Approach for currently off market property

Hi,

There’s a property that I’m interested in which was recently put for sale on the real estate agents website, but has not been advertised on domain/realestate.com yet. So it’s not a fully off market property. I went and had a look at it last weekend and there was only one other person who went to have a look. It’s a house that needs some work to it as there’s some water damage from the shower to the bedroom wall behind it, and there’s some minor cracking that will need something done to it. So estimated it needs somewhere between 50-70k. I’m planning on renting it out for a while (Around 10 years) before building a future PPOR on it.

This particular agent is quite pushy and as I was looking through kept saying do you like it and what do you think. After I had a look through she asked again and I said yeh it’s a decent house but obviously needs some work to it. I then asked what’s the price guide? She responded by saying have you been to any auctions around here recently and i said yes. And she brought up this house that was for auction a couple hours prior to the inspection from another agent two streets behind, which isn’t comparable at all. Other house was 750sqm vs 610sqm for this, and the other is recently renovated so in really good shape. She said yeh that had a reserve of 2.79m, so the price guide for this is 2.55. I said they’re not comparable at all. I didn’t tell her, but I actually went to that other auction and it was passed in at the opening bid of 2.6m. The vendor bid and reserve was set at 2.79m. So I ended up saying yeh they’re not comparable, I’ll need to have more of a think, knowing that it’s not worth anywhere near 2.55 and it’s closer to 2.0. Recent comparables have shown similar size houses in similar streets where the house is in ok shape (old house, but no immediate work required like this) have gone for ~2.1.

I went home and did some more research and found that this house was last sold for 1.9m in late 2018. It’s been rented since. So I’m not sure why the owner bought and sold so quickly. I plan to ask the agent why the owner is selling.

Any thoughts on how to proceed with this? My intention was to either wait for a call in the next couple days or give her a call in a couple days and say I’ve seen this house was sold recently for 1.9m, and comparables suggest a similar price (probably closer to 2.1, but those didn’t need immediate work done to it). If you’re willing to come towards this amount then I will come and have another good look, get a copy of the contract and have a serious think.

 

The selling agent is doing whats right for the seller. Thats who is paying them.

you seem to have correctly identified the comparables adjusted for repairs etc.

Offer what you think its worth. But you may not get it. If you dont, move on. If you plan on renting it out, assume its not an emotional purchase.

 

I didn't think I should be making an offer just yet? I think it requires one more proper inspection to check for any other hidden problems.

Yep no emotional attachment as I would be renting it out for now, and am in no rush to purchase.

 

The question is whether you want to get a building and pest inspection done, before committing to the 0.25%. Assuming this is NSW.

At that price, might be worth doing the building / pest. Unless you are confident in your own skills in spotting issues.

 

Yep NSW, and no I'm not confident that I have spotted everything. I was planning on getting a B&P done if they are willing to come down to $1.9-$2m.

I have noticed in the suburb that I'm looking at that some houses are coming onto the market that were only bought around 2 years ago, and the owners are trying to get their money back, but can't even do that. I wouldn't go above $2m for this place. So I plan on telling the agent that if they're willing to come down closer to the previous sold price for this house, then I will get a B&P done and may put in an offer.