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  • Profile photo of walkernickwalkernick
    Participant
    @walkernick
    Join Date: 2002
    Post Count: 68

    Hi everyone,

    About a month ago I put a holding deposit on a property which was on the market at $209K but I negotiated for $200K.

    Basically it is a large old building that is converted into 2 units. However one of the tenants was very uncooperative with letting me through and I only just got to look through it (I told the r/e agent i wouldn’t buy unless i looked through).

    Anyway, I just purchased a report from residex on the property that says the property was sold to the current owner in July last year for $160k. However homepriceguide.com.au says the area saw 46% growth in the year to Feb 03. Theoretically, then, $200k isn’t overpriced…

    The owner wants a September settlement, and I did all my sums before I put in an offer and I believe it is good value (return/cashflow) for $200k.

    My problem is that I’m not sure whether it’s overpriced. I’m considering getting an independent valuation but I don’t want to delay the agent any more because I have delayed for so long due to not having seen the other unit (I haven’t exchanged yet).

    This is my first property so I’m treading carefully! In retrospect I should have bought the residex report earlier and tried to negotiate further on the price, but that doesn’t help the dilemma I am in now.

    Anyone with any advice??
    -Nick

    Profile photo of NathanNathan
    Member
    @nathan
    Join Date: 2002
    Post Count: 77

    Hi Nick,

    It is always handy to have the ersidex report before you start negotiating, but having said that, it you have done your due dilligence, and the cashflow looks good, I would not be overemphasising the purchase price. If you are obtaining finance, ask them to do a full valuation on the property. (Hopefully the offer is subject to finance.)

    I would me more worried about inheriting a troublesome tennant than the property purchase price from what you have said.

    Good idea to do due dilligence on the tennants as well as the property!

    Cheers,

    Nathan.[:)]

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