May 29, 2023 • 34 mins
Who decides how much a house is worth and why? Valuers and the work they do is often seen as mysterious. But today on the show, we're pulling back the curtain on this important but misunderstood role in the real estate market. Jessica Ricci is joined by Property Value Strategist and Advisor, Belinda Botzolis to break it all down. Belinda shares her best tips for homebuyers and outlines what is and isn't included in a property valuation.
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Episode Transcript
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Speaker 1 (00:00):
The Property Playbook would like to acknowledge the traditional custodians
of the lands of where this podcast is recorded. There
were wondry people of the cooler nations acknowledging the culture,
the history and the connection to the lands of what
we call home. Let's get into it.
Speaker 2 (00:27):
Hello and welcome to The Property Playbook, the podcast where
we take you from A to V of all things property.
My name is Jessica Ricky and hopefully one day soon
I will be a first home owner. But until then,
I'm grouping in every bit of professional help I can
get to help me and you guys along the way.
Today I am joined by the wonderful Belinda bot Solace,
(00:49):
who is a property value strategist, advisor and a registered
tax agent plus a TikToker. You've probably seen her videos
floating around where she chats all things valuation, property and
she's working really hard to increase the knowledge and accessibility
of information out there. Belinda, thank you so much for
joining me today.
Speaker 3 (01:07):
It is my genuine and absolute pleasure. Jess thanks for
having me.
Speaker 2 (01:11):
I was saying before, I'm so excited to have you
because I'm a big fan of your TikTok Personally, and
we were having a really good chat offline about the
industry that is valuation and like finance. I know a
lot of our listeners have come from there. She's on
the money community. Valuation can be a little bit of
a boys club. Is that right?
Speaker 3 (01:29):
Yes, I've never felt intimidated. I guess I was like
this bright eyed, bushy tail girl straight out of UNI,
and I'm like, great, I get to see houses. I
always wanted to do something in property, but didn't want
to be like a real estate agent because I always
wanted to go to UNI and do something in that
kind of economic space, and this just was perfect a
venue for that. And yeah, I was probably one of
(01:52):
only a handful of girls in very much an old
like how do I paint this picture without sounding stereotapes?
Like glasses and gray hair and clipboards and you know,
suspenders and a tie with like with a pen in
the pocket.
Speaker 2 (02:08):
You're painting a wonderful picture. I can really visualize.
Speaker 3 (02:11):
It, only because I used to knock on the door
of people's homes and they'd open it up and look
at me and be like who are you? And I'm like, oh,
I'm Belinda, the value I'm he'd inspector home and they're like,
are you and your own? And they're trying to look
over my shoulder to see if there was someone else
with me.
Speaker 2 (02:26):
I'm like, no, no, someone's supervising you.
Speaker 3 (02:29):
Yeah, hat that because you know, what do I know?
You know, just on my own and there would be
like you don't look like a value. Yeah awful. I
guess it's changed now. But valuers are very much like
the Wizard of Oz. You know, we're kind of behind
this big curtain. No one gets to really talk to us.
(02:50):
We come out on site, everyone's a bit intimidated that
they don't know what to say. Just let them do
their job. What am I supposed to say? And then
when they get the valuation back, you don't talk to
them in case you want to. You know, how did
you get to that figure? My value is worth more?
Can I have a chat? And then it's like no
access to the value are you cannot pass this point?
(03:10):
You cannot you know, come through. And we as a profession,
we hate it. We're just like, ah, leave me alone.
You got hunters and gatherers. Jess and I think if
we were the hunters, we'd be real estate agents. We'd
be out there hunting and you know, in the property world.
But as the gatherers, we're just gathering data and evidence
and analytics, and we're behind the screen and we do
(03:32):
not want to be the other side of it.
Speaker 2 (03:34):
So you don't want to be out in the scary world.
Speaker 3 (03:36):
No, No, the scary world is the inspection. And half
the time we've got our head down and just taking notes.
We're like, don't talk to me, don't doubt me.
Speaker 2 (03:44):
I just want to do my job, get in and
get out. I feel like it's actually a really good
place to kind of start because I feel like as
a lot of people myself included, who don't really fully
understand what a value a does. You know, you hear
people say, oh, the valuation came out and it said X,
or it said and I'm happy or I'm sad. But
the in between is a little bit of a mystery
(04:04):
to me. Can you tell me a bit about the process.
Speaker 3 (04:07):
I'm going to pull the curtain back for you, just
for you, Jess, bring you into my world. My world.
So it's just a person that says the legal value
on your property, the market value on your property. I'll
give you a little bit of my background so I've
been valuing for seventeen years, so it's long time. I
started valuing when you had sort of a pen and
(04:30):
paper and you know, the digital camera and had to
upload the photos. So I've come a long way. Very
old school, very old school. The fundamentals and the principles
don't change. Valuers aren't just people that go out to
your home and say, oh, yeah, this is what it's
worth and then put that figure on a piece of
paper and hand it to the bank. A valuer is
there to assess the market value of a home of
(04:52):
a property, but it's very much on the back of
the instruction. So, for instance, a mortgage value aer goes
off the instruction from a bank and the bank is saying, well,
this customer, let's say, yes, JESSRICKI wants to borrow some money. Yes,
she does, as she does, and she's our client. She's
(05:12):
come to us. Whether you go through a broker, you're
the bank's client. Now we are. The valuer works for
the bank, even though they're valuing the property for you.
So you and I have no duty of care to
each other, okay, even though it's your home. Okay. So
that's where a lot of the misconception is where people
think they have a right to talk to the value
or they have a right to question the valuer because
(05:34):
it's their property. But they haven't sent the instruction even
though they paid for it. They don't own that valuation.
The bank does.
Speaker 2 (05:43):
So the bank could talk to the valueer perhaps, but
the person who owns the home couldn't.
Speaker 3 (05:47):
Is that right, yeah, because our valuation is not extended
to a third party, So you are the third party
even though it's your home, because technically the bank own
your home until it's fully paid off. So the value
is role is to understand the instruction. So if it
comes from the bank, they have to value your property
as security to lend money. So our job is to
(06:10):
not only go out and understand what it's worth on
the date of inspection. So if I'm valuing it today,
it's almost like assuming, jest that it's going to go
to auction in the afternoon or pretty much I'm there
to assess it for the sale ads at that date.
So whatever tomorrow, we might find that the bottom of
the world falls out and the market completely crashes. All
(06:32):
the opposite happens, and overnight three hundred thousand dollars go
on the market, but today is what I'm valuing it at.
And then it's not just what it's worth to a buyer.
There's also we have to flag any risk gratings to
the bank. Is it located on a main road, Is
it next to a PowerPoint like a power station? Is
it got an easeman into the reyard? Is the potential
(06:54):
for redevelopment? What factors contribute to the value of the
home is what the bank need to know, and that's
what we capture in the report. We hand that report
with all the risk readings, the zoning look at the tidle,
see if there's anything on there. Hand that to the bank,
and then the bank see if it's a good enough
security for them to lend on. If there's a lot
(07:16):
of stuff in the property that they sees as a risk,
they may drop your lending a little bit. So they
might say, oh, this one's a big risk. Your LVR
has been adjusted. We may now need a seventy percent deposit.
Speaker 2 (07:30):
For anyone at whom he doesn't know what is LVR.
Speaker 3 (07:32):
LVR is the lender's mortgage insurance. And you know what,
people think that it's insurance for them, So you know
how you get car insurance and house insurance, so if
you crash the car, Liker, NRMA or whatever will pay
you out. Yes. Yeah, So you're paying for the bank's insurance.
With lenders mortgage insurance, what's happening is they're saying, if
we're lending over eighty percent, it's a risk for us,
(07:54):
and you're going to pay for our risk. So you're
going to pay for our insurance. And if you fall through,
then the bank, the insurer, pays us out. We go
in our merry way. And then the mortgage insurers go
and see the value are and they're like, well, you
guys told us it was worth a million bucks, so
we lent eight hundred and then they went mortgaging position
(08:17):
and we sold it for seven fifty plus all our
legal costs. You owe us two hundred and eighty thousand dollars.
