Unless you are a first home buyer or looking at entering the investment market, you are probably going to have to sell the home you are in now before you can make a move. Or are you?
There are important decisions to be made. Do you love everything about where you live apart from, for example, the fact you have outgrown it? Perhaps it will make more sense financially and for your lifestyle to simply upgrade the home you are in now. If you have explored this option and it just is not going to work out, it is time to find the right agent: a person who is going to work hard for you.
Before you decide to sell
If you find yourself thinking about selling but looking around your home and imagining how much you will miss it, do a little bit of research first. Of course, there are going to be times when the problems you have with a home or apartment cannot be fixed with a renovation, and other times moves are dictated by changes in circumstance or a shift to another city for work. If there is any chance your much-loved abode can be updated, it is time to call in the experts.
Adding another room or two or building up to turn a single-level home into a two-storey one might seem like an expensive option. But once you price how much extra you will have to pay for the house of your dreams, then add on the costs of moving, the stamp duty and the fees to sell the home you are in, it could start to seem like a simpler and more effective option.
To upgrade your home or move?
Before you call in the design experts, you should have your property valued by a professional. Especially if you have been living there for a few years, chances are your home’s worth has changed quite a bit and it is important to get an independent valuation. Once you have a proper idea of what you are dealing with, set a budget. If your property is valued at $800,000 and spending $100,000 will give you the perfect home, that is great; if it is valued at $300,000 you will not want to spend nearly that much.
Take a look around your local neighbourhood and see if there is a ceiling value. You certainly do not want to create a million-dollar property in a suburb where most homes sell for $650,000. To a certain extent you can be more flexible on budget and the types of improvements you are making when you are upgrading the family home and you will be living there for several more years. Spending a little bit more than you could make back if you had to sell immediately is unlikely to be a disaster, since you are going to be living there, you hope, for quite a few years to come.
Chances are you will have a few ideas of how an expansion or upgrade might work, but you will also likely be surprised by some of the ideas that an architect or builder can bring to the party. Tell them what you are thinking, listen to what they tell you, then make some decisions.
Remember that, even if you feel as though you may want to live in this updated dream home forever and ever, you still should never overcapitalise (spend more money than you could ever make back). Living in Melbourne, you might spend a lot of money on a pool that is only useful for a few months of the year and that does not recoup its cost when you come to sell. It ends up being an expensive water feature. Potential buyers may also see it as a high-maintenance, high-cost feature and cross your place off their list of options or factor in the cost to fill it in if they cannot see the point of it. Weigh these costs up. If your family will use it and you want it and can afford it, great. If you are renovating for profit, then you need to make sure you can get your money back—and more—to justify the expense. The most important thing for you to do when you are making updates is to set a budget (do not forget to include the cost of a rental property if you need to move out during construction) and a schedule of works. The best way to ensure you do not overcapitalise is to stick to your budget and be prepared to make some compromises if you are seeking high-end fixtures and fittings. Again it comes down to how long you will be living there and whether you are renovating to stay or renovating to move on.
Not so long ago, I had the privilege of looking for and acquiring a home for clients who had decided to downsize and move to St Kilda…
Moving from a big home with a garden to a large townhouse seemed to be exactly what our clients wanted to do, almost a sea change and a lifestyle change too. However nine months later they came to see me and expressed that they thought they had made the wrong decision. They longed for a backyard again and a place where they could potter over the plants and herbs and just ‘be’ in their space together.
I arranged to visit them in their new home to discuss potential options. The first option was to coordinate their sale with a local agent and then to search for and acquire another home. This, as I explained, would be their most expensive option with fees, stamp duty and moving costs, not to mention the stress that goes with these processes.
The second option was to improve the existing house to suit them better. The large courtyard and front garden spaces were crying out for attention, and the internals, which were great, could be made better just by furniture choices and other cosmetic enhancements!
I coordinated an interior stylist and a landscape gardener to quote on these enhancements. Most of the money would be spent internally on furniture and artwork, light fittings and floor coverings, meaning that, if they then decided to move on, a lot of it would go with them then anyway.
With a budget and a new spring in their step to enhance the property and realise their original plans, they were excited once again about their new home.
Had they not thought about and revisited their plans, they could have spent good money moving on and never realised the original potential they saw in this home. This example shows that it is not always about moving on when your home feels as though you have outgrown it, or it no longer serves the purpose you had originally had for it.
This is an edited extract from SOLD! How to buy and sell your home with real confidence, by Nicole Jacobs, and is published by Hardie Grant. RRP $29.99.
Nicole Jacobs is a property expert on Channel 9’s The Block, licensed REIV estate agent, founder and director of Nicole Jacobs Property and Bayside mum of three girls!