Even if you told them you had already ordered an independent valuation that is non-transferable to a lender unless the lender accepts such - which they usually don't even if the valuer is on their panel. So the point about ordering an independent valuation is a red herring as it is pretty much useless for both finance purposes and purchasing purposes as it is not used for either. I personally think people who rely on 'valuations' to try and bargain down a vendor come across as disingenuous and are usually discarded by any savvy real estate agent. It is simply a waste of money and time and it is really only useful for other reasons like working out your CGT cost base or a fair price for a non-arms length transaction.
Put in an offer anyway - or wait till auction?
- Thread starter Uncertain1
- Start date
Even if you told them you had already ordered an independent valuation that is non-transferable to a lender unless the lender accepts such - which they usually don't even if the valuer is on their panel. So the point about ordering an independent valuation is a red herring as it is pretty much useless for both finance purposes and purchasing purposes as it is not used for either. I personally think people who rely on 'valuations' to try and bargain down a vendor come across as disingenuous and are usually discarded by any savvy real estate agent. It is simply a waste of money and time and it is really only useful for other reasons like working out your CGT cost base or a fair price for a non-arms length transaction.
The only reason we ever sought a valuation of the property was to check that we were going to be able to put in a reasonable offer based on what we wanted and could afford to pay, and one that would not be laughed out of town by the REA or vendor. Except that's what they have done anyway 
Sheryn, finance is not an issue - we are definitely on the hunt for our first PPOR, and just looking for the right place that we are happy to pay up to a set $$ amount for, based on our income and lifestyle. We aren't trying to get a bargain, or anything like that, but because both of us are so inexperienced with the property market, we don't want to base such a massively important purchase on emotion alone. I had previously looked into getting a buyers agent, and I am once again considering going this route just because we have no idea what we are doing. We have an awesome MB and thank god for him because he has already given us a heap of valuable advice. The idea of asking about rental potential...I just don't know...neither my partner nor I are very good at playing games and I think we probably look like the inexperienced newbies that we are to any REA. This is where a BA would really come in handy.
Sheryn, finance is not an issue - we are definitely on the hunt for our first PPOR, and just looking for the right place that we are happy to pay up to a set $$ amount for, based on our income and lifestyle. We aren't trying to get a bargain, or anything like that, but because both of us are so inexperienced with the property market, we don't want to base such a massively important purchase on emotion alone. I had previously looked into getting a buyers agent, and I am once again considering going this route just because we have no idea what we are doing. We have an awesome MB and thank god for him because he has already given us a heap of valuable advice. The idea of asking about rental potential...I just don't know...neither my partner nor I are very good at playing games and I think we probably look like the inexperienced newbies that we are to any REA. This is where a BA would really come in handy.
Aaron_C
I think you have your MB hat on, I have my keen purchaser hat on.
If I am unsure of a fair price to offer and there is a time deadline in progress (auction) & I do not want to offer a low ball price.
If I couldn't work out a fair price to offer and I was serious about buying there is a lot of information to be gained from reading a valuer's report eg. environment, hazards etc. [I don't have a report handy to list in detail]
If a financial institution orders a property valuation the potential purchaser does not get to see or read the report the bank does and in some instances the financial institution valuer does a drive by valuation.
Obviously I negotiate differently but it minimises by buyer remorse.
Kind Regards
Sheryn
The only reason we ever sought a valuation of the property was to check that we were going to be able to put in a reasonable offer based on what we wanted and could afford to pay, and one that would not be laughed out of town by the REA or vendor. Except that's what they have done anyway
Don't let the REA
Sheryn, finance is not an issue - we are definitely on the hunt for our first PPOR, and just looking for the right place that we are happy to pay up to a set $$ amount for, based on our income and lifestyle. We aren't trying to get a bargain, or anything like that, but because both of us are so inexperienced with the property market, we don't want to base such a massively important purchase on emotion alone.
Uncertain you came across as genuine in your opening post and I answered you with what I would do if I was in your situation.
