Selling a property, whether a new apartment in a recently completed development or a historical home that has passed its former glory, requires attention to a few key features to maximise the potential for the best price possible.
In a market which has an abundance of buyers and a shortage of available properties for sale, prices are usually higher with buyers competing for the opportunity to purchase. In this instance the seller needs to present the property in its best light to take advantage of the competition and achieve a maximum sale price. Conversely, in a market which has an over-supply of properties, it is essential to make the property stand out in the first instance or take the chance of being disregarded by a potential new owner and never reconsidered.
There are a number of simple strategies which can be used in all cases to give your property the greatest chance of selling. These are equally important for investors who are focused on “flipping” property, by purchasing, making minor changes and reselling in a short timeframe for a profit.
Initially, consider the need for minor renovations or cosmetic updates. Your due diligence process and market intelligence should allow you to approximate the improved value potential with some changes. If the renovations were to cost $100,000 but the increased sale value would only improve by $150,000, it wouldn’t be prudent to undertake them, unless speed of sale is of higher importance. As a general rule of thumb, we want the value to increase by twice the cost for a renovation. Making those substantial renovations may bring the property to the notice of the ideal buyer. If securing an additional, presumably more advantageous, opportunity is contingent on the swift sale of an existing property to free capital, renovations may need to be completed within a short time-frame to have the greatest likelihood of a quick turnaround. In this instance, it may be viable to make some improvements without the desired return on investment. Improvements which make the property saleable as well need to be considered, painting walls, landscaping and styling could be examples of these costs that need to be incurred and without these, the property would not sell.
Smaller updates, however, can be inexpensive, but add significant market value. An outdated kitchen can be refreshed at a small cost by painting the cupboard doors, swapping the handles for more modern ones or even replacing damaged benchtops with cost-effective “off-the-shelf” ones or resurfacing an existing one. A chipped bathtub can be freshened with a professional re-coat and the same updating as the kitchen. Sometimes a professional clean will result in a sparkle throughout the home and sometimes it may be worthwhile to repaint. Either way, ensure the entry and front door are immaculate. If there is chipped paint on the stairs and handrails leading into the property, or the door is faded and shabby, it plants the idea in the buyer’s mind that the property may not have been maintained and there might be hidden issues of disrepair. A stunning entry has the buyer thinking that this property has been loved and will be a valuable purchase.
Floor coverings should not be overlooked either. Scuffed, worn or faded carpets can give the appearance of lack of care so investigate whether changes may be worthwhile. The outside of the home is important as well. The exterior walls are on display long before the buyer ever steps onto the property. If they are unappealing when the purchaser drives past, the property might be removed from the list even before inspection. Many homes have remote control garages, with internal access, meaning that home owners, especially those who work long hours, leaving for work before dawn and arriving home after dark, never “see” the front of their home. As part of the sale preparation process, step out the front and view the property as a potential buyer would see it.
The gardens and lawns should be considered as well. A small investment in a quick burst fertiliser can bring some life into a tired lawn. Freshen patches of sparse or “dead” lawn with an over-sow of seeds if time permits or some purchased lawn. Gardens need to be free from weeds and any dead plants should be replaced with live ones. Not only is your garden going to be viewed by potential buyers driving around the area, it is also going to appear in marketing so a great first impression can help.
Styling a property can be a great investment. Buyers often buy on emotion. The addition of furnishings which appeal to a broader spectrum, or accessories which add a burst of colour, can bring in additional competition which can strive to increase the eventual sale price. An empty house can appear bereft and unloved, but well-placed furniture can bring it to life and allow anyone viewing it to better imagine their own possessions in there. If a buyer can “move in” in their mind, they are one step closer to making an offer.
The advertising and marketing should not be overlooked. Irrespective of whether the market is slow or competitive, the buyers need to know your home is for sale. A combination of traditional print media and contemporary digital marketing is ideal. It is not until after the sale that you will know where your eventual buyer came from. If you decide not to place an ad in the local newspaper, but that is where the buyer who would pay the most for your property is looking, then you could miss that person, meaning you also miss the best price. Similarly, if you decide not to have a signboard, but the ideal buyer for your property is driving around the neighbourhood that they want to move to, they will not know that your property is available.
Marketing costs can be prohibitive, but do consider the advantages of a strong marketing campaign. Not only does it find the eventual buyer for your property, every potential buyer for it is also uncovered. By having a higher number of interested parties, you give yourself the best chance of receiving the premium price through competition.
One final consideration is the choice of salesperson. Many sellers, including developers and investors, opt to sell the property themselves in an effort to “save on commission”. This can be to the detriment of an optimum sale. Unless you are absolutely certain of your ability to negotiate, without letting the emotion of selling impede, it would be wise to enlist the services of a professional and experienced sales agent. Not influenced by a direct connection to the property, not to the financial effect of its successful sale or failure to sell, a valuable agent will be able to negotiate an additional amount greater than their commission, meaning more in the seller’s pocket at the conclusion.
There are always exceptions to every circumstance. A property can certainly sell, even if it is in apparent disrepair, is vacant or not styled and has minimal advertising, but the addition of these processes usually gives a greater chance of achieving a much higher price. Similarly, there will be times that it will make no difference whether the owner sells or employs a sales agent. Generally though, a premium price will be higher than the combined “costs” of minor renovations, styling and marketing, as well as utilising the services, local market knowledge, access to a pool of buyers and negotiating skills of a professional real estate agent, making all of these important factors.