Yes, it would matter a lot.
That 10% overpayment that was 'wasted', could have been used as a deposit on a 2nd IP back in 1985.
So the compounded benefit would be double by today.
Have you ever paid over asking price?
- Thread starter BayView
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That 10% overpayment that was 'wasted', could have been used as a deposit on a 2nd IP back in 1985.
So the compounded benefit would be double by today.
This is a very good point. Why waste money at any time?
Not to mention paying more in stamp duty, having a bigger loan and 30 years of extra interest on that loan too.
Yes, was advertised $X60,000+ & paid over that figure, but thought it was reasonably priced and worked out well when selling a few years later.
Asking price may or may not represent a properties market value, so you could pay over and still be getting a bargain or pay under and be overpaying. The poll is a meaningless measure of an investors ability to score a good deal in my opinion.
Asking price may or may not represent a properties market value, so you could pay over and still be getting a bargain or pay under and be overpaying. The poll is a meaningless measure of an investors ability to score a good deal in my opinion.
I suppose it is very hard to determine if the extra 10% was "wasted", because in reality there is a very high chance that if you don't pay that extra 10% you're not going to secure the property, and someone else paid slightly less than you got it and is enjoying the fruit now and you've once again missed an opportunity because of the extra 10% mindset that hold you back.
Same in Auction, you can't really kick yourself because you start bidding higher than the starting price and bid over the reserve price, and while you're outbidding other people you are pretty much over paying every time you raise the bid.
instead of focus on the money amount should focus on the % of the end result I'd say.
I would of thought that an astute investor would see that paying "overs" is a waste. Why not move onto another investment that ticks all the boxes. There are plenty of fish in the sea.
I've never paid over asking price.
If you have to pay over asking price, then I believe either the Agent is has no idea & is listing the property way too low, so offering over could ensure you get it, or you are in a heated market.
I have bought several at auction, however they have always been in a depressed market & there hasn't been much, if any, competition.
Have bought a couple of new properties and paid the asking price on them.
If you have to pay over asking price, then I believe either the Agent is has no idea & is listing the property way too low, so offering over could ensure you get it, or you are in a heated market.
I have bought several at auction, however they have always been in a depressed market & there hasn't been much, if any, competition.
Have bought a couple of new properties and paid the asking price on them.
I agree entirely.... you'll never really know, even with hindsight.
The post asked about paying more than it was worth...
... so the implication is that there are others of equal quality that you don't have to overpay for.
Or even better pay 10% less than it's worth & put down 2 extra deposits !
The same principle applies to shares - I'm happy to sit in front of a ticker all day & buy 1% cheaper, safe in the knowledge that I've bought 1% more shares for the same $$$ and that the compounded benefits will be huge.
Paying 10% more than you needed to can be a waste (purchase 550k instead of 500k) that extra 50k makes 10k out of your pocket today (80% LVR) and would slow down future purchases.
The advertised price is also meaningless, I ignore the asking price to an extent. If my budget is 500k I am not going to look at 1M+ properties but then again I could tell that it was over. If the price is 400k plus and FMV is 500k and I get it for 450k I technically paid 50k over asking price but 50k less than FMV.
What about the $1 reserve auction they have done... Did those people pay more than what it was worth? Maybe slightly but can you imagine if they responded to this thread saying I paid 500k over the asking price some people would laugh!
The advertised price is also meaningless, I ignore the asking price to an extent. If my budget is 500k I am not going to look at 1M+ properties but then again I could tell that it was over. If the price is 400k plus and FMV is 500k and I get it for 450k I technically paid 50k over asking price but 50k less than FMV.
What about the $1 reserve auction they have done... Did those people pay more than what it was worth? Maybe slightly but can you imagine if they responded to this thread saying I paid 500k over the asking price some people would laugh!
Hmm.....have you bid at auction? There isn't a starting price, but there is a reserve. If you bid too low, the auctioneer may (or may not, if it's ridiculously low) accept the bid, but that does not mean that the property is 'on the market'.
Putting your hand up to bid also does not mean you are paying over. It all depends on the property, the state of the market, and who else is bidding. There may be plenty of people willing to pay a lot higher than the property sells at auction, but won't, because they are just plain scared of the auction process, or because they don't have unconditional finance approved.
My best buys have been at auction, where I've been the only bidder.
I do believe they are here, it's just that they didn't register an account and only read the "where to buy" forum
Might need eyes checked, poll as 'asking price' same with OP post
Hence why we are talking about asking price and not worth price.
Technically a property is only worth what someone is willing to pay and another person is willing to accept. If I offered you $1 for your property you would reject it but if I offered you $100M you would accept. However I would glad offer you $1 and I wouldn't offer you $100M lol.
Yes this is the point I was trying to make.
My best buys have been at auction, where I've been the only bidder.
No competition is where you get the best buys.
Yes it is kind of scary bidding at auction with it being unco but if you have done preapproval and did bid way over what would be FMV then you are normally okay or you can find another bank to lend you.
If you bidded 520k on a 500k property the valuation will come back 99.9% as 520k imho. If you won at 700k on a 500k property they will likely value it at 600-650k (as there was someone else willing to pay 690k for the property!)
Not sure what you mean.
Private sale - no because the asking price is the sale price usually.
Auction yes - because you almost always bid above reserve prices.
Private sale - no because the asking price is the sale price usually.
Auction yes - because you almost always bid above reserve prices.
I hope I do some day, so I can come on here and have a humble (not so humble) brag.
But I'd say this;
"Seller wanted $2.5 mill, I offered him $2.9, but he was a bit unsure, so I chucked in another hunge just to keep him happy!"
I did
House wasn't on market yet and it was going to be 389K so we had contract signed for 389K on first morning house was supposed to be available.
Been told by agent that they have 2 more offers and house wont show up on market as seller is in rush
We offered 403K and secured property
After 5 years, house is worth 850K so I am glad we spent bit more
House wasn't on market yet and it was going to be 389K so we had contract signed for 389K on first morning house was supposed to be available.
Been told by agent that they have 2 more offers and house wont show up on market as seller is in rush
We offered 403K and secured property
After 5 years, house is worth 850K so I am glad we spent bit more
That is a price range; not an asking price.
The "Price Plus" strategy is just that; a strategy to get interest in a property, and then the agent hopefully gets the interested buyers up to the real price.
Same with auctions; the start price/advertised expected price range is never anywhere near the end price..
I'm talking about a property with an actual advertised price - which ultimately is always tied in to the final valuation price.
My agenda with this thread is to point out to the anti-NG sooks that ultimately very, very few greedy rich investors are out there throwing money at Vendors like there is no tomorrow, in order to buy a property and shut out the "little folks" and "battlers" and FHB's etc.
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I think BayView is trying to see if we as investors with the help of negative gearing have created too much competition for others to purchase.
Looking at my own experience, every IP i've bought has only been a head to head battle with the Vendor, there were no other offers on the table except mine.
Ive never bought inner city, ive bought in mid/outer areas of Melbourne and Brisbane , so definitely first home buyer territory and ive never competed against one.
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