August 2009

Things estate agents can’t get away with

by Chris on August 29, 2009

I don’t know about you, but most of the estate agents I’ve seen looked intimidatingly authoritative. As a direct consequence of this appearance, when they speak – you listen, when they demand – you sign, when they say “jump”, you ask “how high?”.

But there are certain things even Estate Agents can’t get away with

Tenants

They can’t raise your bond, even though they have raised the rent. If your rent has been increased and you’re paying more than $350 per week, it doesn’t mean that your bond will be “topped up” and you won’t have to pay an additional bond. If they try to pull that on you, contact Consumer Affairs of Victoria (or your respective organization in another state).

Landlords

They can’t neglect checking references or not verify the information on tenant’s applications. They also can’t choose a tenant without your approval. If they do, this is a breach of property management agreement you’ve signed.

If they don’t have an “authority to manage” – a signed document which makes them your appointed Property Managers – they can’t claim or charge you any commissions or expenses.

Home buyers

If you’ve made an offer on a house, they can’t call you and say “Congratulations, the house is yours!”, and the next day call you with “Sorry, the vendors change their minds the last moment”. It is illegal for agent to mislead you regarding the status of your offer and in case you incur expenses because of such incident, you have a case.

One example of such misleading was John (not his real name). He submitted an offer on a house, subject to financing, and was notified by the estate agent that his offer was accepted. John was excited and contacted his lender immediately to arrange for property valuation – a standard procedure. What he didn’t know was that on the same day 2 offers were submitted to the vendor, his and another person’s, and in the end the vendor signed the other purchaser’s offer. John filed a complaint and the agent, with his tail between the legs, refunded the valuation fee John had to pay.

Do you have a story of your own to share about what estate agents can and can not do?

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Prevent Asbestos Exposure in the Home: Healthy Tips and Green Alternatives

by Chris on August 24, 2009

I have a friend, who had lost her husband because of an exposure to asbestos. If he knew at the time how dangerous asbestos was, he would still be alive today and they would still be together. A lot of people don’t realize what the dangers of asbestos are and where it can be found in their home. You are about to learn why avoiding asbestos exposure is so important and what to beware of.

What is Asbestos?

Throughout the greater part of the 20th century, a naturally-occurring mineral known as asbestos was utilized in a variety of applications. Due to its flame resistant, highly durable and inexpensive qualities, it became the ideal choice for manufacturers as a form of insulation, piping, brake lining and flooring.

Asbestos Healthy Tips

Homes built before 1980 may still contain asbestos, a fibrous mineral used through the majority of the 20th century. Asbestos exposure is easily prevented by taking simple precautions. When purchasing or foreclosing a home, having the assistance of an honest Aussie real estate agent can make this process easy and stress free. This obsolete building material can easily be replaced with green methods of insulation that can even reduce annual energy costs!

If you locate any suspected asbestos, most experts advise to leave it alone and un-disturbed. A home inspector or evaluator can determine the proper course of actions. If you are having home renovations, performed, do not panic. In most cases, the best action is no action in regards to asbestos. However, if removal is necessary, it should be performed by a licensed abatement contractor who is trained and licensed to deal with hazardous materials.

Improper insulation was used in millions of homes and while it is safe when enclosed or in good condition, deteriorated asbestos can cause a slew of health problems, such as mesothelioma and asbestosis, two rare but severe forms of asbestos lung cancer. Diagnosis of this asbestos-related lung illness is a difficult task due to a long latency period and many mesothelioma symptoms mimicking less serious ailments.

Green Alternatives in the Home

Living in the 21st century, many cities are adapting to the new green paradigm, updating old homes and buildings to suit the needs of a healthier environment and home.

Implementing green methods of building can have positive environmental, health and economic benefits. These include: Conservation of natural resources, enhance air quality, protect ecosystems, energy sustainability, increase property value, improve quality of life, improvement of pulmonary and cardiac health and reduction of waste.

Environmentally sustainable insulations are made from recycled materials including cellulose, polyurethane foam and cotton fiber. Cotton fiber is made from recycled batted material and treated to be fireproof. A water based spray polyurethane foam, lcynene features no toxic components. The implementation of these eco-friendly products can reduce annual energy costs in the household by 25 percent annually.

How Asbestos is dealt with in Australia

In January 2009, the world’s largest facility dedicated to asbestos disease research opened in Australia. The Bernie Banton Center was named for an Australian social campaigner who passed away as a result of asbestosis. Professor Nico van Zandwijk, director of the Bernie Banton Center, said identifying the medical mysteries of mesothelioma remains a huge challenge.

The opening of the Bernie Banton Center has received great publicity, aiding in the increased awareness of asbestos-related disease in Australia.

In December 2008, a safety action plan was developed by the Asbestos Advisory Committee aiming to prevent mesothelioma and asbestos-related disease through awareness and education. Under the plan, the Environmental Protection Authority will distribute information to potential home buyers and workers regarding asbestos insulation.

