Did you know that when done well, a kitchen renovation can increase the value of your home? Browse the Century 21 blog now to find out how to do the same.
How to Add Value to Your Home with a Kitchen Renovation
If your kitchen is looking outdated, tired and past its use by date, it might be time to plan a kitchen renovation.
The kitchen is the heart of the home and needs to function well for daily life as well as for entertaining family and friends. In most homes these days, the kitchen is also part of an open plan living and dining area so it also needs to look good and be well-integrated into the space.
There’s no doubt that a smart, fresh, functional modern kitchen adds value to your home and attracts buyers when the time comes to sell. Just how much a kitchen renovation will add to your home’s value depends on getting your budgeting right.
If you are planning to stay in your current home for some years to come, then what you spend on your kitchen renovation is up to you. It’s about improving your lifestyle more than resale value. If you are approaching time to sell, or renovating specifically for resale, then you need to be very careful about how much you spend on replacing or improving your kitchen.
When making improvements to a home specifically with the aim of maximising the sale price, the general rule of thumb is to spend no more than one to two per cent of the home’s current market value on improvements. If your home is currently valued at $500,000 this means you can safely spend $5000 to $10,000 on improvements without over-capitalising.
To find out whether a kitchen renovation would be worth the cost and disruption in order to add value to your home, ask your local Century 21 agent for a free appraisal of the current market value of your home and speak with him or her about what improvements to your home could add value in the current local market without over-capitalising.
From this conversation, you can then work out your budget and determine whether you should do a full kitchen renovation or simply improve some aspects of your current kitchen.
According to Domain, the cost for a budget kitchen starts at $10,000 and can go up to $25,000. A mid-range kitchen will set you back $20,000 to $45,000 and a luxury kitchen from $45,000 to $100,000 or more.
If you’re looking at the budget end of the scale, spend the bulk of your budget on quality construction of the cabinetry then compromise on finishes and fixtures such as tapware and cupboard handles and choose budget rather than high end electrical appliances. Keeping all the plumbing fixtures and electrical fittings in their current positions will also save money.
Use an online home renovation costs calculator to get a feel for prices before getting quotes for your new kitchen.
If you are renovating for resale, also be cautious about incorporating anything overly trendy. Keep the overall look fresh and timeless and limit trendy touches to easily replaceable items such as lighting.
If your budget won’t stretch to a complete kitchen renovation, then look at ways you can spruce up your current kitchen inexpensively. Cupboard doors can be painted using specialist laminate paint or marine paint and new handles added. An outdated or damaged tiled splashback can be replaced with an inexpensive acrylic splashback. Lighting can be replaced for a more contemporary look. Simply replacing the stove and rangehood could be an option. A single sink could be replaced with a double sink and new tapware.
Whether you choose to do a full renovation or simply some strategic improvements, a kitchen update will be well worthwhile come the time your home goes on the market, as long as you use your budget wisely.
Come the time for photographing your home for the market and open for inspections, ensure your kitchen is scrupulously clean and uncluttered, let in maximum natural light and add a few attractive accessories such as a bowl of fruit, potted succulent or a beautiful new cookbook on a stand. You’ll increase buyer interest and help ensure you get the best possible price for your home.
If you’re looking to sell your home, speak with a Century 21 agent well ahead of time to get the best advice on whether a kitchen renovation will add value to your home and how much you should budget in order to maximise your sale price.
When selling your home, one of the first details to discuss with your real estate agent is whether to sell at auction or via private treaty. Both sales methods have their pro and cons and your agent will advise you on which is best for you in the current market.
Here are some details on how both sales methods work to help you make an informed decision.
Selling via private treaty
A sale by private treaty is a standard residential property transaction where you work with your agent to set an asking price for your home and your agent then negotiates with prospective buyers.
When a prospective buyer makes an offer, you can make a counter offer via your agent and negotiations continue until the prospective buyer drops out or you reach an agreed price.
Once an agreed price is reached, contracts are exchanged and a settlement date is set (usually eight weeks but this is negotiable). After contracts are exchanged, there is a cooling off period wherein the buyer can pull out. This period varies from state to state.
Selling by private treaty is generally less costly then selling at auction. It also allows for a larger pool of potential buyers as terms can be more negotiable such as length of settlement period and buyers can place offers subject to finance or subject to sale of their own home.
Selling by private treaty is also less stressful than an auction sale – for both you and your potential buyers.
This method of sale is best in a slow market, where an auction may not attract any bidders, and for those who do not have an urgent need to sell.
A private treaty sale may mean having your home on the market for a lengthy period – meaning a lot of work each week keeping your home picture perfect for open inspections each weekend and private inspections as requested during the week.
