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I don’t get why they didn’t become a standard thing any house can’t be imagined without. Initially I thought that only the old houses still have the regular windows because people won’t be bothered replacing them, but I’ve checked and the majority of new projects don’t have double-glazed windows included, it’s an expensive extra - when it should be the standard.

Australian climate has such extreme temperatures and the houses have such big windows that it’s doesn’t make any sense to use regular windows as all the heat escapes through them quickly in winter and in the summer it’s the opposite, they don’t protect the house from sun.

Dare I say that a good way to start would be for our government to introduce rebates, same as they did for the solar systems and insulation. If we’re talking about conservation of energy - it would save tons because we’d use less gas and electricity to heat and cool our houses.

Enigma # 2 - automated window furnishings.

I didn’t come up with this one myself, a letter I received from a reader gave me a push, but nonetheless - why aren’t motorized shutters and blinds popular? Rum Charles, the principal consultant from Indigo Training says that according to his research only 0.5% (not even one percent!) of all the shutters in Australia are motorized.

Thinking about this, it would make so much sense, especially for the external shutters - why do we need to go outside, when it’s blazing hot, and use some kind of hook to pull the thing down, why not just press a button?

Is it about the money? Rum doesn’t think so and I agree - all the other things in the house evolved and the hi-tech version costs more. Still, we now have microwaves in addition to ovens, we have dishwashers in addition to sinks, we have air conditioning in addition to fans, and the list goes on.

I understand that it might not occur to people that motorized shutters can me so much more convenient and safe - but why doesn’t it occur to the professionals, the designers, the building companies, people who make living designing and building our houses?

And now I would love to hear what you think. If you have any insight, or simply want to speak up and be heard - leave a comment on this post or email me to chris@homeiown.com. You opinion matters.

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Read it again. It says “sign the contract”. It doesn’t say “read the contract and then sign the contract”. Rental agreement is a very important document and yet most people don’t read it, they listen to what the agent explains about the contract, but the document itself is long and boring, so why bother.

Let me give you 5 reasons why you should read the rental agreement.

1. Real estate agents are people and people make mistakes. I have rented 3 different houses and in every contract they gave me to sign, there were mistakes - in dates, in amounts, in various details.

If they put the wrong commencement date, you can end up paying rent for longer than you should. If they put the wrong amount, you can pay more than was advertised.

If they spell your name incorrectly it can backfire in all kinds of ways, including you not getting your rent assistance money from the government.

2. Rent is normally due on a certain date of the month. If you don’t read your contract, you don’t know when that date is. You don’t know when that date is - you miss a payment, and if you miss a payment, expect trouble.

3. Although the contracts are mostly standard, some landlords insist on adding specific paragraphs about what the tenants can’t do. If you don’t read the agreement, you can affix an antenna on the roof only to receive a phone call from the agency kindly asking you to remove the bloody thing ASAP.

4. If there is a special condition you’ve negotiated with the landlord (such as keeping a pet in the rental property), you would want to check that it was added to the contract. As I already said, these contract are standard and any additions can be left out and forgotten.

5. You can assume that certain things are landlord’s responsibility when they are really yours - and the contract says so. For example, changing light globes, replacing batteries in smoke detectors or dealing with pests may seem like something the owner of the house need to take care of, but according to most contracts those are tenants’ responsibility.

The same applies to garden maintenance. You may think: “So what if I’m renting a place with a garden, does it make me a gardener?”. The answer is “No, but you still need to water the trees and to mow the lawn”.

As you can see, there are enough reasons why you want to read the rental agreement - and to pay attention as well while you’re at it.

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People who build single story homes on blocks of land have more options for creating outdoor areas as they have the whole allotment to themselves. Let’s discuss how we can use the land better.

Some people prefer to see their yard tidy without putting much work into it - a lot of them are voting for a lawn and a mower, which solves all the problems.

There are people who convert their yards into heavenly gardens or a veggie patch, others don’t see more in it than a parking spot. Everybody is different and none of the allotments look the same.

Let’s talk about people who prefer meeting their friends not in the restaurants, pubs or gyms - which is fine too - but at their homes. As a rule, these people are fans of long conversation over a cup of tea.

Entertaining indoors and outdoors is not the same. The surrounding flowers, plants, trees, birds and the light breeze make all the difference. For such gatherings light wooden arbors (otherwise known as bowers or garden houses) with a light roof are ideal.

When building a wooden arbor, everything is in the hands of the builders. Wood is such a flexible material that allows implementing some very gracious decorative elements, such as arched wooden lace around the arbor, fancy fence design with elements creating a certain “rhythm”, beautifully framed entrance, comfortable benches which are made a part of the arbor.

