“You are going to profit from the wealth of information we are going to share with you in this document.
In our experience, we have learned that the best price comes from the best preparation. As the local area experts, it is our intention to help you maximise your price and to make the sale of your property an enjoyable and rewarding experience.
It’s important that we keep our eyes on the prize. The prize is securing the best possible price for your home. Your profit will be realised when we attract a buyer, who will inspect the home then obtain a building and pest report that will influence the final decision to buy or not.
With this understanding, we have constructed this document in a way that clearly works to our final moment of truth.
So let’s get started with Preparing your home for profit.” – Mike Lao
YOUR HOME IS YOUR GREATEST ASSET
In life and real estate, it is often said that your principal place of residence is possibly your biggest asset. As a passionate industry professional, I find this true for so many people in the community who get the chance to represent.
With this in mind, it is important that as a property owner you do all you can to maintain the property throughout its lifetime to protect and grow your asset, so at the time of eventual sale you receive the best possible cash profit from your investment.
YOUR HOME COULD DELIVER YOU A TAX-FREE WINDFALL
Selling your home is a valuable opportunity for wealth and profit. Unlike other financial investments, your principal place of residence is free from capital gains tax and stamp duty.
Therefore, a chance of a tax-free gain is rare and should be seized with both hands.
SELLING IS A ONE-OFF OPPORTUNITY FOR CASH
Selling your home presents a unique opportunity to make a chunk of money without you having to sweat for it. Typically every dollar your home sells over the perceived market value is worth two dollars of your hard-earned labour.
Secure the dollars you deserve for the property you own. You get only one chance to sell for profit and then the value passes on to the next owner – so make the most of it!
CLEAN AND SPARKLING HOMES SELL WELL
If you do the work for a potential buyer and your property is clean, crisp, complete and:
this could have a significant impact at sale time.
You could earn more than $60,000 to $100,000 over reserve. The magic happens when you take the hard work out of the equation. Everyone is so busy, potential buyers are prepared to pay for somebody else’s sweat and effort. Profit from that.
A HOME THAT DOESN’T REQUIRE WORK IS AN ATTRACTIVE PROSPECT
Maintaining and preparing your home for profit is a successful strategy for everyone involved. Often incoming purchasers are stretched to their limit and would not qualify for a renovation loan.
This is the reason why people will pay more for a finished, neat and well-maintained property.
A bank will loan on a property’s actual current value. A bank does not favour lending on unfinished or damaged properties. However, if the property has a clean bill of health, the new purchaser is effectively getting a renovation loan on a product with no risk. It’s a win, win.
Keep your eye on the prize. You want to create the best possible home to attract the best possible buyer for the best possible price.
When preparing their home for sale, some people redraw on the current loan to complete repairs quickly. Other people take a longer-term approach. We suggest making a list and spending the months ahead of time of a possible sale, project managing the repairs with a slow and steady budget approach.
1. Buy a hard-cover notebook and allow two pages per area and start making the to-do list of repairs
2. Think like a purchaser
The golden rule of thumb is – if something needs to be repaired – fix it! Walkthrough and be picky – try and see what a potential purchaser will see, not what you have overlooked for
years. Make a list of repairs and improvements that need to be made.
Buyers will mentally add up their perceived costs of repairing all those minor flaws and end up with an amount that is generally much higher than your actual costs will be. You may believe
the repairs are insignificant, however, the buyer may question the maintenance and upkeep of the rest of the property. Necessary, noncritical minor repairs and perceived owner neglect will
either lower the price or lengthen the time to sell.
Look at the colour palette that you have used in your home. If you have used striking, bold colours, it might be time to neutralise them. Your objective is to make your home appeal to
the largest possible segment of the market. Ask yourself, “How many prospective buyers would feel able to move into my home with their own furniture and not want to replace the carpet or
repaint the walls?” Position your property on the market to be as liveable to as many people as possible.
The market is always driven by buyer demand and the average buyer will have difficulty looking beyond bright carpeting and/or bold wallpapers.
3. Take photos of the repairs and stick them in your book
Your repair and maintenance book will become your profit bible. Take the book with you to your home improvement store (e.g. Bunnings or Masters) to save time, money and energy.
4. Dedicate four pages to your trades’ service directory
At the back of your notebook, list the contact numbers and details for all the plumbers, plasterers, painters and associated trades you will need.
5. Walk through again
Once you have done the walkthrough, walk through again and see what you may have missed.
6. Type up a to-do list
Look at your book and see what needs to be done and type up your to-do list.
7. Invite all the trades needed to quote on the repairs
Including the materials cost, it’s worth getting everything priced to give you a factual guide to the investment.
8. Repair or outsource
Make a decision on what repairs you can do and what jobs will be outsourced.
Before starting, get on the web and research the latest products that can save you time and money (profit). For example, there is great tile paint for old tiles, amazing products are now available.
10. Look at DIY
Visit Bunnings and investigate what ‘do it yourself’ products are available you. You will be amazed how the renovation systems have improved to ready-to-install kits.
11. Do one room at a time
Start your list by committing to the discipline of doing one room at a time. This avoids turning the house into an unlivable war zone.
