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If it hasn’t happened to you, it’s probably happened to someone you know. You find a dream home that appears to be within your budget, you get your finance pre-approved, you get your hopes up, and you get blow out of the water come auction day because the agent underquoted the property. 

What is Underquoting?

Underquoting is the misleading practice of advertising a property within a price guide that suggest to hopeful buyers that it could sell below market value or for less than what the agent knows the vendor will accept. 

Accusations of underquoting have been rife in the recent times as national property prices soared 24% over the past year. 

There is no doubt that some agents out there have been intentionally underquoting properties to drum up interest, but not always. On many occasions selling agents get blamed unfairly for their reluctance to predict a strong competitive result, and in many circumstances, vendors exercise their right to change their price expectations without prior consultation with their agent. As property prices peak, less underquoting should occur. 

Why Do Agents Underquote a Property?

The main reason vendors and agencies underquote is based on the belief that an underquoted property will attract more prospective buyers. It is hoped that these buyers will fall in love with the property so much that they will find a way to compete against most cashed-up buyers, helping to push the property’s final price up in the process. 

Unfortunately, the reality is that many buyers find themselves shortlisting properties that are beyond their financial constraints and this leads to disappointment, wasted expenditure for building reports and due diligence, and lost opportunity. 

Isn’t Underquoting Illegal?

Whilst the price guide legislation varied between states and territories, the problem was relatively endemic in many cities across the nation. Underquoting is illegal, there are many legal loopholes that existed in current legislation, particularly in Victoria.  

How Do You Avoid Becoming a Victim of Underquoting?

Rather than rely on the price guide the real estate agent gives you, do your own homework. You can do this by looking at comparable sales within the last month or two on websites such as Domain and compare like-for-like properties and locations. 

Here are some top tips from Real Estate Buyers Agents Association to avoid becoming a victim of underquoting:

1. Compare comparable properties by location, land size and condition. 

2. Spend the months leading up to active bidding time (while obtaining finance pre-approval) to inspect, inspect and inspect as many properties and neighbourhoods as you can. 

3. Look at other similar properties in the area and see what the agents have initially published the estimate price range as, what the reserve price was and what it has sold for. 

4. Consider consulting and engaging a buyer’s agent to take care of the process so you can “buy with confidence.” 

Finally, don’t forget to get in touch with us in advance to get your finance pre-approved. That way, when it comes to crunch time, you can spend less time on your finance application, and more time doing your homework to make sure the properties you have got your heart on have not been underquoted. 

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au     


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.      

About the author:       

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.       

Connect with Louisa on Linkedin.      

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether in business, health or financial.      

We have been told that our home loan is the first one we should get rid of. After all, it is the biggest debt, so it makes sense that most people want to pay it off as quickly as possible.  

But is that really the smartest way to manage your finances? Should homeowners pay off their home loan completely before considering other investments such as buying an investment property?  

For some people, this may make sense. If you want a low-risk profile, can see your income going down in the future or there are other reasons why you want to get rid of this debt, then it could be the right way to go. But when you avoid investing because you want to pay off your home loan first, you will pay a big cost.  

This is known as an opportunity cost. This is simply a way of saying – how much will it cost you to wait 10 or 20 or 30 years before you start investing? How much profit and market growth will you miss out on by waiting?  

If you bought a home in Sydney 10 years ago and waited until you paid it off before you invested in property, you would still be waiting to buy another investment. It would be at least 5 or 10 years, if not more, before owning it outright. BUT if you used some of your equity to buy an investment property 3 or 4 years ago, you would have 2 quality property assets that have both gone through a massive growth spurt. Your wealth would be greater with 2 properties than it would be with 1, even though you have more debt.  

The extra wealth of profit is the “opportunity cost” you miss out on if you wait for util your home loan is paid off.  

How Can You Safely Invest Before You Own Your Home Outright? 