We'll see you in court.
Speaker 2 (08:24):
Yeah, and then is it your liability? Is it?
Speaker 3 (08:27):
Oh? Yeah? That's why now that I've gone out out
on my own, truly, my biggest expense is my insurance
because of the risk I take on as a professional.
Speaker 2 (08:36):
So that's crazy, would you say. I hear a lot
of people talk about they have valuations on their home
before they plan to sell, and a lot of the
time you hear people saying, oh, the valuation came back
lower than I thought. The house down the road sold
for eight hundred thousand, they valued mine at seven hundred thousand.
Do you think that sometimes value is a little bit
on the conservative side because there is obviously that risk
(08:59):
put back on them.
Speaker 3 (09:00):
It goes back to the instruction from the bank. So
if we know that the bank is lending money and
we want them to be it's almost like guaranteeing that's
what it's worth. You know how a real estate agent
will come to your house and say, oh, let's try
for one one. Let's push it as hard as we can.
(09:21):
A valuer knows that it can probably get more if
it went to auction, but I have no evidence to
support that. It's like going to court and then the
judge is like, what proof do you have that you
know you didn't commit that crime? And you come in
with hard evidence. A judge isn't going to go in,
this is the bank. Pretend the bank is the judge.
The judge isn't going to say, oh, what round about
(09:42):
do you think is the evidence? You may have to
support your crime, you know what I mean. So I
don't know if that came out sounding the right way,
but I guess yeah. So a value is like, well
here my sales evidence. And a lot of the time
people have an emotional attachment to their home. They don't
see that it's a oh it doesn't bother me. They
don't see that it's a type of property that may
(10:05):
not appeal to everybody. Where the value is completely objective,
they just walk in, no emotion, they value it, their
walk back out. Yeah.
Speaker 2 (10:11):
Is there a basic framework, because obviously there's lots of
valuers all over the country doing lots of valuations in
different places. Is there a basic framework in place to
ensure that all properties are assessed on the same criteria,
so that theoretically, if one valuer or another valuer came
in on the same day, they should come up with
about the same result.
Speaker 3 (10:31):
This is hard because I've heard time and time again,
and I've seen other valuations where a bank would have
sent it to me saying another company valued it for
this amount. What do you think, as like a second opinion?
Speaker 2 (10:45):
Oh, is that common?
Speaker 3 (10:46):
It happens. It happens. I'm not a mortgage valuer. Now
I specialize more in tacts, but when I used to be,
they would send it to me every now and then,
or an owner would give it to me on site
and go, oh, I'm trying to find a different bank
his evaluation I got from the last bank, and I
sometimes don't agree with it because it really it's we're
(11:07):
all human and we come down to our own opinion.
Just like you could get three different agents go through
a home and they can each tell you different prices
that they think the home will sell for. And also
when you go to auction jest, sometimes you have fifty
people and each person has a different limit that they're
prepared to pay on that property. Each one stops bidding
(11:29):
until there's the highest bidder. So the highest bidder could
boord on emotion, and that's something that the valuer can't
assess because of the evidence of other properties. The hardest
part of value when you get the most discrepancy is
probably over the last two years, because the market's moving
(11:49):
so quickly, and if I'm basing my valuation on sales
evidence that's happened over the last three months, the markets
move so quickly. In three months, sales are already outdated.
The market's moved, and as we know, I feel that
we have hit the bottom of the market and it's
now turned and we're coming back up again. Homes that
(12:11):
are renovated are selling for a far superior premium than
homes that are unrenovated because of all this uncertainty with
construction cost. So when we go in and we're valuing
homes that are fully renovated, and I'm looking at evidence again,
the evidence from the last three months, I've got to
look at it. And that's my job as a professional
to adjust and factor in market movement. So I'm like, Okay,
(12:35):
well that was three months ago. The market's moved, is
probably worth more, And then I have to justify how
much more and by what amount it's increased. And then
by the time that property then goes to auction, two
months have passed and then they sell it for a premium.
They said, oh, we got it valued for one point
five we sold it for one six. Well, yeah, there's
(12:56):
big market movement in that time. Of course, it's going
to sell for more. That's why a lot of the
time our valuations look a lot lower because they don't
factoring with value mood in a moment in time.
Speaker 2 (13:07):
Yeah, that's such an interesting point because I suppose to
that end, if you've got a value are coming over,
you want your house to look as good as possible,
I would imagine, so you mow the lawns and make
sure it's tidy, because I'm assuming you guys are looking
at all of those superficial factors that a potential buyer
would be looking at as well, right, correct.
Speaker 3 (13:26):
So I'll give you, since you're looking to buy and
your listeners, a pretty big tip. We are professionally trained
to inspect properties on a vacant possession, so that's how
we value all homes. It doesn't come with the furniture.
So if it's got built in furniture, I don't know
if you've you can see I've got a study and
it's all built in joinery that's fixed and permanent on
(13:48):
the home that stays. So I've got to take that
into consideration. But beautiful couches and beds and you know,
beautiful pillows, that stuff makes sierra difference to me. I'm
professionally trained to look past all that. So here's my
tip for you guys. When you walk into a home
that's been professionally styled Big Northern furniture. It is there
(14:11):
to make you fall in love with the home, but
you are not buying the furniture. And I cannot tell
you time and time again, I walk in to the
property to do the valuation for the bank when the
furniture is gone, and I'm like, oh my god, this
house is terrible. How much because they put really expensive furniture.
(14:32):
It's like, I say this all the time. It's like
lipstick on a pig, right, you know, and there, but
you take the lips to go off, it's still a pig.
And I'm not calling the house a pig, but it's
that analogy.
Speaker 2 (14:43):
But a little bit it might be a pig.
Speaker 3 (14:45):
Yeah. It's like remember I don't know if you know
those nineties rom cons when they would give the girl
a makeover and literally all they do is take her
glasses off and take It's like.
Speaker 2 (14:56):
The Princess Diaries is my favorite one ever, the like,
we give you a pre sess and they open it
up and she just has straight hair and fund her
eyebrows exactly, so they've plased the eyebrows of the house.
And people spend so much money on staging when they're
selling a property for that exact reason, because they're trying
to make it look beautiful and appealing to a buyer,
so they spend as much as possible.
Speaker 3 (15:17):
Yeah, so if you're selling one hundred percent, get it styled, okay.
And it's about putting not just any lipstick. It's like
putting like Chanel lipstick. Like nothing wrong with the Revlon,
but go for the Chanel because it's like maybe a
better shade of red. Right, So go for the Juggernal
when it comes to styling. But as a buyer, make
(15:38):
sure that you take a step back. And it's the
same is when you go through the display homes when
you look into like a rebuild and you see it
and they're stunning and they've got and then all I'm
looking at is that looks budget, that looks cheap. That's
why is this such a small bedroom? Why is the
window facing the wrong way? That shouldn't be there. So
I because I'm trained to look past that where you're
(16:00):
looking at it going oh and you know, if you've
got a partner, like a bay, that's the nursery bed.
But what they don't see it's a tiny, tiny bedroom
all they see is the cot and the you know,
the toys in the corner, and they pull on those
heart strings.
Speaker 2 (16:14):
They imagine the life that they could have there.
Speaker 3 (16:16):
Correct, And that's what they're selling. And you know, it's marketing.
And if I'm selling, I want to pull on people's
heart strings because I want them to pay more for
it on that emotional factor. But our value is we're
cold hearted. We're cold blooded. Man, are you walking?
Speaker 2 (16:32):
With you walking? And be aggressive with it? Okay, well
that is very interesting. I feel like that's the perfect
spot for us to duck to a really quick break
and when we come back, I want to pick your
brain a little bit more about adding value to a
property that you have. So don't go anywhere. Welcome back everybody.
Today I am chatting with Belinda bot Solace, the wonderful
value She's got over seventeen years of experience and we're
(16:54):
chatting now all about how to add a little bit
of value to your home because Blinda, you have this
fabulous series on your social media where you talk people
through the things that maybe do and don't add value.
