Learn how to sell a renovated property in Australia. Advertising costs often exceed $10,000 in major cities. Hold 2-3 open inspections weekly, price based on comparable sales, and secure deposit release before settlement to protect your profit.
Chapters
In most capital cities in Australia, the owner pays for the advertising in addition to the agent's commission. You will decide the scope and the cost of the advertising in consultation with your agent. There will be decisions to be made on brochures, magazine and newspaper advertisements, online advertising, flyers and promotion on their website. Now this is usually free, but some agents have started charging for it on a high end structural renovation. In a capital city, it's not unheard of for the advertising costs to exceed $10,000. That's in addition to the real estate agent's commission and any campaign costs such as getting a stylist. Like the campaign type, advertising is a matter of getting advice as to what works in your area. The uses of property videos and individual property websites such as MyHome.com are becoming common throughout Australia and can be arranged through an increased number of agents. There are also some great examples of social media being used to sell a property. Remember though, a property is on the market for typically six weeks, setting up and more importantly, getting followers and driving traffic to that account for just six weeks is lots of work. So if this is something you're interested in, be prepared for lots of work. Otherwise, use a professional and capitalise on their skills. In addition to the real estate agency's marketing, it's also possible to conduct private marketing. Some savvy professional renovators are doing things such as property websites with videos, property Facebook pages, online advertising such as Google AdWords. There are also online service providers available that can build an entire social media campaign around selling your property. For a demonstration of these services, see the bonus section. Another good idea is to place feature lists in each of the rooms. These can be as simple as a laminated piece of paper describing the features of that particular room. Now these features could include the brand names of the appliances, the type of bench top warranty information, the air conditioning description, even data cabling is available. These are just short descriptions designed to make visitors aware of things that they might have otherwise missed. At the start of the real estate campaign, put in place a schedule of communication with your agent. This may be as simple as a once a week catch up and phone call at a set time the morning after each open for inspection. As with any relationship, it's important to keep the lines of communication open and be sure to flag any concerns as they arise. And do that early during the campaign. Your property is likely to have two to three open for inspections per week, plus random private inspections conducted by the real estate agent. It's very important that the property is available to be inspected and presented in the best possible light at all times. Prior to letting anyone in the front door, it's your job to make sure all of the lights are on and the doors and windows are open where appropriate. Floors, walls and windows are clean. Bench top appliances and splashbacks are clean and free from fingerprints. The property smells nice. Consider having something baking in the oven such as cookies or a cinnamon loaf. If it's cold weather, make sure that the inside of the house is cozy warm with open fireplaces going. If it's hot weather, cool the property down prior to the inspection taking place. Even if you choose to have the external doors open in the living areas, this will still prevent the house from heating up excessively over the short period of the inspection. Prior to even purchasing the property as a result of your due diligence, you should already have your sale price in mind. If you have successfully stuck to your budget, then this will presumably become your reserve. It is sometimes tempting when looking at the finished house to consider asking more than the price that you originally arrived at through looking at comparable sales. Think very carefully before doing this. It is far easier to generate interest and create competition if your property is priced to sell in and around other properties on the market. Buyers can make a direct comparison and hopefully conclude that yours is is a superior product. Selling at the top of the market or trying to set a record price in your street will narrow down your amount of buyers considerably and you risk ending up with an expensive campaign that is dead in the water and an unsold property. This is also where you need to have an exit strategy in place. Sometimes good offers come in early, which is why we discussed earlier it is crucial to have your paperwork ready to early offers can create a dilemma, particularly before you've gathered the much needed buyer feedback which only comes through a couple of weeks of the campaign. Accepting early offers comes down to the individual circumstances and personal risk profile that is Sometimes a bird in the hand is definitely worth considering. Most real estate agencies have a system in place for notifying all the other would be buyers that the property has an offer on the table. Disclosure of the amount of the offer to the other buyers differs from agency to agency. As part of the terms of the sale, I always try and secure the deposit release prior to settlement. This is like the valuation and potential equity release and is done primarily for the benefit of cash flow and perhaps even covering some of those invoices. It's important to go through the numbers of the project with your accountant at the earliest opportunity. Don't go rushing off and splurging your profit on holidays, etc. Only to find out that your profit after tax wasn't quite as much as you thought it would be. Consider delaying that holiday or new car deciding instead to lay a foundation for future projects by holding onto the capital you've made particularly early on. This allows you to build up working capital which when used for instance in the form of a line of credit, can mean avoiding having to go to the bank with hat in hand. For every single project in this module, we've looked at how to gain access to the equity your renovation has created and worked out how many properties you need to create the end equity position you really want, how to then leverage that equity to build real long term wealth and how to protect that wealth, and how to select the right property manager or real estate agent to market your property. In the next module, which is our last module, together we'll be bringing it all together. We'll be putting in place measures for reviewing the success of our renovation, looking at what went right, but more importantly what we could have done better, streamlining the processes and techniques that will make us even better renovators the next time round.