How can an investor use their home equity safely, so it does not impact their lifestyle and enables them to buy a property at the same time?  

Our suggestion is that people pay off their home loans enough to be able to avoid paying Lenders Mortgage Insurance. This means you want to borrow no more than 80% of your property’s total value when you withdraw some equity to buy an investment property.  

Let us explain… say your home is worth $800,000 and your loan is $500,000. A loan worth 80% of its total value is $640,000. You owe $500,000 so you can borrow another $140,000 against your home to use as a deposit and stamp duty on an investment property.  

Here are a few tips for people who are considering this strategy: 

What Are the Traps to Know About?

Over the years we have seen a similar pattern play out in that inexperienced people don’t structure their debt correctly and end up with loan products that don’t suit them or that restrict their borrowing capacity.  

Other traps we have seen is that borrowers fall into is include using redraw, causing them to lose tax advantages, taking out principal and interest loans on an investment loan that is not tax-effective, or they don’t think about using the equity they have built on their properties to use on purchasing investment properties.  

To best leverage your loans for both your home and investment properties, it is ideal to set up the right structures and loan features from the beginning. Working with a mortgage broker and an accountant can be so powerful – it can save you from making mistakes that could cost you thousands, tens of thousands or even hundreds of thousands in lost profits, missed opportunities and unnecessary fees.  

If you are interested in property investment but don’t know where to start or whether you should pay off your home loans first, feel free to get in contact with our friendly team today and we can help look

Phone: 1300 855 022
Email: clientservices@zippyfinancial.com.au     


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.      

About the author:       

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.       

Connect with Louisa on Linkedin.      

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).    

Disclaimer:This article contains information that is general in nature. It does not consider the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.      

We’re being inundated with enquiries from first homebuyers at the moment, who are all keen to take advantage of record-low interest rates to get into the property market. 

With mortgage rates so low, it’s a great time to think about buying a home, and at Zippy, we love the opportunity to help everyday Australians reach their dream of owning property. 

But we’re finding a recurring theme with the first home buyers who are coming to us right now – and it’s holding them back from getting started. 

Taking Your First Step on the Property Ladder 

It reminds me a little of leaving school. For some people, the path after high school leads to university. And sometimes, people can have an expectation that they’ll graduate, swiftly land an executive job and start earning six figures from day one. 

The reality isn’t quite like that. You have to start somewhere. Usually, you start in a junior role, learn about the industry and work your way up. Then, as your knowledge and experience grow, your climb your way up the career ladder.  

Some people may be able to skip some steps and take a different path. But for the majority of us, this is the recipe to career success: hard work, grit, determination, and time.  

The same philosophy applies to buying a home. Unless you have a hefty inheritance or financial gift to give you a leg up, saving a deposit to buy a home in a city like Sydney or Melbourne isn’t going to be easy. This leads me to the dream home myth that’s holding people back… 

The Dream Home Myth 

Just as you don’t step out of university and into a high-paying executive job, it’s unlikely you’ll be able to step from your rental home into your ideal dream home.  

And if you hold on to the idea that your first home should be your dream home, you might delay your ability to buy a home by months, years… or even indefinitely.  

Here’s the truth: for many first home buyers, your first home won’t be anywhere near your dream home. And that’s okay. In fact, that’s really normal.  

You may not be able to buy in your ideal area, with your ideal number of bedrooms and with the kitchen you’ve been building in your mind for the past decade. 

But you will be able to take your first step on the property ladder – and that is going to lead you towards your ultimate goal. 

Getting Realistic about Your Next Step 

We’re getting a lot of enquiries from first home buyers at the moment and their wish list is not easy to achieve. They want to live…

Often, these homes have a price point of $1.5 -2m (or even higher), which means these first homebuyers are toiling year after year to save a deposit. It’s disheartening and heartbreaking, and it’s understandable why so many people feel that buying a home is never going to happen for them.  

But, there is an alternative.  

