Why Buyers Should Have A Finance Clause

Are you getting a home loan for your next property purchase? Are you sure that you don’t need a finance clause for your next home?

Buyers need to do their homework and get pre-approval prior to looking for their home or investment. It’s not enough for buyers to think that they have a great income. A good amount of deposit and equity will not ensure getting your loan approved quickly.

There is a risk that if your loan is not approved on time that your contract may be canceled. Lenders take time to process the loan, to do all the checking to make sure they have all the facts correct before submitting it to the approval department. Get a real pre-approval done before you start your property search. 

What is a “Subject to Finance” Clause?

A subject to finance clause is a legal agreement with the seller to purchase a property on the condition that you receive a home loan approval from the bank.

If in the event that your home loan is declined for any reason, a finance clause is necessary to protect you from losing your deposit and to avoid being subjected to damages that may arise.

Why do you need It?

In some home purchase contracts, a subject to finance clause is a standard condition. This clause will give you more time to search for the right home loan for you.

Including a finance clause in your contract of sale will also protect you from situations that you didn’t even foresee. Aside from the possibility of being denied the loan approval, there might be delays from the typical approval timeframe. If the delay goes beyond your agreed timeframe with the seller, you need to find other ways to finance the purchase.

Perth’s economy is doing great right now and is even projected to grow by next year. But there are still some uncontrollable factors that can affect your employment. Sudden changes in employment can affect your loan approval.

Some lenders might provide pre-approval for your loan. This doesn’t mean that it is already safe to not include a finance clause. There are different types of pre-approval and most do not guarantee that your loan will be approved. Hence, a finance clause is still recommended.

A subject to finance clause is something that you should definitely consider adding to your sales contract. By using an experienced buyer’s agent, they will ensure the correct wording is put into the contract to protect you. The buyer’s agents will act as a third party to give you wise advice in selection, negotiations, and the special conditions you should add to the contact to protect you through to the final settlement.

In the long run, this decision can save you a lot of time, money, and stress. Contact the buyer’s agents at Buying Perth Real Estate to give you a further understanding of the ‘subject to finance’ clause in real estate.

Why Now is the Time to Buy For First-Time Homebuyers

Coronavirus led to a downfall of our economy so people, especially aspiring first-time homebuyers, might think that now would be a really bad time for an investment in the property industry. However, things are the opposite for Western Australia.

With an economy that’s not dependent on tourism, travel-related industries, and the government’s relatively quick effective response to Covid-19, the property market in Western Australia is in a state of a boom.

So, for millennials and aspiring first-time homebuyers, now might be a perfect time. Here are a few signs that might convince you to buy a property in Perth sooner than later:

You might have enough money for a deposit right now.

first time homebuyers savings to buy property

First time home buyers are usually the younger market. This age range usually spends their money on lifestyle but because of the pandemic, this aspect has been largely restricted. Since there are fewer opportunities for them to spend their money on, they were able to save more money than what they had originally planned. With this, they might just already have enough money for a deposit sooner than they expected.

Perth real estate is the most affordable in Australia.

Perth real estate is the most affordable in Australia for first-time homebuyers

According to Property Observer, properties in Perth are currently the most affordable among all Australian capital cities.  Hence, it is a perfect opportunity for first-time homebuyers. In real estate, it has always been advisable to purchase a home sooner, especially when the prices are low since the value projection in the upcoming years is usually positive.

Perth property market is expected to boom in the upcoming years.

Perth property market is expected to boom in the upcoming years.

As mentioned in our previous point, the projection for the value of a real estate is often increasing in the next several years. It might surprise you that the property you purchased this year might have already increased because of the growing demand in the Perth suburbs.

Due to WA’s quick response to the pandemic, the curve has been flattened sooner, lessening COVID19’s impact on our economy. This is contrary to what we initially forecasted. With the emerging economic growth and the current work from home situation, we expect a low-vacancy rate. Given this, we expect that the real estate market will rise in the next several years as we are currently in the early stages of a property boom.

The Building Bonus Grant is Perfect for First-time Homebuyers

building bonus grant

The Building Bonus grant, which is part of WA’s recovery plan, grants $20,000 to any homebuyer who applies and signs a contract by December 31, 2020. The grant allows homebuyers to build a new house or to purchase a new property in a single-tier development. 

This effort is aligned with Western Australia’s goal to rebuild the economy quickly. The government is encouraging workers living in other regions to consider moving to the area. So far, the campaign has been effective and according to several bank reports, Perth property prices are expected to rise by 12% in mid-2021.

