What NOT to fix when selling a house in Sydney and NSW

Study the Local Property Market

Understanding the Local Property Market

The current real estate market in Sydney & NSW can greatly impact what repairs and renovations you should make to your property. The real estate market is constantly evolving. It's important to keep up with the latest trends and buyer preferences. Researching and understanding local trends can help you make informed decisions about what home improvements add the most value to your property.

For example, suppose there is an increase in demand for energy-efficient homes. In that case, investing in upgrades such as insulation or installing a solar panel system may be worth it. On the other hand, if there's a minimalist trend, then it may be best to keep your renovation efforts simple and understated.

Your target audience

Understanding the target audience

The target market for your property is another important factor to consider. Who are you selling to?

• First-time homebuyers?
• Families?
• Retirees?

Knowing the target market can help you make informed decisions about upgrades.

For example, if you're selling to families with a high bedroom count, adding an extra bathroom or creating a more open floor plan may add value to your property. Alternatively, adding features such as grab bars or a walk-in bathtub may be more appealing if you're selling to retirees. These are very situational examples, though, and you’ll probably already know what applies to you if you’ve already felt you’ve been doing without when living in the property.

A step into the buyers' shoes

It’s important to step outside your shoes as you may be used to dealing without having a certain feature, and it doesn’t bother you like it may have at some point. Imagine what it’d be like walking into your property for the first time. Remember that buyers have no emotional investment in your property. They think logically so it’s important to try to cater to those thoughts.

Minor vs Major Renovations

Minor repairs vs Major renovations when preparing house for sale

Let's talk about the difference between minor repairs and major renovations. When it comes to fixing up your property, choosing the right repair or renovation is important. Minor repairs, such as cosmetic updates, can add value to your property without breaking the bank.

For example:

• Repainting the walls
• Replacing outdated light fixtures
• Updating your kitchen handles and backsplash

These can all be simple and cost-effective ways to add value to your property. On the other hand, major renovations, such as installing a brand-new kitchen or bathroom, can be costly. As a result, they may or may not add much value depending on your property or price point.

Cost-to-benefit ratio

It's important to consider the cost-to-benefit of these types of renovations and ensure they align with the market conditions, target audience, and overall area value.

An example would be if you’re selling a property in a very affordable area, spending big may do more harm than good to your pocket. On the contrary, you may have a property that your audience feels is in dire need of renovation. Doing nothing in this case could make or break the sale. It’s all situational.

What NOT to fix when selling

What not to fix when selling a house

So, what not to fix when selling a house? Well, avoiding making common mistakes when fixing up your property is essential.

These are just a few examples of what not to do:

• Over-renovating
• Installing outdated fixtures
• Upgrading parts of the house but neglecting basic maintenance

These mistakes can actually lower the value of your property and make it harder to sell. A few examples of over-renovating include:

• Spending big on custom-sized and style tiles made from expensive materials
• Fully renovating a property that may be better advertised as a knockdown-rebuild or development site
• Fully renovating a property in a highly affordable suburb.

In these situations, renovating simply to sell can often lead to diminishing returns, may not net you a return at all, or may even incur a loss.

When this happens, something some vendors experience is they find they end up chasing a particular price in their mind that makes up for their investment. This is what we mean when we talk about hurting the sale. We may never be able to agree to meet the market.

What TO fix when selling a house

What to fix when selling a house

So, what should you focus on when selling a house? Some home improvements are key that will almost always be applicable and add value.

These are all things that can make a big difference when it comes to selling your property:

• Minor cosmetic updates
• Cleaning and decluttering
• Basic maintenance

For example, replacing your front door, installing new windows, or planting fresh flowers in your front yard are all small home improvements that can add value and make it more attractive. On the maintenance side, repairing things like chipped windowsills, worn brickwork or steps, maintaining the garden, or even relaying worn sections of the lawn will go a long way.

What's your property's style?

Another important factor to consider is your property's overall style and aesthetic. When selling a house, it's important to create a cohesive, attractive look that appeals to potential buyers. This can be achieved through simple updates such as repainting walls to modern neutral colours or more involved renovations such as creating an open floor plan or updating your kitchen. It's important to consider your home's overall style and your target market's preferences when making these decisions.

Buyer objections

Buyer Objection

All the changes we’ve mentioned can increase the value of your property and make it more appealing by removing or reducing what we call “buyer objections”. How do these objections work in practice?

Well, the extreme end of the scale is where a buyer may simply decide the property is not for them. On the more common end, many purchasers see an area for improvement that could be accomplished for a few hundred dollars and a bit of elbow grease but then attempt to negotiate tens of thousands of dollars based on it. We must tackle as many friction points as possible before they arise.

Energy efficient improvements

Energy-efficient improvements

Home improvements that add the most value in Australia are often related to energy efficiency and sustainability. Features such as solar panels, insulation, and water-saving fixtures can reduce your home's carbon footprint and increase its value. Lower running costs are a win all around.

CommBank covered a recent global study revealing that energy-efficient upgrades are an important purchase criterion for 66% of buyers. This study included Sydney, Australia. So, if you're considering renovations, it may be worth investing in sustainable upgrades that benefit the environment and your wallet.

How home improvements add value

How home improvements add value

We’ve spoken a lot about “adding value” to your home, so let’s cover how this works and doesn’t work.

Online valuing system

When we talk about improvements adding value, there isn’t some magical number that increases on an online system that governs a property’s potential selling price.

Not to mention online systems that claim to tell you the property value you’ve no doubt come across, certainly don’t know if you’ve ever renovated or in what way. This is why you’ve probably noticed they’re all different, inaccurate, or how some give you a massive range that doesn’t really tell you a whole lot. On the contrary, agents are legally only allowed to operate within a 10% range for accuracy when giving you an estimate.

Online property value calculator

In addition, and this is the big one, some form of online property value calculator where you can input your improvements doesn’t exist and likely never will. This is purely due to the infinite number of variables. Fun fact, almost 1800 people search google for an online property value calculator every month across Australia and are likely disappointed shortly afterward.

We want to help you understand from now. If this is what you’re hoping to find, unfortunately, you might need to change how you think about property value. Homes are only ever worth what a buyer will pay, and nothing can change this. Certainly not the agent nor a number we hope and dream of achieving. When a property sells, whatever the figure was, that’s what it was worth in that market.

Perceived value

Perceived Value

Lastly, we have our bonus tip. We want to cover possibly the most overlooked and unknown topic of renovation. It’s something known as Perceived Value. Perceived value relates to a renovation or improvement that doesn't always necessarily increase or decrease property value. These are improvements that depend entirely on how much value the buyer perceives them to add.

For example, let’s look at the most controversial feature, the swimming pool.

Swimming pools and Spas

Some vendors are adamant it will add value, while others refuse to install one even on larger properties because they believe it devalues the land.

The truth is they’re both right and wrong at the same time. Installing a swimming pool may not add much value if you sell to:

• A family with young children who are concerned about safety.
• Purchasers who don’t want the added maintenance.

On the other hand, a buyer who entertains often and is the family hub for the year’s holidays may be unable to do without one. In this case, you’ll find that some purchasers may be willing to offer more for a pool, while it may represent lower value to others. Some may not wish to purchase at all. This is extremely common.

Conclusion

Always remember, it's important to understand what home improvements add the most value and what not to fix when selling a house. Researching, understanding the market and considering the preferences of your target audience can all help you make informed decisions and maximize your return on investment.

Remember, simple, cost-effective changes such as minor cosmetic updates and basic maintenance can often make a big difference when selling your property.