as well as striving for perfection.
Investors can also suffer from analysis paralysis, as they can become so caught up in pinpointing the "perfect location" that they can let buying opportunities pass them by.  While it's fine to concentrate on criteria such as minimum rental yield, proximity to preferred amenities and position of property, the age-old goal of buying a property in a suburb with potential for great capital growth is certainly something all of us, as investors, strive for.
However, none of us have a crystal ball and while it’s fine to draw educated conclusions on factors including historical growth, demand and supply figures for a particular area and infrastructure and development updates, there is no such thing as a guaranteed return when it comes to property.
We all know this. Investors who are smart enough to understand this, and yet are still willing to take risks, eventually make a buying decision, secure in the knowledge that there is no one perfect suburb or type of residential investment.
Buying well entails research, but overanalysis results in confusion and indecision.
I often suggest to buyers, when embarking on a purchase for the first time, to write two shortlists.
One with a list of six "essentials" and another with six "preferables".  Ensure that your budget is sufficient for the essentials list before you embark on a search, and maintain a checklist of the first five to 10 properties you inspect, to verify that you are indeed on the road to reality.
Buying property shouldn’t be without its challenges, but the search for that perfect property needs to involve compromise, no matter what the budget.  
Jacque Parker is director of <a href="https://www.housesearchaustralia.com.au">House Search Australia</a> and the president of the <a href="https://rebaa.com.au/" target="_blank">Real Estate Buyers Agents Association of Australia</a> (REBAA).
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Are you suffering from analysis paralysis?

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GUEST OBSERVATION
The new NSW 2014 Contract for Sale and Purchase of Land 2014 edition will be released in a few weeks and there are several changes that both buyers and vendors should be aware of. 
The main alterations include the following:
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The introduction of E-Conveyancing in Clause 30 means that National Electronic Conveyancing (NEC) is to be the new environment for completing real property transactions and lodging land title dealings throughout Australia.  The aim is to streamline conveyancing and mortgage transactions but it’s s not an entirely electronic conveyancing environment.  Contract formation, vendor disclosure, and even requisitions (in NSW) will still be paper-based.  NEC, however, will allow for electronic settlement, funds movement, revenue collection and lodgement/registration.  
</li>
<li>
Extra vendor disclosure documents will be required including those relating to the Swimming Pools Amendment Act (2012) and the Home Building Amendment Act (2014) as well as amendments to additional disclosure obligations on lot owners of strata and community schemes. 
</li>
<li>
Recognition and insertion of buyer’s agent names with space being provided on page one of the 2014 edition, if a purchaser is being represented by their own buyer’s agent.  The definition of “deposit holder” in Clause 1 has also been extended so a buyer’s agent (who maintains a trust account) is able to be deposit holder for those matters where there is neither a vendor’s agent nor a vendor’s solicitor. 
</li>
<li>
Additions to Inclusions on page one now to include solar panels. 
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<li>
The increasingly common practice of payment by deposit bonds or guarantees is reflected in a new Clause 3 which now requires vendors to explicitly choose whether to accept a deposit bond from a purchaser, with the default choice in the printed form being a “no”.
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The 2014 edition will also only be sold in an electronic format with watermarking of the individual address across the contract, to minimize possible multiple duplication and copyright issues. It is expected that, as with previous NSW editions, that the cross-over period for solicitors and conveyancers will take time, however a new edition was long overdue given the last one was 2005.
As buyer’s agents, I believe the new insertion is a step closer to widespread recognition of the increasing role our industry is now playing in real estate property purchases.  Buyer’s agents are fast becoming a secret weapon in the property market as home buyers realize the benefits of having a professional and fully independent advocate on their side.
Jacque Parker is director of <a href="https://www.housesearchaustralia.com.au">House Search Australia</a> and the president of the <a href="https://rebaa.com.au/" target="_blank">Real Estate Buyers Agents Association of Australia</a> (REBAA).
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Jacque Parker

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