Five smart room fixes to boost your home sale

If you’ve ever inspected a home to buy, you know that a fuss-free well-presented property is a far more attractive proposition than one with wonky guttering or musty old carpet. So if you’re on the selling side of the equation, making cosmetic improvements and smart repairs can help you sell your home faster at a higher price.

Unless you are selling a home in a derelict condition – in which case, real estate agent Mark Dawes, director of Richardson & Wrench Alexandria and Waterloo in Sydney, advises to leave it untouched – your property should be clean, welcoming and ready for its new owners.

“You should get it to a point where someone can move in without spending any more money,” Dawes said.

This is particularly important if you are targeting first home buyers, as they usually have little money left over for repairs once they’ve paid their deposit.

Here are the top five repairs that will help you reap rewards at selling time.

A lick of paint

Ask any selling agent and they’ll tell you that a fresh coat of paint can transform a property, presenting it in the best light possible – fresh, clean and inviting.

“Painting all interior walls is the first thing anyone should do when selling,” Dawes advised.

Revamped flooring

Refreshed floors go hand-in-hand in importance with freshly painted walls, according to Dawes.

“Carpet and paint are the two most important things you need to do,” he said.

If you are selling an apartment, new carpet is the way to go as floorboards or other flooring options require body corporate approval, which would delay the process. For a house, Dawes recommends ripping up old carpets and polishing the floorboards. If they are not in good condition, be prepared to replace them.

Updated kitchen and bathroom details

Outdated kitchens and bathrooms instantly let down a property, making it look rundown and tired. But you don’t need to go the full hog with a complete renovation. You can simply replace the cabinet doors or just add new cabinet knobs, modernise the kitchen splashback, update the light fittings or simply add a statement mirror in the bathroom.

Dawes recommends regrouting the tiles in both the kitchen and bathroom.

“It makes a massive difference because the first thing people notice is the dirt between the tiles,” he said.

“Regrouting can make the tiles look pristine.”

Spruced up exterior

Some sellers make the mistake of focusing their efforts on the interior of a property at the expense of curb appeal. If you are selling a house, the exterior is the first impression your home will make on potential buyers and sets their expectations before they’ve even walked through the front door.

“The outside appearance is very important because you want to get buyers in there,” Dawes said.

“Paint the outside and do some basic landscaping at the front. For a small amount of money, you can look at a house and think it looks really nice and appealing.”

Upgraded heating and cooling

Underfloor heating is a big plus but requires a more major renovation. For a quick improvement, Dawes suggests adding gas heating to your property if you have a gas connection and air conditioning will also add to the property’s appeal. You can also improve insulation with double glazing and window treatments.

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Learn more about home loans

What is bridging finance?

A loan of shorter duration taken to buy a new property before a borrower sells an existing property, usually taken to cover the financial gap that occurs while buying a new property without first selling an older one.

Usually, these loans have higher interest rates and a shorter repayment duration.

What are the pros and cons of no-deposit home loans?

It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.

The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.

But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.

What is equity? How can I use equity in my home loan?

Equity refers to the difference between what your property is worth and how much you owe on it. Essentially, it is the amount you have repaid on your home loan to date, although if your property has gone up in value it can sometimes be a lot more.

You can use the equity in your home loan to finance renovations on your existing property or as a deposit on an investment property. It can also be accessed for other investment opportunities or smaller purchases, such as a car or holiday, using a redraw facility.

Once you are over 65 you can even use the equity in your home loan as a source of income by taking out a reverse mortgage. This will let you access the equity in your loan in the form of regular payments which will be paid back to the bank following your death by selling your property. But like all financial products, it’s best to seek professional advice before you sign on the dotted line.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

What does pre-approval' mean?

Pre-approval for a home loan is an agreement between you and your lender that, subject to certain conditions, you will be able to borrow a set amount when you find the property you want to buy. This approach is useful if you are in the early stages of surveying the property market and need to know how much money you can spend to help guide your search.

It is also useful when you are heading into an auction and want to be able to bid with confidence. Once you have found the property you want to buy you will need to receive formal approval from your bank.

What is a guarantor?

A guarantor is someone who provides a legally binding promise that they will pay off a mortgage if the principal borrower fails to do so.

Often, guarantors are parents in a solid financial position, while the principal borrower is a child in a weaker financial position who is struggling to enter the property market.

Lenders usually regard borrowers as less risky when they have a guarantor – and therefore may charge lower interest rates or even approve mortgages they would have otherwise rejected.

However, if the borrower falls behind on their repayments, the lender might chase the guarantor for payment. In some circumstances, the lender might even seize and sell the guarantor’s property to recoup their money.

How do I take out a low-deposit home loan?

If you want to take out a low-deposit home loan, it might be a good idea to consult a mortgage broker who can give you professional financial advice and organise the mortgage for you.

Another way to take out a low-deposit home loan is to do your own research with a comparison website like RateCity. Once you’ve identified your preferred mortgage, you can apply through RateCity or go direct to the lender.

What is breach of contract?

A failure to follow all or part of a contract or breaking the conditions of a contract without any legal excuse. A breach of contract can be material, minor, actual or anticipatory, depending on the severity of the breaches and their material impact.

What happens when you default on your mortgage?

A mortgage default occurs when you are 90 days or more behind on your mortgage repayments. Late repayments will often incur a late fee on top of the amount owed which will continue to gather interest along with the remaining principal amount.

If you do default on a mortgage repayment you should try and catch up in next month’s payment. If this isn’t possible, and missing payments is going to become a regular issue, you need to contact your lender as soon as possible to organise an alternative payment schedule and discuss further options.

You may also want to talk to a financial counsellor. 

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Remaining loan term

The length of time it will take to pay off your current home loan, based on the currently-entered mortgage balance, monthly repayment and interest rate.

Why was Real Time Ratings developed?

Real Time RatingsTM was developed to save people time and money. A home loan is one of the biggest financial decisions you will ever make – and one of the most complicated. Real Time RatingsTM is designed to help you find the right loan. Until now, there has been no place borrowers can benchmark the latest rates and offers when they hit the market. Rates change all the time now and new offers hit the market almost daily, we saw the need for a way to compare these new deals against the rest of the market and make a more informed decision.

What is a debt service ratio?

A method of gauging a borrower’s home loan serviceability (ability to afford home loan repayments), the debt service ratio (DSR) is the fraction of an applicant’s income that will need to go towards paying back a loan. The DSR is typically expressed as a percentage, and lenders may decline loans to borrowers with too high a DSR (often over 30 per cent).