A Low-Deposit Solution To Getting A Foot On The Property Ladder

It’s often said that the hardest part of building a sustainable property portfolio is accumulating a deposit for that first property. Here’s a lateral-thinking option that just might enable you to get your money working harder real soon.

Experienced mortgage broker, David Hoar of Home Loans Newcastle, says there’s a large number of wannabe property buyers who are unaware of the Family Equity option and how it can help them get on to the property ladder sooner, save money, and get their money working harder.

“Saving a big enough deposit to buy that first property is often a very long process, especially for younger people who may have spent time travelling, studying, paying for a wedding, or ‘finding’ themselves,” said Mr Hoar.

The old-fashioned way to buying property involved saving a 20 per cent deposit and acquiring a home loan for the rest. To accelerate the process, it’s become increasingly more common for property buyers to purchase with a smaller deposit while satisfying lender’s security requirements by paying a one-off insurance premium known as Lenders Mortgage Insurance (LMI).

A family equity loan essentially means, in lieu of a property buyer satisfying a lender’s standard 20 per cent equity requirement, a third party (usually a family member) assists the buyer by providing a security guarantee.


If your first property is an investment, some lenders will allow you to use a Family Security Guarantee to help you buy with a small or no deposit.

To read answers to more questions and the rest of this article written by David Hoar, click on the links below.



By David Hoar

Website: www.homeloansnewcastle.com.au, https://www.propertyology.com.au/

Article Link: A Low-Deposit Solution To Getting A Foot On The Property Ladder

Tags: www.homeloansnewcastle.com.au, https://www.propertyology.com.au/

Tips for Choosing a Listing Agent

Sellers often fail to choose the right listing agent because they solely base their decision on two factors: highest list price for their home; and lowest commission.

You probably think this is right and you would do the same……. After all, what seller doesn’t want the highest possible price for their property and pay the least amount of commission? But the truth is these two criteria shouldn’t be factors at all when choosing a listing agent.

Here is why:

The Maximum Suggested List Price

It’s not true that agents can’t tell seller how much their property might sell for.  Data on comparable sales, pending sales and activities can be provided by your listing agent. However, the person who chooses the sales prices is YOU and the person who will tell you if the price is right is the BUYER. Your listing agent can suggest a price that would be acceptable for buyers, but the outcome depends on the buyer and what you choose to do with the buyers offer or intention.

Be wary of agents who bend the truth in order to get your business. Request from the agent evidence backing the suggested list price and be warned if the agent can’t show you figures or only provides you figures verbally.  Be aware that they must provide evidence in writing and that it is a requirement.  Failure to do so could result in fines or loosing their licence.

Find an agent who provides a price range. It may be a small range but note that most agents will take advantage of the 10% range they are allowed to use. There are many factors that influence the range such as:-  

• Recent Sale prices of similar properties in the area,
• Location, aspect and outlook of the property,
• The presentation, age and condition of the property,
• The current state of the property market.

Skill is needed for pricing. Within the first 30 days on the market is the best time to receive an offer. The ideal time is 21 days. If the price of a home is right, buyers will make an offer. If the price is too steep, no people may even show up; you’ll get no takers and you’ll be forced to lower the price. This would make buyers think there is something wrong with your property.

Agent with the Lowest Commission

Every agent is different. Take note that roughly 10% of the agents perform about 90% of the business however you should never choose an agent on volume only. 

Why would an agent have lower fees than other agents? Some agent feels that it’s the only way can compete with others because they don’t believe they can win clients based on service, knowledge or negotiation skills.

If the only attraction an agent has for you is their discounted fee, then the agent may be desperate for business or not qualified and that’s not good for you.

If you are stuck between two agents who offer the same services, you can check a track record of each agent’s original list price and final sales figures. It’s highly likely that the lowest-fee agent will have more price cuts and longer Days on Market (DOM).

Why is Agent Marketing Important?

What sells homes is good marketing. Request to see a full copy of the agent’s marketing strategy. Find out how the agent plans to sell your home. No single technique is effective. It’s a mix of techniques that sells properties.

Look for the best Characteristics of an exceptional Listing Agent?

You will be working with your agent for a period of time, so choose one that you can relate with. The following are the characteristics that sellers say they are looking for in an agent:

  • Experience – No sale is the same and the more experience an agent has the better equiped they are.
  • Education & Knowledge – They have to know more than you!
  • Honesty – You want an agent who will tell you what you need to hear; not what you want to hear.
  • Networking – Well connected agents have more opportunities.
  • Negotiation Skills – An agent who can successfully negotiate their own fees will do the same for the sale price on your property.  
  • Good communicator – Is not just about providing you with feedback; they need to be an active listener too!

Lastly, request for a personal guarantee in writing. Stay away from an agent who would not give a guarantee performance and free you from your contract upon request.

Important Things to Know About Underquoting

What is the term “underquoting?”

It is the method of promoting a property for the purpose of drawing a higher number of prospective buyers and creating a stronger perception of competition for the property.

Though most real estate agents follow ethical standards in their methods of marketing properties, there are still those who don’t, despite the recent changes implemented in New South Wales.

Underquoting, also known as “bait pricing,” make both parties frustrated, especially the buyers who believe that the home of their dreams is within their reach, only to be crushed when they are outbid at auction.

Tightening regulation

The consumer body responsible for regulating underquoting in NSW is the NSW Fair Trading in New South Wales.

New underquoting regulations relating to the sale of residential properties was launched back in January 2016.  With the reforms, NSW real estate agents are required by law to quote prices no lower than 10% of the highest appraised price and must not be lower than the lowest price on their appraisal. This helps make sure that buyers are not deceived into investing in a property that they cannot afford. Agents who are found to have underquoted may lose their commission and fined up to $22,000.

In addition, it is now illegal in NSW to put ads with the terms “offers over” or “offers above” but some agents are getting around this buy advertising “Price Guide $…….”.  

Safeguard yourself against underquoting by checking comparable sales.  Study up-to-date property reports and suburb profile reports that contain the sale prices and auction results of similar properties within the area.

You can also check with professionals. Talk to third party real estate agents or buyers’ agents and request information on the actual estimate of the sale price. Chat with locals who are knowledgeable about the area, especially people who are recent transplants there.