Auction Advice for a Confused Buyer

[mags]

Wondering if anyone can give a bit of advice or an opinion as to what course of action they would take in this scenario?

I am/was seriously considering bidding on a property that is going to auction next Saturday. The house is an old Queenslander which has had some improvements / alterations since it was moved to its new Qld home site approx 12 years ago.

I have had a building and pest inspection done on the property and the report recommends that I get local council searches done as there are additions and improvements that they cannot confirm have been passed by council.

The problem that I have is that the owner will not approve me getting these searches done (which I believe I need to get done before auction as the auction is unconditional). The reason he says he doesn't want me to get the searches done is that "if I find out anything negative I may not bid on the property" and also "the council may chase him up to get the alterations passed" when all he wants is the property sold due to personal problems. He insists that the alterations are all legal (as he is a builder) This is what the Real Estate agent is telling me.

He has been upfront and told the real estate the things that he HAS got approval for:-

Free standing double garage
Double Carport

and the ones that he has NOT got approval for:-

Roofed patio attached to rear of dwelling
Subfloor alterations, including removal of support stumps
which have been replaced with steel beam substitutes.

I love the house and would like to make it my PPOR but.........not sure what the right thing is to do. Seems to me that the important things are the things he hasn't got council approval for AM I RIGHT? ... I think so!!

The report that I got did say that the property had "no evidence of structural damage" and the builder who inspected it said it was "sound" but still advised me to get council to look at it and make sure that the beams were the right size and thickness according to the Building Standards Act.

Has anyone been in this situation before? You can see that I am fighting with myself all the time and all I need is some other opinions so that I can weigh it up properly instead of my heart telling me one thing and my head telling me another

 

[LynnH]

mags

You could tell the owner that unless he gives approval for you to have the searches done, you will definitely NOT be bidding at auction! The absolute gall of the man - he wants YOU to buy a property that may or may not be structurally sound and/or acceptable to the council and for YOU to accept the financial consequences of any rectification work required!

IMHO, I would be listening to your head on this one!

Cheers
LynnH

 

[HandyAndy888]

If you really like the house (ie. its to be your PPOR), just buy it/bid without the approvals. Make sure you are happy with the job that was done though.

 

[buzzlightyear]

There will always be another property, whether IP or PPOR that will eventuate.

These are headaches IMHO, you don't need down the track (or earlier!)

 

[mags]

Thank You LynnH, HandyAndy888 and buzz for your thoughts and comments.

I still have until next Saturday to decide what I am going to do although I just KNOW if he had nothing to hide he wouldn't be bothered that I want the searches done.

So........better to be safe than sorry "as they say" another place will come along that I love just as much if not more "I HOPE"

Regards
Mags

 

[Perp]

A couple of thoughts:

1) Do you need his approval to conduct searches? My understanding is that anybody can conduct searches, though I may be mistaken.

2) Have you tried checking online (if Brisbane City Council) at this website? You can conduct queries and find out a fair bit about previous approvals etc immediately.

3) You can also try just ringing Council and talking to them, rather than conducting searches formally. They're usually pretty happy to discuss this kind of thing over the phone. You could find out whether retrospective approval is possible, and what would be involved. I seriously doubt that the Council would pursue the owner re illegal renovations; nearly every dwelling has something that's not quite up to code. Particularly if it's for sale, and the prospective owner is indicating their intention to rectify. I seriously doubt that either of these are going to cost you a lot.

If this is for your PPoR and you really feel that it's right in every other way - good location, house is the right size for your current and future needs, and you think you can afford it and it will experience reasonable growth - then go for it. Just make allowance for necessary rectification works when determining your maximum bid. Once you've decided your maximum bid, write it down, give it to an independent third party, and get them to come with you to the auction and wrestle you to the ground if you're tempted to bid higher than the figure you wrote down.