Because there are some things that you go, oh, if
there's a pool out the back, it's worth so much
more money that in my head, that's the thought, because
a pool is a pipe dream at this point. Can't
(17:15):
afford a house, let alone a pool to go with it.
But I've seen you talk about how they don't necessarily
always add that much value, and I'd love for you
to talk me through kind of how those figures work
and how you can figure out if something will or
will not increase the overall value of a property that
you own.
Speaker 3 (17:32):
Yeah. Sure, I guess we'll start with the swimming pool
since you mentioned it. Yeah, the series that I have,
it's like things that are cool to have but add
little to no value.
Speaker 2 (17:41):
Yeah. Yeah, there's some people listening who are getting the
visual of you in their head right now.
Speaker 3 (17:46):
And I do the whole part one, part two. So
I had, for instance, the swimming pool, I had something
like an integrated fridge. I had a zip tap, I
had a whole bunch of stuff in there that you
know what it all comes down to. They're cool to
have if you want them for yourself and they're going
to add value to your life, just do it, okay,
(18:08):
But if you're concerned about the added value or the
return on your investment of putting the pull in and
so on and so forth. Then you've got to think
about it strategically, just like how we spoke about going
through a home and having that emotional factor of the
furniture brings you. It's the same as the pool, right.
If you want it to enjoy it, get it. If
(18:29):
you are doing it to add value, you've got to
take the emotion out of it and just look at
the figures and the return on your money. Typically, the
more expensive a home is and the closer it is
to the coast rule of thumb, the more buyers want
the pool. You're in Victoria, I'm in New South Wales
(18:49):
and then Queensland if you talk about that eastern seaboard
Queensland homes more often than not have a pool rather
than not. A pool adds.
Speaker 2 (18:58):
Value because it's so warm up there all the time,
right correct? Not getting much use of a pool in Melbourne,
definitely not in the winter.
Speaker 3 (19:05):
No. And Sydney is you know, if talking about Sydney
in New South Wales is much warmer than Victoria, and
a lot of the homes, you know, eastern suburbs, northern beaches,
lower north Shore, all those prestige areas. If you've got
a house that doesn't have a pool, you're missing out
on market value. And that's important. And sometimes it's not
(19:28):
so much the pool that adds value, because if you
just stick a pool or a hole in the ground
fill it with water, it's not enough. It's what you
do in and around the space. It's the landscaping, it's
the cabana. It's because swimming pools are only there, what
couple months a year, and then you're only swimming it
a couple of hours of the days of the year
(19:48):
that you're using it. The rest of the time, you're
going to look at a hole in the ground with water,
might as well make it pleasant and make sure that
you have usable yard around it. That's how you add
the value. If you have two homes, identical backyards, identical pools,
once plucked right in the center, no usable yard is
probably going to be worth less. And the house next
(20:08):
door who has it strategically placed to the side plenty
of grass. Kids can still use it in winter when
they're not swimming in it. And it's about how you're
going to use the pool to add the value to
the home, not as a feature that's only going to
be used a couple times a year, and then typically
as you go further out in the less a home
(20:29):
is worth. And this is where it comes down to.
And it's nothing to do with it, I guess, you know,
talking about a class of people or anything. It's just
the socioeconomic factors that we face as we go into
the homes that are worthless. People that have homes that
are like five hundred, six hundred, seven hundred thousand dollars
are usually those people that can only afford to buy
(20:50):
that much, So then you have running costs are a factor.
Cleaning the pool is a factor, the chemicals every month
is a factor. So it's not just about having a
pool to enjoy. If you're at that price point, your
priority is less disposable income on the pool and using
what income you have to pay for the house and
(21:10):
the bills and the mortgage, and do I really want
to spend over and above. I'm already not struggling, but
I want to be comfortable. I don't want to extend myself. Whereas,
again it's nothing to do with the people. It's more
of a disposable income. Sing closer you are to the coast,
the more the houses are worth, the more you know,
people have bit more money to spend on those things,
(21:31):
and they want those luxuries more we go room.
Speaker 2 (21:33):
That's like, someone like me is not going to be
buying a house with a pool, as much as I
would love it, It's just not in the budget. It's
not something that I would spend money on. So to me,
that feature doesn't I suppose, provide any value, and it
just pushes the house outside of what I could really afford.
That's such an interesting point that you make around how
the same amenity I suppose you could say, may or
may not add value depending on where you're from. Like
(21:55):
it might be more worth while having a pool in Queensland,
where it makes your property more probable to all of
the other ones, whereas somewhere in Melbourne, I don't know
anybody who has a pull. It's a real luxury that
you see in the very fancy, very posh neighborhoods as
opposed to the suburbs or somewhere where I would typically live.
What do you think in terms of people who are,
as you say, buying established and looking to renovate because
(22:18):
with building costs and all of the chaos that's happened
over the last few months with building companies going over,
I think people are starting to feel more and more
skeptical of building ground up and are starting to really
consider established properties. What kind of things should people consider
in terms of wanting to make a good return on
their investment for those renovations that they're making if they
(22:40):
did want to sell in their future.
Speaker 3 (22:42):
Typically, what we find at the moment, any agent will
tell you that homes that are ready to move into,
beautifully renovated, turn key ready, so to speak, are getting
a premium. People are prepared to pay more just for
the convenience to move in and not have to do
a single thing right. It's one thing to just paint
a new kitchen and bathroom, and there's another thing to
(23:03):
do a renovation. Because of renovation is knocking down walls,
you know, CDC, going through council, all that sort of stuff.
So if we're playing in that spectrum and we're going
into like a proper renovation, not just a cosmetic redo,
it's so important to understand what you're getting into. It's
very important to understand upfront and whatever you think it's
(23:26):
going to cost, add fifteen to twenty percent as a
contingency plan and keep that aside and make sure that once.
The hard thing is with adding value to a renovation
at the moment, because things are so expensive, is you
could easily sink one or two hundred thousand dollars into
your home fixing water leaks, fixing asbestos, new wiring and plumbing,
(23:51):
fixing those things, and you have actually added zero value
to the home because those things are part of the
structure of the Home's assumed that if I'm getting a home,
it's not going to leak. The electricals working and the
plumbing is working, so I'm not going to pay over
and above market value for that in a property.
Speaker 2 (24:08):
It's just an expectation that that's how it is.
Speaker 3 (24:10):
Correct. It's like you're buying a car. You expect the
brakes to work, expect the windscreen wipers to work, and
the seat belt needs to click, all those safety things right,
and it's like, well, I'm not going to pay more
just because it's working. I'll pay less because it's not.
But I'm not paying you more because it is. If
that makes sense, So then you've sunk one hundred two
hundred thousand dollars into a property only to then have
(24:33):
another three hundred thousand dollars left in the budget, and
perhaps you didn't realize it was going to cost you
so much to rectify those issues. So that's what's really
important to know, because that could have been seventy or
eighty grand two or three years ago. It's now costing
two hundred grand, and that's something that people didn't expect.
Budgeting is really important. I think if you're unsure, go
(24:54):
with the project manager. Have someone hold your hand through
the whole process that's done it before time is money.
They'll do things so much faster. They know what trades
to engage, they know the little shortcuts, they know this
process followed by this process, which means that you could
potentially say three months of back and forth with counsel.
That three months, that's three months of mortgage repayments. That's
(25:16):
three months of your time, three months of stress. So
understanding that and also this is so important for renovating.
Understand your market. Renovate for yourself if it's your forever home, okay,
but understand the market you're in. This is where you
can overcapitalize. So there's a lot of renovation shows, a
lot of renovation in SPO pages, LOMP, interest and Instagram.
(25:39):
We all get sucked into it. You're looking to buy.
I'm sure you're like.
Speaker 2 (25:43):
Oh, I've got lots of saved and pinned images.
