Just because the house needs some work, doesn’t mean you can lowball

If you’re buying on a budget, you may hold out hope there’s a renovator in your dream suburb for well under the median price. But agents warn that usually won’t be the case.

In fact, a general rule of thumb is only buy a renovator if you can afford a finished product in the same suburb, agents say. Unless you’re in the construction industry and you can literally do-it-yourself, and buy materials and tools at cost price. Otherwise, you may end up spending just as much as you would on a fully renovated home. 

Ray White Stones Corner agent Amanda Van de Hoef recently sold a Paddington renovator at auction for $743,000. The early 1900s Queenslander at 101 Fernberg Road had been covered in cladding, had the verandas enclosed and some of the VJ walls were covered in cement sheeting by the former owner.

In short, it needed some work.

“There’s a long story with this one,” Ms Van de Hoef said. “Because it was a deceased estate, it was the worst house in the street.

“There’s nothing endearing about the updates done to the house.”

Ms Van de Hoef said she had a lot of interest from young people looking for a cheap house to do up in their own time, most had price expectations that were far too low.

“Some people thought they could get it for $350,000,” she said.

• Related: The fastest growing suburbs in Australia
• Related: ‘Houseproud’ vendors lead to overpriced homes
• Related: House building up in Brisbane, down everywhere else

Even on auction day, most of the registered bidders weren’t willing to pay any more than $500,000. “We had eight registered bidders on the day and the bidding started at $500,000 and only two people were bidding,” Ms Van de Hoef said.

Buyers needed to have a realistic idea of local property and renovation prices before attempting to buy into Brisbane’s elite suburbs or otherwise. “You need to reconsider,” Ms Van de Hoef said.

Down the road in Red Hill, Ray White Paddington agent Sonya Browne said she was in a similar situation with 27 Argyle Street. “I think most people haven’t done their homework,” she said.

Ms Browne didn’t shy away from the fact the old home needed some work, but said potential buyers often underestimated the underlying quality of the build.

“It looks shabby inside, the wallpaper is peeling off, but it’s just cosmetic. It’s a pretty good solid house in its structure,” she said. “Even the floorboards are beautiful hardwood floors, the bathroom’s quite good. They just freak out and say it’s going to cost lots of money.”

Often buyers made offers on houses in Red Hill with as little as $400,000, said Ms Browne.