I had previously looked into getting a buyers agent, and I am once again considering going this route just because we have no idea what we are doing.
There is no reason not to use a buyer's agent - just find a good one.
We have an awesome MB and thank god for him because he has already given us a heap of valuable advice. The idea of asking about rental potential...I just don't know...neither my partner nor I are very good at playing games and I think we probably look like the inexperienced newbies that we are to any REA.
Knowing the current rent you could get if you needed to move/relocate is just another confidence builder. Example - buy at auction for 382K knowing rent appraisal is $490 - $510.
This is where a BA would really come in handy.
Good luck and you will get emotional.
Sheryn
Thanks Sheryn - you have offered me some fantastic advice
For IP's I do this - any auction can be an "unlucky" one for the vendor where the right buyer didn't front up and it gets passed in (don't I bloody know it being a vendor a few times!). Addtionally, you lose all conditional rights in an auction (and 3 days either side of it).
HOWEVER - as your future PPOR, my advice does not stand - because IMO, a potential PPOR can be a lot harder to find than an IP!
The Y-man
Regardless of what you think the property is worth, I'm not surprised the agent wouldn't take you offer of $30k less than they paid for it 12 months ago, and I doubt they'll happily accept 10k less than they paid.
All the other advice seems sound, just thought I'd add my 2c.
Well that assumes that you are buying in an area of which you have absolutely no idea about - which is most unlikely, especially if you are someone who lives nearby. I certainly don't think you would ever rely on what a valuer told you because they are there to protect themselves for their PI insurer and not to help you make a good judgment about the property.
Yes, good advice - think I am just going to have to grit my teeth and get over it as most of the properties we have been looking at are for sale by auction. We have been going nuts the past few months, attending auctions just so we can observe all of the procedures...I am sure the first time we bid will be the worst and then we will get used to it (not necessarily expecting to be successful with this current property I have been discussing).
I really do suggest reading Patrick Bright's book on property buying both at auction and via private sale. It's quite insightful and tells you how to get under their (the agents') skin
I really do suggest reading Patrick Bright's book on property buying both at auction and via private sale. It's quite insightful and tells you how to get under their (the agents') skin
Thanks Aaron
will give it a read. Love the idea of getting ahead of the agents!
Personally I would be inclined to get a pre-auction valuation which can be alos used later for my finance, as auction waives your some of your rights.
What happens if the bank values the property below your PP? Do you have extra funds to support the purchase? are you happy to loose your deposit?
To me I would prefer to get a valuation which can be used, which is going to give me a fair indication of what the property is currently worth with recent sales in the area. Piece of mind to bid at auction for <$300
2c
Brady
What happens if the bank values the property below your PP? Do you have extra funds to support the purchase? are you happy to loose your deposit?
To me I would prefer to get a valuation which can be used, which is going to give me a fair indication of what the property is currently worth with recent sales in the area. Piece of mind to bid at auction for <$300
2c
Brady
Then find a bank which takes the purchase price as valuation...
Does this happen frequently? That idea really worries me!
While we have a decent deposit, I don't like the idea of having to make up a big shortfall between the PP and the valuation. So if I get a valuation prior, I can use that for finance?
Sorry - these are probably silly questions, but would appreciate some clarification with how a private valuation can help or hinder me.
Yes if it is a bank ordered valuation. Have you spoken to your broker about ordering one?
Yes we have - that comment about having to make up the potential difference has me scared though!
Valutations are a great way to bring you piece of mind.
I get one done on my place each year to see how much capital growth I have earned since last year and since the begining. This is something my father does too on all of his properties. I guess we are lucky that the bank we use gives us 3 free valuations per year per loan.
For the place I bought as my PPOR I was able to buy it at 510k, 20k under the bank value and reserve price. This allowed me to rest easy that night knowing I have paid less than what a conservative value was, but at the end of the day it is what the market was prepared to pay on the day.
However in saying off of this the valuation was no suprise to us as we estimated it was probably worth 520-550k but yes if I did win at auction and it went for $550k, I knew I maybe asked to pay an extra 20k (530k->550k) to keep my LVR in check.
