The gamble an Auckland builder and his partner took when they bought a North Shore house with no code of compliance certificate has finally paid off after they sold it last week for $1.235 million.
Harcourts agent Annie Booth told OneRoof that the house had found a buyer three months after it hit the market.
Booth had sold the 1990s house to the vendors two and a half years ago, for just over $1m, well below its $1.225m CV. They were keen to take on the challenge and figured their 40-plus years in the construction industry would serve them well.
Their original plan to renovate the house for their daughter changed, so rather than renting it out, they put the finished home on the market in May.
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When the house passed in at auction, Booth slapped a price of $1.35m on the house. The change of tactic helped to bring in more buyers, and after some negotiations and a final price tweak, the house sold for $1.235m.
Booth said that pricing a property weeded out the “opportunists”, who were not looking at the size of the property or the quality of the build, but making low-ball offers based on outdated estimates.
The couple's makeover included replacing the original corrugated iron cladding with a Stria fibre cement product, enclosing the carport into a garage, rebuilding the deck, adding new flooring, lighting, and heat pump, as well as putting an ensuite bathroom and re-jigging the master bedroom floor plan.
The new buyers are a local couple who had driven past the renovation through the build period.
The house had a re-jig of its floor plan, new cladding, a garage, and decorating work to bring it up to standard. Photo / Supplied
The homeowners own a well-known building company in the area, so could deal with the problems of the uncertified house to bring it up to standard. Photo / Supplied
“They weren’t looking at all, like a lot of locals, and didn’t know whether they’d like it inside or not. They loved the easy living all on one level, that it was so sunny,” she said.
Booth said the vendors were happy to have the sale done.
Taking on a tricky house is not for the faint-hearted. Builder, project manager, and former real estate agent Jared Simm, of Simm Projects, has established a niche business helping vendors update their properties to get them ready for sale.
It is not just a splash of paint and some staging. Simm undertakes a complete rebuild that may include rearranging a floor plan for better indoor-outdoor flow, adding a new kitchen and bathroom, decoration and new flooring, insulation, and sometimes even re-roofing, replacing some windows or doors and re-cladding.
While he tries to keep most of the work to replacing like with like to avoid the seven to 10 weeks’ time delay to get council consents, Simm said recent makeovers have been testing his timelines to get through the red tape.
In exchange for the labour and project management, Simm takes a cut of the profits when the renovated house is sold: the difference between the agreed valuation or appraisal for the old property and the sale price of the newly done-up home.
Last month a three-bedroom brick and tile house on Lynwood Road, New Lynn, went for $811,000 after a makeover – over $145,000 more than a near identical house in the same block in original condition sold for at the end of last year. Simm and the client split the profits after deducting the $50,000 renovation cost.
Earlier this year a professional makeover on an original-condition house by Simm Projects earned the Glenfield homeowner and builder Jared Simm a $90,000 profit each. Photo / Supplied
The renovation included a new kitchen, transformed bathroom, new carpet, flooring, lighting, and decoration, and tidied up landscaping.
“We come to an agreement between myself, the real estate agent and owner, or sometimes we get a registered valuation. People know it’s a three-month process and when the places are done, the agents like to get them sold quickly through an auction.
“We get good feedback, because they’re priced keenly,” he said.
Simm said he noticed some would-be flippers stumble because they over-spent on the reno or did not buy well in the first place, or didn’t know what mattered to buyers.
“We set a maximum value for the renovation, and we can’t go over that. There is nothing that is a surprise for me - we are expecting that old toilets and bathrooms will need completely new floors, that kitchen walls won’t be straight and plumb. We always do good kitchens and landscaping, as first impressions are key.
“But speed and efficiency are everything.”
In December last year Simm partnered with an elderly owner to transform his long-term four-bedroom home in Glenfield on the North Shore. The house sold for $300,000 more than what anyone was prepared to pay for it when it was in its original condition, yielding Simm and his client a $90,000 profit each.
Once the property, which passed in at auction at the end of December, was priced at $1.325m the Harcourts agent Deb Talbot-King was swamped with interest, fielding five offers before it sold. Simm funded and carried out the renovation, which cost $144,000 excluding his own time and even created a fourth bedroom out of a laundry.
Simm is currently working on an apartment in Northcote Point that had consent issues and said that he already has projects booked in for work to be done in time for listing for the pre-Christmas market.
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