12. Declutter, declutter, declutter
As you are working through your rooms, it is imperative you also sort through your stuff. Decluttering a home can also be a life-cleansing process. Box up the valuables and hire a skip for the end of the road items. Be ruthless, space is everything, a home shines when it can actually breathe.
13. Complete general maintenance
Stay on top of your regular home maintenance tasks to avoid costly repairs in the future. Spending time now saves you hassles later. Ensure that minor repairs don’t turn into major expenses.
Make a preemptive strike and pay for a building and pest inspection
These days most people will get a building and pest inspection before they purchase a property. Many owners assume they are only relevant to purchasers who generally have them conducted as part of the pre-exchange process.
However, having your home inspected for structural and termite damage can be highly advantageous.
It gives you control over the selling and negotiation process. If no issues are found, you will have peace of mind knowing the purchaser won¹t be able to use any problems as a means to negotiate the price down. And if an issue is found, you can take action to resolve it before your home is listed for sale.
Forewarned is forearmed
Even though your property may appear to be structurally sound and there is no visible indication that termites, subsidence or mould is present, there could be hidden problems lurking in the foundations, roof, plumbing or walls that only a professional can identify.
Many people are worried that building and pest inspectors may uncover some terrible truths about their property. For many, this concern stops them from having an inspection. But is that logical? If something is wrong with your property wouldn’t it be better to know before you put the house on the market? Being forewarned is forearmed and puts the power in your hands.
Being aware of any issues with your property allows you to take control and have them fixed and doesn’t erode your position when you put your house on the market.
A building and pest inspection report empowers you
While many buyers will still insist on having their own pre-purchase building and pest inspections conducted, showing them the reports you have had prepared shows them you have nothing to hide about the condition of your property and gives them less ammunition to negotiate.
At the end of the day, building and pest inspections aren’t deal breakers. And it’s what we find out right now before the investment of marketing and Inspections and agent’s performance fees that will protect your sale price and final profit. The report will cost less than $1000 yet could be the vital knowledge in a negotiation that saves your sale and protects your profits.
Now what may come back in a report may not be pretty. Please note that a building and pest inspection report and the photos that accompany it are a complete list of defects of the home, and are very different from the feature brochure that we will create as part of your marketing.
Most people are shocked with the report and many misinterpret what has been noted.
Remember that the report has been written by someone who only sees bricks and mortar, whereas you see the home you love. Don’t panic and remember that any prospective purchaser will be reading the same information.
For example – the report may say:
The home is 24 years old and … is in need of new roof tiles.
Roof tiles last approximately 25 years and need replacing on every home of that age. The point to remember here is that all homes at one time or another require maintenance and that this is known as a capital improvement on the property. You would have to make a decision if you think that it is necessary to re-roof for sale.
If you do the report after your initial clean-up and repairs, it will definitely be a negotiation asset. Failing to do a report only plays into the hands of a purchaser as they can note items and defects discovered in a report and attempt to have their repair deducted from the price.
Your agent would release the report prior to the offer and explain clearly that prior to marketing a full inspection was conducted and maintenance performed has been built into the marketing price or price guide.
When it comes time to sell and more importantly negotiate the final profit price for your property, you would have wanted to do all you could to protect your final profit position. When selling real estate the worst feeling is to lose the best buyer who is emotionally engaged with your home on the surface, yet becomes $40,000 cold due to becoming alarmed by normal issues below the surface.
Do’s & don’ts list
Now that you have gained full visibility on the property with the building and pest report you now have a detailed visual checklist and some decisions to make that will form your do and don’t list.
For example, the report may say your roof tiles are up for replacement as the home is 24 years old and … is in need of new roof tiles.
Roof tiles last approximately 25 years and need replacing on every home of that age. The point to remember here is that all homes at one time or another require maintenance and that this is known as a capital improvement on the property, so as your agent we would recommend you don’t replace the roof as you will get the life of the roof. And chances are where ever you buy what may also need a new roof. In short, when selling or buying a property you take it on warts and all.
Once you have completed your property maintenance program it’s a perfect time for us as your agent to reassess the marketplace and the recent sales around you that have affected pricing.
We would go right back through the property and take into account all repairs and improvements and re-establish your new to marketing price. Once your house is looking spit spot, it could be a good time to consider getting the photos done so we can store them for marketing and start to prepare the selling list and best features of your property.
Together as a team we will capture every little delightful detail and list them in our property specification pages of our detailed property booklet.
When it comes time to market a property, there are no shortcuts to a great price.
A lot of preparation has to be undertaken, therefore, to make sure your property hooks and pulls a potential buyer in. When a buyer sees your property online or in person, she or he must
think, “that’s the one”.
Photographs of your property are one of the main ways to draw in a buyer. They matter because they are the first point of contact that a buyer has with your property. Therefore, it is essential that you present your property in the best possible way. Excellent presentation and high-quality photographs seduce a buyer into a home.
Photography and presentation go hand-in-hand. If you’re preparing a property for photos, that’s exactly the way it should appear for each and every open home, for each and every buyer inspection, and throughout the marketing campaign.
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