Home buying and selling mistakes that could cost you a fortune
Home buyers and sellers looking to save are racking up huge bills instead with some blunders they could have easily avoided, experts say.
Trying to save a few (thousand) dollars here and there during the buying or selling process is a tempting proposition.
But with much of the property market shifting to more buyer friendly conditions, cutting back and “doing it on the cheap” could be costing both sellers and buyers more in the long run, experts are warning.
They’ve revealed some of the common cost-cutting mistakes for those buying and selling property in the current market:
SELLING OFF MARKET
Selling off market can be a useful strategy when the market is booming and you don’t want to keep your home showroom beautiful for weeks at a time. However, it can also be risky, Jo Lynch from the Jo & Jo Sales Team, LJ Hooker Southern Gold Coast said.
“Selling off market could save you around $4000, but in the long run, it could cost you hundreds of thousands of dollars,” she said. “We had a recent sale in Tugun and our seller asked us to attempt an off market sale initially.”
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After several buyers from their database walked through the property they received an offer for $1.23m.
Lynch and her sales partner Jo Elwin convinced the seller to take the property to market and the home went on to sell for $1.485m just two weeks later.
NOT GETTING YOUR HOME STAGED
Another common mistake sellers make is skimping on staging, Elwin added.
Justine Wilson of Vault Interiors said the benefit of staging starts when the buyer is scrolling on their phone.
“There’s plenty of research that suggests styled properties get more clicks and get more buyers to the actual opens,” Wilson said.
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Once there, buyers are more likely to forge an emotional connection, helping to drum up competition.
Elwin said skimping on staging can cost the seller big time when it comes to turnkey properties.
She recently sold a furnished home that had received offers both before and after partial staging had been done.
“The difference from spending $4000 to do some partial staging from the first offers without it was $50,000-$60,000,” she said.
NOT PAYING FOR PEST AND BUILDING REPORT
Director of Rethink Residential at Rethink Group Mina O’Neill said buyers who cut costs on a Pest and Building report may find themselves hit with unexpected maintenance, repairs or even renovation expenses after purchase. An added benefit of commissioning your own P & B report is that your solicitor may be able to negotiate terms and conditions into the contract to rectify issues raised – or to agree to a reduced purchase price that takes the cost of repairs into account.
“If you buy an older property, don’t underestimate the maintenance that may be involved,” she said. “Always have those buffers there just in case.”
She said while a P & B report costs as much as $600, buyers may face hundreds of thousands of dollars worth of issues if they don’t fork out for a good, reputable and trusted inspector to do the job.
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NOT CHECKING THE STRATA REPORTS
Apartment buyers should never skimp on getting a solicitor to go through the Strata report with a fine tooth comb, O’Neill said. Fees, special levies, and any problems with the building should be looked at as well as how the committee has dealt with previous problems.
She has seen family members lose a huge amount of money through rising levies alone.
“They’ve actually lost a lot of money in the Strata fees because they haven’t checked certain things, like the history of the building, what the defects and structural problems could be,” she said. “Unfortunately those levies have gone higher and higher because they’ve found defects over time.”
She has seen some people go from paying $600 to $2000 then up to $3000 per quarter on Strata fees after being hit with a series of special levies.
“It’s unbelievable how much money you can bleed,” she said.
WAYS TO SAVE WHEN BUYING
Instead of trying to save money on a Pest and Building report, why not use the Pest and Building report to save money over the long run, Mina O’Neill of Rethink Residential said.
Here are three ways to ensure you get the best understanding of the property through a P & B report in order to avoid being hit with unexpected costs after purchase.
1. Use a trusted inspector – O’Neill always uses an inspector that she knows and trusts to do a thorough and detailed job
2. Be thorough – she also asks plenty of questions so she has a solid understanding of the property and all of its issues, including how much it will cost to fix them
3. Negotiate – if you are exchanging contracts, your solicitor may be able to add any defects into the contract that need to be rectified before settlement, or negotiate a lower sales price.
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Originally published as Home buying and selling mistakes that could cost you a fortune
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