A good location for such arbor would be a top of a little “hill” (around 30-40 cm) and it would need gutters installed on the roof to avoid rotting of wood that touches the foundation.

The roof of the arbor should be light, for example made of aluminum or some other thin metal with an anti-corrosive coating. There are many materials available on the market to suit that requirement, varying in prices and quality.

However, arbors will suit larger allotments, and owners of smaller blocks of land closer to the city centre need to seek another solution, namely pergola.

Usually a pergola is adjacent to the house; however nothing stops you from building it anywhere else. Constructing a pergola by the house allows you to walk out of the door and right into its shadow. The roof of pergola is not solid as it is an element of sun protection in the open air.

When a pergola is adjacent to the house, it’s construction becomes a lot simpler because a wall of a house is used as an element guaranteeing its stability. Two posts are enough (each post can be assembled from two parts), connect them by a horizontal board and the skeleton of your pergola is ready.

To avoid the contact of the lower side of posts with the floor we must use a metal piece with anti-corrosive coating. This metal part is attached to the floor and serves as a foundation for your pergola.

A word of warning - if you don’t want a boring standard pergola, some architectural imagination is required. The color of the paint you will be using needs some thought as well - in can either complement or be in contrast to the colors of the house.

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So let’s start with my latest reads:

Getting dumped by conveyancers

Did you know your conveyancer can dump you? Yes, I know, it sounds completely unprofessional, and you might expect it from a lover but not from a person you’re hiring for a job.

Nonetheless it happens and here is why: conveyancers charge less than lawyers because they work on assumption that your case will be a very “straight-forward” one and all they’ll have to do is push paperwork. As soon as there are complications that make their life more difficult and you become less profitable as a client, there is a risk of you being dumped, meaning they will return your file and say they can’t (= don’t want to) do anything for you. This is especially dangerous for you if the settlement date is very close because of all the fees you might have to pay for failing to settle.

It doesn’t mean that you have to put up with this dumping and as a customer you have rights, which you can read all about here, in Peter Mericka’s blog.

In-room property auctions - what are they and why should we care

Have you ever seen one of those TV shows where they sell antiques at an auction? Apparently, they sell houses in a similar way. When I think property auction, the image that comes to mind is a bunch of people on a footpath waiting for the show to begin. Well, this is not the only way and if you want to avoid curious neighbors, bad weather or public embarrassment if nobody comes, go for an in-room auction.

Here is what happens: the estate agency books a room in a neutral location and presents about 50 houses at once for people to bid. Although those in-room auctions are quite popular in Queensland and New South Wales, in Victoria they were only recently introduced and right now there is just one real estate group that is holding them.

These in-room auctions looks like an ideal solution for investors, obviously because they are a great time-savers, but on the downside the pace of bidding is faster and the atmospheres can get somewhat intimidating, so I wouldn’t recommend those for a beginner. Read the full article in Herald Sun and find out all the details.

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It would therefore be good for you to speak to a foreign exchange broker. These brokers specialise in getting clients an exchange rate that is far close to the interbank rate, therefore meaning your money goes a lot further. They are also able to offer you options that will protect you from adverse rate movements in the future. One broker even offers ‘Currency Options’ which are a hedging strategy that allow you to protect yourself from these negative rate movements in the future, whilst also allowing you to take advantage of the rate.

Even if you are living in Australia and need to send funds overseas for whatever purpose, it pays to speak to people who genuinely specialise in this area and focus on giving you the best possible rate.

When I moved my savings from overseas to Australia, I wasn’t using a bank - I was using a broker. My mistake, however, was to pick a small company because I was looking for the lowest possible fees. I should have thought about the reputation of the company and about the way they work, meaning efficiency, reliability, things we often forget about. As a result they’ve made numerous mistakes and I ended up losing a considerable amount which took me months to recover. They did repay me the losses I suffered because of their mistakes, but it took a lot of time, and in general was a nuisance.

For those of you who decide to learn from my mistakes, here is a recommendation - one broker who has a reputation for reliability, efficiency and competitive rates is World First. They also have offices in Australia, New Zealand and London which means they are available around the clock.
You can visit their website at www.worldfirst.com

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Store finance deals have many traps that we’ve warned about for many years. These credit deals are lucrative for finance companies and can be profitable for retailers too, but for consumers they’re a real mixed bag. Some provide good value if used cleverly; others should probably come with a wealth warning.

