Who here has overpaid for a ppor knowingly?

I bought my PPOR well under the maximum amount I was prepared to bid up to but knew I probably overpaid by around $15k. Eight months later however, a similar house in the same street but on a slightly larger block sold for $66k more than what I paid for mine.

No regrets.

 

I'm sure we overpaid for our current PPOR. That was in 2002. It had passed in at auction some months before I found it and we paid what the vendor wanted. Unique property, though, and it has turned out to be a great purchase.

 

For the condition of our PPoR we overpaid for it (all cosmetic stuff, structurally very good and it has great infrastructure). The owner wouldn't budge at all and we would have kept looking for years more (patience is a virtue ).

Great question about IPs @Barny , it would be interesting to see what people thought about the prices once the deal is done and the head has cooled (I can say yes on one, but don't have buyers remorse as we have fudge-factor funds and yield is a big factor of our decision making process so out of pocket not bad, it will also appeal to buyers when we come to sell).

 

Overpaid by $10k for my PPOR land in 2012. Poor negotiation skills.

As a consequence of that decision I've had capital growth of approx $411k ( on land + completed house ). Go Sydney!

 

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From the responses I guess most look long term and are willing to spend additional. It's not everyday the right property comes up for sale. So spending the extra locks in that dream. I always like paying less if possible, but fare market I'm good with, but overpaying for the dream I'm not sure on that as yet.

 

How would you feel if the property went the other way, down in price?

 

My new PPOR is in an area that has 1-2 properties sold a year if you are lucky so hard to guage prices. I probably paid too much, but maybe I paid too little.

A house on a larger block (22 acres vs my 12.5) of land sold at start of year for $30k less than mine, and it was a much newer larger house (1980s vs 1930s). In comparison to that I paid too much, but it was dirt road access, and no creek for water like mine does, and did not have the shedding and outbuildings. The house while bigger and more modern was also a blandy 80's 2.4m ceiling place with no soul.

Another house sold recently for 50k more which was a massive near new place on bit less land (10 acres) with indoor pool pavilion, guest house and about 350sqm of living space. It had no road frontage and was accessed via easement road, and was 95% bush block which would have cost hundreds of thousands to clear, destump, till, seed and fence.

Ultimately unless you are overpaying by silly amounts, a great PPOR is worth every cent. And even if you did overpay, in 10 years who cares

 

I underpaid considering the views and potential for my property. I haggled the crap out of the vendors and played a good hand of poker with them for the win at approx $100k under what they had paid only 4 years previous in a similarly soft market.

I bought in my area because

1) The style of home is very rare in Ocean Reef; and
2) The views are unlikely to be built out; and
3) Minor cosmetic details are likely to add a large chunk of equity; and
4) The talk about Ocean Reef marina was building and looks more likely every day to turn dirt before 2020 - but not banking on it.

 

Why not use the income from your investment properties to pay for your PPOR upgrade ?

 

I knew it would go gangbusters given time due to the long awaited infrastructure boost.

Sydney Metro got planning approval 4 months before I bought the land (June 2012). I signed the contract in November 2012 whilst the market was still quite dead after the GFC.

It took a while for the herd to pay attention to the changes that would occur.

 

It's also dependent on competition, there was more than one offer on the table so we paid my guess around 30k above market value

 

Not necessarily also investment properties when playing in hot markets where you have lots of competition

you may have to pay more than market value to shoot competition out of the water, but markets are rising so quickly it won't matter you will be well ahead

 

Overpaid by quite a bit for 'new' factor. We jump in eyes open though. Told hubby if we do it this way it'll be way over the median of the suburbs and he wouldn't budge.

 

I reckon I overpaid by about $50k. I was relocating from Sydney to Gold Coast. When I saw what I could get for my price range I didn't bother haggling so hard as it was so cheap compared to Sydney.

 

I saw people clambering in with the first home buyers grant who paid ~$345k for something worth maybe $300k. I think they got dazzled by a cheap reno job that was done on the property and got completely played.

Anyway, that was in around 2009 and it would be worth roughly $530-$550k now, but I think those owners sold a couple of years back already.

 

Underpaid by 20-25% in 2012. All the local agents with our names on their data base (as potential buyers) at the time couldn't believed the price when we told them.

 

Everyone has been telling me that we underpaid by a lot.

I'm not so sure...I suspect we got it about right and anyone that paid more than us is overpaying.

Still can't believe it's mine!

 

How do you gauge "overpaid"? Unless you purchased an OTP apartment in Melbourne's Docklands its fair to expect that the Bank's valuation will agree with whatever you paid as being a fair market value. Unlikely the bank would value it higher.

I feel I paid $20-30K too much, but took a long term view and was somewhat "inspired" by having missed out on the last 4 auctions I attended.

So, some numbers.

Recent local sales were $1.2 - 1.4m, but all were larger blocks and fully renovated homes...this place was a "renovator's delight"! I took this as scope for manufacturing CG. The property had last sold 2yrs prior for $800k. Allowing for CG in the area I figured it was worth $900-930K. Ended up paying $950K.

I figured great location, potential for CG through reno, was liveable, better located and $300K less than others we missed out on and ultimately $20-30K over 10 yrs or more was not too much of a premium for lifestyle. Settled in May 2016. Was pleasantly surprised when I received the rates notice with the Council val at Jan 2016 being $975K.

 

I think I got good value on our PPOR land but I am probably over spending on the house we are building. It's a lifestyle location with 10 acres which tend to be one of the flakiest markets in Perth and the price we paid is pretty much what the last owners paid and the owners before that. Between the sale in 2006, then 2010 and what we paid in 2014 there is only $135k increase over the 8yrs.

 

But it wasn't really knowingly at the time?