If you can adjust your thinking and get realistic about what’s possible, you could find yourself owning a home sooner than later. 

It’s about adjusting expectations: to get your first house, you start small, in an area that you can afford. It might mean you buy a house in a different suburb for $750,000, then wait until that grows in value and leverage into something closer to the city. 

You don’t have to live in it – you might decide to rentvest instead, where you continue renting in your desired suburb, but buy a home where you can afford it. Want to learn more about rentvesting and how it could help you get onto the property ladder? Read our article ‘The risks and rewards of rentvesting.’

After 2 or 3 years, you buy a townhouse, a little closer to town. Before long, you work your way up to a freestanding house in your ideal suburb. 

The sooner you get started in the property market, the sooner you can get on the path towards owning your dream home, on the beach, with a brand new kitchen and a pool. And it all starts with letting go of the myth that your first step on the property ladder needs to be your dream home. 

If you’d like to find out more about getting started in the property market, get in touch with Zippy Financial today. Buying your first home is an exciting time but it can also be stressful. It is not uncommon to feel a little overwhelmed by the whole process, but with us on your side we can make buying your home much, much easier.  

Phone: 1300 855 022             
Email: clientservices@zippyfinancial.com.au


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business. 

About the Author:  

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.  

Connect with Louisa on Linkedin

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025). 

Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 

What is the Family Home Guarantee?

The Family Home Guarantee is an Australian Government initiative that aims to support eligible single parents with dependants in purchasing a family home.

From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years to eligible single parents with dependants, subject to their ability to service a loan.

The Family Home Guarantee can be used to build a new home or purchase an existing home with a deposit of as little as 2 per cent, regardless of whether that single parent is a first home buyer or a previous owner-occupier. Investment properties are not supported by the Family Home Guarantee.

How does the Family Home Guarantee Work?

Eligible single parents with dependants looking to build a new home or purchase an existing home are able to apply for a loan to purchase an eligible property through a participating lender.

The Family Home Guarantee program is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.

NHFIC guarantees to a participating lender up to 18 per cent of the value of the property, provided the borrower has a minimum 2 per cent deposit, and is eligible for the program.

This will enable single parents with dependants to enter, or re-enter, the housing market sooner.

What Types of Properties are Eligible?

For a property to be eligible under the Family Home Guarantee, it must be a residential property – this term has a particular meaning under the program and is consistent with the First Home Loan Deposit Scheme.

Eligible residential properties generally include:

Who is Eligible for the Family Home Guarantee?

The eligibility criteria must be satisfied at the time the loan agreement is entered into. More information on eligibility criteria for the Family Home Guarantee will be outlined in forthcoming amendments to the National Housing Finance and Investment Corporation Investment Mandate Direction 2018.

What Property Price Thresholds Apply for the Family Home Guarantee?

The property price thresholds for the Family Home Guarantee will be the same as those applying to the First Home Loan Deposit Scheme.

The capital city price thresholds apply to regional centres with a population over 250,000 (Newcastle & Lake Macquarie, Illawarra (Wollongong), Geelong, Gold Coast and Sunshine Coast), recognising that dwellings in regional centres can be more expensive than other regional areas.

For the territories of Jervis Bay Territory, Norfolk Island, Christmas Island and the Cocos (Keeling) Islands, the relevant price cap is the same as the rest of state cap that applies in the closest State – New South Wales (for Jervis Bay Territory and Norfolk Island) and Western Australia (for Christmas Island and the Cocos (Keeling) Islands).

How to Apply?

Eligible single parents will be able to apply for the Family Home Guarantee through a FHLDS participating lender.

There are no costs or repayments associated with the guarantee. However, eligible single parents are responsible for meeting all costs and repayments for the home loan associated with the guarantee.

NHFIC will not accept applications directly and does not maintain a waiting list for places, including for the additional guarantees to be made available.

Date of issue: May 2021

Source: Australian Government

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