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This is a sure fire way to cost you money, cause frustration and lead to a thoroughly frustrating experience. For everyone there should be a rational “prepared to sell price” and an emotional “love to get” price. Setting the target for your home is not about what you need, it’s about what the home can reasonably be expected to get in the market. You need research and expertise to price your property. Yes you may love the changes you have made, you may love your home, but YOU are NOT buying it. Even though emotion plays a huge part in the decision to purchase a home, the person you want to be emotional is the buyer not the seller. You want the buyer, to picture themselves in your home, to feel the joy of the life your home could provide. That sort of feeling can lead to an emotional offer because they just “have to have it”. You also need to understand the longer your home sits unsold the more likely people will think there is something wrong with it. Homes on the market for long periods get a “smell”. You will inevitably have to lower the price and in doing so may well find yourself lowering it well below your original “prepared to sell” price”
Oh what a disaster. You sold on the first day of your open home because it was priced $100,000 below where it should have been. Ouch. Again your price has to be based on evidence, not guesswork. An expert agent should be able to provide the evidence you need based on sales data of similar homes. But you should also be across the recent sale prices of homes in your area. Make sure you go to auctions and open homes so you know exactly how the homes were presented and the condition they were in.
This can be a classic mistake. If you are considering a renovation remember you want to appeal to the broadest possible target and spend your money with the overall picture in mind. Lots of people claim kitchens and bathrooms sell homes. The surest way to cost yourself money is to spend $50,000 on a new kitchen in a home that needs money spent just to mend the basics. First make sure the stuff that’s broken is fixed. Then ensure whatever you do is done with the overall package in mind. An award-winning bathroom in a home that’s likely to be knocked down by the new owner is a waste of your money. So too is the kitchen that’s done to your tastes. Getting back even dollar for dollar spent can be a task, let alone making a profit. One of the biggest mistakes I see is people letting emotion get in the way and making personalised improvements that don’t help sell the property. You may think converting the garage into a footy-themed man cave, with bar and pool table is a cracker of an idea but it will just waste your money and make the place harder to sell.
So first you have to understand the type of person most likely to buy your property. That will be determined both by the type of property and the area. So know your potential market. In other words: who will buy this place, what kind of budget will they have and what will be their story within this property? Understand how you are going to give them a glimpse of that story.
If you are thinking of extending, or building a granny flat or doing any other structural renovation ask each agent you are considering what value the change would make. Don’t settle for “Oh I think buyers would like that”. Ask the hard question. You want to know if by spending $20,000 will you get more than that back. If not, don’t do it. However, renovating to make better use of space or to perhaps give you an additional bedroom (say turning a two bedder into a 3) can make you a quid if it’s done simply and cost effectively.
Overcapitalisation is a killer but only if you are making changes when getting ready to sell. If it’s your family home and you are making changes to suit you and your family and you intend to stay there, then you have to consider the intangible value those changes provide. Not everything is about dollars and cents. But renovating to sell is. If you are buying to flip and have to renovate, be very careful not to fall into the trap of falling in love with your own ideas that may cost more money than you will recoup. A clean and tidy home, with good street appeal that is priced right will sell a lot quicker than the place that has been renovated and improved beyond the value of homes in the area.
While you don’t want to open your doors to any and everybody you do need to make things as easy as possible for any genuine potential buyer. Consider having your home open Saturday and Sunday and your agent should have a platform that makes it simple for the buyer to download any document they need and get a quick answer to any genuine question.
Don’t. It’s one thing to accept an offer from a buyer subject to finance but doing it on the basis of waiting for the other person to sell their home can be a disaster. There are just too many things out of your control. If your agent suggests withdrawing the home from the market subject to such an offer then you are with the wrong agent. Yes, you may feel it’s appropriate to tell a potential buyer that you would sell for the figure they have offered but you should precede as if there is no such offer. Keep the home on the market and try to find another buyer. If you are tempted to exchange contracts with an extended settlement period that’s fine but make sure the offer is good enough to make up for the additional mortgage payments you will make while waiting to settle. And obviously never sign a deal that takes your home off the market but allows the purchaser to withdraw on the basis of lack of finance or their home not selling, unless there is a penalty attached. They should forfeit the agreed deposit.