Speaker 3 (25:46):
Yes you do, and then say your price point was
a seven hundred thousand dollars home. A lot of these
homes jess. And this is where I get clients in
mine that are like Bell, I want to do this
and this to renovate. And then I feel like the
bad guy when I'm like, you're just not going to
get the value back in your home because putting a
sixty thousand dollar kitchen may not add the sixty thousand
(26:09):
dollars to the value of your home. But understanding your
market means that if you are in those fancy pants
areas that need a swimming pool to get that extra
value they need the sixty thousand dollar kitchen, you may
only need a twenty five thousand dollar kitchen. So really
understanding your market because you could go and pump three
four hundred thousand into a home and only add two
(26:31):
hundred thousand dollars in market value. And the reason I
use the word market value, the marketess is not a
price that the value a sets, that the real estate
agent sets The market value of your home is the
value that a willing buyer and a willing seller come
together and negotiate on. That's the market. That person buying
(26:52):
and that person selling shake hands, they negotiate a price.
That price becomes statistic. Statistic becomes evidence, That evidence eventually becomes.
Speaker 2 (27:03):
A graph somewhere that a value of somewhere is taking
into consideration.
Speaker 3 (27:06):
Yes, and it's just the open market. What are they
going to pay for your property and what are they
prepared to accept as reasonable? And understanding who your buyer
is in your area can also help you determine how
much to spend. Another thing, too, is it's hard because
it's your home. Yeah, And if you see yourself living
(27:29):
their long long, long term and spending a little bit,
market value goes up. So if you do spend a
little bit now, it's okay because eventually the market will
absorb the renovation and the value will go up. For me,
it's for a potential buyer thinking, oh, I really really
want that, but I don't want to overcapitalize. It's about
(27:51):
having a list and having a list of needs and
then a list of wants. We all need a kitchen, okay,
and then we all need stone benchtops because that's with
the market once. But do you need it to be
corra marble or can it be an alternative stone? And
that's when you go it needs to be because I
want it that that is my non negotiable. It's going
(28:12):
to enjoy your life. You're going to love walking into
your kitchen because it's got that fance. Just do it.
But then somewhere else you can pull it back a
little bit. But if you start going I want, I want,
I want, I want everywhere, eventually your budget blows out.
So sometimes going okay, that is my non negotiable. That's
going to make my heart seeing every time I go
in the kitchen. Just do it, and eventually your house
(28:35):
will go up and it'll be worth more than the renovation.
Speaker 2 (28:38):
It is so interesting to hear a value as perspective
on this because earlier in the season we spoke to
interior designer Alison Lewis about renovating and the process and
what that can look like. So it's really interesting to
hear from you. I suppose the flip side of that
that you're looking at when you do go to sell
or when you are kind of considering those things The
last question I wanted to ask you before I let
(28:59):
you go is around timing of engaging with a valuer, because,
as you said earlier in the episode, a lot of
the time the value is engaged by the bank, we
don't really get to ask any questions. It can be
a very tough process. And there's probably a lot of
people listening right now who might be going, oh my goodness,
at some point, I really you know, I plan on
(29:19):
selling or I plan on doing this, right, plan on
doing that? And who do I ask my questions to
Can an individual engage a valuer themselves to help give
them some insight on any changes or things that they
should be doing before they go into the process of
getting ready to sell or renovate or do whatever they
want to do.
Speaker 3 (29:38):
Yeah, I think, Jess, And this is this is not
me giving myself a huge plug, but this is the
main reason I went in and I started the business
because valuers again are so we are so in the box,
you know, so straight laced, straight up and down. Our
job is to go out and do a valuation. And
(29:58):
then if the other value are listening to this, they're
probably going to be like, well, be quiet. So as
we provide a valuation that you can take and there's
no consultation around it. You come in, you get the report,
just like you would get a building in pest or.
Speaker 1 (30:14):
You know.
Speaker 3 (30:15):
You get the report and that's it. You don't get
to talk to the value about what should I do
to my home in my business. That's I don't give
a report. I just give my my consultation. Because of
what I've seen in my experience, if you do engage
a value, be prepared to not have a consultation with
them and that valuation. You can't take that and shop
it around to the banks. Needs to be instructed from
(30:36):
the bank, so you can get a valuer to come
around and tell you what you think it's worth. That
would be a good idea for you at least to
know that is what my base is, and then you
can go, well, the value said it's going to be
worth one point five I want to get to two million. Maybe.
Then you start thinking, well, I need to do a
(30:57):
renovation to it, because if that's all it's worth with
the valuer, then I have some scope talk to the
valuer on site and say, hey, do you think if
I did this, this, this, and this, it would add
some value. See what they say, but they're not really
in the business of consulting a real estate agent. I feel.
Just be careful because sometimes they just coach you and
tell you because they just want your listing and they're like, oh,
(31:19):
I don't worry about don't worry about renovating because they
want There's no stock on the market at the moment,
so they want your home. They want to put on
the market tomorrow because they want that commission. An interior
designer may lead you down a really I'm not saying
expensive because they have these grand visions for homes and
sometimes you're like, dude, I just want the lipstick version.
Speaker 2 (31:38):
Put it on the pig.
Speaker 3 (31:41):
What or sha do we go with pink? Do we
go with red? What lipstick? Just tell me that's I
guess what I've in my business. What I do is
I just want to tell the clients what they need
to do. But if you are getting evaluation to sell,
just be prepared to understand you can't really do anything
with that document. You can't go chop it around. It's
just for your own peace of mind to know, well,
(32:01):
at least this is especially if you look into buy
another property at least you know this is the base.
If they said one five, then I'm pretty damn certain
I'm going to get one five for it. I can
only hope for more, and then you can start maybe
planning your next purchase around that.
Speaker 2 (32:17):
That's perfect. Oh my goodness. Well, I feel like that's
a great place to leave it. Thank you so much
for sharing your insight. And if people do want to
find you and they want to have a chat to you,
they can find you at advaluer dot com, or they
can find you on your socials where you share all
of your fun little tips and tricks as well. I'm
a huge fan. I love those videos. I think they're
absolutely brilliant and they're so helpful for someone like me
(32:37):
who's kind of just trying to learn the different bits
and pieces that you can look out for in these
properties and you are at the valuer. Yes, all right, well, Blinda,
thank you for sharing your insight with us today. I
know that there's probably a lot of people who are
feeling much less scared by the concept of a valuer now.
I feel like I'm definitely feeling a lot better about
it personally. I know what you do now, which is
a win, is there anything else you wanted to say
(33:00):
everyone before we head off.
Speaker 3 (33:01):
If you're out there looking, just be really really clear
with what you want. And actually I'm going to give
you a hot tip. When you're looking to buy a
property and you want to know what things are worth,
instead of looking for things, instead of going by on
a real estate dot com or domain dot com, have
a look at everything that's.
Speaker 2 (33:17):
Sold genius, because that's the actual value. That's the data
you're looking at.
Speaker 3 (33:21):
That's the data you're looking at. And also have an A,
B and C grade suburb that you're prepared to maybe
negotiate wiggle room on and see what they're selling at
and get in with as many agents as you can.
You call them so it wait for them to call you.
You get in with them. Hey, any off market opportunities?
Is there anything coming up that I should know before
(33:43):
you call the buyers agents? Call me blah blah bah,
because that's what the buyer's agents do. They get in.
They become like mate skis with all the agents and
they're like, yep, you become mate skis with them, and
you get in and you try, and then they will
give you the first dips. Oh we've got a property
coming up next week. Quick look before it goes on
the market.
Speaker 2 (34:01):
Oh, I think I'm going to be hitting some people
up after this episode.
Speaker 3 (34:05):
Yeah, you get in with them. It's like sucking up
to the mid away. Yeah.
Speaker 2 (34:09):
So I want to be your best friend and get
all of your best properties. Thank you so much, amazing.
All right, Well that's it for today, guys. I hope
you enjoyed. If you want to catch up with Blinda
and see everything she's doing, we'll have her links in
the info box, so definitely check it out. Just before
we head off, let's quickly wrap the boring but important stuff.
