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Are you kidding me?

Discussion in 'General Property Chat' started by Rayan, 5th Sep, 2016.

  1. Rayan

    Rayan Active Member

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    Hi Property Chatters,

    I want to canvass general opinion on this. Saw a property listed for sale on Friday evening. Price guide for auction is 1.75m which in Sydney usually means they want at least $1.85-$2m. See link:

    209 Darling Street Balmain NSW 2041 - House for Sale #123489214 - realestate.com.au

    First step in due diligence, I googled the address and found it was purchased 10 months ago for $1.5m. See link:

    Sold Price for 209 Darling Street Balmain NSW 2041

    From the photos and floorplan, the only thing I could see that the vendors had changed in those 10 months was to repaint walls and ceiling and change the light fittings. I could not understand how they could be seeking $400k for a 10 month hold and the cost of a coat of paint so I rang the agent on Saturday and yes- its confirmed.

    The agent states they have made cosmetic renovations only, which included painting and "some work to the garden"

    Opinions????
     
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  2. House

    House Well-Known Member Premium Member

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    It's that Cherie Barber up to her old tricks again :D

    Perfectly acceptable and good on them if they get the price they want. Though the market has moved up in the more affluent areas so could have been 90% of the increase. Though that's a lot of lost potential equity.
     
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  3. Rayan

    Rayan Active Member

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    You're a nicer person that I am. I felt outraged at it. Values in Sydney have not gone up that much in such short a period. And for the potential purchaser- if there was anyone willing to pay $400k more for a coat of paint- they surely will be in for a nasty shock when the bank does a valuation.

    Would a licensed valuer really tell the bank the property was almost half a million more, in less than 1 year, with no significant changes made to the property?

    And wouldn't every potential purchaser simply see that last sold price and baulk at the new asking price??
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    Why? It's a free market. There's also capital growth.
     
  5. Player

    Player Well-Known Member

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    What if they bought very well in the first place and well under its intrinsic value. A liitle lipstick to make it more appealing and a still hot market could give it the uplift that is being sought.

    Was the purchase price 10 months ago realistic or less than it should have been?
     
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  6. MTR

    MTR Well-Known Member Premium Member

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    Sounds like a boom;)... I have seen people do crazy things during boom times, like pay too much when its close to peak, nasty surprises, they ignore this one.
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    The assumption here is that the previous sale price is perfectly accurate, whilst the new list price is inaccurate?

    The previous sale could have sold well under, the local area could be performing well above the Sydney median average, that particular property might have special driving forces which goes above the norm.

    In the end it's an open market place where people can list their property for whatever they like - in the end someone has to agree to buy the place. If no one is willing to pay the price, they will have to adjust their prices accordingly until seller and buyer can reach agreement.
     
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  8. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

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    I think if the shoe was on the other foot, and you bought and sold for those prices as the vendor, you'd be rather happy with your efforts. :)
     
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  9. Scott No Mates

    Scott No Mates Well-Known Member

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    Selling in <12 months = full cgt unless it was ppor
    Maybe they can't afford to hold it?
    Don't want to pay land tax?

    This could be the distressed sale of a lifetime.
     
  10. Rayan

    Rayan Active Member

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    But are we doing ourselves a disservice by creating an artificial boom based on the easy availability of credit and falling interest rates?

    I have done well in Sydney real estate and I am all for capital gain and renovating and building equity, but there comes a point where you are looking for a "sucker" so to speak, because even if someone purchases it at the asking price a bank valuation will very likely disagree that the intrinsic value has gone up that much....
     
  11. kierank

    kierank Well-Known Member

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    I can give an example. I bought a property in February this year for $600K (yep, $600,000) under the previous sale price 8 years ago.

    Did I get a bargain?:- Nope, I believe I paid fair market value.

    Did the vendor pay too much?:- Nope, I believe they paid FMV at the time.

    Some times markets go up, some times they go down.
     
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  12. Graeme

    Graeme Well-Known Member

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    According to the Realestate.com.au investment page for Balmain, the suburb's median house price has gone from $1.65 million to $1.75 million. So you could set your bidding limit to $1.6 million, and not feel hard done by. :D

    I've seen a few places that have had rather large jumps in their asking prices, despite being held for a short period. This house in Church Point sold for $1.35 million in 2015, and the vendors were looking for up to $1.5 million when it was on the market in August.

    Or how about the Mojo House? It sold for $476K in June 2014, and resold for $899K in August, having just had a cosmetic renovation.
     
  13. TMNT

    TMNT Well-Known Member

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    Dont be outraged.
    If one idiot overpays. Then thats their problem and the vendors win
    If more than one party is willing to bid thats where the market is

    Would you be outraged if an old granny pays 300k for a old house and finds a 1968 ferrari gto worth $20m in her garage!
     
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  14. hammer

    hammer Well-Known Member

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    I've been looking at Properties that were for bought for 350k 10 months ago and are now asking 280k.

    No need for outrage. It works both ways.
     
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  15. larrylarry

    larrylarry Well-Known Member

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    It's not a perfect world. If you don't want it someone else would. The perception of value differs from one to another. A person from Hong Kong may find this a steal compared to a box they live in HKG.

    The market dictates and some people loathe it. This is what we have at the moment.

    It's a listing price to test the spring market...will be interesting.
     
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  16. Sonamic

    Sonamic Well-Known Member

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    Don't buy it then. Pretty simple.
     
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  17. New Town

    New Town Well-Known Member

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    Current buyers in Syd are incredible optimists

    I’m sure valuer reports are full of warnings but the market is expected to hold so banks are lending. The worst job in Australia would be a syd res valuer at the moment. Their hands must be shaking as they sign off a report

    At least this property is blue chip - I've seen bigger increases in Campbelltown
     
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  18. Scott No Mates

    Scott No Mates Well-Known Member

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    Finance may be the issue - its a mixed use building not a house/terrace. The front room is commercial.

    @Corey Batt or @Jess Peletier or @Rolf Latham - is this gonna be a deal breaker?
     
  19. sanj

    sanj Well-Known Member

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    Why do you care?

    For all you know they might have bo8ght it under market previously.
     
  20. MTR

    MTR Well-Known Member Premium Member

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    Wont matter if purchased in a Trust