Is this property really only worth $280,000?

Hi all

1/123 Grange Road Glen Huntly Vic 3163 - Apartment for Sale #126245334 - realestate.com.au

For those regulars on these forums you may have noticed I have been looking for a cheapie apartment to buy and use for when I am in Melbourne. I did have my heart set on something very cheap in Mentone for some time but have also kept looking around other south eastern and eastern suburbs of Melbourne.

One cheapie that took my interest was 1/123 Grange Road Glen Huntly and the reason is because it is located next door to shops, 50 metres to a tram stop/Subway (YUM!) and a 7 Eleven,, 200 metres to a train station and surrounded by Caulfied East, Carnegie, Bentleigh East and Bentleigh but I always wanted to have a ground level property with a car space on title and a courtyard where this one does have a courtyard but not on title but at least it is licensed to the apartment I am looking to buy and a nice sized courtyard to boot where it could be made into a nice outdoor area.

In September 2014 the property sold for $308,750 to a popular Buyers Agent in Melbourne named Frank and has been on the market for some time where someone just informed me it has been on the market for over 220 days, that is a huge amount in time in the current Melbourne market. I do remember contacting the agent about it when I saw it for sale in December 2017 at $319,000 and told the sales agent if the buyer is negotiable to please come back to me as I am a cash buyer and I never heard back from the agent. At that point in time I was happy to pay $305,000 to $310,000 for it but just didn't think the vendor would have accepted my offer by how the sales agent was talking about it at that point in time.

Well 48 hours ago I see it still for sale with the same agent and with an asking price of $299,000 which is considerably less than what I was prepared to pay for it and I thought ah well they could be struggling to sell it so I contacted the agent wanting an inspection but was informed that I will miss out if I want an inspection as they have another offer of $280,000 on the table right now that they received in writing and the vendor is considering this offer.

I thought stuff it, if the vendor who is a buyers agent is considering the offer of $280,000 I would offer $276,500 with no conditions other than saying I am happy to offer this amount on the assumption there are no known building defects which isn't even a building inspection and no personal inspection required either as it can't be offered in a timely manner and I will miss out. The agent came back to me 20 minutes later and said if I offer $281,000 they will see what can be done because my $276,500 offer is not accepted, I would have thought a buyers agent would absolutely love to deal with someone like me that purchases property on a very regular basis and intends to buy at least another 20 to 30 or so properties in my lifetime but it never played out that way!

So my questions to those of you reading this long winded post now that I am trying to justify that I have done the right thing by not offering $281,000 for the above mentioned property, is it really only worth $280,000 in this market or is it worth less or more? I know it is run down, needs a renovation, doesn't look nice from the street etc but look at the courtyard and what can be done with it! It is currently rented on a month to month basis at $1,200 pcm.

Please give me a ***** slap if required, have I misjudged that car parking and larger sized courtyards place no extra value to apartments at the bottom end of the market? Shouldn't this property be priced a lot higher with those features?

Regards,

alicudi

 

So you were prepared to pay $310K four months ago?
But now $281K is too much?
What changed?
Marg

 

Hi

Fair question, what changed for me is the realisation it has been on the market for over 220 days in this silly hot market that Melbourne is where property normally sell in less than a month, the fact it hasn't gained any value since September 2014 which is the previous sale date and is for sale approx 10% for less than what it changed hands for since then which I did not know back in December 2017 when I was prepared to pay over $300,000.. Am I been to cautious?, am I worrying about nothing?

When I was happy to pay $310k or so I did not know it had been on the market for approx 100 days at that point in time and maybe that would have raised alarm bells for me back then to. Did this agent screw up by not getting my best offer from me in December 2017 which would have been around $305,000 to $310,000 and am I lucky I didn't pay that much considering it has an asking price of $299,000 right now and the vendor is considering an offer of $280,000?

Am I just writing this thread and reply to your message to make myself feel clever and smart?

I am lost!!!

Regards,

alicudi

 

Hi

That was my initial thought as well due to it been under 40m2 but units of the same size/structure/age/condition have been selling in the immediate area for between $270k to $325k.

Some ground level and some on the first floor and none of these have had courtyards.

Regards,

alicudi

 

Hi

Yes that is correct the courtyard is not on title. But still better than no courtyard at all right? Sure the license is for 99 years and can be changed/cancelled at any time but surely it is more valuable than one of the middle units that can never have a courtyard attached to it as they have units built along each side of them?

Regards,

alicudi

 

Re. The courtyard - what does 'under licence' mean?

 

Hi

"Under licence" is a term used when the Owners Corporation agrees to let a lot owner, in this case apartment number 1 have the sole and exclusive use of some of the common property. Very common in the suburb of Victoria and is often used for things like car spaces and courtyards but is not a sure thing as the licence conditions can be changed as I have actually seen in the past.

Regards,

alicudi

 

Hi

A major problem would be finding a bank that would want to finance an apartment under 40m2 and then to take it on with only 20% deposit so this "CF+ at 20% deposit" wouldn't apply for this property.

Regards,

alicudi

 

strata fees? any major works on the agenda given its age?

 

Hi

OC fees are just under $1,000 per year. No major works on the agenda as far as the OC is concerned and by looking at the exterior it is showing its age and looking tired.

Regards,

alicudi

 

Hi

Yes this is screaming out at me especially since I can't do an internal inspection.

Regards,

alicudi

 

Hi

The sales agent tells me if I wait for an inspection the property will be sold. Today they had an offer of $280,000 on the table and said that the vendor is considering it. Between the agent having a day off and a tenant residing in the property they tell me that if I put an offer subject to an inspection I will miss out and won't get it. Currently my offer is sitting at $276,500 and a 10% deposit will be paid once I have had the opportunity to inspect inside the premises, this offer expires tomorrow at 1pm but they have already told me it isn't enough as the other offer is higher than mine and I need to offer over $280,000 without an inspection of the premises to secure the property.

Either a very good sales tactic to make the sale a simple one or the interior of the apartment has damage that they are trying to hide.

I come from a family of estate agents and worked in real estate myself many moons ago and deal with estate agents on a weekly basis and haven't yet confirmed what angle the sales agent is coming from yet but will eventually no doubt!

Regards,

alicudi