Client Case Study October 2016 – Is the asking price too much?

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One of the most stressful things about buying a property is figuring out how much to pay for it. There is always the fear of over paying and being behind the eight ball from the get go, or offering too little and being outbid by another party.

As property owners, the majority of us tend to be overly optimistic about what our property is worth. Ours has got better fittings, it’s better constructed, it’s maintained to a higher standard, and it’s in a better location of course. As a result when it comes time to sell, we almost always want top dollar and more than the market is willing to pay.

As property buyers, we must always remember this. The Seller is emotionally and financially attached to their property. The asking price is generally the price they would be happy to accept to commit to a sale– no questions asked. And as a buyer, we need to ask questions…..

So how do you know if the asking price is too much?

  • Get to know the local market inside out and find out how much other properties in the area have sold for (this takes copious amounts of time, research and market knowledge in order to make an accurate assessment)
  • Be familiar with current property market trends. Are prices in the area rising or falling?
  • Talk to rival estate agents selling similar properties in the same area. They will often know their rivals listings and will happily point out negative aspects that you may have overlooked
  • Find out about the history of the property. How long has it been on the market? Has a previous sale fallen through? Has the asking price changed?

Using all of the above expertise, we were recently able to secure a property for our client $39,000 under the asking price.

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Personal Profile

  • Young married couple with two dependents
  • One income
  • Own family home in regional Victoria
  • First time investors
  • Can afford $100-$150 per week to put towards new investment property
  • Would like to acquire another property within 24 months
  • Do not want maintenance hassles
  • Comfortable investing interstate

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PW Strategy

  • Low holding cost important but not critical
  • Low price point to reduce risk on first acquisition
  • Low ongoing expenses (i.e. maintenance etc.) as clients are time poor
  • Unit or townhouse in inner Brisbane where yields are stronger and affordability is better
  • Balance of cash flow and growth

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Property Profile

  • 2 bedroom, 2 bathroom apartment with single lock up garage
  • 100m2 internally with a 12m2 courtyard
  • Ground floor and one of only 5 apartment in the complex
  • One of the suburbs best streets
  • Low body corporate fees
  • Fully repainted, floors and fixtures updated within last 5 years
  • Complex recently repainted and in immaculate condition
  • Excellent location with Walkscore of 81/100

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Renee’s Comments

This apartment was originally listed at $489,000, was then reduced to $479,000 and we exchanged contracts at $450,000.

Being familiar with the area and surrounding suburbs we knew this property wasn’t worth the asking price the minute we inspected it. buy azithromycin online | ohnerezeptfreikauf Our inspection was thorough and we grilled the Agent on the Sellers circumstances and mind set.

We put a value on this property of up to $465,000 so our clients have done very well with their new investment. A big congratulations to them and to the PW team.

 

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