We found a place!!! Now, how to buy it!

[KrisK]

Its in Randwick, gorgeous old 2bedder, no car space in a old art deco building.

Problem is, it hasnt sold in the lat 18 years and its very unique so we cant get a guide from residex or those online reports.

We have found a figure the owners are willing to sell at BEFORE auction, but we feel its overpriced.

The owners are willing to sell to us before auction at the right price

Anyone know what we should be doing? My gf is scared if we go to auction it will go over our budget.

The price they are asking now is $20k over budget, and I still feel its not worth the money.

Any help would be great

Thanks

 

[The Y-man]

PPOR or IP?

Cheers,

The Y-man

 

[MichaelW]

The price they are asking now is $20k over budget, and I still feel its not worth the money.

Hi Krisk,

Sounds like you already know what you should do. Y-Man is on the money, is this a PPoR purchase? Seems like it given the degree of emotion attached to the purchase.

My advice would be go to auction and see what it goes for. If it comes in under your budget then bid for it, if not let it go.

Simple really...

Cheers,
Michael.

 

[KrisK]

Its a PPOR, it doesnt tick every box but my other halve totally LOVES it. She wants us to extend our budget my 20k but i think this is silly...

I have every intention of going to the auction, btu she think its will go for WAY more..

 

[alexlee]

There is no such thing as a 'unique' property. And how much are you guys going to love your property if it drags you back financially? It may not be 'silly' to increase your budget to get a house you want, but you also have to calculate whether you can afford it.

BTW, if it goes to auction and it DOES go for way more than the price the seller is currently willing to accept, then you're going to get a LOT of complaints from your other half.

For a PPOR, it's not just about the dollars. If this was an IP, I'd actually tell you to forget it because you're too emotionally involved.
Alex

 

[Spectre]

I had 2 auctions on the weekend, one went thru but $100k under appraisal and the other passed in. The one passed in lower than the original offer price on it.

And RIO and BHP are up.

Funny times....

 

[KrisK]

Thanks guys! I feel we can get it cheaper than the price they are asking privately...

if it was a IP, i would forget it too!!

We've not be successful in finding something similar for a similar price..

Whats the best way to make sure we arent overpaying if we do make a higher private bid before auction?? Its difficult to put a price on this. That said, its WAY over what other units a tad smaller with car sapces are going for (this has no car space)

 

[coastymike]

Kris,

Have been analysing Randwick for about 3 months now. 2 bedroom units, with balcony, with car space neatly presented are selling for between $420-$460K. I recently put a bid in for one property advertised at $460K and offered $410K. Vendor came back and said for $430K they would accept. Wasn't interested. Anyway should give you an idea. Randwick is a good area in my opinion and a good long term hold but don't overpay.

 

[Rolf Latham]

Hiya

As an aside

If you are going to Auction or dong a 66W, make sure you have a good pre approval !

Residex data goes back to the early 1980s, so usually something can be found that may be used as a guide, but all this things are just sanity check tools, they cant be relied upon in a vacuum

ta
rolf

 

[The Y-man]

Its a PPOR, it doesnt tick every box but my other halve totally LOVES it. She wants us to extend our budget my 20k but i think this is silly...

I have every intention of going to the auction, btu she think its will go for WAY more..

Ok, so the original post should have read: "I feel it is overpriced" not we

This means it is not simply a price thing........ what is the penalty for non-compliance?

i.e. "If we don't get this place dear, the consequence is.........."

Cheers,

The Y-man

 

[alexlee]

"I told you we should have gotten the other place but you were too cheap to go another 20k!"

 

[KrisK]

Penalty is what Alex said, but for the rest of eternity

Thanks coastymike, thats what I feel. Upper limit would be $500k

This one , the vendor wants... wait for it.. $620k!!!! Its top floor, 3 in a block, art deco and very lovely. No car space, laundry in the kitchen and sits on a busy(ish) street.. Gorgeous building, no common walls and about 107sqm.

I , yes I, feel its way over priced...

Rolf, our preapproval is solid. As is the place we are chosing and our deposit so its all healthy.

 

[coastymike]

Kris,

Severely overpriced. Particularly when my offers are coming back with counter proposals around $20K more. $400 - $460K MAX in my opinion. $40K extra would get you one of these other units and still have enough to fitout a new bathroom and kitchen. Bargain like a turkish carpet salesman in this market. Let it go to auction and pass in. Maybe i'll go and offer $400K so your offer will look attractive

 

[alexlee]

BTW, is it 20k over your budget, or 20k over what you think it's WORTH?

I was looking for my PPOR last year, and I ended up buying something that was about 40% higher than my original budget (which I kept upping when I didn't like what I was seeing).
Alex

 

[KrisK]

coastymike, thats what I feel. I say we are best to wait until auction...

How big are these 2 bedders your seeing go for? must be quite small for your prices. One in our street at about 80sqm without car space went for $525k mid last year...

 

[KrisK]

BTW, is it 20k over your budget, or 20k over what you think it's WORTH?

I was looking for my PPOR last year, and I ended up buying something that was about 40% higher than my original budget (which I kept upping when I didn't like what I was seeing).
Alex

Alex, its 20k over our budget, but I still feel its about 40k over what I think its worth.

 

[KrisK]

the girlfriend laughed at the penalty.. she said:

reply: DIVORCE

and then says..

i wont be around to keep repeating it for eternity.you'd only hear it once

 

[coastymike]

Kris,

90-100sqm in size. Remember the market has come off quite a bit in Randwick which is why I like the area. If you build in a 5% fall in value over the next 6 months and offer that into the price (i'm going for desperates who need to sell their investment property due to margin calls or baby boomers retiring with a pre CGT unit and a $40K drop is nothing particularly when I am saying I will sign contracts within a week after building and pest comes back ok).

 

[stumunro]

be careful with art deco's with small blocks as any major works are copped by the owners.

my friend who owned an art deco in roseville got copped a 35k bill to redo some windows and a general refurb to the block.

Sure it will add itself and more in value, but with older buildings its more frequent and you don't have control over what you think would add value or not, apart from a vote at the body corp meeting.

p.s not saying to stay away, just caveat emptor

 

[Jacque]

Hey Kris

Sounds like you're hooked already

Have the other two units sold recently?
What are the comparable sale prices for similar units in the immediate area?
Why is the vendor selling?
What condition is the property in (get a strata report) and is there likely to be major funding needed to be spent in the near future?
How important is parking to you?
How many properties have you looked at prior to this?
Have you purchased at auction before?
How long do you intend to live in this place if you buy?

Sorry for all the questions but trying to garner further info so I can hopefully assist