10 GOLDEN RULES OF BUYING, RENOVATING AND SELLING
Given that the great Australian dream of home ownership is alive and well, with about 70% of us either owning or paying off a family home, we hope most of you will find an idea or two from the below tips that you can adopt.
We all should start looking at our home as part of a long term strategy to build wealth, particularly since we will not have to pay capital gains tax on it when we sell.
Consider these following golden rules or tips when choosing your next family home.
1. Choose an undervalued area
Our first tip is to look at a map of your city and work out how it is expanding outwards to find the most likely suburbs that will take off next.
Find the areas that have boomed and look for nearby areas which have the same potential but lower prices. Seek out suburbs that have a hub where cafe's anf shops can flourish, have good road and public transport access to the city and also have pleasant amenities or waterfront reserves.
Visit the local council and checl out any positive developments, such as new parks and shopping facilities and improved pedestrian walkways.
2. Choose a property with upgrade potential
Make sure you increase the value by more than the cost of the improvements.
Look for properties where it's easy to add another room, maybe a family room or a bedroom with an ensuite. Secondly, look at soundly built period homes that need updated kitchens, bathrooms, additional storage and more natural light. Finally, where a home is on a large block of land it's always worth investigating with the local council whether the block can be subdivided.
Visit www.renos.com.au for further tips on renovating.
3. Negotiate the right price
The asking price may not always be the highest price a vendor is hoping for, this may be a hook to draw in more offers. Right at the start work out the maximum you will pay for a property and set that in stone. Don't fire your best shot first.
Another thing to watch out for is real estate agents who come on as your new best frined. Remember, they are working for the vendor so always hold your cards close to your chest when you speak to them.
4. Know when it pays to use a buyer's advocate
Buyers Advocates don't sell property, they represent you when:
- Searching for suitable properties
- Negotiating with the real estate agent on price
- Bidding at auctions and organising building inspections
Expect to pay up to 1.50% of the purchase price for their full service. If you see the need for a buyers advocate we have a reputable one to recommend.
5. Select the rooms to focus on
Look at the home through the eyes of potential buyers. Kitchens and bathrooms are genrally a good place to start - they're very important to home buyers. Whatever rooms you choose to focus on, consistency is vital. Make it look like a home - loved and lived in and not renovated just to make a profit.
If you see the need for an Investment Property Designer we have a reputable one to recommend. This business will help increase your net worth and rental yield without you lifting a finger by rejuvenating your rental property.
6. Avoid overcapitalisation
This is when you spend more on the renovations than the value they will add to the property.
Note the price you paid for the property, add the expected total cost of the renovations, add another 5% for landscaping and you have the cost of your house and improvements. Next, look at houses in your street and check newspaper real estate ads featuring nearby homes. If there are no homes valued as high as your improved home, then you are probably overcapitalising.
7. Keep costs down
Establish a budget. Also consider getting an Archicentre Renovation Design Report - it will provide design options and costings to renovate and add value to your property. Reports cost about $1,100 to $2,300 but can be a good way to work out whether renovating is worthwhile.
Be smart about where and how you shop. Look at auctions, discount warehouses and even online on sites such as eBay - you may pick up a few bargains.
8. Consider selling it yourself
Bypassing an agent can save you thousands considering they can charge up to 3% of the sale price.
First, research the market to find out the sale price of similar houses in your area by ordering an independent valuation.
You will then need to decide whether to sell via private treaty or at auction. It's also important to get your contract sorted - we have a reputable solicitor or conveyancer to recommend.
Listing your property on the internet is a must. You cannot advertise on www.realestate.com.au or www.myhome.com.au , however, individuals can advertise on www.domain.com.au and DIY sites such as www.owner.com.au
A For Sale sign is also a good idea as most people will buy within their local area and drive around looking for homes for sale.
It helps to have some marketing material to hand out when people inspect the property.
It helps to be confident and outgoing. If that doesn't sound like you, then an agent might be a better option.
Visit www.owner.com.au for more handy hints on DIY selling.
9. Choose the right agent
Don't choose solely on the agent being the cheapest. Look at structuring the commission so that if the house sells for the price suggested by the agent, they would receive more commission.
Some agents will pass on the full cost of advertising to you while others will absorb some of the costs.
Don't choose the agent who will list the property at the highest price. Ask your friends or neighbours for recommendations.
Choose an agent in your area because they'll have an understanding of the local market.
Ask the agent whether they think the house should be sold at auction or by private treaty, a recommended advertising/marketing campaign and the cost.
10. Add value to your home
- Add vibrant colours
- Replace old linoleum in the bathroom and kitchen
- Resurface old bench tops
- Open up your living room on to your garden
- Install skylights to increase natural daylight
- Install ducted heating/cooling