For example, not all credit deals are interest-free — some charge interest straightaway. Rates are likely to be higher than competitive personal loans and credit cards. Some deals, give a no-interest period (such as one year) before charging interest for the rest of the term. But with a high interest rate charged for the remainder (for example, three years), it’s not an option we’d recommend — unless you repay in full within the interest-free period.

Do you think that the chart of “Household debt Vs income” in the report represents a change in mindset of Australians regarding debt and debt management? Or do we spend more because of the marketing strategy of credit card companies that gets better and better over the years, combined with loose lending regulations?

The main reason for the increase in debt are housing costs and high mortgages. Australians have recently adapted to the tough times ahead and are reducing their reliance on debt by repaying credit cards and other debt. But credit card debt still stands at record levels.

Are certain demographics more likely to have trouble managing debts and if so, why? In other words, is there a certain age group that is in greater danger of getting into debt?

According to government statistics the majority of bankrupts is aged over 40, 19% are aged between 25 and 209 and 27% are aged between 30 and 39 years. 16% only owe less than $10,000 with about half of all bankrupts owing between $10000 and $49,000.

The report says: “Many people spiral into debt through circumstances beyond their control, such as losing their job, family breakdown or illness”. How do you know when to ask for help? What are the signs? How do you catch it before it’s too late?

Trouble of meeting your repayments or paying your bills would be a sure sign that you have a problem. The worst thing you can do is paying off one credit card with another one as it gets you in deeper. A good place to go are also financial counselors they can give you information about your options, help you with budgeting and making a hardship application.

The report suggests that people should consider selling a second car to reduce the debt. At the same time, it says that if a person is unable to make repayments on a mortgage they should apply for early release of super. Why not suggest that they sell the house to cover the debts and rent a place to live until their financial situation improves?

We are not suggesting that people should apply for early release of super – this option is a dangerous last resort. For most people, early super withdrawal is a trap, and one that’s been used by unscrupulous and predatory lenders. What we are suggesting is to go to a financial counselor and to find out your options.

If you are unable to make repayments the first thing is to contact your lender and let them know about your situation. The Uniform Consumer Credit Code allows you to make an application for a hardship variation of your loan in case of temporary financial difficulties. Apply for temporary relief such as reducing your minimum repayments or a waiver of fees or even interest.

In the GFC (global financial crisis), do you think Debt relief companies need more regulation? For example, should they be required to refer people to a financial counselor or at least to mention that as an option?

Debt relief companies are regulated by the Insolvency and Trustee Services Australia and all debt agreements need to be lodged with the government regulator. We would consider it good practice for a debt relief company to mention a financial counselor as an option. One thing to be aware of is that financial counselors are still desperately under funded, while the government has recently made more funding available for financial counselors there are still long waiting lists for some services.

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Let’s face it - we spend a lot. Sometimes more than we should have. Sometimes more than we earn. And recession such as this one is a good time to re-assess our budget voluntarily, before God forbid our creditors come and make us do so. Or do we even have a budget?

Reacting to the global financial crisis, Choice released a report that IMHO is a must read for anybody, no matter how safe you feel right now money-wise. This report discusses quite a few important issues.

For starters, they say that we spend $160 for every 100 we make - which basically means that the majority of us live outside our means. And to think that only 10 years ago we spent only half that much!

This leads to the most logical conclusion - some belt tightening is in order. Here is how - in addition to the report, Choice have put together a calculator to help us understand where our money goes. It allows entering your income and all the expenses (nicely classified in categories) and shows whether or not your family is spending more than earning and on what.

But what do you do if it’s too late to make a budget, if your family is left with just one income or even worse, no income at all? Choice’s report says that the most important thing is to react fast, contact your lenders and see a financial counselor. I don’t know about you, but this was the first time I have ever heard about a financial counselor. Apparently they exist, are funded by the government and their job is to help you find the best debt relief solution for your family.

The report mentions a lot of options to help with paying bills: reducing the minimum repayments on mortgage (or even the interest!), a repayment holiday for people who lost their job, etc. I was surprised to learn that if you’re unable to pay your bills (such as energy bills or taxes), there is an option of contacting the billing company and asking for a flexible repayments plan. Another option they mention is a no-interest loan scheme.

And the most important thing - you should definitely seek financial counseling before signing a debt agreement with a debt relief company. Debt agreement is basically you saying to your creditors “I know I owe you a $1000, but can only afford to pay a $100 back.” and debt relief company arranges everything to freeze your debts, no more interest will apply and you will pay the agreed amount over a long period of time. As easy as this sounds, Choice says this is may not be the best solution for your situation and it will certainly harm your credit history.

