What to compromise on

Let my try and help here in a general way, and I am pinching a bit from the Empower Wealth chaps on this.

Write down on a piece of paper the following four things:

1) Price
2) Location
3) Land content
4) Property condition/quality

Now, with your hands, cover the two things that you absolutely will not compromise on (usually it is price and location). The two remaining items that are uncovered are the two things that you must compromise on.

Hope this helps.

 

I'm facing this situation from the other side on a property i want to sell.
I think non renovated you can see what need to be done without dodgy cover ups.
Agents and most buyers are the opposite. Consequently a house needing a 50k proper reno will get 100k less as is. Buyers just mainly want a pretty place to move in.
Only low balling investors are mainly interested in unrenovated properties.

 

Yeah it sucks, a quick dirty reno is still the way to go unfortunately. I could tell the place I just bought had a pre-sale reno and in a perfect world I should have been able to pay a "blank canvas" price as it all had to be ripped out again...but I had to face the fact that not many other people would realise this so I had to make an offer based on it being properly renovated. Annoying as hell.

 

We're getting an enquiry a day from people in this exact same scenario who are continually missing out. Remember, value perception is relative and it often takes much longer for people's expectations to adjust than the values themselves. For starters, I wouldn't be waiting for the market to cool down.

Often when people are missing out it's because (as just mentioned) their expectations haven't caught up with reality. They miss out on a few, are bewildered by the price, think it must be an anomaly and get caught out a few more times before realising that that is now the new price benchmark and they're now caught up having to change their brief while people around them have also been caught out and are having to change their brief too, meaning they're moving with the competition, not ahead of the competition.

One of our roles as BAs is setting expectations and providing market knowledge due to our daily exposure. I can see almost immediately why people are missing out and whilst BAs do not control sales agents, vendors or the market, we can control expectation through knowledge and if people listen, they get a result.

If you're finding you're missing out then you need to adjust your expectations for what's happening in the market before everyone else does. Or just find a good BA

Good luck!

- Andrew

 

I'm not up on what's good value in Bexley, but at a guess, I'd say that you'd only get something like this for just over $1m.
114 Harrow Road, Bexley, NSW 2207 - House for Sale - realestate.com.au

It's not a lot of house & needs major work. Of course, I could be right off the mark.

Compare to Western Sydney & you can get something like this:
27 Todd Row, St Clair, NSW 2759 - House for Sale - realestate.com.au

 

You should take a peek at the Canberra market. Forget about houses almost hitting the 1M mark and requiring significant repairs - most have unapproved structures AND structures built on easements ! It baffles me how someone is willing to pay so much for so little.

 

thanks for all the responses

so what is everyones thoughts on this - keeping in mind, 1.5 would be absolute max budget, and if we went that far I don't see where we would have money anytime soon to do major work or rebuild.

Old house, nicely presented, terrible layout, great block: https://www.realestate.com.au/property-house-nsw-beverly+hills-135484726
estimating it to go 1.5

Newer duplex, ready to go 19 Henderson Road, Bexley NSW 2207 | Domain
not sure on price, maybe up to 1.4 who knows these days

 

Saw that, will be interesting to see what it goes for. I don't know how busy the road is there, but I will be amazed if it goes for under 1.3

 

I'm thinking the same. A house half that size is selling for about 1.1 only one suburb over...

https://www.realestate.com.au/sold/property-house-nsw-earlwood-135264570

 

Earlwood is on another level again. The under quoting there is ridiculous, I went to the open for this https://www.realestate.com.au/property-house-nsw-earlwood-135639914 and there was a queue to get in. I think it will go for 1.6+

 

Yeah I know Earlwood is more desirable but if I could go one suburb over and get a house double the size for the same price I would. That's why I agree with you that 1.3m seems a little generous.

 

See, I just could not justify spending that kind of money for such a home.

 

They'll set the reserve on this at $1.1m and it'll blow right past it

- Andrew

 

I've no doubt about how high it could go, my point was that you can buy a whole lot more house for your money if you move further out than inner city.

 

Right, well yes that's true of course, However I was responding to the line that you could get that for just over $1m, which you won't.

- Andrew

 

Haha, I DID say that I don't know the area. And to me 1.3m id judy over 1m.

 

If folks are only willing to pay your measure of 'just over' my asking for my properties, I'd be happy as Larry

 

Everything can be compromised. But it depends on what the end goal is. Generally, as an investment, the worst house on the best street is going to trump the best house on the worst street. But if you are going to be living in it, then emotion comes into play, and that may or may not be entirely true.

If you are looking at things that need work, look at what kind of work they need. There is a massive difference between a house that requires immediate structural attention and something that may simply look outdated and ugly (need new paint and carpet) but is otherwise fully functional and able to be lived in as is until you can afford the time and money to fix those issues.
A lot of people discount houses based on minor issues like paint and carpet and overgrown gardens. And that is silly, because those things are easily fixed and not really all that costly either, especially if you are willing to do some of the hard work yourself. But then they will overlook some of the more hidden structural or functional issues. Ie a house with a bad layout and in need of a new kitchen or bathroom immediately, is going to be a much larger expense, and a huge inconvenience to do whilst you are also trying to live there.

 

Fair!