In life, we often encounter immutable laws—rules that govern our world, from Murphy’s Law to the Law of Attraction. These laws are simple, yet powerful, offering insight into the forces that influence our experiences. The real estate industry operates under its own set of unshakeable laws, or codes, which determine how homes are bought and sold. Whether you’re a first-time homebuyer, a seasoned seller, or an industry professional, understanding these codes is key to navigating the often unpredictable real estate market.
The following six unshakeable codes of real estate offer a fresh perspective on home selling, buying, and the true factors that drive success in your homes sale.
30 years ago someone in a huge agency must have said, “Go to the client and sell our companies reach, say that the company has an international market, that we have 130 offices, 650 agents nationwide, we auction homes in Australiasain wide, so of course, they are going to sell your home too.”
The agency a real estate agent works for has nothing to do with how well your home will sell. The agents approach is the key factor, How they structure your price, presentation and promotion will sell your home, and a great agent will definitely sell your home for top dollar regardless of what agency they represent.
Think about it… there are many traits of a good agent; how many of those traits are individual traits vs company traits?
Negotiation skills? - Individual.
Personality? - Individual.
Personal connections? - Individual.
The best way to waste real estate energy? Allowing yourself to get caught up in what the Smiths' home sold for last year. Home prices fluctuate more than the daily Canterbury temperature, and holding your breath for a sale price similar to the neighbours is unrealistic.
Along those same lines, assuming that a registered valuation has a permanent bearing for your home's sale price… also a waste of time. RVs are logical; calculated solely on size, age of your home and what the homes on the same street are selling for, whereas buyers purchase emotionally. Two homes can have the exact same RV, floor size and land size. But Property A is perfectly suited for a new family, while Property B barely has a zero line of sight from the kitchen to the kids playing in the backyard…
We enunciate “can”, as the bank's answer for the constant changes in home loan regulations. Changing LVR rules can have a huge impact on what your home is worth, as even if a buyer WANTS to pay $850,000 for your house, the reality is they can only borrow $700,000. An extreme example, but that idea rings true nationwide.
No one can dictate the worth of a home. Not you, a real estate agent, valuer, appraiser, council... no one. And in this current market your value will change this month, compared to two months ago, and two months from now.
It’s not a simple calculation of, “I spent X in renovations so it must have increased the same X”. Or, “I built it for A and bought the land for B, I add those together and the home is worth C.” The reality is your home is worth C, plus or minus a whole lot of emotion and bank funding. That isn’t an equation a mathematician finds captivating. Finding a lucky buyer (and I use luck very purposefully), to pay top dollar for your home is generally part of a larger timing game you are forced to play.
In short, it doesn’t matter what the homeowners think their home is worth. And it certainly doesn’t matter what any agent or owner wishes the home was worth. What matters is what a buyer thinks it’s worth — and in the case of a financed transaction, whether a lender will approve a loan at that amount.
In fact, general maintenance adds zero value – do not expect to replace the hot water cylinder and get your money back…
Spend $50,000 on a landscape architect to guide you to a perfectly planted and irrigated section, and a home’s value is not automatically increased by $50,000. Depending on the usefulness of the newly planted gardens, the colour scheme involved, the amount of bird friendly trees, and the direction the prevailing wind blows, your $50,000 landscape plan might add $15,000 or $20,000 to the value of the home. Or it might, in fact, add nothing. If a buyer isn’t impressed, you’ve gained zero value. We're more than happy to clients in what they SHOULD spend their money on to increase their value.
Some kitchen and bathroom improvements (home renovations), assuming you’ve stayed away from a poor DIY job, tend to have higher rates of payback than others. But rare is the improvement that adds equal or more value to a home than what it cost.
The same goes for large scale maintenance – new cladding, new roof, rewiring.. these of course are appealing to a buyer and might be the final bump it takes for someone to put an offer on your home over another, however when buyers are in a competitive market, they EXPECT you’ve done these improvements. It’s not extra, it’s assumed.
Send your agent on a holiday, and given some unseen and completely irrational code, you will soon find yourself in a multi-offer situation.
We’re not joking. Ask any seller (or buyer) what happens in their real estate life when their agent goes away to a conference or is sitting on a beach in Bali. All of a sudden your home is plated in gold and buyers run to the banks asking for more money. Murphy’s Law at its finest.
When you do get around to selling, it's vital to turn your focus to the “Three P” approach. Essentially, your home will never sell for its top dollar if you don’t put energy into all three of these aspects.
Example: if you have put energy into beautifully presenting your home, and promoting it with an impressive online reach, but you haven’t included a logical price guide.. You’ve missed the mark.
A logical price guide to bring buyers through the door, being attentive to your presentation through maintenance, landscaping, property styling and professional photography, and an investment into boosted online and social media advertisements never fail to attract a competitive buying market. It’s this competition, this tension around the home, that pushes your home's price well above the market value.