Soaring Australian Property Prices No Long A Cause For Concern, Reveals Rick Otton
An Ipsos Survey conducted in November of 2013 showed that while the property market in many areas of Australia is soaring, more than half of the Australians surveyed felt that these rising prices were probably not a good thing for the country.
House prices rose by around 10% in 2013 and the survey produced some interesting findings:
• The 30-40 years age group are those most worried about house price rises;
• The second most concerned age group was the over 50s;
Many young parents are particularly concerned about the implications for their children, whether they will ever be able to purchase a home of their own in the future.
Saving Enough for A Deposit Is a Concern to Australians
The primary problem for first time home buyers is that they just cannot manage to save up enough money for a deposit,as their rate of saving is unable to keep up with the rapid increase in property prices. While leaving many Australians feeling despondent, this factor has many people believing that they may never manage to purchase their own home using the ‘traditional’ method. Saving for a deposit to enter into a market of which the prices continue to rise, currently has many people putting their dreams of owning their own home on hold. However, it doesn’t have to be this way, reveals Rick Otton.
A Different Approach
When looking at purchasing a home through the traditional process, it can seem that there is no way to find an affordable property for sale in an overpriced market. However, the truth is that affordability can be created anytime and in any market condition if people adjust the terms under which they purchase the house. Seller finance strategies offer a solution to the problems introduced by the traditional process through flexible payment terms, which won’t require a buyer to take out a new bank loan or save up a large deposit to get started.
What is Seller Financing?
Seller financing, or vendor finance is simply where the seller (vendor) of a property is willing to provide some (or all) of the financing on the property. These strategies have been a success because they facilitate flexible payment terms between the seller and buyer rather than forcing prospective homeowners to make a lump sum payment for the property’s total price.
How Could Seller Financing Work?
As an example, a buyer who does not have sufficient funds for a large deposit can say to the seller that they will pay the full asking price for the house today. The offer is immediately attractive to the seller for two reasons, being that the buyer is ready to make the purchase right away, and secondly that he is going to get the full asking price. Mention of these two extremely clear benefits will immediately make the seller keener to help the buyer complete the purchase, by assisting them with the funds needed for the deposit.The deposit amount the seller might be willing to fund could vary - it could be half, it could be all.
Another scenario might be that the buyer has almost all of the required deposit but needs the seller to help finance them for anything from a few months to a few years. In the end, it all comes down to what the two parties, the buyer and the seller can together agree on.
Probably, many prospective buyers would not even know which questions to ask to secure a deal like this. Many sellers still don't know that this sort of deal could even be available to them. Knowing the right questions to ask could help solve the current problem that so many buyers, particularly first time buyers, have with raising a deposit and in consequence could help provide a solution to the very real problem of property affordability.
If you are interested in finding out more about how seller financing could give you the edge on buying a property, you can receive a free information pack by visiting www.creativerealestate.com.au.
For almost a quarter of a century, Rick Otton, founder and director of We Buy Houses Pty Ltd., has been teaching people about innovative property strategies such as seller financing- with the aim of empowering people with the knowledge to transact property in today’s market.