 

[mags]

Hi Tracy

I have phoned council (Ipswich City Council) and they have informed me that I need the owners approval to conduct the searches. The council were really good in that they let me know that the garage and carport have been passed (and these are the two things that the owner said had been passed) so he is being truthful and upfront.

The owner has informed the real estate agent that he would be more than happy to let me have a builder come in to give me an estimate of what costs would be involved in getting the alterations passed to council standards so I am a happy chappy :>)

I went again today to the open house and had another look and I am still in love with the house. I have spoken to my other half and we have decided what our maximum amount will be.........so we are going to go for it!

Will keep you up to date

Watch this spot next Saturday 24th May

 

[Perp]

Well, you learn something every day; I had no idea you needed the owner's permission to do searches! Is this the same in every jurisdiction?

Good on you, mags, for doing the preparation.

I hope I'm not telling you to suck eggs, but I'm a little concerned that the vendor knows how much you love the place, which could cause them to hold out for a high price, confident that you'll pay it. (This is exactly what happened when we bought our first PPoR - I was so green I gushed about how much I loved it and I'm sure I paid too much. )

So if you talk to the agent during the week, play it cool. You're not sure, you're still thinking, you don't know if you'll bid, you're tossing up between that place and one other, etc...

Of course if somebody else is bidding, then psychology (with respect to the vendor) doesn't matter as much - you've got to beat that other bidder. But if nobody else is bidding and you've let the vendor know (via the agent) that you just love the place, the vendor may hold out for a higher price than would otherwise be the case.

 

[wylie]

To follow on from Tracey, why not go really quiet this week, keep the agent guessing as to whether you have gone cold on this house, or even hint that you found something else you really love this weekend.

You don't want to be a "sitting duck - ripe for plucking" at the auction.

 

[wylie]

For me, I would not touch this with a barge pole because it seems quite obvious that there is something the vendor wants to hide.

If the approvals for the work done without approval are so easy to get, why wouldn't the vendor get them prior to placing the house on the market. It smells a bit fishy to me, but maybe I am paranoid. If something is really wrong, or the council make you pull down something, you will be in a big pickle.

Don't forget you will have to sell this on one day. My mother told me stories of people who didn't buy houses because the ant caps were missing. This house is one we bought ourselves. No termites, no problems, we just inserted ant caps, but somebody had pulled out of the sale due to just this little thing. One of the worst houses in one of best streets in Coorparoo too. People are scared of what they don't know, so I would be very wary.

However, if you have decided to try to buy it, then to follow on from Tracey, why not go really quiet this week, keep the agent guessing as to whether you have gone cold on this house, or even hint that you found something else you really love this weekend.

You don't want to be a "sitting duck - ripe for plucking" at the auction.

 

[LynnH]

Well, you learn something every day; I had no idea you needed the owner's permission to do searches! Is this the same in every jurisdiction?

Tracey

To add a little info here, you don't require the owners permission to inspect Council records when you have a signed contract to purchase a property. We have gone to (different) Councils several times with a copy of the contract, and there has never been a problem getting info. (Obviously in mags case, there is no contract since it is going to auction.)

Cheers
LynnH

 

[suburbangirl]

I agree with the previous poster who said you need to think about what if you ever need to resell the place. If you are buying something without permits where you can get the permits later on, then all's well and good; but if you are buying something without permits, and you are unlikely to be able to get the permits later on, then how would this impact your sale if you decided to sell the place a bit further down the track? A lot of people can be put off by stuff like this, they would rather just walk away if there is any hint of a potential problem.

I know you say you love the house, but there will be other houses to love that don't have this big question mark hanging over them.

I'd steer clear.

Having said that, if you do decide to bid, make a big huff about all these potential problems and let them know you've found another place (ie even if you haven't) and are seriously tossing up between the two.

Good luck and let us know how you go.

 

[wylie]

If you are brave enough (I wouldn't be ) you could ask loudly before the actual auction begins "do the additions have council approval?" and see what happens?

It might leave you the sole bidder. Certainly will cause a stir and should put a cat among the pidgeons