Determining A-Grade Property

The quality of your property is critical to protect yourself from losing money, and to enjoy your lifestyle. This isn’t a difficult concept to understand, but so many buyers compromise on the quality of the property without fully understanding the consequences until it is too late.

When we talk about the grade or quality, we aren’t only referring to the design or construction of the house itself, we are also including the location and land characteristics.

Let’s look at what constitutes an A-grade property.

We’ll start with land characteristics. A-grade properties are not overcapitalised with expensive buildings on cheap or small land parcels. They are normal for the area in terms of size and position of building on the block. That means in suburbs where the typical home is freestanding with a backyard and the house sits in the middle of the block, that’s what you’d expect in an A-grade property in that suburb.

When it comes to location, A-grade properties are not found on main roads or busy streets, and they aren’t found next door to schools or shops or any other mixed use. A-grade properties are found next to other A-grade properties, in quiet and pleasant streetscapes. A-grade properties are walking distance to transport, to shops, schools and open spaces like parks, rivers, beaches or other desirable lifestyle draw-cards.

Last but not least, the building itself plays a role in the grading of a property. We’ve touched on overcapitalising, which refers to how much more value there is in the building than there is in the land. There’s also the quality and condition of the construction of the house, and how scarce or how easily reproduced the property can be. Scarcity is a big factor when it comes time to sell, because if there’s a lot of the same type of building as yours on the market at the same time, you’re having to share the pool of buyers and reduce the competition which ultimately drives prices higher. Some of the other building characteristics that determine an A-grade rating are the orientation of the backyard so that the living areas of the home are flooded with natural light. A good floor plan with bedroom and living area separation, and living areas flowing out to outdoor entertaining areas with northern aspect are complementary and desirable for buyers.

You now have a better understanding of what determines A-grade property, but why is this so important if you’ve found a home you love anyway?

The reason is simple. It stops you from losing money. If you buy a B or C grade home in a rising market, you’ll have competition and pay at or above market value to secure the property. If you sell in a falling market, like Melbourne and Sydney in 2018, you’ll have very few buyers interested in your property and if you need to sell urgently, the only way to entice a buyer will be a price discount.

There’s so many different reasons that force home owners to sell- marriage, divorce, growing families- and that is why it’s critical in having some clarity into what your needs are today and into the future, and how to protect you from making mistakes and losing money.

Francesca Luccitti
Principal
0430 393 396
[email protected]
www.cumberlandrg.com.au
Shop 8, Greystanes Shopping Centre Greystanes NSW 2145
181 Dunmore St Wentworthville NSW 2145