Again, we’re still seeing the good properties sell fast and sell well. The properties that are renovated and presented well are selling fast and selling well. Why? Well, I believe with the cost of building and the cost of renovating, people would rather spend more on their mortgage than renovate a home once they’ve purchased it. $100,000 deposit goes further $100,000 worth of renovations at the moment. Why buy an $800,000 house that you need to put in a new kitchen, new bathroom, new deck for a total cost of $100,000; when you can buy one for $1,100,000 without having to do the work, or get approvals? In some cases, this isn’t always possible, with borrowing capacities taking a hit; and interest rates and mortgage repayments going up. So in many cases it’s better to buy something that’s liveable now, and be able to renovate slowly over time – but pricing the renovations is expensive. I’ve been there. Buyers start taking money off for the renovations they need to do. We need a new fence, that’s $5,000; we need to paint, that’s $10,000, etc. More often than not, these buyers miss out on a few properties before they realise why they’re missing out. FOOPWe are seeing buyers have Fear Of Over Paying, however buyers are beginning to realise that their borrowing capacity is going down each and every interest rate. Last year, buyers weren’t willing to let the property go to any other buyers and were willing to offer whatever they could afford to secure a home. This year, that is not the case, buyers are willing to be a bit more patient. Some buyers are trying to snag a bargain, offering $100,000 less than market value in the hope the sellers are desperate. In many cases the sellers aren’t desperate and will hold onto the property rather than “give it away”, and although you do have a bit more power compared to last year, the sellers still hold the keys until an offer that is suitable appears. If anything, you sometimes might be better to wait for a property to hit the market and if it’s not sold in the first few weeks, the seller might be more aligned with market value, rather than actually achieving a discount. Rental AppraisalsOne thing I’ve noticed is some sales agents are getting rental appraisals for properties they’re selling where they’re embellishing the rental appraisal to try to raise the sale price for investors. For instance, a lot of properties in our area achieve 3.5% gross rental returns, so if you do the reverse calculations on a rental amount, you will come up with a sale price. Most people are a bit savvier and will do their own research in the area, but every now and then it might just work. Where it can hurt is if someone buys the property, moves in and then expects to rent it out a few months later for that sort of price…and they find out it’s 30% lower. I’ve found our team is very honest on rental appraisals, sometimes they may be $10-15/week lower, but generally, they’re on the money. As the owner, you need to think about the lost rent for each week the property is empty. For instance, $20 per week extra might cost you a week in lost rent, as you’re waiting for a tenant to move in – which totals $1040 per year. So if you’re chasing $520/week, and you don’t get any applications in the first week, it definitely pays to lower the asking rent to $500/week pretty quickly. A higher rental price will often attract tenants that have to pay inflated prices just to secure a property. Would you rather have a few prospective tenants to choose from, or one tenant to select? Get in touch if you’d like a rental appraisal for your property today.