There are so many reasons to purchase your first property in Perth as soon as possible. The property market is in a phase of high demand and prices will surely increase within a year. 

Have you been planning to buy your new home? Consider buying a property in Perth. Get a free consultation from us today and we’ll help you answer any questions.

The Future of the Perth Property Market

Given the Covid-19 pandemic happening all over the world, many industries worldwide have been suffering economic impacts. While Australia also felt these impacts, the Perth property market seems to be recovering faster than ever.

Western Australia’s well-controlled handling of the pandemic is resulting in more stable growth and faster recovery period compared to Eastern Australia. Perth is also less reliant on affected industries such as tourism and international students. They were less vulnerable to the economic blows that other cities in Australia faced. Western Australia is fortunate to have a huge continuous income from the mining industry.

Here are some forecasts to watch out for on the real estate market industry in Perth:

Perth house prices predicted to rise to 12% in 2021

real estate statistics

It has been reported that east coasters are starting to discover West Australia as they take advantage of government incentives such as the $20,000 Building Bonus grant. Plus the opportunities offering to obtain well priced established real estate.

With a more than the expected demand from applicants taking up the State Government’s $20,000 building grant, the Perth property market is experiencing a higher demand for vacant land. Perth house prices are forecasted by several of the major banks to rise by 12% in the last half of 2021, and by 18% in 2022. This will increase Perth’s median house prices to at least $532,000.

Sales increased by 56% in October 2020

perth property market increased in sales

In October last year, metropolitan Perth reported 603 sales but this October 2020, it significantly increased to 946 sales. This is a 56% jump from the previous year. Sales have rapidly increased due to fewer listings for this year. From 14,000 listings last year, it decreased to 10,000 listings. Since there is less supply entering the market, the competition becomes tighter. Contracts are being closed faster compared to the addition of new listings in the market. Hence, pushing up the value of the properties.

Western Australia Border Open on December 08, 2020

More people will now be returning back to Western Australia and will be looking for somewhere to live, as the borders open to allow Victorians and New South Wales people back into the State without quarantine restrictions. While this will only last while those States remain free from the virus, there are many already taking advantage of the freedom of moving to West Australia.

COVID-19 pushed professionals to prioritize savings and investments 

savings and investments are being used to buy from the perth property market

According to Westpac’s consumer sentiments, WA now leads the measure of “time to buy a dwelling” throughout the whole nation. After two years of slow downturn, home financing levels are finally recovering. With the pandemic and the fear related to financial security, professionals prioritized saving more with an average of almost 20% of wage savings. Before the pandemic, people usually save only 3% and spend the rest of their salary.

Although there is news that the anti-COVID19 vaccine will be available soon, people do not plan to go out and spend their extra savings just yet. It seems that they prefer to spend extra savings on housing-related expenses. The number of real estate transactions now is already above the level during the pre-pandemic period.

The Perth property market is in the early stages of a market boom

While most countries are struggling with the effects of the pandemic, West Australia is recovering fast – including the real estate industry. Given all these forecasts, Perth is once again on the journey of having a real estate boom after over a decade.

Now is the time to invest in selected real estate in the Perth suburbs. With interest rates for borrowing at an all-time low and the real estate market showing strong signs of recovery, what better time to engage an experienced buyer’s agent to stand alongside you through the journey of selection, negotiation, due diligence, building reports, and a host of unknowns to most buyers.

Learn more about the status of real estate and properties in Perth. Get a free consultation from us today.

5 Misconceptions About Buyer’s Agents

Different terms in real estate often confuse buyers. Some do not even know that there is a designated type of agent for buyers, known as Buyer’s Agents.

When you’re buying a property, it would be best to hire a Buyer’s Agent. But what is a Buyer’s Agent? Do you know what they do? What is their difference from other real estate agents? You have most probably thought of most, if not all, of the misconceptions about buyer’s agents listed below. 

man confused about buyer's agents and has misconceptions about buyer's agents

Buyer’s agents are the same as other real estate agents.

One common misconception about buyer’s agents is that they are the same as other real estate agents. Since most people only know about real estate agents in general, they think that a listing agent, seller’s agent, and buyer’s agent are the same. Based on their understanding, real estate agents are general agents who you can contact for any real estate transaction. Some Buyers don’t even know Buyers Agents exist. 