The advice shared on the Property Playbook is generally in
nature and does not consider your individual circumstances. The Property
(34:31):
Playbook exists purely for educational purposes and should not be
relied upon to make an investment or a financial decision.
And I will see you in the next episode. Bye.
The Property Playbook would like to acknowledge the traditional custodians
of the lands of where this podcast is recorded. There
were wondry people of the cooler nations acknowledging the culture,
the history and the connection to the lands of what
we call home. Let's get into it.
Speaker 2 (00:27):
Hello and welcome to The Property Playbook, the podcast where
we take you from A to V of all things property.
My name is Jessica Ricky and hopefully one day soon
I will be a first home owner. But until then,
I'm grouping in every bit of professional help I can
get to help me and you guys along the way.
Today I am joined by the wonderful Belinda bot Solace,
(00:49):
who is a property value strategist, advisor and a registered
tax agent plus a TikToker. You've probably seen her videos
floating around where she chats all things valuation, property and
she's working really hard to increase the knowledge and accessibility
of information out there. Belinda, thank you so much for
joining me today.
Speaker 3 (01:07):
It is my genuine and absolute pleasure. Jess thanks for
having me.
Speaker 2 (01:11):
I was saying before, I'm so excited to have you
because I'm a big fan of your TikTok Personally, and
we were having a really good chat offline about the
industry that is valuation and like finance. I know a
lot of our listeners have come from there. She's on
the money community. Valuation can be a little bit of
a boys club. Is that right?
Speaker 3 (01:29):
Yes, I've never felt intimidated. I guess I was like
this bright eyed, bushy tail girl straight out of UNI,
and I'm like, great, I get to see houses. I
always wanted to do something in property, but didn't want
to be like a real estate agent because I always
wanted to go to UNI and do something in that
kind of economic space, and this just was perfect a
venue for that. And yeah, I was probably one of
(01:52):
only a handful of girls in very much an old
like how do I paint this picture without sounding stereotapes?
Like glasses and gray hair and clipboards and you know,
suspenders and a tie with like with a pen in
the pocket.
Speaker 2 (02:08):
You're painting a wonderful picture. I can really visualize.
Speaker 3 (02:11):
It, only because I used to knock on the door
of people's homes and they'd open it up and look
at me and be like who are you? And I'm like, oh,
I'm Belinda, the value I'm he'd inspector home and they're like,
are you and your own? And they're trying to look
over my shoulder to see if there was someone else
with me.
Speaker 2 (02:26):
I'm like, no, no, someone's supervising you.
Speaker 3 (02:29):
Yeah, hat that because you know, what do I know?
You know, just on my own and there would be
like you don't look like a value. Yeah awful. I
guess it's changed now. But valuers are very much like
the Wizard of Oz. You know, we're kind of behind
this big curtain. No one gets to really talk to us.
(02:50):
We come out on site, everyone's a bit intimidated that
they don't know what to say. Just let them do
their job. What am I supposed to say? And then
when they get the valuation back, you don't talk to
them in case you want to. You know, how did
you get to that figure? My value is worth more?
Can I have a chat? And then it's like no
access to the value are you cannot pass this point?
(03:10):
You cannot you know, come through. And we as a profession,
we hate it. We're just like, ah, leave me alone.
You got hunters and gatherers. Jess and I think if
we were the hunters, we'd be real estate agents. We'd
be out there hunting and you know, in the property world.
But as the gatherers, we're just gathering data and evidence
and analytics, and we're behind the screen and we do
(03:32):
not want to be the other side of it.
Speaker 2 (03:34):
So you don't want to be out in the scary world.
Speaker 3 (03:36):
No, No, the scary world is the inspection. And half
the time we've got our head down and just taking notes.
We're like, don't talk to me, don't doubt me.
Speaker 2 (03:44):
I just want to do my job, get in and
get out. I feel like it's actually a really good
place to kind of start because I feel like as
a lot of people myself included, who don't really fully
understand what a value a does. You know, you hear
people say, oh, the valuation came out and it said X,
or it said and I'm happy or I'm sad. But
the in between is a little bit of a mystery
(04:04):
to me. Can you tell me a bit about the process.
Speaker 3 (04:07):
I'm going to pull the curtain back for you, just
for you, Jess, bring you into my world. My world.
So it's just a person that says the legal value
on your property, the market value on your property. I'll
give you a little bit of my background so I've
been valuing for seventeen years, so it's long time. I
started valuing when you had sort of a pen and
(04:30):
paper and you know, the digital camera and had to
upload the photos. So I've come a long way. Very
old school, very old school. The fundamentals and the principles
don't change. Valuers aren't just people that go out to
your home and say, oh, yeah, this is what it's
worth and then put that figure on a piece of
paper and hand it to the bank. A valuer is
there to assess the market value of a home of
(04:52):
a property, but it's very much on the back of
the instruction. So, for instance, a mortgage value aer goes
off the instruction from a bank and the bank is saying, well,
this customer, let's say, yes, JESSRICKI wants to borrow some money. Yes,
she does, as she does, and she's our client. She's
(05:12):
come to us. Whether you go through a broker, you're
the bank's client. Now we are. The valuer works for
the bank, even though they're valuing the property for you.
So you and I have no duty of care to
each other, okay, even though it's your home. Okay. So
that's where a lot of the misconception is where people
think they have a right to talk to the value
or they have a right to question the valuer because
(05:34):
it's their property. But they haven't sent the instruction even
though they paid for it. They don't own that valuation.
The bank does.
Speaker 2 (05:43):
So the bank could talk to the valueer perhaps, but
the person who owns the home couldn't.
Speaker 3 (05:47):
Is that right, yeah, because our valuation is not extended
to a third party, So you are the third party
even though it's your home, because technically the bank own
your home until it's fully paid off. So the value
is role is to understand the instruction. So if it
comes from the bank, they have to value your property
as security to lend money. So our job is to
(06:10):
not only go out and understand what it's worth on
the date of inspection. So if I'm valuing it today,
it's almost like assuming, jest that it's going to go
to auction in the afternoon or pretty much I'm there
to assess it for the sale ads at that date.
So whatever tomorrow, we might find that the bottom of
the world falls out and the market completely crashes. All
(06:32):
the opposite happens, and overnight three hundred thousand dollars go
on the market, but today is what I'm valuing it at.
And then it's not just what it's worth to a buyer.
There's also we have to flag any risk gratings to
the bank. Is it located on a main road, Is
it next to a PowerPoint like a power station? Is
it got an easeman into the reyard? Is the potential
(06:54):
for redevelopment? What factors contribute to the value of the
home is what the bank need to know, and that's
what we capture in the report. We hand that report
with all the risk readings, the zoning look at the tidle,
see if there's anything on there. Hand that to the bank,
and then the bank see if it's a good enough
security for them to lend on. If there's a lot
(07:16):
of stuff in the property that they sees as a risk,
they may drop your lending a little bit. So they
might say, oh, this one's a big risk. Your LVR
has been adjusted. We may now need a seventy percent deposit.
Speaker 2 (07:30):
For anyone at whom he doesn't know what is LVR.
Speaker 3 (07:32):
LVR is the lender's mortgage insurance. And you know what,
people think that it's insurance for them, So you know
how you get car insurance and house insurance, so if
you crash the car, Liker, NRMA or whatever will pay
you out. Yes. Yeah, So you're paying for the bank's insurance.
With lenders mortgage insurance, what's happening is they're saying, if
we're lending over eighty percent, it's a risk for us,
(07:54):
and you're going to pay for our risk. So you're
going to pay for our insurance. And if you fall through,
then the bank, the insurer, pays us out. We go
in our merry way. And then the mortgage insurers go
and see the value are and they're like, well, you
guys told us it was worth a million bucks, so
we lent eight hundred and then they went mortgaging position
(08:17):
and we sold it for seven fifty plus all our
legal costs. You owe us two hundred and eighty thousand dollars.
We'll see you in court.
Speaker 2 (08:24):
Yeah, and then is it your liability? Is it?