The cooling off period after contracts are exchanged could lead to a buyer changing their mind and dropping out just when you think the whole process is coming to a close.
You will also be starting at the asking price and negotiating down, as compared to an auction where the sale price is negotiated upwards. With an auction, there is far more possibility you could achieve or even exceed the asking price in a lively market.
Selling by auction
When selling by auction your agent will set a date for buyers to come together to bid for your property and will book an auctioneer for the day.
On the day, you and your agent will set a reserve price. When bids reach this amount, the property is said to be ‘on the market’. The highest bidder over the reserve price becomes the successful buyer.
An auction campaign can be very quick and your property could be on the market for as little as five weeks. If your agent advertises that you are open to offers prior to the auction you could even sell beforehand. If the sale passes in on the day (i.e. bids do not reach your reserve price) then you can still negotiate with potential buyers, starting with the highest bidder.
An auction creates a sense of urgency and flushes out serious buyers who need to act quickly if they really want to secure your property. Contracts are exchanged on the day and there is no cooling off period.
An auction generally requires a more expensive marketing campaign than a private treaty sale, plus you have the additional cost of hiring an auctioneer.
In a slow market an auction campaign can fail to attract any serious bidders, meaning additional costs for a new marketing campaign for a private treaty sale.
Selling at auction is stressful as you will be in the background on the day and your agent will be in contact with you throughout the auction for you to make instant decisions. You need to keep a cool head and have complete faith in your agent and your auctioneer.
If you’re thinking of selling in the near future, ask your local Century 21 agent for a free appraisal of your home and discuss what sales method would work best for you.
Not sure where to start when making an offer on a house? Century 21 has you covered with the basic know-how. Browse now for more information.
You’ve been spending Saturdays driving around to open inspections. You’ve weighed up the pros and cons of each house you’ve looked at. Now you’ve made your decision and it’s time to put in an offer. Where do you start?
Making an offer on a property you have set your heart on can be nerve-wracking. Just like any negotiation process you have to start somewhere but you don’t want to put in too high an offer and pay more than the house is worth, nor start too low and possibly miss out.
Before you put in your offer
Before you even make an offer on a house, be sure to do some legwork. Research the property thoroughly online to determine a fair market price. Look at how long the property has been on the market and check out recent sales of comparable properties in the same area.
Next, ask the selling agent who showed you around the property for some more information. Ask him or her about any previous offers and what price they think the vendors will accept. Ask why any previous offers were rejected. Request a second property inspection to be sure this is the house you want and also to get to know the agent and show serious interest.
Once you are sure you want to put in an offer, decide on the maximum price you would be willing to pay for the property and ensure your lender has preapproved a loan for this amount.
Conditional and unconditional offers
Most vendors selling by private treaty, rather than auction, set a sale price above the price they will actually accept to leave some wriggle room for negotiation. If they have a good selling agent however who has advised them wisely, this will be very close to a fair market value.
Having done your research, you will know whether or not this is the case and can decide on a fair first offer accordingly with room for the vendors to negotiate down and for you to negotiate up. It’s not advisable to put in a very low offer that could offend the vendors and stop them from negotiating with you further.
Offers can be either conditional, where you put conditions on the offer, or unconditional. It’s highly advisable to make your offer conditional on certain requirements such as obtaining finance or subject to the results of building and pest inspections. If any problems arise after you have had the inspections done, then you can use these to negotiate lower on price.
Put it in writing
Not all states require that your offer must be in writing but it’s advisable to do so anyway in order to have a record of the negotiations and what each offer and its conditions are.
This should take the form of a formal offer in writing (either letter or email) to the selling agent outlining the price you would like to offer and any conditions.
You can also offer favourable terms to the vendors such as a shorter or longer than average settlement term to sweeten your offer.
The waiting game begins
The selling agent will pass your offer on to the vendors. Be patient, wait and see the vendors’ response and whether they come back with a counter offer. Negotiations can go back and forth for some time, so consider each of your responses carefully and keep your top price in mind.
Keep the tone of all negotiations formal and neutral. Aim for a win-win for both yourself and the vendors and the process should go smoothly.
If negotiations reach your top price, then spell out that this is your limit and you are unable to go any higher. At this stage, the selling agent will likely advise the vendors to accept your highest offer.
Once a price has been agreed, you are on your way to owning your own home. The contract can be finalised and, once signed by both parties and the deposit paid, the deal is completed!
With over 3,000 offices, CENTURY 21 is the largest real estate sales organisation in the Asia Pacific region. We’ll help you purchase the property of your dreams. For more information on making an offer on a house, buying or selling, please get in touch with a local member of our team now.