Do not be scared of the auction system, I orignally come from Brisbane where private sales are dominate to Melbourne where auctions are considered king. I am the first person in my family to go to auction. Word of advise, go look at some auctions on the weekends prior to the place you like, have your building and pest done along with a valuation as what is $1k (total cost for DD) in $500k or whatever price are looking at buying.
Good luck with the auction and let us know how it goes, it gives you great stories to talk about (I still talk about my first).
William
I get one done on my place each year to see how much capital growth I have earned since last year and since the begining. This is something my father does too on all of his properties. I guess we are lucky that the bank we use gives us 3 free valuations per year per loan.
For the place I bought as my PPOR I was able to buy it at 510k, 20k under the bank value and reserve price. This allowed me to rest easy that night knowing I have paid less than what a conservative value was, but at the end of the day it is what the market was prepared to pay on the day.
However in saying off of this the valuation was no suprise to us as we estimated it was probably worth 520-550k but yes if I did win at auction and it went for $550k, I knew I maybe asked to pay an extra 20k (530k->550k) to keep my LVR in check.
Do not be scared of the auction system, I orignally come from Brisbane where private sales are dominate to Melbourne where auctions are considered king. I am the first person in my family to go to auction. Word of advise, go look at some auctions on the weekends prior to the place you like, have your building and pest done along with a valuation as what is $1k (total cost for DD) in $500k or whatever price are looking at buying.
Good luck with the auction and let us know how it goes, it gives you great stories to talk about (I still talk about my first).
William
Update on our auction adventures!
Hi Guys,
Thought I'd give an update on our situation with this property. Unfortunately, we were not successful at auction, as the reserve price was not reached and the property was passed in.
The vendor actually wanted much more than expected for the reserve, and we were not even in the ballpark with how much they were after. It remained on the market post-auction and has sat about for weeks with nothing much happening. We had basically moved on, and were busy investigating another property in a neighbouring suburb that has potential, although it needs some extensive work done in the long term. That one is up for auction in a couple of weeks time.
This week, the REA contacted us to let us know that there is an offer on the original PPOR for around the figure that we want to pay. He wanted to know if we were still interested, and is encouraging us to put in an offer if we would like to purchase. We were told that there are now 'several interested parties'; probably REA speak for one other potential purchaser at a guess. If we decide to put in an offer, subject to finance and B&P, how much time should we give them to get back to us? Is there a 'standard' time limit that we should apply - or is this even important? Obviously we would want this resolved one way or another prior to the auction date of the other property.
I feel like we might be about to participate in a blind auction of sorts...
Hi Guys,
Thought I'd give an update on our situation with this property. Unfortunately, we were not successful at auction, as the reserve price was not reached and the property was passed in.
The vendor actually wanted much more than expected for the reserve, and we were not even in the ballpark with how much they were after. It remained on the market post-auction and has sat about for weeks with nothing much happening. We had basically moved on, and were busy investigating another property in a neighbouring suburb that has potential, although it needs some extensive work done in the long term. That one is up for auction in a couple of weeks time.
This week, the REA contacted us to let us know that there is an offer on the original PPOR for around the figure that we want to pay. He wanted to know if we were still interested, and is encouraging us to put in an offer if we would like to purchase. We were told that there are now 'several interested parties'; probably REA speak for one other potential purchaser at a guess. If we decide to put in an offer, subject to finance and B&P, how much time should we give them to get back to us? Is there a 'standard' time limit that we should apply - or is this even important? Obviously we would want this resolved one way or another prior to the auction date of the other property.
I feel like we might be about to participate in a blind auction of sorts...
LOL, what a co-incidence that there is "another offer" and many "interested parties" at the price that you originally offered.
Sounds more like vendor has had a reality check and the agent remembers your earlier offer and is wanting to get a formal offer from you to take to the vendor and have them "meet the market" so he can get some commision.
By all means make an offer with a 48 hour sunset clause... and make it less than your first one. See how much the agent will do to get the sale.
