How does this work?

[wildfire]

I have decided on a house, it is listed as going to auction at the end of October, however I would like to purchase the house before auction.

It has a price asking $270 000 + buyers

Realistically what would be considered a good pre-auction settlement price (i know this is a silly question but I am going to ask any way) ? I am happy to make an offer of up to $290k but I don't want them to know that and as the house needs work I would prefer to save as much as I can on initial purchase price and grab a bargain and put the money into reno... Should my first offer be $270k ? or would it be acceptable to make a $260k offer ?

Average house prices in the area are $290k highest sale price in area has been $490k

I think I have a bargain it is a very large size block with live able house and a house around the corner (800m) is for sale for $480k with council approval to build 4 x 1 bedroom units + study... It states on the advert that the vendors are realistic and will sell

Sorry, first time doing this and I want to make sure that I am doing as much homework as possible to ensure that I am making a good investment...

 

[Bargain Hunter]

We have previously made a pre-auction offer which was unaccepted as the auction was only a couple of weeks later. We picked up the property for $500 more than what we offered pre-auction.

The REA has indicated an auction price of $270,000 +. Make an offer that suits your requirements. If you believe it is a bargain at $290,000 then make the offer. If you go in at $270,000 it is unlikely to be accepted and you will need to compete at auction. If this is the case you might pick it up for less then you were willing to pay prior to auction.

Good Luck.

 

[buzzlightyear]

How did you determine that it was a bargain? Are the comparable sales you are comparing against exactly that? eg same property type, size of block, position, condition

Recently, I had made a pre-auction offer of $352k approximately 3 weeks before the auction date. They had not signalled or advertised a price, other than a conversation with a minimum $350k from the agent. It was rejected.

It went to auction, passed in at $363k, reserve is $375k...I didn't go to the auction because I only wanted to buy if I could pick it up a solid price. I will let it go for another few weeks, and if its still available, re-appear again and make the same offer.

 

[Sunder]

Wasn't there some scandal in Melbourne, with REAs quoting "ranges" consistently about 30% below what an independant valuer would? As in, if they were asked to sell it, they'd put $400k, but if they were asked to auction it, they'd say "To suit buyers 300k+"?

The idea of course being that once people have invested time doing the B&P, and getting a solicitor to check the contract, they figure people would go "Hell, we've spent $1000 up to date, it'd be a shame to lose that money. Honey, we can afford another 5k right? 10k? 15k?"

I think the problem has been solved with a "whopping" 3 fines handed out, but still, if you're very sure it's a bargain, then maybe "if it's too good to be true, it is".

 

[willair]

I have decided on a house, it is listed as going to auction at the end of October, however I would like to purchase the house before auction.

It has a price asking $270 000 + buyers

Realistically what would be considered a good pre-auction settlement price (i know this is a silly question but I am going to ask any way) ? I am happy to make an offer of up to $290k but I don't want them to know that and as the house needs work I would prefer to save as much as I can on initial purchase price and grab a bargain and put the money into reno... Should my first offer be $270k ? or would it be acceptable to make a $260k offer ?

Average house prices in the area are $290k highest sale price in area has been $490k

I think I have a bargain it is a very large size block with live able house and a house around the corner (800m) is for sale for $480k with council approval to build 4 x 1 bedroom units + study... It states on the advert that the vendors are realistic and will sell

Sorry, first time doing this and I want to make sure that I am doing as much homework as possible to ensure that I am making a good investment...

Wildfire,if the price range is between 290k and the high end is 490k then that gives you a idea on the price,first of all ring up the council and find out what can be done to this block from the development side of things
then find out what price the vendors paided for the property,and how long they have held the property,then find out in this area what are the numbers% on properties that sell prior to auctions,then find out what%
of properties sell on Auction day,then you will see how many get passed in
with one vendor bid,that way you have a idea before even talking to the Real Estate agent,you will also feel more confident and be able to establish what a reasonable price for this property is,just don't let the agent decide for you what the price is,that's up to you and if they don't like it just walk away,the buyer decides the price,not the vendor not the agent but you,and tell the agent very little about yourself or your plans you have with this property,,good luck willair..

 

[wildfire]

Thanks Willair!

The buyer range is $270k + buyers but REA has suggested $270 - $320k buyers

The house was purchased by the current owners 50 years ago and are the original owners.

As for propetry percentages of sold/passed in etc the last edition of the local newspaper RE pull out had listed as 100% for all :S