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Through this website I have met a lot of people, directly and indirectly, and have made new friends. They are from all walks of life (property investors, entrepreneurs, home-owners, renters, builders, bloggers), but have one thing in common – they all are very interesting, kind and generous.

I recon now is a good time to thank my readers – guys and galls, you are the best. You are motivating me and helping me to keep going, keep working on Homeiown. This blog wouldn’t be the same without you. I am glad you like my posts and keep coming back for more. I wish all of you a prosperous New Year 2009.

Let the count down begin!

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HAPPY NEW YEAR 2009 EVERYONE!

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You’ve got to play it right from the start. Don’t show too much interest in the property. Here are a couple of ideas: when you show up at inspection, have a list of addresses with you and keep on looking at your watch. Have a look around with your best poker face on, showing no emotions, and if the agent asks you: “Well, what you think?” Tell him: “I think it’s so-so / nothing special / I’m not impressed / I’ve seen better”. Then thank the agent and say you’re in a hurry to get to other inspections.

When you’re ready to make an offer - put it in writing (not verbally) and show the agents that it’s no big deal to you, behave like you’re doing it every day. That should demonstrate the agent that you’re an experienced buyer.

If the agent says “Whoa, that’s too low for me to be taking to vendor” – remind him that by law he has to take all the offers to the vendor, unless the vendor specified a threshold for the offers (in that case the agent is allowed to not pass offers below the threshold to the vendor).

How to make sure your offer is being taken to the vendor? When I was looking for a house to buy, I was making a lot of offers and suspected that several agents weren’t taking my offers to the vendors. It really looked like they were playing me and trying to get a higher offer out of me. I even called REIV about it and asked whether or not the estate agents are legally allowed to not pass offers on to the vendor. The whole story was very frustrating.

The solution to this problem is simple. Just sign the offer, give it to the agent to pass to the vendor and place a copy in the vendor’s letterbox or mail it to his address. Works like a charm, provided that the property is owner-occupied.

Remember, the agent is working for the vendor and his job is to sell the house for the best price he can get. That means that any offer you make, the agent will push you to go higher. A nice trick to stop that (unless you want to spend months negotiating) is to tell him that this house is your second choice and if your offer won’t be accepted then you won’t be back because you’ll concentrate on the main one, listed with another agent and more attractive to you because … (it’s in a nicer area, it’s 20K cheaper, etc).

And the last piece of advice - don’t be afraid to put in a low offer. You might get laughed at - but you also might be the one having the last laugh!

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A post I wrote about 7 recession food strategies has made it to the Carnival of everything credit. As the name implies, you will find there a lot more advice on how to create better financial habits.

Rich life carnival has featured my article about preparation for disasters and emergencies. Check it out, and while you’re there, have a look - I found some good articles about personal finance there.

Peter Mericka wrote an interesting article about auctions. Nowadays they seem to have been around forever, but the truth is that 30 years ago auctions were almost unheard of and most of the houses were sold via private sale. Read how real estate agents made auctions popular and why in Peter’s article here.

Another revelation - when real estate agent recommends a conveyancer, you never know - he might be getting paid for this referral. According to the latest story at Australian Real Estate blog, conveyancers are willing to pay the estate agents up to $150 for a referral. Guess who they must be passing this cost on to - yea, I bet it’s us, the clients, home-buyers and home-sellers.

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How to break a lease

You have to give a notice to the landlord / his agent as soon as possible and in writing that you intend to leave on a particular date. When you move out and return the keys in that date, your tenancy ends and you can stop paying rent.

What it costs the tenant to break the lease

Because of your leaving early the landlord is entitled to compensation. You will need to compensate him

1) for the loss of rent that he would otherwise be getting and

2) for the costs he incurred to advertise the house again.

This means that you’ll have to pay the rent until a new tenant is found or until your fixed term lease ends. The good news is that the compensation is limited to 25 week’s rent, so even if you’ve just signed for a year and after 3 months had to leave they can’t charge you for the whole remaining 9 months.

Speaking of costs of re-letting the house again, these too have limit. Under no circumstances your landlord can ask for more than a week’s rent to cover these costs. And no matter how much they ask for, request an itemized list specifying all of their expenses to justify the bill. In other words they can’t just charge you a “re-letting fee” of one week’s rent without explaining what exactly they spent that money on and proving that the money was actually spent.

