Should you renovate before you sell?

Morning everyone. Hope you're well. We're just driving to Brisbane because we got a high res food camp this weekend. So tomorrow and Sunday in Melbourne and passing Aussie world there which is on the freeway at Sunshine Coast. So today I'm going to talk about.

Whether you should fix the property up and.

Or renovate it before you put it to the market. And the.

Simplest of answers to that is yes you should. And there's a number of factors of why you should. So you'll have to excuse the noise and the rattling. I'm actually in the, in the what we call the limousine which is a veto van. That's that we just have at home to do odd jobs and pickups and stuff. So it rattles in the back.

The thing with selling a proper there's a number of factors that will affect the sale of a property and the first factor is going to be your agent and how good or bad your agent is. And if you pick an agent that is not good, they're going to probably put an overprice to try and get your business and then they'll start conditioning you straight away. Conditioning is where they start feeding you negative information and no positive information whatsoever straight after the first inspection and or as soon as they've actually as soon as you've signed the contract, which is very typical of a lot of them. I'm not saying all of them. In which case you've got to choose your agent very carefully. So to choose your agent you simply. There's a number of actual rating sites nowadays. Again with any site that has reviews or ratings you've got to be wary of whether that's been put together in a way to make the agent look good by people around them. And however there's quite a few of them. The other way that you can check how good your agent is is have a look for the style of.

Hey guys, have a look at the style of property that you're selling to the market and then go to the sold section of realestate.com or domain and have a look at the exact same product. So if it's a 4 bedroom 2 bathroom in your suburb, look up just 4 bedroom 2 bathroom sales in your suburb and have a look at the. Hey Tim, have a look the.

Properties that have sold in that area and who is the agent that sells the most of them for the most price. Okay. Not who sells the most at a really low and average price. So you want to see. And this will take you to. Maybe you want to do it an Excel Spreadsheet maybe you just want to do it in a simple paper version so that you can actually look over it. And then that way you'll actually start to pick the better agents in the area. Now, an agent works with confidence. Like any job and any process, your confidence is the most important part of being able to do your job. So if an agent is selling really well and is confident on how they're doing stuff, they're going to be in their last four or five sales going to be really happy about how they do. So you always want to look at the last, the most, the most popular at the highest price with what are their last few sales. Because you want to know what's on their books, what other competition you've got with that agent in its own franchise. And then make sure that's right. Now that's the first thing. Make sure you pick the agent. Because if the property is not selling, it's usually because that can be one of the conditions it's not selling for because it's the agent. The second can be the market. And so the market.

And the market might be an issue that looks at, you know, it's just not a sale. It's not salable simply because no one's buying or because everyone's got their property and hits it at the market at the same time. You know, everyone talks about that September period is the best time to sell in the spring period. Well, it might be for horses, but it's not so much for property anymore. Although it does have a peak and trough. But I think that's simply because people put their property on the market. There's expectation that people are looking at that time and they do look at that time. So the market's the other thing. The third thing can be the condition of the property. The property itself can be the reason it doesn't sell. Now, I'll talk for the rest of this around whether it's not selling or whether you're going to put it to the market anyway. Out of those three things, the only thing that's going to help you sell a property is price. So if you can't fix any of those factors, price is the determining factor of whether you can sell your property. Because if you drop your price enough, it will get to a point where the property will sell. So there's definitely no issue with any property selling it as long as you drop your price enough. And that's where people normally get their bargains. When we teach students, it's around teaching them how to find the deal and Find one that's been on the market for a long time. There's actually a website that's called. I think it's. I think it's called over90days.com or something like that, where they. They only list properties that have been on the market for 90 days or longer. Maybe Tim will know the property, the website I'm talking about. So that's one thing. Let's talk about whether you should fix up the place or renovate it before you sell it to the market. Every. Not every, sorry. I say a lot of real estate agents will sell, say to you, don't worry about it. Let's just put it on the market. And the reason an agent wants to say that is for a number of reasons. And they'll say, don't worry about it because the people that are going to come in are going to renovate it anyway. Well, I don't agree with that because there are some people that will come in to renovate it, but there's money in renovation. So do you really want to have the person buying your property being the one that's trying to screw you down? Because they're going to renovate the house so that they can sell it six weeks to eight weeks later? Probably not. It's only a small market, so don't worry about it. The agent will also say, don't worry about renovating it because people will come in and do it to their own tastes and they will be able to see what the market looks, what the property will look like fixed up anyway, and it won't affect your price too much. Bullshit radar needs to go up straight there and then. Because the fact is that 90% of people cannot visualize an end product. So they will be completely stuck on the fact that they're looking at this drippy, drabby place that' quite not right. And it's not as shiny as they'd like it to be. So they would be emotionally wanting to purchase it. So the thing with a property is that you want to. You want to emotionally attach the buyer to your property, and that is whether it's through the front. So, you know, street appeal is a big thing. So can you. Can you make the street appeal just buzz and make and look really fantastic, or can you make the front just look tidy so that when they get in through the front door, that.

