I'm attending an auction this weekend which should be very interesting- the last sale was for $475K back in May 04 and I well remember the frenzy that surrounded this particular sale. It was rare at the time for any freestanding house on a decent block of land (723sqm) to be advertised for under $500K and buyers were still falling over themselves to buy (oh how times have changed ). The property was only on the market for a short time and had several contracts issued in the first few days as a new listing. It is a basic red brick 3 bed 1 bath house but has had an interior renovation makeover done since it was last purchased. Polished floors, new kitchen etc (which has no doubt cost at least a good $15K+) but, with recent comparables showing many results in the low to $470K's I would be surprised to see it achieve it's 2004 sale price, even with the renovations. When properties like this come up for sale, I always consider that the vendor must HAVE to sell, for whatever reason. Will keep you posted as to the result. And, no, I won't be bidding on this one. Doesn't fit my criteria of a good investment in this suburb
Some vendors do "have" to sell, regardless of the state of the real estate market. What I have observed, over many years of working in the industry, is that many vendors are not really aware of whether the maket is good or lack lustre- they are suprised that their home is not snapped up as soon as they have decided to sell it. Many home owners (not investors) have already found a new home -before they have sold the old one- then they call in the agent! People still are exchanging on a new property before they have sold the old one- the only way to sell when time is of the essence is to take the property to Auction, but a result at Auction is not guaranteed as we all know, what it does do though is establish a price for the current market. I am also following a property that was sold 2 years ago, the new owners have totally over capitalised the site because they were going to stay- now it goes to auction next week because they have exchanged on an acreage so their kids can have a horse- will it be sold? at what price? is there a buyer to be found? Let us know the auction result on the weekend
Jacque, I just had a meeting with my personal banker to discuss my mortgage on my new IP at Mona Vale. Because I'm going to 85% LVR they required a full detailed valuation of the property (the banks are getting nervous). Anyway, the quick valuation showed it sold a few years back for well above what I paid for it! hundres of thousands above!! So my banker asked if they still needed to do the full valuation and they said they did. So we await the results. Unfortunately I don't see the final valuation amount, I only get a pass/fail kind of result on my finance. That's not an issue as I have enough cash to drop the LVR to 80% if need be, but it would be nice to see the latest valuation... Anyway, the market certainly has exposed some real bargain priced properties now, well below their recent highs of 2003-ish. My property is a good example of this. Please do let us know how that auction goes. Cheers, Michael.
?? Are they really bargains or just not as expensive as 2003?? Time will tell. BTW Congrats on the purchase DaveJ
Dave, Spot on! Always keep that in mind when buying. Its not that its cheaper than it once was that makes it a bargain, its that its cheaper than it is likely to be in the near future. My analysis showed that my property was a bargain as I could develop it and thereby add significant value to it in the near future. I also personally believe that Sydney is nearing its bottom that will occur some time in 2007/08 and that the price I paid (10% below asking) has buffered me from further falls. The timeframe for the market to bottom gives me sufficient time to develop my property and have three modern townhouses in a sought after area ready to lease at the bottom/turn of the Sydney market. I plan on holding all three at completion if my finances permit. Should the market then gradually lift the price of my property(ies) then that's added cream on the deal as the development alone will create sufficient incremental equity for me and make this one a winner. Cheers, Michael.
Hi Michael- don't you wonder why the vendor sold as such a loss? was it a forced sale? the agent you purchased the property from should be able to shed some light on this - then again he might not. Good luck with the new val.
I've got a few hints from the agent. They were definately a motivated vendor and my original thought was divorce settlement as the agent pointed out it was two vendors not one. I then asked about this and he said that it was a mother and son partnership. Apparently they're Italian and he had some fiesty encounters with them through the whole process too. The falling market and doom and gloom stories certainly helped my case, but I'm not sure whether they were committed elsewhere either. I'll keep niggling away at the agent and see if he sheds some light. Cheers, Michael.
Well, even I was surprised by the end result of this auction. After tracking a little more of it's history, I discovered that it was sold in March 03 for $344,950 then resold in May 04 for $475,000. I can only imagine the vendor (who turned out to be a MIP) must be crying in his tea this afternoon when his beloved property sold for a miserable $376,000! The reserve was surpassed, from what I gathered, by a thousand dollars or so. Auctions such as this (see previous posts for other examples) really show the effects of a cycle and illustrate further the importance of timing of the market, if you are to trade residential property, rather than retain it for the long term. The winner in this case was the owner who purchased before the boom had finished and made a nice little profit of some $100,000 between 03 and 04. This property also holds the honour of being the cheapest in the street (50 homes in total) since 2001 when a home sold for $368,000. Looks like I'll be attending some more auctions to pick up my next bargain out my neck of the woods
Oh that ugly thing.... I wouldnt touch that one, there are kids all over that front yard every schoolday, climbing the tree etc....that is a low price though....with a front fence (to keep those kids out), some new turf and fix up the garden , they could get a valuation around 420k ish??
Perfectly placed for a childcare centre, though 420 certainly would be easily achievable without any work at all. I'm still astounded that it went for under this amount, given the sales in the street. It ideally needs an extension, a deck, rendering, a carport (double would fit on the LHS) and some sympathetic internal work (new paint, light fittings etc) The 723sqm block is the biggest thing going for it, of course, and the fact that it's almost level ground.
Yes, I thought of that too. Or a before/after school care centre, which means it is in use for maybe 4 hrs per day. However, I don't know if council would allow it - as the driveway is right next to the crossing - many people/cars driving in and out next to a crossing would probably not be allowed??