I have heard from friends about cases where the landlord wasn’t trying to find a new tenant and just kept charging the tenants that broke the lease because that was easier for him. You should know that it is actually illegal, and the landlord is not entitled for compensation for loss that could have been minimized or avoided if they had the house advertised for rent. If this is happening to you, here is what you can do:

• Make sure that the agency is advertising the house for rent
• Make sure they haven’t increased the rent (because obviously that will attract fewer prospective tenants)
• Don’t pay the rent (the compensation) up front - you should be compensating for the loss that the landlord has suffered, not covering anticipated loss.
• Until they find a new tenant, keep checking that the house is advertised. If they take it off the market for renovations, you shouldn’t be paying the compensation.

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Apart from the utility failures I have already mentioned, in Australia we have to think about natural disasters, such as bushfires, cyclones, floods and storms that were not all that uncommon lately. They too can cause the failure of utilities - for example a bushfire can leave a whole city without electricity by melting a major electrical cable.

That said, here what your proposed survival kit should include:

1. Cash. ATMs might stop working if there is power outage. Make sure the amount you have is in small bills and coins: $1,$2,$5,$10,$20 because stores will run out of change soon enough.

2. Generator - in case there is a power shortage and you still want your fridge to work.

3. Candles - in case there is power shortage and the generator just died.

4. LED flashlight (9 LED’s) and lots of spare AA batteries.

5. Food supply: freeze-dried food, canned food (don’t forget the can opener), noodles, rice and grains (you can find an exhaustive list of groceries to consider here). Store them in plastic see-through boxes for convenience.

6. Bottled water - 3 liters per person per day.

7. Battery-operated radio - to listen to the weather forecast, emergency announcements and the like.

8. Gas bottle for cooking.

9. Lighter and water-proof matches.

10. First Aid kit.

11. Pack of seeds to keep growing your own veggies

12. Pet food - they’ve got to eat too.

13. Hands sanitizer - alcohol based gel or wipes for cleaning hands and disinfecting objects when water is not available.

14. A stock of “barter” goods like toilet paper, soap, deodorant, shampoo, shaving razors, tooth paste, child diapers, etc. In times when the supply of goods in stores is irregular, these things are as good as gold and can be exchanged for other goods that you need.

15. A knife or better yet a multitool such as Letherman or Swiss army knife.

If you feel like being ready for anything and everything, here’s a couple of great resources: Frugal Dad explains really well how to prepare to emergencies of all kinds and SurvivalBlog is the ultimate place to be looking for answers to all survival questions.

Do you have anything to add? What’s missing on my list?

Update: this post has made it into Modern Families carnival

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Do you have memberships in clubs you are not interested in any more? Cancel them and save that money.

7. Cancel your newspaper / magazine subscriptions.

Are you reading every one of those issues? Is it worth to pay for weekly subscription if all you read is one magazine a month? Maybe you could cancel it altogether and read the magazine at the library, they usually have a rich collection of popular magazines.

8. Cancel your gym membership.

When was the last time you went? If the answer is “Can’t remember”, then you should definitely cancel it. Walking is free and an excellent way to exercise.

9. Buy products online.

In 9 cases out of 10 the online stores are cheaper. Do the research, find stores with good reputation and buy there.

10. Don’t buy books.

No, I don’t mean stop reading – use the library. It’s free; it’s a money saver and a great thing to teach your kids. Another idea is to stop buying music CDs and movies. You can listen to the music over the Internet for free and swap DVDs with friends (here’s a great article from Almost Frugal about it).

11. Postpone any renovations and not urgent expenses.

Anything that can wait – should wait. These are the times to tighten the belt and there is no such thing as renovations emergency.

12. Buy at cheaper supermarkets

ALDI is well-knows chain of cheaper supermarket. Give it a chance, do your shopping there a couple of times and then compare how much you save. If it work, you’ve found another way to save. This blog here is a great place to find recipes for dishes, all made from ALDI ingredients.

I am sure you have more tips for better family budget. Care to share?

Update: this post has made it to the Bankruptcy and Debt Carnival.

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1. Pay less for energy.

Many people stay with the same energy retailer just out of habit, when they can find a cheaper one just by shopping around. Go to http://goswitch.com.au, compare all the energy retailers and choose the cheapest one. You will be still getting the same gas and electricity, but paying less for it.

