Comments | planeterry: Boring Real Estate Talk...

planeterry

Boring Real Estate Talk...

Feb 23, 2009 13:40

Got building inspection back on the house we liked last Saturday. The roof needs replacing. Before winter. Um. Suspect/worry that most of the places we've been looking at (old houses in good neighbourhoods) would have similarly expensive problems. But I think we put off that one for now. At least until we get a few more such reports and can ( Read more... )

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exp_err February 23 2009, 03:29:42 UTC

We went to the auction for our place expecting that it would go for way more than we wanted to pay, but were surprised, and hence unprepared. Luckily it all worked out for us. Buying at auction (or on the night, after the auction) is legally different from buying, not at an auction, so if there's any chance you go, you should be ready. You probably know this, but anyway:
1) If you buy at auction, you don't have a "cooling off" period and the option to back out, like you would otherwise.
2) You need to go armed with a bank cheque for the deposit amount. You can negotiate what this amount would be with the sellers. If you don't win the auction, you can take it back to your bank.
3) You should have your loan approved and a conveyencer sorted out ahead of the auction, because you might only get a couple of weeks to settle.

homonculus and I found it useful to:
1) Agree beforehand exactly what we were willing to pay, and who would do the bidding. As well as the standard background research, a quote from one of those online automatic property valuation things helped make us feel confident about the amount.
2) When the bidding slowed to $1000 increments, but was still a fair way below our max, we went with $5000 increments to scare off the competition.
3) When it didn't reach the reserve and was passed in, we had the highest bid, which meant we had first right of negotiation. But we declined the auctioneer's silly suggestion to bid against ourselves to get it over the reserve :)

Also, they say it's best not to show your hand by bidding early: bid after other bidders have slowed down.

planeterry February 23 2009, 07:01:54 UTC

Cool thanks! How about your negotiating after it was passed in? How long did it take? How hardball did you play?

I think (or maybe like to think that) I might err on the side of too hardball and thus not end up with a house.

exp_err February 23 2009, 21:27:40 UTC

We'd reached our agreed maximum in the auction, so we were very reluctant to move above that. We eventually moved up an extra $2.5K, which was still below the reserve, but seemed to be enough to cheer up the sellers. Apparently, they got an offer for a few K more the next day, which cheered us up.

exp_err February 23 2009, 21:41:31 UTC

Or rather, was reassuring for us. We were already cheerful about it.

planeterry February 24 2009, 00:45:40 UTC

Noice!

planeterry May 5 2009, 06:11:46 UTC

Oh hey, re "3) You should have your loan approved " - is this another Melbourne thing? We can only get "pre-approval" which still gives the bank the option to pull out if they think we paid too much for the house, which they SAY won't happen if bought at an acution cos supply-demand, etc., but still, really doesn't give us any rights...

Also, we were told we can use personal cheques usually? Only sometimes do they specifically ask for bank cheques?

We might be taking a break anyway :-\

exp_err May 5 2009, 06:28:49 UTC

Pre-approved is probably the best you can get, since the bank will want to do its own valuation, but an auction price is seen as a good indication of value. We hadn't even got ours pre-approved. If you can't get the loan signed off after buying at auction, you lose your deposit, whereas if you buy otherwise, you can make it subject to approval of your loan, or subject to valuation, or just change your mind anyway within 7 days.

I dunno about personal cheques. We were asked to bring a bank cheque, but maybe that isn't universal.

Taking a break just from house-hunting? Too stressful?

planeterry May 5 2009, 06:51:25 UTC

Is getting a bit boring seeing everything going for a few thousand more than the 1st homeowners limit ($500K), which is also our limit...
(Have seen 2 go for less, one was last year before we were pre-approved, other was this year but a place we kinda had our eye on but didn't particularly want).

So we're rationalizing that it might be better to wait till next financial year after it finishes (hopefully). Saw some analyses indicating prices in this tier are inflated $16K (dunno what their control sample was!)...

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