How to avoid losing money when buying and selling real estate…

For most people buying a home is the biggest purchase you will ever make in your life, by a long way.

Because the average family only moves every 7 years it is hard to become an expert in something you simply don’t do very often, and with the market changing so rapidly the learning curve is steep each time you enter the market. So here are the key tips I have learnt and now share with my family, friends and clients after selling houses every day since 2007.

Before you buy / Finding your dream home:

1. Learn about the market in your area.

Don’t buy the first house you see (or at least look at lots of others before you offer). Look at what else you can buy for your money. Ask agents for recent comparable sales and ask how those sales compare to the property you are considering. Drive past those recent sales and run a google search on those properties because often the professional photos will still be available online after the property has sold (if open2view was used by the owners). Learning the market is the best way to avoid paying too much (or offering too low and missing out).

Check out: 6 tips to help you decide on a price…

2. Don’t offer on the first visit.

You are buying a massive asset. This is not the time to rush into it. Take a night to think about it, have a 2nd look at the property. Drive past it late at night to check out the area. Do you have a family member who could look at it with you? Sometimes a 2nd pair of eyes can be extremely helpful and they will spot things that your emotional connection to the house won’t let you see. Try out the commute during rush hour to see what it will be like. Make a considered decision and you will avoid buyers remorse.

3. Buy for sun.

When friends and family are looking to buy I tell them to focus on buying a sunny home. If a house gets good sun it usually sells quickly and for a good price. Sunny houses are warmer, stay drier and are generally considered nicer to live in. Sometimes it feels like we don’t see the sun that much in Wellington so you might as well make the most of what we do get!

4. Think long term.

If you end up paying a high price for a property you will generally be fine as long as you hold onto it for a while (eg. allow the market time to improve). In other words – you don’t necessarily have to time the market as long as you own your property long enough. If you are thinking you might move overseas or to another City in a year or so then buying may not be the best decision. Selling is expensive and can eat into your equity if you haven’t owned the property for long.

Once you own the property (the bare minimum maintenance plan)

1. Wash your home every year. Stop moss from growing and look after your paint job.

2. Clear the gutters once a year. Blocked and non-performing gutters can be a disaster.

3. Keep trees away from the property. Stop rodents from getting into your roof. Improve the amount of sun you get and protect your gutters and paintwork.

4. Paint the outside if it needs it. Every 7-10 years for plaster homes especially.

5. Have your fireplace checked if you have one to make sure it’s safe to use.

6. Use a Dehumidifier or invest in an HRV system. Keep your home healthy and dry.

There you have it. The lazy man’s guide to home maintenance!

When it’s time to sell

1. Don’t be pressured.

Sell before you need to and sell before you buy. Are you thinking you might need a bigger home in a year or two? Now is the time to start planning. Moving is stressful enough without the added pressure of having to accept an offer because you are paying two mortgages or you don’t want to miss out on your dream home. In this highly competitive market, trying to find a new home first before selling is a recipe for added stress and a broken heart.

Check out: 9 critical mistakes to avoid when selling your home

2. Trust the process.

In this market only a fool thinks they can accurately value a property to within $5 or 10k. Pricing your property from the start will often end up costing you money if you set it too low, or costing you buyers if you set it too high. Also, if you get an offer after only 2 or 3 days on the market, how do you know if it’s the best you are going to get?

3. Don’t skimp on marketing or presentation.

Clean and tidy like your mother in law is coming to visit, make your section look as low-maintenance as possible and complete any little fix-up jobs that you know need to be done. Always remember that clutter eats equity so be ruthless and live like a minimalist while you are on the market.

Next up, invest in a marketing plan that attracts maximum interest from your target market (think feature upgrades on trademe and, boosted facebook posts, professional photos and floor plans). Once you have attracted those buyers, remove hurdles for them and make it easy for them to offer by providing a LIM and builders report. Investing $1 or $2k can often be the key to achieving a 5 or 10% premium.


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