If you’re planning to sell up you’re going to want the best price for your property.
So how do you go about getting the best price possible when it comes time to sell your home or investment property?
That is, one that will attract buyers and give you the return you seek.
Part of the answer lies in informing yourself about what the market is prepared to pay remembering that more often than not your view and the market’s view on price can be quite different.
And let’s not forget that as most purchasers will need a mortgage what their lender, or more correctly their lender’s valuer thinks the property is worth becomes central to getting the price you want.
Where to begin
It’s important therefore to gauge how reasonable your asking price is by getting your price expectations verified, or if you’re not sure, getting help to set the price.
This is where engaging a reputable selling agent can pay considerable dividends as they can provide valuable and usually free reports on your property, drawing on their local knowledge and recent completed sales data in your area.
In fact most selling agents can prepare comprehensive reports that include things like suburb demographics which provide useful insights for price setting and your marketing and sales strategies.
It’s important to remember though, the selling agent’s price estimate is not a valuation but more of a price guide.
However, if the estimate is way below what you want, this indicates a problem and you may have to reassess your expectations.
The upside though is that you can discuss any differences with your agent and work out what can be done to add value and improve your property’s appeal.
You could of course pay for your own independent valuation which would give you that extra bit of comfort, but there would be a cost in doing so, and you must ensure you ask for one that could be used for mortgage purposes so your valuer is thinking like the lender’s valuer.
Whichever approach you adopt if there’s a match between the independent assessment of your property’s market value and what you’re after than all well and good.
Otherwise, you’ll have to start working on adding value as quickly and cheaply as possible to bridge the gap.
Things you can’t fix
Unfortunately there will be some things you won’t be able to fix when it comes to improving your property’s value.
And chief among these is its location.
You could have a fantastic property with all the mod-cons but there may be something about its position that makes it undesirable to buyers.
For instance, it might be next to an industrial park, a busy road or a power sub-station, or there could be other things that may turn-off potential purchasers.
Another location problem is lack of proximity to shops, schools and public transport.
If these are desirable to your target buyer market than you may not be able to generate the interest needed to get the price you want.
A further issue is the size, shape and slope of the land.
If it has an unusual shape, has drainage problems or limits the ability to extend or improve the property (for instance as a result of Council restrictions) than buyers may perceive these as major limitations to the property’s development potential and hence their ability to make changes to meet their personal and lifestyle needs.
And this will have a big impact on what buyers would be prepared to pay.
It’s important to identify and work out all those aspects of your property that take away value and cannot be remedied easily or cost-effectively, so you can focus on marketing your property’s positive attributes and directing your attention and energies to highlighting the good points and making them even more appealing.
Things you can fix
You can create a great deal of value out of small and relatively inexpensive renovations or upgrades to your property.
Feedback from your selling agent and/or valuer will give you useful insights into the areas you need to focus on.
Typically this will be the bathroom, kitchen, floor coverings, garden and general decoration.
It’s also a good idea to sort out those small but annoying maintenance items like leaking taps, broken roof tiles and apply a lick of paint where it’s needed.
Sometimes a major renovation may be required, like a new kitchen, adding a second bathroom or a major garden overhaul.
Just be careful not to overcapitalise and be sure any work done is consistent with the period, style and decoration of your property and the neighbourhood.
As a rule of thumb aim for a $5 return for every $2 you spend.
To put this into perspective, if you spent $25,000 on renovations you’d want your property to go up in value by around $62,500.
If you could generate a return above this level that would be a real bonus.
You can use this measure to determine whether it is worth spending the time, effort and money fixing up your property, or whether it’s better to accept a lower price and let someone else take on any property upgrades.
This is a bit of judgement call and really depends on how confident you and your agent are that the planned renovation and maintenance work will deliver the increase in market value you seek.