What a difference a year makes!
My name is Alex, and I am the Treasurer of HYP this year. The HYP Panel Breakfast marked the first event in which I co-organised and boy was it worth all the hard work. To give you a bit of background about my HYP journey; I started attending events around this time last year and at the John Pirlo breakfast in September I saw Emily (Vice-President) hosting and thought to myself ‘that is what I want to be doing next year’.
It was only at this event that I was able to truly reflect on the year that had passed and what I had achieved since becoming a board member of HYP – from organising an event of 100+ people, growing the confidence to be able to speak publicly, ensuring board members aren’t too frivolous with their spending on events and keeping the books up to date. This is after only a few short months, and all it took was to step out of my comfort zone.
This morning’s breakfast was another great event on the 2014 calendar and it was awesome to see so many new faces. If you were unable to attend, or even if you did and would like a reminder of the key take away points from our expert panel members here are their top tips:
Ashleigh John – Specialist, Family Law at Mullane & Lindsay Solicitors
1. Estate planning is not for old people
Get your will, Enduring Power of Attorney and Appointment of Enduring Guardian done while you’re young, and capable of giving instructions. It is especially useful if you are going to travel overseas, so someone can manage your affairs for you while you are away.
2. Superannuation is not included in your will
Superannuation is treated differently and does not automatically form part of your estate. Make sure that you have nominated your beneficiaries with your super fund.
3. Don’t set and forget
Review, and if necessary update, your legal documentation when any major event happens in your life such as when you start living with your partner, marriage, separation or when you have children. Marriage can revoke a will and does terminate a Binding Financial Agreement made between de facto partners.
4. Documents make the best evidence
Keep records of major financial transactions. If you start a relationship and own a house already, ensure that you have documents to show what it was worth at that time, if you borrowed money from parents, etc. This makes it clear that it was intended to be repayable.
5. Be careful of the message being conveyed, it’s hard to change your mind later on
When completing documentation, consider how your significant other is described. If you describe as de facto partner now to obtain a loan and then later claim that you were not a couple, or if your parents sign a Statutory Declaration now saying they are giving you money as a gift and you later claim that it was a loan, you will have difficulty succeeding in your argument.
Mark Kentwell – Director, PRD Nationwide Newcastle & Lake Macquarie
1. Get pre-approved
Whether you are looking to purchase now or within the next few months, this will allow you to be in a better position to make offers and be treated seriously by the agent.
2. Get active
It is important for you to get a feel for the market. Attending as many auctions as possible and tracking the properties to see how much they sell for will give you an idea of the competition in the area, assist you in understanding the negotiation and auction process and could give you an edge over other buyers. Auctions are becoming increasingly popular and the transparency at preparation time of an auction can provide a buyer with some advantages.
3. Make decent offers
Offering well below the asking price can have an adverse effect on the negotiation process, especially in an active market. Do your research on recent comparable sales and where other properties have been selling in relation to their price guides, and make an offer to motivate and encourage owners to work with you to come to an agreement. Although agents will try to get back to everyone who makes an offer, the owner isn’t at liberty to sell at any price and therefore there may not be a second chance if your offer is lower than others.
4. Secure the property formally
Having an offer accepted or placing a holding deposit is not formally securing a property. The cooling off period in the ‘NSW Contracts for Sale’ allows you time to organise your finances and your pest and building report after the exchange of contracts. If you pull out of the cooling off period you forfeit 0.25% of the purchase price to the vendor however this is a small price to pay to ensure there is nothing wrong with the property. If you do not exchange and someone offers above you, you may be gazumped. An exchange of contracts is your only way to formally secure a property. Agents are authorised to exchange contracts in NSW with your permission as soon as your offer is accepted. If you are purchasing at an Auction or prior to Auction you will need to have obtained your own pest and building report and Strata report if applicable, and have your finances ready to go. PRD offers a ‘Friendly Auction Guide’ which will give you an indication of the difference between an Auction and a Friendly Auction.
5. Just do it
Historically, property in Australia has increased in value 70-100% in 8-10 years, so sometimes it is better to buy in a location which is close to what you are after. Your ‘forever home’ that ticks all of the boxes may not quickly materialise, and in the time spent waiting for ‘the one’, the market can increase up to 30%. Not only do you get into a new home but you are making money at the same time.
Andrew Shakespeare Director, JSA Financial Planning
1. Create a banking structure that protects you from yourself
Create specific bank accounts for your separate needs. At its most basic format, you would have a ‘fixed bills’ account for the unavoidable expenses, a ’weekly spend’ account for misc expenses like going out for dinner, or the movies and a ‘savings’ account for travel and investments. If you have a bad savings history, putting access restrictions on this account is imperative to sticking to this plan, for example, don’t activate internet banking as it will be harder for you to access your funds.
2. Government incentives
If you are a first home buyer, take the time to research any available government incentives or grants that are applicable for your situation. Visit the OSR Website for more information.
3. ‘Real’ wealth
Determine what ‘wealth’ means to you. Is it the big house opposite Merewether Beach, the freedom to go out on the weekends with friends or being able to go on holidays and short getaways at a moments notice? It is important to ask the question, “what makes you ‘content’?” and you might find that it’s not always the material things in life.
Keep it simple! Consolidate your super and if you can, put a little extra into your fund each week. Although you are not able to access these funds until 60 years of age, that little extra money will be accumulating for the next 30-40 years, so invest in your future.
5. Get protected
If there is one thing I beg all young people to do, it is to get advice for appropriate personal protection in case you or your partner suffer a serious illness or are unable to work for any reason. You never know what tomorrow will bring so be proactive, not reactive.