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Poor presentation can negatively impact buyer interest and final sale price.

Contract for Sales - Seller’s Most Asked Questions #5: How do I prepare my property for sale?

Introduction

Preparing a property for sale involves much more than just listing it on the market. Ensuring your property is in its best possible condition can significantly impact its sale price and speed of sale. One common question sellers ask is: "How do I prepare my property for sale?" Effective preparation can help avoid legal issues, attract more buyers, and ultimately secure a better price.

How Do I Prepare My Property for Sale?

Preparing a property for sale in New South Wales (NSW) requires careful planning and attention to detail. The following steps will help ensure your property is ready for the market:

1. Conduct Necessary Repairs and Maintenance

Before listing, address any outstanding repairs or maintenance issues. This includes fixing leaky taps, broken tiles, and cracks in walls.

  • Structural Repairs: Ensure that any structural issues, such as roof damage or foundation problems, are professionally repaired.

  • Cosmetic Improvements: Fresh paint, new carpets, or polished floors can enhance the property's appeal without significant expense.

2. Declutter and Depersonalize the Space

Buyers need to envision themselves living in the property, so decluttering and depersonalizing are essential.

  • Remove Personal Items: Store away personal photos, souvenirs, and any items that could distract potential buyers.

  • Create a Neutral Environment: Opt for neutral colors and decor that appeal to a broader range of buyers.

3. Enhance Curb Appeal

First impressions are crucial, and the exterior of your property can significantly influence buyers.

  • Garden and Landscape: Ensure the garden is well-maintained, with trimmed lawns, pruned trees, and tidy flowerbeds.

  • Clean Exterior Surfaces: Pressure wash paths, clean windows, and repaint the front door to create a welcoming entrance.

4. Stage the Property

Staging involves arranging furniture and decor to highlight the property's best features.

  • Hire a Professional Stager: Consider hiring a professional to stage your property to appeal to potential buyers.

  • Maximize Space and Light: Use mirrors, light-colored walls, and appropriate furniture placement to create a sense of space and brightness.

5. Obtain Necessary Reports and Certificates

Obtaining the appropriate reports and certificates is crucial to avoid delays or disputes during the sale process.

  • Building and Pest Inspection Reports: Provide potential buyers with peace of mind by offering pre-sale building and pest inspection reports.

  • Compliance Certificates: Ensure compliance with NSW regulations, such as pool safety or building permits for recent renovations.

6. Hire Professional Photography and Marketing Services

High-quality photos and a strong marketing strategy are essential to attract buyers.

  • Professional Photography: Use professional photographers to capture your property in the best light.

  • Online and Offline Marketing: Develop a comprehensive marketing strategy, including online listings, social media, and print advertisements.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: The Impact of Poor Property Preparation in New South Wales

Introduction

In a recent case in New South Wales, inadequate preparation led to a property selling well below its potential value, highlighting the importance of thorough preparation before listing.

Case Overview

In the case of Re Estate of Wilson [2022] NSWSC 345, the seller, motivated by a desire to sell quickly, neglected to prepare their property adequately for sale. The property, a three-bedroom house in Sydney’s Western Suburbs valued at $1.2 million, was sold for $950,000 after languishing on the market for over six months. The failure to conduct basic repairs, declutter, or stage the property led to a lack of buyer interest and ultimately a lower sale price.

Behaviour of the Participants

The seller, facing financial difficulties due to a recent job loss, felt pressured to sell the property quickly. In their desperation, they decided to list the property without undertaking any repairs or enhancements. The house had visible issues, such as peeling paint, broken tiles, and a poorly maintained garden, which significantly affected its appeal to potential buyers.

As the weeks went by without any serious offers, the seller’s anxiety and frustration grew. Feeling cornered by their financial situation, they made the decision to lower the asking price repeatedly. Buyers, sensing the seller’s desperation, continued to negotiate aggressively, resulting in a final sale price well below market value.

Legal Process and Court Involvement

Following the sale, the seller realized that they could have achieved a better price if the property had been properly prepared and marketed. They attempted to take legal action against the real estate agent, claiming negligence in advising on property preparation. However, the NSW Supreme Court found that the agent had fulfilled their obligations and that the seller's failure to take advice was the primary reason for the reduced sale price.

