In today’s show we have an incredible story about 2 identical units in the same complex that sold weeks apart but for very different prices. Why would one outsell the other for almost $100,000 more? Geoff Hall, from Metropole Properties in Melbourne, knows the answer.
Kevin: How does it happen? I’ve seen it happen recently in Melbourne with two identical properties in the same block, and one sold for about $80,000 to $100,000 more than the other one, only a matter of weeks apart.
To tell us the story, Geoff Hall joins us from Metropole Properties in Melbourne.
Geoff, what was the story?
Geoff: It was an interesting one. As you said, there were two identical properties in a row of six apartments in a lovely street in the eastern suburbs of Melbourne. One of them had a tenant in place, and the agent was selling it with the tenancy in place. Of course, the presentation was less than ideal –a lot of mess around – and the auction campaign for that particular property didn’t go as well as I’m sure the agent was hoping. That particular property ended up selling at auction. In fact, it passed in and sold just after auction.
Exactly the same property two doors up – within the same block but two apart – sold six weeks later with a different agent. What that agent had decided to do was furnish the property, so they staged it. They’ve put a coat of paint over the property and thrown some tanbark in the courtyard out the back.
The properties were exactly the same, the floorplans were the same, and were in the same location, obviously. The difference in the sale price was close to $80,000, about a 20 percent difference in the sale price for exactly the same property. It all came down to presentation.
Kevin: All down to presentation. Was the second one staged?
Geoff: The second one was staged, yes. It had the hire furniture, and when you walked in, it had a much superior feel to the first one that had the tenant in it.
Kevin: Can you give me an idea on how much that staging cost? No, let me ask you this: how much would it have cost to improve the first property that undersold?
Geoff: The agent told me that they’d spent around $6000 in total. That was with painting, some minor tarting up of the courtyard, and the staging of the hire furniture. So about $6,000 has contributed to an $80,000 increase in price.
Kevin: That’s quite staggering, isn’t it? That’s a huge lesson. Now, also, one had a tenant in and one didn’t have a tenant, obviously. Is that some more advice to investors as well?
Geoff: I think there are two lessons there. There’s one for investors: if you’re looking to buy, look beyond the presentation. As buyer’s agents, we often like buying properties that have tenants in place because of that very reason. A lot of owner-occupiers will get put off by the way the property is presented with tenants involved. So if you’re buying, you have to look beyond that.
And there’s a lesson there for vendors, people selling: presentation is key. It can make a huge difference, and sometimes it’s a lot better to wait until a tenant is out, do some minor work, and then sell the property. You’ll get a much better result.
Kevin: There are some great lessons there. Thanks for sharing them with us, Geoff. I appreciate your time.
Geoff: My pleasure, Kevin.
Kevin: Geoff Hall from Metropole Properties in Melbourne. Thanks, mate. I’ll talk to you again soon.
Geoff: Cheers. Bye now.