Property passed in - now private treaty

[tess85]

Hello again

I did a search but couldn't find anything relevant...

We are v. v. interested in a property which was passed in at auction and is now selling by PT. (Unfortunately we weren't at the auction, believing it to sell way above our budget, so we don't know what the passed-in price was.)

The property is now advertised at $550k.

Is the negotiation process any different for a property which has been passed in already?

I would assume that the owners were more desperate to sell (since it's been passed in). How can we make the best of this situation?

Thanks in advance

 

[Gee Cee]

I would say that there probably was not even a bid at the auction. Or if so just a vendor bid. It is on the market as a normal private sale.

What do you think the property is worth compared to recent sales of similar homes?

I would come in with a LOW offer.
See how you go. You can always go higher. And the vendors just may be desperate to sell. Usually get more desperate the longer the home is on the market.

Gee Cee
Greg

 

[The Y-man]

...

We are v. v. interested in a property which was passed in at auction and is now selling by PT. (Unfortunately we weren't at the auction, believing it to sell way above our budget, so we don't know what the passed-in price was.)

Either get the relevant auction results from whoever publishes it in your state (REIV and Domain in Victoria). Having said that, as GC says, it can be masked by a vendor bid.

You can also ask the agent (they just might tell you!)

Ask all normal PT questions.

Cheers,

The Y-man

 

[Jacque]

Hello again

I did a search but couldn't find anything relevant...

We are v. v. interested in a property which was passed in at auction and is now selling by PT. (Unfortunately we weren't at the auction, believing it to sell way above our budget, so we don't know what the passed-in price was.)

The property is now advertised at $550k.

Is the negotiation process any different for a property which has been passed in already?

I would assume that the owners were more desperate to sell (since it's been passed in). How can we make the best of this situation?

Thanks in advance

Hi Tess

Often when a property is PI at auction (regardless of the PI price) it then goes onto the market as a normal private treaty sale if a buyer cannot be found on the same day; sometimes for a quick sale but not always.
It's up to your to ascertain your limit, based on your previous research on this property (what's it worth in the current market? How do you know this?) and obviously your budget.

Never assume owners are desperate to sell- unless you know their motivation/situation. Several chats with the REA may have revealed incentive (or not) but regardless, offer your price with your market knowledge as fuel, your confidence in finding another property obvious and best of luck. How many homes have you found so far besides this one?

 

[The Y-man]

I would assume that the owners were more desperate to sell (since it's been passed in).

I have never been a fan of selling by Auction. What I discovered to my surprise this year however, is that in Melbourne, the Auction process itself is only about $200 more than doing a private sale.

With this revelation, I have taken all bar one of the sales this year to Auction (there was only one where the agent advised against an auction - said the particular property/market did not suit auction). So passing in a property is definitely not a "desperate situation" in all cases - it really may be a "testing of the waters" before putting it on sale.

Cheers,

The Y-man

 

[tess85]

Thanks for the responses, all

Jacque, this is the 3rd house (out of 40+) that we would seriously consider buying. We've been looking a few months. And dare I say it (I know we shouldn't get emotionally attached to something we haven't bought yet)... I love it!

I won't be totally devastated if we miss out, there will be many opportunities to buy over the coming year (our deadline is mid-09 due to 14k FHOG expiring).

 

[tess85]

Thanks for the responses, everyone. What about negotiating on the price of a new development of units/townhouses? (we are considering this due to the 21k FHOG). Would the developer be just as motivated to sell as a distressed seller is? (unlikely, I know, considering the increased interest due to the 21k FHOG) Don't really know how we're going to pick up a bargain by buying a new place... Is buying a newly built place much the same thing as buying a new car (massive depreciation in first couple of years)?!?!

Thanks clearly the FHOG has made me think about a lot of things, but it's getting me stressed at the thought of all these other FHBs jumping into the market. We were going to buy regardless within the next 6 months, but now things are heated up a bit in our price range.

 

[The Y-man]

... Is buying a newly built place much the same thing as buying a new car (massive depreciation in first couple of years)?!?!
.

That's a pretty good analogy - I like it.

Cheers,

The Y-man

 

[tess85]

aah damn. well at least it's not on the scale of 50% in the first 3 years

So would it be worth the extra 14k to go and buy a new development (townhouses, built already)? we are seeing the place today so i will update this thread with my thoughts. My guess based on depreciation alone is NO.

 

[BV]

Tess,

There are benefits in buying new and the biggest one is that the place is brand new without a scratch and in many cases you can customise it with your own colours, floor type and appliances.
There could also be some disadvantages such as minor construction defects
but these would be covered under warranty.

Developers until recently were under a lot of pressure to sell but the situation may change when buyers realise that the sky is not going to fall.

Also, the falls in interest rates would make private sellers more reluctant to accept a low price but every vendor is different so it doesn't hurt to test the waters and as Gee Cee said you can always go higher.

Cheers

 

[boomtown]

Tess,

There are benefits in buying new and the biggest one is that the place is brand new without a scratch and in many cases you can customise it with your own colours, floor type and appliances.

All of which are irrelevant if you are buying it primarily as an investment rather than as a long term home - depends on your objectives.

 

[tess85]

eep. an offer of 546 has been made + accepted, according to the agent. We can counter-offer but this is a bit above our budget *sigh* we were planning to offer 530!!

what to do, what to do...

 

[evand]

Let it go, there's plenty more out there. The agent might be bluffing and you can have ago later. If not, no biggie.

 

[tess85]

That's what my brain is telling me, but my heart is saying "I love the place, I can't bear to miss out on it".

I got emotionally attached to this one even before I saw it in person. I even had a dream about it the night before I 1st went to see it in person. Hubby and I have been thinking about this one day and night... aargh!

 

[tess85]

agent says the other party have done their pest/building inspection. So my guess is they're not likely to back out of the deal or use the 5 day cooling off period. Sigh. I guess we will have to let it go, even though it kills me to do so.

 

[Bradsdad]

Don't be disheartened Tess, this will mean you can look at another dozen or so houses on the weekend. Aren't you looking forward to it?

 

[josko]

I have never been a fan of selling by Auction. What I discovered to my surprise this year however, is that in Melbourne, the Auction process itself is only about $200 more than doing a private sale.

With this revelation, I have taken all bar one of the sales this year to Auction (there was only one where the agent advised against an auction - said the particular property/market did not suit auction). So passing in a property is definitely not a "desperate situation" in all cases - it really may be a "testing of the waters" before putting it on sale.

Cheers,

The Y-man

I am currently in the process of my first auction Y-Man, and I am finding it great in the sense that there is an "end" date and a sense of finality. By the week before auction I should have a relative idea as to the "market" value of my property, or what sort of money peole are in the market to pay for a house like mine. The advertising was no more expensive than normal sale advertising. (Bar the auctioneer).

I think that regardless of the Vendor's motivation for selling, an auction gives a sense of urgency to the buyer. The buyer would have his finances sorted and you won't be tempted by a novice buyer that can make an offer before knowing if they can afford it!

Tess, there will be others you can bet on it!
Regards Jo

 

[tess85]

lol at bradsdad. We've got 8 inspections lined up this weekend - the game is back on

yep - thanks josko i know there will be others. thanks all for listening!