2. Find a cheaper car and house insurance.

It doesn’t take more than a day to shop and find the best and the cheapest insurance for your home and vehicle. Many companies have special offers if you buy the insurance online and it allows saving even more.

3. Switch to a cheaper mobile plan.

It often happens that people have a mobile plan where they are paying for more than they use. Anyone who has had a mobile phone for 6 months or so has the statistics of their monthly usage. Use those numbers and find a cheaper plan that suits you better (don’t forget about the exit fees for your current plan).

4. Consider canceling landline

If you’re not using the landline much, consider canceling it. “But wait”, you say, “what about my broadband, I need my landline for the Internet access”. Well, actually you don’t, because there are Naked DSL plans that let you have the broadband without paying line rental fees. By canceling the landline you could be saving at least $240 a year.

5. Cancel cable TV packages or replace with cheaper ones.

Think about it - how many channels do you really watch? How many do you enjoy? Maybe you can get a cheaper TV package that will still include all of your favorite channels and it will cost less because you’ll get rid of all the useless ones.

More tips are coming, stay tuned. Meanwhile, what are your ideas for a better budget? Leave a comment, let me know.

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You need to make more money to save more money and here is how:

1. Earn more if possible by working more hours.

This is the easiest way, really - no new jobs to look for, no resumes to send, just start handling more tasks at work, do more overtime and consequently get more money.

A nice side-effect of that will be the good impression you’ll create. Having seen that you’re taking more responsibilities your manager will start appreciating you more and hopefully this way you’ll have more chances to keep your job if and when they start firing people.

2. Work from home.

There is a number of things you can do from home - starting from filling surveys online to professional blogging. You can buy and sell stuff on EBay, become a VA (virtual assistant), do anything you like, anything you are good at, and earn more money. I won’t bore you with all the possibilities, you can google “work from home” and get an exhaustive list of ideas.

3. Get a part time job - in addition to your existing one.

If you ask me, having two part-time jobs is much safer during the recession than just one full time job. Simply because the chances that you will get fired from two jobs at once are much smaller. So even if you get fired from one of the jobs, you’ll still have half of the income to live on while you’re searching for another part time job.

But if having two part-times is not an option for you, then consider finding a job that you can do on weekends or evenings, so that it won’t interfere with your main job. It can be house-minding, dog-walking or anything else really.

4. Sell things online.

Ever heard of garage sale? Of course you have. Well, you can hold a garage sale as we know it, in a traditional way, or you could be courageous and innovative and sell the dusty, useless, cluttering-your-space stuff on EBay. Either way you’ll make money out of items that just sit there.

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What’s in it for the home owners?

If you’ve got a $300, 000 mortgage with a flexible rate, you’ll save nearly $200 a month. That is assuming that your bank will be passing on the interest rate cut. The good news is that Commonwealth and National Australia Banks are passing on the full 1% cut, while Westpac and ANZ are passing 0.80 and 0.83 percent respectively. Simply put, people with mortgages in the Commonwealth and National will save more and people with mortgages in Westpac and ANZ will save less - but everyone will save.

What’s in it for the home buyers?

With the boosted FHOG and the record low interest rates, it may look like the right time to buy, but let me give you something to think about:

If now, when the monthly repayments are $600 less then they used to be, you can finally afford the mortgage, what will you do when the interest rates start climbing up? Even if you get a mortgage with a fixed rate, the lender won’t let you to fix for more than 3 -5 years.

There are no guarantees, but chance are that the interest rate will be climbing up during those years, and even 5 years are not enough to significantly reduce your principle, which means that once your interest becomes flexible, the repayments will get much higher all at once.

Some may argue that if they wait, they will miss out on the increased FHOG, which expires July next year. Yes, you’ve been given an incentive to buy, an extra $E7000, but if the property prices fall as little as 2% (and it looks very likely that they will during 2009), you will be paying $7000 less for a house worth 350K. And that will be translating into more savings for you because the less your house costs, the less council rates you pay every year.

Don’t get the wrong idea; I am not talking you out of buying a house - but definitely talking you into looking at the big picture, thinking ahead and having Plan B.

OK, let’s hear from you now - do you think it’s a good time to buy?

Update: this article has made it to the Year End Housing Report Blog Carnival.

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