When they get through the front door, they look down the hallway. Thanks, Sarah. And they look straight down and go, wow, I can't believe it. Now, Christine and I were still our specialists in Creating that well wow. I can't believe it. That's amazing. It's not what I was expecting. Style factor. And the way we used to do that is we would buy average style houses and we would keep the front, you know, just up, update the front, paint it floor sanded and then we would put an extension on the back and we would have a clear delineation between the old house and the new. So people could walk through and go this is nice and comfortable. Get to the back section of the house. Full open Plan living big 6 meter wide doors, 3 meter high, BI fold so you can completely open it up to the outside and people. I would actually stand in the spot so that when people walk down the hallway and they got to the back room I could see their eyes light up. And you knew you had them then, right? So I had a neighbour years ago who, who said to me, you know, you would never try and sell a car that's not finished or done up and expect to get the same value, less the cost to do it up. Okay, so people that go out and buy cars and do them up to make money, those ones, you know, the choppers that make money out of it all, they go out looking for bargains that are sitting in someone's shed that was someone's dream that never quite got finished. So when you're looking at property, it's actually almost similar. People are looking for property that have started the renovation and haven't completed it because they know they're going to pay way under market value. I mean banks are typical of this. Banks are banks. If you go in to get a bank to value your property halfway through a renovation they will discount, discount it. The valuer will discount it enormously. And so that's a clear indication that the valuers know that if you had to sell that property it would be far, far lower than something that was fixed up. And we got Christine and Rebecca in the car and Rebecca well, you know, decluttering people, there's people that go in and just declutter houses. So back in my day as a handyman when I was working, I was working as a handyman for about six months around Kings Cross Point Piper Elizabeth Bay, that high end area of Sydney, Rush Cutters Bay through to Rose Bay. And we had a real estate agent that would have rental properties and they were going to put it to market to sell and they'd call us in and we would go in, we would look at all the walls and we'd go, well that wall's got Scuff marks or whatever. And we'd simply from one corner of the room to the other corner of the room and leave the rest of the walls if they were still okay. Then we'd look at some the floors and if they, if there was tiles and it made the grout needed cleaning up, we'd get a hydrochloric mix. We'd simply just pour it on, weaken the hydrochloric acid, pour it on, let it bubble, fizz away, clean it off, and then do a sugar soap over the top of that. And that would make the floor really pop up and make and look clean and new. The same with tiles in the bathroom where we would sometimes scrape out the grout and that was enough to actually get the grime off the ground. Or we would have to scrape the grout out completely and reground. We would look at ceilings and sometimes with ceilings and walls, you just need to wash them down with.

Morning cake. You'd only just have. We'd only have to wash them down with sugar soap. So that's, you know, really cheap cleaner that you buy from Bunnings, that you just mix it into water. And then we would look at other things. So we'd walk out the back and have a look at deck. And if the deck had rotten boards and stuff, sometimes we would suggest to them, maybe we need to pull this deck up and put it down, put a new one down. Or maybe we need to just give it a quick sand and put a stain over the top of it or put a new oil over the top of it. And when you, when we just step through the house, we would normally spend back in the day, no more than four or five thousand dollars is what we would spend on behalf of the client. And we would then go to a point where the realization you, you can never tell what the realization is. What you can tell is how quickly they sell.

However, we've worked a couple of deals. We had a client a few years ago where the agent said exactly that. Don't worry about renovating, don't worry about doing anything. It was probably a 1980s house and it had the older carpet and it had older furniture in it. And they said, look, you'll probably get. I can't remember at the time, it might be 720,000 or something like that. So our clients went in, our students went in and did a renovation on it. They spent $30,000, so owed them, technically the 720 they would have sold. And the 750, they end up selling that for 805 or something. So they made a good amount of money simply by renovating the property and bringing it up to the next standard. So when you're, when you're trying to sell a property, you're not trying to sell it. If you're trying to sell it to the top of the suburb area, you're going to, it's going to limit your amount of buyers. The maximum amount of buyers are actually in the, in the middle to top of the middle. So not the top middle to the top of the middle quadrant. So the old bell curve, if you look at the bell curve, you're trying to hit the majority of people in the bell curve to sell to. So don't you know, you can still sell to the higher market, except that, you know, if you're going to present to the higher market only, you're going to have fewer buyers in that suburb. So should you renovate? Yes. A cosmetic renovation will do wonders for your property. Now, how much should a cosmetic renovation cost you? We normally work on somewhere around the 5 to 9% of the property value is how much you should be spending on a cosmetic renovation. So that is, I go in and say it's a $400,000 house, you shouldn't be spending more than 20 to 30k roughly is what I wouldn't be, what I would be spending now for five or six thousand dollars. You can do amazing stuff with properties. Just the outside. There's a house, there are house cleaners. So actually external home cleane that will come in and pressure wash all the concrete around your house. They'll do all the walls, they'll do the roof, they'll do the gutters. Sometimes you don't even need to. And sometimes you can repaint the roof. If you're going to repaint the roof, that makes an amazing outcome. Sometimes you just need to spray it down and clean it. So when it comes to the roofs themselves.

A typical design feature is if you want something to stick out, or more important, if you want something to disappear, appear, you paint it a dark color, a black color or something similar and that, that will make it disappear. So a driveway that you don't want to be seen or a roof, you simply paint them black. We do this a lot in the houseboats that we build. Wherever we've got beams and cross braces or whatever that we don't want to see, we simply just paint them black and they disappear into the background. So the, the answer to my question is should you renovate or tidy up? Yes. Should you bring, just bring a declutter. Yes. Should you style the property? Yes, obviously, if it's regional, maybe not. But if you. Again, for the spend of some of the, Of a styler coming in, it's probably. When I say staging and styling, it's probably a subject for another day. I might do it in the next few days and talk about why it makes a difference and how it makes a difference for you. So any questions? You know, this is now, where are we Friday morning. And hopefully you're not watching this tomorrow, thinking that I'm speaking live. But any questions, any questions that you have while I'm talking, just make the comment because that means that I can reply to you down the track today, next day, next week, next two weeks, if you, if you're listening to it. All right, so moral of the story is make sure you do sell. And this is, this is brought to you by my best man who is currently.

In Sydney with a nice property and looking at selling it. And he's doing a really great job of cleaning and tidying the place up. So, yes, keep going. Chris did a good job. See ya.