Your Property Questions Answered: July 2021

Welcome to the first edition of our new regular column that looks to answer property-related questions from you, our OpenAgent users. 

The market is ever-changing, overly complicated and often confusing, and the pace of this year's boom only makes it harder to keep up with the state of play. 

That's why each month we'll take your questions and seek expert advice to make sure we're keeping you as informed as possible.

For the next edition we'll be speaking to top real estate agents from around Australia, so if you have any questions you'd like to ask an agent, please send them in here. 

To get things started we'll address three questions we're hearing regularly at the moment. 

When is the right time to sell?

My partner and I are ready to sell our terrace in inner Sydney (we’re looking to buy a bit further out to the Hills to be nearer to my parents) but we can’t help but feel like we’ll miss out on the extra gains they're saying are coming in the next couple of years. How can we make sure we pick the right time to sell? - Diana

This is among the most frequently asked questions we're asked, and that's not surprising. 

So often there's a temptation to try to time the market just right to maximise your sale price, and that can be a tricky game to get caught up in. 

If you're buying and selling in the same market though, and you're not downsizing significantly, you need to be wary that whatever benefits you might get as a vendor will be counteracted by challenges you'll face as a buyer. 

The same fierce competition and hot market conditions that might net you a high sale price will likely make it harder for you to secure the new property you want for the price you want, so when you're talking about holding off on selling to make the most of a rising market, in a way it all comes out in the wash when you're participating as a buyer too. 

It's also important to keep in mind that, while there's currently such a strong sentiment that the market will continue to rise, there's never any certainty in real estate, and as the events of the past 18 months have shown us, major disruptions can come at any time. 

Tristan Tomasino of Biggins & Scott in Yarraville and Max Klimenko of Sydney's Ray White Touma Group both believe that it's safer not to speculate, and if you have a reason to move now, that should be prioritised over dreams of picking the market's peak. 

"My advice to clients since the start of the year has been if you are ready to go and the home is ready, sell straight away," Mr Tomasino says. "Just go to market, because the market is red hot."

Mr Klimenko puts it simply: "the best time to list is when you're ready to list." 

Every home, street, suburb and situation is different, so it would be a good idea to seek input from real estate agents in your area who have a strong understanding of the local market and can give you the best, most personalised advice on your particular property and circumstances. 

We also recommend taking a look at our article 10 signs it could be time to sell your house which runs through a bit of a checklist to help you determine whether it's the right time to move. 

Have a question you'd like us to find the answer to? Submit it here. 

Selling off-market: a big money saver? 

I’ve recently got a new job interstate and need to sell my property quickly to relocate. I have done some reading about selling off-market and how you can potentially save some money and time. Is selling off-market a good option in the current market, and how can I go about making that happen? - Keith

As Myles du Chateau of RichardsElliot Estate Agents in Surry Hills tells it, there's a lot of off-market selling activity going on at the moment that perhaps isn't all that obvious from the outside. 

The process of selling off-market—meaning a property doesn't get published on the usual listings websites and instead is shown privately to motivated buyers in an agent's database—is an alluring one for a number of reasons. 

The most obvious is saving on marketing costs, which often amount to around $5,000 or more when including online listing costs, a signboard and whatever else is required for the public campaign. 

"Truth be told, that's probably the smallest aspect that's appealing for off-market, because a five grand investment for the sake of selling one's most important asset is not a huge amount of money," Mr du Chateau explains. 

Instead, he says it's the ability to run a "litmus test" on the market without making an all-in commitment that can be most useful for vendors, as shopping out your home before publicly listing can give you and your agent a clearer idea of where the property is positioned in the market and, ultimately, a realistic sense of what buyers would be willing to pay. 

It can also draw out a strong offer or offers from buyers looking to get ahead of the competition, and that too can be an advantage for a seller looking to make a quick, easy sale or just avoid the stress of undergoing an auction campaign. 

There are risks involved, though, and the biggest is that by limiting your buyer pool and withholding your home from the broader market, you could be missing out on one or two or multiple buyers who are willing to go that extra mile to secure the property. You also miss out on the auction day heat that can elevate the sale price to another level. 

The balance of the pros and cons will fall differently for every vendor, and it's important to seek local expert advice from an agent who knows your market and your property, and who understands your selling circumstances and requirements. 

"At the end of the day, the golden rule is that it comes down to what the vendor is happy with," Mr du Chateau says. "If they're comfortable, if it allows them to maybe exercise other options, that's the most important thing."

Have a question you'd like us to find the answer to? Submit it here. 

How does the government's downsizing incentive work?

My husband and I are 62 and 66 and we are wanting to sell our family home and move into a smaller house up the coast. We have heard about a downsizing scheme that the government is doing and we wanted to know what it's all about? - Galit

First announced by the federal government in the 2017 budget and enacted in July 2018, the downsizing contributions into super scheme was introduced for a couple of key reasons. 

It sought to help free up larger properties by encouraging retirees to move into smaller, more practical residences without multiple unused bedrooms or high-maintenance yards, allowing the next generation and their young families to access more appropriate housing stock. 

In the process, it also intended to help those downsizers capitalise on what in many cases would now be their biggest asset—the family home—and convert it into savings to ensure a more comfortable retirement. 

To be eligible, you had to be over the age of 65 and for either you or your spouse to have owned your home for 10 years or more. 

With the pressures of the current housing boom stretching stock to its limits, the government announced it would be dropping that age of eligibility down to 60 from July 1st, 2021. 

So how does the scheme work? Essentially, it allows the downsizer to invest up to $300,000 from the home's sale into superannuation, meaning you'll be able to take advantage of the lower 15 per cent tax rate for super contributions and your investment earnings are tax free—a significant upside. 

The usual super caps or restrictions don't apply, you don't have to purchase a new property to be eligible, and if you're a couple you can invest $300,000 each—a potential $600,000 in total.

Depending on things like pension eligibility it may not be the right choice for everybody, so seeking advice for your specific circumstances would be wise, but if you fit the criteria and you're thinking of downsizing now or in the future then it's well worth looking into. 

Have a question you'd like us to find the answer to? Submit it here. 

Submit your questions for next month

As we mentioned before, we'll be answering more of your property questions next month, and we want your submissions. 

We'll be reaching out to some of the most experienced real estate agents in the country for the next edition, so if you have anything you'd like answered by a top agent, send it in here.