Bottom line - Choice is saying this: you may be in debt and lost your income, but your still have consumer rights, the situation can be fixed and there are people you can see to seek help and solutions. Read the full report here and learn how.

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Chris: Hi Andrew and thanks for being here. I must admit, for quite some time I’ve been confused about whether or not Realestate.com.au allowed listings from private sellers on their website.

How come you don’t offer advertising packages on the leading real estate website, Realestate.com.au?

Andrew:

Very good question and one that has almost everyone similarly confused. Let’s clarify by saying at the outset and categorically – Private sales are not permitted on realestate.com.au at the time of this interview.

Are there private sale on that site right now? Absolutely!

And how and why is this amazing contradiction occurring? Simply because the REA ( that’s the company which owns realestate.com.au ) has given up to 30 days for all private sale companies to comply with the REA’s new Terms of Service.

You see Christine the companies that are listing private sellers on realestate.com.au, are fully aware that they are in breach of the TOS and I’ve been told in writing today by the REA solicitor ( Nicole Birman ) that they have 30 days to comply with the new REA Terms of Service. They have already had the benefit of many weeks of getting away with this practice and now they have another 30 days at least.

PropertyNow is not offering the service for one reason only and that is because the REA won’t permit private sales.

We have been offered an account with the REA 3 times in the past 3 weeks and so far have declined because they are still saying no to Private sales. We seek to have their policy changed. We believe it’s manifestly unjust but we can only do something long term and meaningful about it through legal avenues or the ACCC.

Meanwhile we won’t accept our clients money on false pretenses while knowing the service is doomed within weeks.

Chris: What do you know about the companies that do offer private listings on Realestate.com.au?

Andrew:

I know of at least 6 companies breaking the REA rules. Whether or not the REA’s rules are just and enforceable, is almost irrelevant. You just can’t mislead people and take their money while blaming the REA. That won’t fool anyone. The REA must change and we won’t rest until they do, but fooling people and using false advertising is not the way.

In fact there are very severe penalties for any real estate agent engaged in false and misleading advertising , which surely this must be.
Note: theoretically only a real estate agent can have an account with the REA, so all the private sale businesses offering the REA service must be Licensed real estate agents.

I had one Private sale business tell me over the phone yesterday that he intends to continue offering the service. He’s been in the business of offering private sales on REA for just 3 months and apparently thinks he can dictate the terms to the REA ( perhaps he can, at least that’s what he told me ).

I’m glad I’m not the one who’ll be speaking with his very disgruntled clients shortly, although I bet he has a sneaky TOS of his own embedded somewhere. I also would anticipate that he will not refund anybody but we’ll see soon enough. The good fellow had the temerity to tell me that the PropertyNow service is inferior to his and if by inferior he meant “legal” then again he must be correct.

PropertyNow was offering private sales on the REA 3 years earlier than this new kid on the block, but we were forced to stop. The difference is that immediately upon the REA making it clear to me what their policy was I closed my account in protest. The account was suddenly worthless for private sellers. Neither did we accept new clients nor take money, long before the decision of the REA was official.

Christine, I’m sorry if I come across as angry but I’m sure you appreciate the gravity of this matter. You see, PropertyNow’s clients are getting a terribly rough deal in this and I perceive that it’s the fault of the REA and also the devil may care Private sale companies, who are flouting REA rules openly and without any apparent fear of the consequences for they and their clients.

I guess if you are one of the lucky ones who sells before the hammer drops you’ll think you’ve done well. For the others ( the majority ) it might be cause for legal action against either the REA or the company breaking their rules ( or both ).

Chris: Some things change over time - has the policy of REA changed? I know that you exchanged quite a few letters with them, what do they say?

Andrew:

Ah, another very relevant question Christine. The REA rewrote and published their new TOS just last Thursday ( 28/5/09 ) I am certain they did so because we have been forcing the issue with increasing strength for the past 6 weeks. The new TOS are extraordinarily tight, so much so that I personally doubt that most real estate agents with normal agencies could pass the test, let alone the FSBO companies. I say they are tight in what they require of real estate agents , who like me, would seek to assist private sellers.

But tight, is not the same as legal. Yes, you’re right we have exchanged a good many letters and they have approved our account and offered it to us on 3 separate occasions.

Chris: Andrew, in your opinion, should people trust the websites that are offering advertising on REA and why?

Andrew:

Categorically not.

These companies are putting financial gain ahead of Duty of Care to their clients by way of through truth in advertising. If the companies are even mentioning to potential clients that the REA may dispute their listings, that in itself is no defense.

