What do we offer?

[mustapha]

Hi,

We were recently outbid at an auction for a townhouse. After the auction we were approached by an owner who had another townhouse in a different area of the same suburb. After inspecting the house we agreed with the owner’s comments about it being much nicer, needing no work etc. The floor plan is almost identical to the original townhouse.

After looking at some comparable sales it seems that properties in this new location are worth less than similar properties in the original location. This is likely due to several factors (closer proximity to power lines, slightly further away from public transport etc.). They are not factors that bother us but they may affect the value of the property.

We feel that the owner is after a similar price to the original townhouse as they know the amount that we are willing to spend. We are willing to pay the market price of the property. If we get a pre purchase valuation done we will be up for $400-$500 and the low valuation is likely to discourage the vendor from selling. We really want a valuation before making an offer but don’t want to risk losing $400-$500 for nothing

Is it possible to say that we are willing to split the cost of a professional valuation prior to making a formal offer? Worst case, the valuation is low, the owner decides not to sell and we lose $250. As a vendor would you accept this (they will get a half price valuation on their own house)?

Is this a case for some kind of subject to finance or subject to valuation clause to be included with our offer?

I thought that eliminating agents from a home sale would make the negotiating process easier. Any advice is appreciated and apologies for the long thread.

 

[NBS]

First off theer are a lot mor experienced people on here to comment.

However from my thoughts, does not matter what the other one sold for you need to focus on how much they are selling in the area you are now looking.

Going to real estate agents, real estate dot com etc etc will give you a general figure IE between $350000 - $370000 thou or what ever. If the owner is asking $450000 you have to ask yourself is it that much better or is the owner just off pace with the market.

Have you asked the owner how much he is wanting? You maybe surprised. $400 - $500 for a valuation may seem a lot, yes, you may lose it but it may also save you buying an over priced property.

That seems a lot for a valuation my daughter only paid $250.00 for a full walk through.

Brian

 

[mustapha]

First off theer are a lot mor experienced people on here to comment.

However from my thoughts, does not matter what the other one sold for you need to focus on how much they are selling in the area you are now looking.

Going to real estate agents, real estate dot com etc etc will give you a general figure IE between $350000 - $370000 thou or what ever. If the owner is asking $450000 you have to ask yourself is it that much better or is the owner just off pace with the market.

Have you asked the owner how much he is wanting? You maybe surprised. $400 - $500 for a valuation may seem a lot, yes, you may lose it but it may also save you buying an over priced property.

That seems a lot for a valuation my daughter only paid $250.00 for a full walk through.

Brian

Thanks Brian.

We understand that the different area will affect the price. We just want the owner to understand that when we make an offer. They have said that they are after an offer in the vicinity of the other place. Sure, the house is nicer but comparable houses in the area are worth less.

An independant valuation seems like the best starting point to base our negotiations. I am just wondering if suggesting a split of the cost is reasonable or should I assume that risking $400-$500 is just part of the buying process.

Did your daughter get a valuation in Melbourne? Maybe I have just obtained expensive quotes. Does anyone know of any valuers who are much cheaper than that in Melbourne?

 

[Rolf Latham]

Hi Mustapha

If you were our client, this is what I would suggest

Limitng losses is a good thing, but worrying about 250 bucks on a purchase like this is perhaps not in your best interest.

If you want a val that represents your view, pay for it and commission YOUR valuation.

If the seller wants one, let them pay and order another one.

Else, get your broker to do a residex for you ( whch isnt always reliable)or run a free val with your preferred lender NAB, ANZ etc, or do a COV val with cba at 199 bucks, there are lots of options.

Usually, you'd want a val for mortgage purposes in any case, not some pumped up or deflated val with conflicting instructions depending on who orders it

ta
rolf

 

[mustapha]

Hi Mustapha

If you were our client, this is what I would suggest

Limitng losses is a good thing, but worrying about 250 bucks on a purchase like this is perhaps not in your best interest.

If you want a val that represents your view, pay for it and commission YOUR valuation.

If the seller wants one, let them pay and order another one.

Else, get your broker to do a residex for you ( whch isnt always reliable)or run a free val with your preferred lender NAB, ANZ etc, or do a COV val with cba at 199 bucks, there are lots of options.

Usually, you'd want a val for mortgage purposes in any case, not some pumped up or deflated val with conflicting instructions depending on who orders it

ta
rolf

Hi Rolf.

I have already downloaded the homepriceguide property report. I don't trust the value but it is useful for comparable sales, history of the property
etc.

We have pre approval with ANZ. Are you saying that we can tell them about our interest in this property and they will give us a free desktop valuation? I understand that banks are usually more conservative but it would be a good starting point.

I am leaning towards paying for the valuation. If the valuation comes in much lower than the expectations of the owner, isn't it then in our interest to say "we offer you x dollars based on the pre purchase valuation that has been conducted"? Wouldn't letting the owner know the independently calculated value be a method of conditioning them to accept a realistic price?

One valuer that I spoke to mentioned that you should always keep the value close to your chest. What is the advantage of doing that in this case?

Thanks for your advice.

 

[Rolf Latham]

Is that the Free Service from HPG ?

Re the ANZ val, a broker can push for a full val even........so I cant see why the branch cant.

It is a good idea to get a val done, I think I have been saying that, but dont expect the vendor to cover half the price of a low val thats of no use to them.

A val can be used to set some form of expectation with the seller, but much depends on what they want

Id always ask

How much do you really want ?

No point with you wasting time and money of you are already 100 k apart, right now you are making assumptions on what they want.

ta
rolf

 

[mustapha]

Is that the Free Service from HPG ?

Re the ANZ val, a broker can push for a full val even........so I cant see why the branch cant.

It is a good idea to get a val done, I think I have been saying that, but dont expect the vendor to cover half the price of a low val thats of no use to them.

A val can be used to set some form of expectation with the seller, but much depends on what they want

Id always ask

How much do you really want ?

No point with you wasting time and money of you are already 100 k apart, right now you are making assumptions on what they want.

ta
rolf

It was a $75 property report. It gives you the estimated value, projected value, recent similar sales, property sales history etc.

One last question. If it is possible for you to get your broker to order a free full valuation through your bank, why would you pay $500 for one (my three quotes have all been around the $450-$500 mark)? Is there a big difference between the thouroughness of the valuations? I have read that banks can tend to be more conservative when they value properties.

Thanks again for your advice.