This article has been kindly contributed by Paul James, the National Awareness Coordinator of the Mesothelioma Center. Thank you, Paul, for my chance to educate, warn and save lives.

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Property inspection: don’t become a horror story

by Chris on August 17, 2009

The following is an article by Leon Cupit, an experienced property inspector and owner of Independent Property Inspections.

As most real estate professionals know, there is an Australian Standard AS4349.1-2007 that documents the minimum standard for a Pre-Purchase Inspection on Residential Buildings.
A good inspector will either carefully explain what’s included, or have a pre-inspection agreement for their client to read and sign, or have a sample report to show their client so they are fully informed of what will be included before placing an order for the inspection.

A good inspector will also have a preferred contractors list of service providers that can complete any other specific concerns the buyer has. It is crucial that you only engage appropriately qualified professionals. For example, a building inspector is not qualified to comment on the electrical system in a home, however if during his inspection the inspector identifies abnormalities he can highlight this and refer it to the appropriate professional for further detail. This is how the system works.

Although it might appear self serving for a property inspector to say you need the services of a professional property inspector when you buy your home. I can only say that many years of experience have repeatedly justified that advice. (To the extent that I am now writing a “Book of Horror Stories”). I really believe that this one piece of advice is the best and most valuable bit of advice in this entire article.

No one else in the home buying process (apart from your lawyer) has the comprehensive training and experience necessary for the protection of your interests. No one else in the process has the true independence and lack of conflict that are required to protect your interests than an independent property inspector.

Gone are the days of getting your home inspected by a well meaning friend of relative, this process demands professionalism and expertise that can only be delivered by an experienced independent property inspector.

Not getting a professional pre-purchase inspection done to discover hidden defects before you buy a home is one of the most expensive mistakes you can make, and is the easiest to avoid.

If you are not a professional home inspector, hire one. You should make your contract subject to receiving a satisfactory building report from a professional independent inspector. Whether the house is new or used, any home can have a wide variety of defects that go way beyond the obvious cosmetic ones and it will take a skilled inspector to uncover these defects that will only prove very costly to repair after you buy the property then it’s to late.

In addition you can also make the contract contingent on more specific systems in the property like Plumbing, Electrical, heating, air-conditioning etc. Alternatively, a well written contract can also require the seller to warrant that these systems are all in proper operating condition. If you’re buying in a Termite prone area a timber pest inspection should also be included.

If you’re to buy at auction the building inspection must be done before the property is auctioned
We have seen to many buyers dreams shattered by not having a professional pre-purchase inspection carried out before they brought the home. Not getting a professional pre-purchase inspection done to discover hidden defects before you buy a home is one of the most expensive mistakes you can make, and is the easiest one to avoid. It seems incredible that all this can be avoided with just one phone call, yet so many still make the same mistake.

HORROR STORY

Take Jim for example. Jim had just been through a really rough part in his life, his children all lived over seas, his wife of 47 years past away six months ago after he lovingly nursed her through the cancer treatments for three years. Now Jim just wanted a new start, so with what little savings he still had plus the money from the sale of the family home Jim could afford a nice two bedroom unit closer to town, something he could potter around the garden in and live out his days.

Jim went to his first open home, a nice little unit and it had a garden just like he wanted, there was lots of furniture and all sorts of rugs and mats throughout, Jim said it looked a bit cluttered but his furniture would fit right in. Jim went to the auction (His first time ever)with a pocket full of cash. It was the happiest day for years when he won the final bid and brought his own little piece of paradise.

Jim called me the day he got the keys. The unit was settled that morning and Jim went straight out there to start moving in.

Now with all the furniture and rugs removed Jim new he was in serious trouble. When I inspected the unit the next morning I found the concrete floor had completely failed and sunk by up to 150mm or 6 inches, none of the doors would close, some had even been removed completely, the tiled roof was supported through the walls onto the floor slab and had also sunk.

Jim had a major structural failure and was looking at a possible complete demolition and rebuild. When I gave him the bad news he just slumped in the middle of the empty lounge and sobbed. He kept repeating “why didn’t I take the advice and get it inspected first”.

Buying a property is a complex transaction; You will need a dependable team around you like a Lawyer, Lender, Inspector, Insurer as well as all you own due diligence and advice from friends and family. You should enlist the help of all these experts early in the buying process.

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Green homes explained

by Chris on August 12, 2009

While we’re on this subject of green and energy efficient housing, how many of you know what 5 stars energy rating means?

5 stars rating

Just a week ago I was writing about how all the new homes in Victoria must be rated 5 stars, but I didn’t explain exactly what a house needs to have, to be rated 5 stars for energy efficiency. Here are the compulsory features:

A rainwater tank for toilet flushing or a solar hot water system
A star energy rated building fabric
Water efficient taps and shower heads

Now having dealt with 5 stars, we’re getting to 6 stars rating. One thing is definite – it will make the houses more expensive, but what are the benefits for occupiers? Although I couldn’t find a firm standard anywhere, I did find an example of what a 6 stars building is like.