They are profiteering while they can and the noose is about to tighten on them. There is a way to approach this problem and ripping people off is not part of the solution.

Chris: Do you think REA is going to allow private vendors on their website soon?

Andrew:

Hmm?? That’s truly the sixty four thousand dollar question Christine.

I think they will be dragged kicking and screaming through the courts and/or via the ACCC. They will resist and they have very deep pockets. They receive literally millions of dollars every month from agents. If we sue we could be kept in court for years.

Agents line the REA pockets and they won’t abandon them easily.

Let me put it to you this way Christine. About 3 years ago a State Manager of the REA said to me, in Port Macquarie “while ever I’m in charge there will be no private sellers on realestate.com.au”. That manager is still on the REA and in a very senior role.

I can only hope that the public good will eventually be served through our legal system because that is the only avenue that can succeed. Remember that Telstra was forced to share it’s lines with Optus and others ….and Telstra is bigger than the REA. Of course a 900 million dollar company such as the REA can make it very difficult for PropertyNow and others who seek justice, equity and change… but public pressure in tandem with the legal system, can work wonders. It’s certainly a fight worth fighting.

Ask any independent person whether they feel that they should have a right to access the largest real estate website in Australia ( without the restrictions on use it currently imposes ) and the answer is obvious. Ask a private seller if it’s fair and it’s even clearer.

So yes, Christine, it’s a matter of time, but if I am framing the odds, I think it may take many months and quite possibly years to achieve this long overdue change. One thing’s for sure PropertyNow will be leading the charge.

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2. You can get a company named Lawyersrealestate.com.au to advertise your house for you on both Domain.com and Realestate.com.au as a part of a package of services they offer to private sellers. The rest of the package includes photography, negotiating and conveyancing.

3. You can get your house advertised on both Domain and Realestate.com.au via a website http://www.forsalebyownerrealestate.com.au. This is a new service, I’ve just found out about it a couple of days ago.

The costs

Sign board 900x 600mm: $50 - $75 (the simple one without the photos)

Property photography: about $200 - $250

Advertising:

1. LaywersConveyancing.com.au: $4400 for the whole package, if your house is sold within 3 months. If not, you will be paying for advertising alone. Don’t forget to add 400 for the property valuation.

2. Domain.com for a month - $500

3. http://www.forsalebyownerrealestate.com.au: $300 for the first month and $80 for any additional month until property is sold.

Comparing the 3 options, here is what I think:

1. Domain.com alone won’t get your house the optimal exposure.

2. Lawyers real estate is cheaper than the agent’s fees and they include the conveyancing. However, they require a valuation by a professional property valuer which costs about $400 and takes a week to prepare. Another disadvantage is that they are setting the price range around the valuation, which could mean that the price you are after won’t be achievable.

3. The third way looks the best to me, because it covers both major websites and there are no “extras” in the bundle that you can live without but must pay for. There is a warning though – according to the policy of realestate.com.au they don’t accept listings from private buyers (read the whole story here) and this company could be promising something they can’t deliver. Buyers beware, as always.

And now over to you – have you tried to sell your own house? How did you do it? What was the outcome?

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I must say that in Australia selling one’s house without an agent is almost unheard of, and the courageous people who dare sell on their own get looked at in a weird way. Not to mention the estate agents, who come to their doors and literally laugh in their faces: “What do you think you’re doing, you never going to sell, not without me!”

The big advantage of selling with an agent is they have everything pre-arranged. They have a photographer on call, they have a sign guy who installs the “For sale” board in your front yard on an hour’s notice, they know the right day for booking an ad in the newspaper and they have all the forms for submitting the written offer ready.

To an average person it will take a week to arrange all that and put the house on the market. This shouldn’t discourage you though – I am writing this with just one purpose, to give you a realistic expectation of the timeframe so that you won’t get frustrated with how slowly things are moving.

So here is what you need to do:

1. Get your own “For sale” board
2. Don’t take house shots yourself - but get a professional to do it.
3. Do your own advertising
4. Do your own negotiating

And here is how to do it:

Getting your own “For sale” board and some pretty photos is not a big deal, but finding the right kind of advertising that will reach the highest number of buyers for the lowest price is not trivial. I have written about the power of online advertising and the bottom line is that you need to put your house on two major websites, domain.com and realestate.com.au (read this post for explanation why).

There are several ways to advertise your home and reach the most buyers. In my next post I will be discussing and comparing them (including the costs). Subscribe to Homeiown via email and be the first to get it.

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