Speaker 3 (08:27):
Oh? Yeah? That's why now that I've gone out out
on my own, truly, my biggest expense is my insurance
because of the risk I take on as a professional.
Speaker 2 (08:36):
So that's crazy, would you say. I hear a lot
of people talk about they have valuations on their home
before they plan to sell, and a lot of the
time you hear people saying, oh, the valuation came back
lower than I thought. The house down the road sold
for eight hundred thousand, they valued mine at seven hundred thousand.
Do you think that sometimes value is a little bit
on the conservative side because there is obviously that risk
(08:59):
put back on them.
Speaker 3 (09:00):
It goes back to the instruction from the bank. So
if we know that the bank is lending money and
we want them to be it's almost like guaranteeing that's
what it's worth. You know how a real estate agent
will come to your house and say, oh, let's try
for one one. Let's push it as hard as we can.
(09:21):
A valuer knows that it can probably get more if
it went to auction, but I have no evidence to
support that. It's like going to court and then the
judge is like, what proof do you have that you
know you didn't commit that crime? And you come in
with hard evidence. A judge isn't going to go in,
this is the bank. Pretend the bank is the judge.
The judge isn't going to say, oh, what round about
(09:42):
do you think is the evidence? You may have to
support your crime, you know what I mean. So I
don't know if that came out sounding the right way,
but I guess yeah. So a value is like, well
here my sales evidence. And a lot of the time
people have an emotional attachment to their home. They don't
see that it's a oh it doesn't bother me. They
don't see that it's a type of property that may
(10:05):
not appeal to everybody. Where the value is completely objective,
they just walk in, no emotion, they value it, their
walk back out. Yeah.
Speaker 2 (10:11):
Is there a basic framework, because obviously there's lots of
valuers all over the country doing lots of valuations in
different places. Is there a basic framework in place to
ensure that all properties are assessed on the same criteria,
so that theoretically, if one valuer or another valuer came
in on the same day, they should come up with
about the same result.
Speaker 3 (10:31):
This is hard because I've heard time and time again,
and I've seen other valuations where a bank would have
sent it to me saying another company valued it for
this amount. What do you think, as like a second opinion?
Speaker 2 (10:45):
Oh, is that common?
Speaker 3 (10:46):
It happens. It happens. I'm not a mortgage valuer. Now
I specialize more in tacts, but when I used to be,
they would send it to me every now and then,
or an owner would give it to me on site
and go, oh, I'm trying to find a different bank
his evaluation I got from the last bank, and I
sometimes don't agree with it because it really it's we're
(11:07):
all human and we come down to our own opinion.
Just like you could get three different agents go through
a home and they can each tell you different prices
that they think the home will sell for. And also
when you go to auction jest, sometimes you have fifty
people and each person has a different limit that they're
prepared to pay on that property. Each one stops bidding
(11:29):
until there's the highest bidder. So the highest bidder could
boord on emotion, and that's something that the valuer can't
assess because of the evidence of other properties. The hardest
part of value when you get the most discrepancy is
probably over the last two years, because the market's moving
(11:49):
so quickly, and if I'm basing my valuation on sales
evidence that's happened over the last three months, the markets
move so quickly. In three months, sales are already outdated.
The market's moved, and as we know, I feel that
we have hit the bottom of the market and it's
now turned and we're coming back up again. Homes that
(12:11):
are renovated are selling for a far superior premium than
homes that are unrenovated because of all this uncertainty with
construction cost. So when we go in and we're valuing
homes that are fully renovated, and I'm looking at evidence again,
the evidence from the last three months, I've got to
look at it. And that's my job as a professional
to adjust and factor in market movement. So I'm like, Okay,
(12:35):
well that was three months ago. The market's moved, is
probably worth more, And then I have to justify how
much more and by what amount it's increased. And then
by the time that property then goes to auction, two
months have passed and then they sell it for a premium.
They said, oh, we got it valued for one point
five we sold it for one six. Well, yeah, there's
(12:56):
big market movement in that time. Of course, it's going
to sell for more. That's why a lot of the
time our valuations look a lot lower because they don't
factoring with value mood in a moment in time.
Speaker 2 (13:07):
Yeah, that's such an interesting point because I suppose to
that end, if you've got a value are coming over,
you want your house to look as good as possible,
I would imagine, so you mow the lawns and make
sure it's tidy, because I'm assuming you guys are looking
at all of those superficial factors that a potential buyer
would be looking at as well, right, correct.
Speaker 3 (13:26):
So I'll give you, since you're looking to buy and
your listeners, a pretty big tip. We are professionally trained
to inspect properties on a vacant possession, so that's how
we value all homes. It doesn't come with the furniture.
So if it's got built in furniture, I don't know
if you've you can see I've got a study and
it's all built in joinery that's fixed and permanent on
(13:48):
the home that stays. So I've got to take that
into consideration. But beautiful couches and beds and you know,
beautiful pillows, that stuff makes sierra difference to me. I'm
professionally trained to look past all that. So here's my
tip for you guys. When you walk into a home
that's been professionally styled Big Northern furniture. It is there
(14:11):
to make you fall in love with the home, but
you are not buying the furniture. And I cannot tell
you time and time again, I walk in to the
property to do the valuation for the bank when the
furniture is gone, and I'm like, oh my god, this
house is terrible. How much because they put really expensive furniture.
(14:32):
It's like, I say this all the time. It's like
lipstick on a pig, right, you know, and there, but
you take the lips to go off, it's still a pig.
And I'm not calling the house a pig, but it's
that analogy.
Speaker 2 (14:43):
But a little bit it might be a pig.
Speaker 3 (14:45):
Yeah. It's like remember I don't know if you know
those nineties rom cons when they would give the girl
a makeover and literally all they do is take her
glasses off and take It's like.
Speaker 2 (14:56):
The Princess Diaries is my favorite one ever, the like,
we give you a pre sess and they open it
up and she just has straight hair and fund her
eyebrows exactly, so they've plased the eyebrows of the house.
And people spend so much money on staging when they're
selling a property for that exact reason, because they're trying
to make it look beautiful and appealing to a buyer,
so they spend as much as possible.
Speaker 3 (15:17):
Yeah, so if you're selling one hundred percent, get it styled, okay.
And it's about putting not just any lipstick. It's like
putting like Chanel lipstick. Like nothing wrong with the Revlon,
but go for the Chanel because it's like maybe a
better shade of red. Right, So go for the Juggernal
when it comes to styling. But as a buyer, make
(15:38):
sure that you take a step back. And it's the
same is when you go through the display homes when
you look into like a rebuild and you see it
and they're stunning and they've got and then all I'm
looking at is that looks budget, that looks cheap. That's
why is this such a small bedroom? Why is the
window facing the wrong way? That shouldn't be there. So
I because I'm trained to look past that where you're
(16:00):
looking at it going oh and you know, if you've
got a partner, like a bay, that's the nursery bed.
But what they don't see it's a tiny, tiny bedroom
all they see is the cot and the you know,
the toys in the corner, and they pull on those
heart strings.
Speaker 2 (16:14):
They imagine the life that they could have there.
Speaker 3 (16:16):
Correct, And that's what they're selling. And you know, it's marketing.
And if I'm selling, I want to pull on people's
heart strings because I want them to pay more for
it on that emotional factor. But our value is we're
cold hearted. We're cold blooded. Man, are you walking?
Speaker 2 (16:32):
With you walking? And be aggressive with it? Okay, well
that is very interesting. I feel like that's the perfect
spot for us to duck to a really quick break
and when we come back, I want to pick your
brain a little bit more about adding value to a
property that you have. So don't go anywhere. Welcome back everybody.
Today I am chatting with Belinda bot Solace, the wonderful
value She's got over seventeen years of experience and we're
(16:54):
chatting now all about how to add a little bit
of value to your home because Blinda, you have this
fabulous series on your social media where you talk people
through the things that maybe do and don't add value.