A buyer’s agent can also help you sell your home.

buyer's agents don't sell houses

Buyer’s agents may also have the skills to sell your home. Normally, the buyer’s agent’s clients are genuine and motivated with finance approved ready to go. However, their specialty is looking for and recommending properties based on the buyer’s brief and eventually negotiating the sale. The owners pay the real estate agent to look after the seller, not the buyer.

Hiring a buyer’s agent is expensive.

The first thing that must have come into your mind is that hiring a buyer’s agent when purchasing a property will cost you extra money. Maybe that is true, but an experienced buyer’s agent can save you money on the purchase. 

Buyer’s agents are experienced in negotiating, often saving 10’s of $1000 off the asking price for the buyers. More importantly, if buyer’s agents are experienced former real estate agents, it means that they know the market and they know the areas to avoid. They have a good working relationship with all the good agents who feed them with off-market properties. They will save you time as they will scan many more properties in a week than the normal buyer can ever see in a weekend. You must remember that buying a home or investment is a huge outlay. The buyer’s agent’s fees are very small in comparison especially if it saves you buying on emotion the wrong property. 

You can save more money by not hiring a buyer’s agent.

misconceptions about buyer's agents: you can save more money by not hiring a buyer's agent

Some buyers think that it would be more practical for them to transact directly with listing agents. They think that they can close a deal on their own. However, buyer’s agents are more experienced with negotiation and can actually get you a good deal. Given that they have more knowledge in the field and have more insights into property purchasing, buyer’s agents can save you from many possible issues in the future. Hence, saving you from possible additional costs, that may run into major expenses in the future.

Buyer’s agents have restrictions on the property they are selling.

Unlike listing agents, buyer’s agents do not have limitations on the properties they can sell. They can find the buyer’s ideal property in any suburb and they are not limited to any area. They can show a buyer any property, depending on the buyer’s requirements. Buyer’s agents can also offer you properties established or newly constructed, even organize house and land package deals. Buyers just need to tell them what property they are interested in and the buyer’s agent can make possible recommendations and arrangements.

Most buyers don’t really see the value in hiring a buyer’s agent. This is because they have misconceptions about buyer’s agents and lack knowledge of what the buyer’s agents can do for them.

Of course, all the things we said about a buyer’s agent relate only if they hire an experienced buyer’s agent. Experienced buyer’s agents are those who have worked in the real estate industry as a real estate agent for a minimum of 10 years. Why? Because this indicates they have seen real estate market trends, have worked with a range of agents, have a good reputation, and are known to be a person of good integrity.

Do you have any more misconceptions about buyer’s agents that you want to clear up? To know more about how buyer’s agents can help you have a hassle-free purchasing journey, feel free to reach out to the buyer’s agents at Buying Perth Real Estate, and get your free consultation.

We would be more than happy to walk you through the details of how a buyer’s agent can help you with purchasing a property. 

How To Choose A Buyer’s Agent Who is a Real Expert

Did you know that there are experts and non-experts in the field of property buying services? It doesn’t matter if you’re a property investor or homebuyer, it pays to be aware of who qualifies as a buyer’s agent expert when buying properties.

Qualifications of a Buyer’s Agent

qualifications of buyer's agents who is a real expert

The ideal person in today’s complex property environment should be fully conversant with strategies of real estate selling and buying.

That means they should have experience in working in a real estate selling office before becoming a buyer’s agent. This is vital because anyone can simply undertake a course and obtain a license.

That doesn’t make them an expert in selling real estate – nor an expert in being a buyer’s agent.

A considerable degree of experience and expertise is needed to have the skills and know-how for implementing the best strategic plan for an investor, let alone get a full understanding of the wishes of a home purchaser.

The Real Expert

The principal of Buying Perth Real Estate, Clive Elliott, was a renowned real estate agency principal before entering the field of being a buyer’s agent.

Clive Elliott was one of the leading real estate agents in WA for many decades. In his time of operating Clive Elliott Jennings Real Estate, he sold hundreds of properties from low-cost home units to houses worth millions of dollars.

Many home sellers could testify to Clive’s negotiating skills. It was not unusual for him to come back to his seller with a price above the listing price because he had found several prospective buyers for their property and had simply negotiated the best price possible.

It is highly unlikely that any buyer’s agent in Western Australia has anything like his depth of experience. One thing is for sure if you’re a buyer with his negotiation skills on your side, you have chosen well.

He is a Buyers Agent who is a REAL EXPERT.

Written by Howard Wilkinson past employee of Clive Elliott Jennings Real Estate