6 stars rating

There is a suburb in Melbourne called Aurora and it is planned to have only 6 stars rated houses. And here are the features that justify the rating:

Solar water heating
Insulation of buildings
Houses designed with good ventilation and orientation of windows.

The size and orientation of the windows are such that in the summer when it’s hot, the cool air at night is able to flow rapidly through the windows and cool the house down quicker. In winter, the house manages to capture as much of sun’s heat as possible, reducing the need for artificial heating.

The windows are double-glazed

I was especially blown away by this feature:

The streets in Aurora are designed to capture for optimal capturing of solar power. Wow.
The way homes are positioned enables them to make the most of natural lighting, which means that less electricity is used.
They also are using a thing called rain gardens.

I don’t know about you but I’ve first heard about it just yesterday. Apparently rain garden is a garden designed around driveways, roofs, footpaths etc, and the it is designed to absorb as much of stormwater as possible. That kills 2 birds with one stone – the people will use less water in the garden and there will be less water flowing into the storm drain, which causes all kinds of nasty things.

And the question of the day is: Would you consider making your next home a 6 stars one and why?

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How to get yourself a government-funded hot water system

by Chris on August 7, 2009

Remember we discussed free ceiling insulation just 2 posts ago? Even if you’re not thrilled with the idea of having your house turned upside down to get that insulation installed, it doesn’t mean you have to miss out on free energy savings.

There’s another rebate you can claim – $1600 on a solar hot water system. This rebate works a little bit differently and you do pay up front the costs of the system, but then after you’ve submitted your rebate application in 8 weeks maximum your money is back in your account.

Why should you bother?

It saves you money. A lot of it. If you’ve got an electrical water heater, around 28% of your energy bills goes to water heating. Once you’ve got a solar hot water system, you will be saving those 28% or up to $700 every year.

Also imagine your old hot water system is about to die – they do have a life span of around 20 years. So if you’re living in a house that was built in the 70s or the 80s and your water heater hasn’t been replaced yet, well, you know what that means. Why not act early and get an (almost) free new one?

Who can claim their money back?

Anybody who didn’t do so already for ceiling insulation, people aged 18 and up, landlords or tenants, who replaced their electric storage hot water system, after 3 February 2009. See full eligibility requirements here.

How to go about it?

1. Download and read the rebate application form and guidelines – to make sure you’re eligible.

2. Decide on a hot water system – shop around and once you’ve found the system you want to install, check that it is on the list of approved ones.

3. Get a quotation for an installation. Better yet, get 3 of them and choose the best one. Make sure that the person is a licensed electrician or plumber and that they have no problem completing a section of your application form that requires their signature.

4. Go ahead and have the system installed. Then within 6 months of installation submit your application form and a copy of receipt.

That’s it! In 8 weeks time your money will be back where it belongs – in your account

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Property news: 4 real estate articles worth reading

by Chris on August 3, 2009

Last week I came across some interesting articles.

Builders oppose to energy ratings on houses

Remember my post about government supporting the environment? Well, it appears that the builders are not so thrilled with the idea of making houses as “green” as possible. Why? Obviously because it makes the houses more expensive and therefore, reduces builder’s profit, plus makes the house harder to sell.

All the new homes in Victoria now must have a 5-stars rating in energy efficiency, and that’s not the highest rating – you could go to 6 or even 7 starts, but it will cost you. For 6 starts you will have to add about an extra 10,000 and for 7 starts – 14,000.

Google in real estate listings market

Not long ago we discussed Google’s invasion of the real estate listings market and what it might bring, and now it looks like the largest companies in that market are not happy. In fact, Domain.com.au and RealEstate.com.au are considering pulling their advertising off Google (that totals in millions of dollars they pay Google for displaying their ads, when people are searching for real estate keywords).

While the giant media companies aren’t happy about the competition, I believe that for us, the consumers, there will be advantages and benefits. I would imagine that prices and possibilities of advertising on Domain.com and RealEstate.com.au will get better, let’s wait and see what happens.

Costs of land are up

Undeveloped land in Australia became more expensive by 7.4 %, a survey by HIA (Housing Industry association) says. It happened in the March 2009 quarter and the median lot price increased to $172,490. I just couldn’t find their definition of “lot” to see exactly how much land it is. It would be a number between 744 square meters (the largest median lot, located in Tasmania) and 607 square meters (the smallest median lot, located in WA).

No more underquoting in real estate pricing

Can you believe that estate agents will finally stop deliberate underquoting? I have trouble imagining that, but we shall see, as now Consumer Affairs of Victoria and ACCC (Australian Competition and Consumer Commission) are making this happen.

Under new laws from January 1 2010 if you’ve done pre-purchase inspections, paid for pre-purchase advice (any pre-purchase costs you’ve incurred), and at the auction it turned out the reserve price was higher than the ad said, you are entitled to get everything you spent back. Also vendors would face fines up to $220,000 for underquoting.

And over to you – what is the most interesting piece of news you’ve read last week?

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