Because there are some things that you go, oh, if
there's a pool out the back, it's worth so much
more money that in my head, that's the thought, because
a pool is a pipe dream at this point. Can't
(17:15):
afford a house, let alone a pool to go with it.
But I've seen you talk about how they don't necessarily
always add that much value, and I'd love for you
to talk me through kind of how those figures work
and how you can figure out if something will or
will not increase the overall value of a property that
you own.
Speaker 3 (17:32):
Yeah. Sure, I guess we'll start with the swimming pool
since you mentioned it. Yeah, the series that I have,
it's like things that are cool to have but add
little to no value.
Speaker 2 (17:41):
Yeah. Yeah, there's some people listening who are getting the
visual of you in their head right now.
Speaker 3 (17:46):
And I do the whole part one, part two. So
I had, for instance, the swimming pool, I had something
like an integrated fridge. I had a zip tap, I
had a whole bunch of stuff in there that you
know what it all comes down to. They're cool to
have if you want them for yourself and they're going
to add value to your life, just do it, okay,
(18:08):
But if you're concerned about the added value or the
return on your investment of putting the pull in and
so on and so forth. Then you've got to think
about it strategically, just like how we spoke about going
through a home and having that emotional factor of the
furniture brings you. It's the same as the pool, right.
If you want it to enjoy it, get it. If
(18:29):
you are doing it to add value, you've got to
take the emotion out of it and just look at
the figures and the return on your money. Typically, the
more expensive a home is and the closer it is
to the coast rule of thumb, the more buyers want
the pool. You're in Victoria, I'm in New South Wales
(18:49):
and then Queensland if you talk about that eastern seaboard
Queensland homes more often than not have a pool rather
than not. A pool adds.
Speaker 2 (18:58):
Value because it's so warm up there all the time,
right correct? Not getting much use of a pool in Melbourne,
definitely not in the winter.
Speaker 3 (19:05):
No. And Sydney is you know, if talking about Sydney
in New South Wales is much warmer than Victoria, and
a lot of the homes, you know, eastern suburbs, northern beaches,
lower north Shore, all those prestige areas. If you've got
a house that doesn't have a pool, you're missing out
on market value. And that's important. And sometimes it's not
(19:28):
so much the pool that adds value, because if you
just stick a pool or a hole in the ground
fill it with water, it's not enough. It's what you
do in and around the space. It's the landscaping, it's
the cabana. It's because swimming pools are only there, what
couple months a year, and then you're only swimming it
a couple of hours of the days of the year
(19:48):
that you're using it. The rest of the time, you're
going to look at a hole in the ground with water,
might as well make it pleasant and make sure that
you have usable yard around it. That's how you add
the value. If you have two homes, identical backyards, identical pools,
once plucked right in the center, no usable yard is
probably going to be worth less. And the house next
(20:08):
door who has it strategically placed to the side plenty
of grass. Kids can still use it in winter when
they're not swimming in it. And it's about how you're
going to use the pool to add the value to
the home, not as a feature that's only going to
be used a couple times a year, and then typically
as you go further out in the less a home
(20:29):
is worth. And this is where it comes down to.
And it's nothing to do with it, I guess, you know,
talking about a class of people or anything. It's just
the socioeconomic factors that we face as we go into
the homes that are worthless. People that have homes that
are like five hundred, six hundred, seven hundred thousand dollars
are usually those people that can only afford to buy
(20:50):
that much, So then you have running costs are a factor.
Cleaning the pool is a factor, the chemicals every month
is a factor. So it's not just about having a
pool to enjoy. If you're at that price point, your
priority is less disposable income on the pool and using
what income you have to pay for the house and
(21:10):
the bills and the mortgage, and do I really want
to spend over and above. I'm already not struggling, but
I want to be comfortable. I don't want to extend myself. Whereas,
again it's nothing to do with the people. It's more
of a disposable income. Sing closer you are to the coast,
the more the houses are worth, the more you know,
people have bit more money to spend on those things,
(21:31):
and they want those luxuries more we go room.
Speaker 2 (21:33):
That's like, someone like me is not going to be
buying a house with a pool, as much as I
would love it, It's just not in the budget. It's
not something that I would spend money on. So to me,
that feature doesn't I suppose, provide any value, and it
just pushes the house outside of what I could really afford.
That's such an interesting point that you make around how
the same amenity I suppose you could say, may or
may not add value depending on where you're from. Like
(21:55):
it might be more worth while having a pool in Queensland,
where it makes your property more probable to all of
the other ones, whereas somewhere in Melbourne, I don't know
anybody who has a pull. It's a real luxury that
you see in the very fancy, very posh neighborhoods as
opposed to the suburbs or somewhere where I would typically live.
What do you think in terms of people who are,
as you say, buying established and looking to renovate because
(22:18):
with building costs and all of the chaos that's happened
over the last few months with building companies going over,
I think people are starting to feel more and more
skeptical of building ground up and are starting to really
consider established properties. What kind of things should people consider
in terms of wanting to make a good return on
their investment for those renovations that they're making if they
(22:40):
did want to sell in their future.
Speaker 3 (22:42):
Typically, what we find at the moment, any agent will
tell you that homes that are ready to move into,
beautifully renovated, turn key ready, so to speak, are getting
a premium. People are prepared to pay more just for
the convenience to move in and not have to do
a single thing right. It's one thing to just paint
a new kitchen and bathroom, and there's another thing to
(23:03):
do a renovation. Because of renovation is knocking down walls,
you know, CDC, going through council, all that sort of stuff.
So if we're playing in that spectrum and we're going
into like a proper renovation, not just a cosmetic redo,
it's so important to understand what you're getting into. It's
very important to understand upfront and whatever you think it's
(23:26):
going to cost, add fifteen to twenty percent as a
contingency plan and keep that aside and make sure that once.
The hard thing is with adding value to a renovation
at the moment, because things are so expensive, is you
could easily sink one or two hundred thousand dollars into
your home fixing water leaks, fixing asbestos, new wiring and plumbing,
(23:51):
fixing those things, and you have actually added zero value
to the home because those things are part of the
structure of the Home's assumed that if I'm getting a home,
it's not going to leak. The electricals working and the
plumbing is working, so I'm not going to pay over
and above market value for that in a property.
Speaker 2 (24:08):
It's just an expectation that that's how it is.
Speaker 3 (24:10):
Correct. It's like you're buying a car. You expect the
brakes to work, expect the windscreen wipers to work, and
the seat belt needs to click, all those safety things right,
and it's like, well, I'm not going to pay more
just because it's working. I'll pay less because it's not.
But I'm not paying you more because it is. If
that makes sense, So then you've sunk one hundred two
hundred thousand dollars into a property only to then have
(24:33):
another three hundred thousand dollars left in the budget, and
perhaps you didn't realize it was going to cost you
so much to rectify those issues. So that's what's really
important to know, because that could have been seventy or
eighty grand two or three years ago. It's now costing
two hundred grand, and that's something that people didn't expect.
Budgeting is really important. I think if you're unsure, go
(24:54):
with the project manager. Have someone hold your hand through
the whole process that's done it before time is money.
They'll do things so much faster. They know what trades
to engage, they know the little shortcuts, they know this
process followed by this process, which means that you could
potentially say three months of back and forth with counsel.
That three months, that's three months of mortgage repayments. That's
(25:16):
three months of your time, three months of stress. So
understanding that and also this is so important for renovating.
Understand your market. Renovate for yourself if it's your forever home, okay,
but understand the market you're in. This is where you
can overcapitalize. So there's a lot of renovation shows, a
lot of renovation in SPO pages, LOMP, interest and Instagram.
(25:39):
We all get sucked into it. You're looking to buy.
I'm sure you're like.
Speaker 2 (25:43):
Oh, I've got lots of saved and pinned images.