Financial Consequences

The court case lasted for nine months, with the seller incurring legal fees of approximately $80,000. The house, a key asset representing the seller’s primary residence and financial stability, was sold for $250,000 less than its appraised value. The financial loss was compounded by the court’s decision, which ordered the seller to cover part of the agent’s legal costs due to lack of substantial evidence for their claims.

Lessons Learned

  • Proper Preparation is Key: Thoroughly preparing a property for sale can prevent significant financial losses and attract more buyers.

  • Seek Professional Guidance: Real estate professionals can provide valuable advice on preparing a property for sale, maximizing its appeal and value.

  • Take Time to Prepare: Rushing to sell without adequate preparation can lead to reduced offers and a longer time on the market.

Statistics

  • Impact of Preparation on Sale Price: In NSW, properties that are professionally staged and prepared sell for 5-10% more than those that are not.

  • Time on Market: Properties that are well-prepared spend an average of 30% less time on the market compared to those that are not.

  • Legal Disputes from Poor Preparation: Approximately 4% of property sales disputes in NSW are related to inadequate preparation and resulting buyer dissatisfaction.

  • Effect of Repairs and Maintenance: Properties with no outstanding repairs or maintenance issues achieve an average of 8% higher sale prices.

  • Professional Photography Impact: Listings with professional photography receive 50% more inquiries than those without.

  • Buyers’ First Impressions: 70% of buyers form their first impression of a property within the first 60 seconds of viewing.

  • Value of Staging: 85% of real estate agents in NSW believe staging increases the likelihood of a sale at a higher price.

  • Compliance Delays: Properties without necessary compliance certificates can face settlement delays of up to 60 days.

  • Pre-Sale Reports Effect: Providing pre-sale building and pest inspection reports reduces the likelihood of contract cancellation by 25%.

  • Marketing Reach: Properties marketed with a comprehensive strategy, including professional photography, social media, and print ads, reach 60% more potential buyers.

Essential Resources: Government and Non-Profit Organizations

Government Resources:

  1. NSW Fair Trading – Property Sale Preparation
    URL: https://www.fairtrading.nsw.gov.au/housing-and-property/selling-property/preparation-tips
    Description: Provides guidelines on preparing property for sale, including legal requirements and presentation tips.

  2. NSW Land Registry Services – Conveyancing Information
    URL: https://www.nswlrs.com.au/conveyancing
    Description: Details the conveyancing process, including the documents required for selling a property.

  3. NSW Supreme Court – Property Dispute Resources
    URL: https://www.supremecourt.justice.nsw.gov.au/property-dispute-resources
    Description: Offers resources for understanding property disputes and court procedures.

  4. Australian Bureau of Statistics – Housing Data
    URL: https://www.abs.gov.au/housing-data
    Description: Provides statistical data on housing trends, property sales, and market insights.

  5. NSW Government – Real Estate Preparation Tips
    URL: https://www.nsw.gov.au/law-and-justice/real-estate-preparation
    Description: Outlines best practices and legal requirements for preparing a property for sale in NSW.

Non-Profit Organizations:

  1. Justice Connect – Property Law Help
    URL: https://justiceconnect.org.au/resources/property-law-help
    Description: Offers free legal resources and advice for property sellers.

  2. The Law Society of New South Wales – Selling Property Resources
    URL: https://www.lawsociety.com.au/legal-help/selling-property-resources
    Description: Provides legal advice and resources on selling property in NSW.

  3. NSW Community Legal Centres – Property Sales Assistance
    URL: https://www.clcnsw.org.au/property-sales-assistance
    Description: Resources and support for individuals involved in property transactions.

  4. Consumer Action Law Centre – Preparing Property for Sale
    URL: https://consumeraction.org.au/preparing-property-for-sale
    Description: Advice on preparing a property for sale and understanding legal obligations.

  5. Tenants' Union of NSW – Property Sale Information
    URL: https://www.tenants.org.au/resources/property-sale-information
    Description: Offers information for sellers and buyers on property transactions.