Speaker 3 (25:46):
Yes you do, and then say your price point was
a seven hundred thousand dollars home. A lot of these
homes jess. And this is where I get clients in
mine that are like Bell, I want to do this
and this to renovate. And then I feel like the
bad guy when I'm like, you're just not going to
get the value back in your home because putting a
sixty thousand dollar kitchen may not add the sixty thousand
(26:09):
dollars to the value of your home. But understanding your
market means that if you are in those fancy pants
areas that need a swimming pool to get that extra
value they need the sixty thousand dollar kitchen, you may
only need a twenty five thousand dollar kitchen. So really
understanding your market because you could go and pump three
four hundred thousand into a home and only add two
(26:31):
hundred thousand dollars in market value. And the reason I
use the word market value, the marketess is not a
price that the value a sets, that the real estate
agent sets The market value of your home is the
value that a willing buyer and a willing seller come
together and negotiate on. That's the market. That person buying
(26:52):
and that person selling shake hands, they negotiate a price.
That price becomes statistic. Statistic becomes evidence, That evidence eventually becomes.
Speaker 2 (27:03):
A graph somewhere that a value of somewhere is taking
into consideration.
Speaker 3 (27:06):
Yes, and it's just the open market. What are they
going to pay for your property and what are they
prepared to accept as reasonable? And understanding who your buyer
is in your area can also help you determine how
much to spend. Another thing, too, is it's hard because
it's your home. Yeah, And if you see yourself living
(27:29):
their long long, long term and spending a little bit,
market value goes up. So if you do spend a
little bit now, it's okay because eventually the market will
absorb the renovation and the value will go up. For me,
it's for a potential buyer thinking, oh, I really really
want that, but I don't want to overcapitalize. It's about
(27:51):
having a list and having a list of needs and
then a list of wants. We all need a kitchen, okay,
and then we all need stone benchtops because that's with
the market once. But do you need it to be
corra marble or can it be an alternative stone? And
that's when you go it needs to be because I
want it that that is my non negotiable. It's going
(28:12):
to enjoy your life. You're going to love walking into
your kitchen because it's got that fance. Just do it.
But then somewhere else you can pull it back a
little bit. But if you start going I want, I want,
I want, I want everywhere, eventually your budget blows out.
So sometimes going okay, that is my non negotiable. That's
going to make my heart seeing every time I go
in the kitchen. Just do it, and eventually your house
(28:35):
will go up and it'll be worth more than the renovation.
Speaker 2 (28:38):
It is so interesting to hear a value as perspective
on this because earlier in the season we spoke to
interior designer Alison Lewis about renovating and the process and
what that can look like. So it's really interesting to
hear from you. I suppose the flip side of that
that you're looking at when you do go to sell
or when you are kind of considering those things The
last question I wanted to ask you before I let
(28:59):
you go is around timing of engaging with a valuer, because,
as you said earlier in the episode, a lot of
the time the value is engaged by the bank, we
don't really get to ask any questions. It can be
a very tough process. And there's probably a lot of
people listening right now who might be going, oh my goodness,
at some point, I really you know, I plan on
(29:19):
selling or I plan on doing this, right, plan on
doing that? And who do I ask my questions to
Can an individual engage a valuer themselves to help give
them some insight on any changes or things that they
should be doing before they go into the process of
getting ready to sell or renovate or do whatever they
want to do.
Speaker 3 (29:38):
Yeah, I think, Jess, And this is this is not
me giving myself a huge plug, but this is the
main reason I went in and I started the business
because valuers again are so we are so in the box,
you know, so straight laced, straight up and down. Our
job is to go out and do a valuation. And
(29:58):
then if the other value are listening to this, they're
probably going to be like, well, be quiet. So as
we provide a valuation that you can take and there's
no consultation around it. You come in, you get the report,
just like you would get a building in pest or.
Speaker 1 (30:14):
You know.
Speaker 3 (30:15):
You get the report and that's it. You don't get
to talk to the value about what should I do
to my home in my business. That's I don't give
a report. I just give my my consultation. Because of
what I've seen in my experience, if you do engage
a value, be prepared to not have a consultation with
them and that valuation. You can't take that and shop
it around to the banks. Needs to be instructed from
(30:36):
the bank, so you can get a valuer to come
around and tell you what you think it's worth. That
would be a good idea for you at least to
know that is what my base is, and then you
can go, well, the value said it's going to be
worth one point five I want to get to two million. Maybe.
Then you start thinking, well, I need to do a
(30:57):
renovation to it, because if that's all it's worth with
the valuer, then I have some scope talk to the
valuer on site and say, hey, do you think if
I did this, this, this, and this, it would add
some value. See what they say, but they're not really
in the business of consulting a real estate agent. I feel.
Just be careful because sometimes they just coach you and
tell you because they just want your listing and they're like, oh,
(31:19):
I don't worry about don't worry about renovating because they
want There's no stock on the market at the moment,
so they want your home. They want to put on
the market tomorrow because they want that commission. An interior
designer may lead you down a really I'm not saying
expensive because they have these grand visions for homes and
sometimes you're like, dude, I just want the lipstick version.
Speaker 2 (31:38):
Put it on the pig.
Speaker 3 (31:41):
What or sha do we go with pink? Do we
go with red? What lipstick? Just tell me that's I
guess what I've in my business. What I do is
I just want to tell the clients what they need
to do. But if you are getting evaluation to sell,
just be prepared to understand you can't really do anything
with that document. You can't go chop it around. It's
just for your own peace of mind to know, well,
(32:01):
at least this is especially if you look into buy
another property at least you know this is the base.
If they said one five, then I'm pretty damn certain
I'm going to get one five for it. I can
only hope for more, and then you can start maybe
planning your next purchase around that.
Speaker 2 (32:17):
That's perfect. Oh my goodness. Well, I feel like that's
a great place to leave it. Thank you so much
for sharing your insight. And if people do want to
find you and they want to have a chat to you,
they can find you at advaluer dot com, or they
can find you on your socials where you share all
of your fun little tips and tricks as well. I'm
a huge fan. I love those videos. I think they're
absolutely brilliant and they're so helpful for someone like me
(32:37):
who's kind of just trying to learn the different bits
and pieces that you can look out for in these
properties and you are at the valuer. Yes, all right, well, Blinda,
thank you for sharing your insight with us today. I
know that there's probably a lot of people who are
feeling much less scared by the concept of a valuer now.
I feel like I'm definitely feeling a lot better about
it personally. I know what you do now, which is
a win, is there anything else you wanted to say
(33:00):
everyone before we head off.
Speaker 3 (33:01):
If you're out there looking, just be really really clear
with what you want. And actually I'm going to give
you a hot tip. When you're looking to buy a
property and you want to know what things are worth,
instead of looking for things, instead of going by on
a real estate dot com or domain dot com, have
a look at everything that's.
Speaker 2 (33:17):
Sold genius, because that's the actual value. That's the data
you're looking at.
Speaker 3 (33:21):
That's the data you're looking at. And also have an A,
B and C grade suburb that you're prepared to maybe
negotiate wiggle room on and see what they're selling at
and get in with as many agents as you can.
You call them so it wait for them to call you.
You get in with them. Hey, any off market opportunities?
Is there anything coming up that I should know before
(33:43):
you call the buyers agents? Call me blah blah bah,
because that's what the buyer's agents do. They get in.
They become like mate skis with all the agents and
they're like, yep, you become mate skis with them, and
you get in and you try, and then they will
give you the first dips. Oh we've got a property
coming up next week. Quick look before it goes on
the market.
Speaker 2 (34:01):
Oh, I think I'm going to be hitting some people
up after this episode.
Speaker 3 (34:05):
Yeah, you get in with them. It's like sucking up
to the mid away. Yeah.
Speaker 2 (34:09):
So I want to be your best friend and get
all of your best properties. Thank you so much, amazing.
All right, Well that's it for today, guys. I hope
you enjoyed. If you want to catch up with Blinda
and see everything she's doing, we'll have her links in
the info box, so definitely check it out. Just before
we head off, let's quickly wrap the boring but important stuff.
The advice shared on the Property Playbook is generally in
nature and does not consider your individual circumstances. The Property
(34:31):
Playbook exists purely for educational purposes and should not be
relied upon to make an investment or a financial decision.
And I will see you in the next episode. Bye.
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