My partner and I are currently looking to purchase our first home but as first timers need a little help.
The purchase price is $25000 and we have not yet seen the place except in photo’s as it is quite a distance from where we are now. In the photo’s it looks like it needs alot of work but is currently tenanted so we could still live in it right away.
my one concern is that it is not worth the asking price.
what could we possibly do to find out without much outlay.
currently we are tight on funds as we are both on pensions.
the finance is not a problem just the upfront costs like travelHi Jaawz0224,
Why do you think it’s not worth the asking price? Did you mean to write 25,000? That’s very cheap?
No matter what the asking price, you can get info on house prices a number of ways. Some websites have limited info on recent sales/auctions. So if there have been recent sales in that area, you might get the info for free.
If no sales have been recorded thru the free websites, then you can get info thru one of the paid sites at about $50. The report would give you all sales in that area for the last year.
Or for around $200 (but shop around) you can get your own impartial valuation done by a Valuer.
There is always the option of calling local real estate agents and asking. They may or may not be able to advise, especially if you would be willing to look at a comparable property on their books…
Good luck
thankyou for your reply
yes asking price is 25 000
I have looked at past sales in the area and one similar property in the area went for 15 000 but going by the photo’s the one I am interested in will need a roof repair, flooring and an exterior paint and is currently two flats to be converted into a house so work wise it is more than the 15 000 needed. This is based on the few photo’s I have recieved and land size is pretty much the same . I am really interested in it but dont want to go into it blind and over pay or fork out travel costs wich is about $800 just to find out that it was not worth it.Hi Jaws,
you havn’t said where the house is located, I assume that it’s is not in metro areas. Perhaps you may be able to get a building inspection for $300 or so. This should identify any problems and approx costs.
Also you said that you are first timers if this means that you and your partner have not owned other property before, then you may be able to get the first home owners grants.
hrm
the property is in nth qld and is classed as rural we are able to get the first homeowners grant but will be using that for our deposit. although finance is not a problem this property will max it out but because we are both on pensions we want to try to get it to be able to have a bit more financial security and not be paying 200 a week on someone elses morgage. we have two children and one on the way so we are really anxious to own for them and us.
have done some investigating on prices of building reports in the area and can get one for about 200 or so so i’m thinking that we will have to put at least this amount out to get any further.
thankyou for your reply.A standard contract is always “subject to building and pest inspection”, so if you haven’t already, you might consider signing a contract on the property and then negotiating the price or pulling out after you get the building report. This will a) stop you spending $300 on an inspection only to have someone else buy it in the meantime, and b) put you in a stronger bargaining position. You still can’t get away from the fact that due diligence costs money. It sounds from your post like you will be living in the property? In that case, I would definitely be having a look myself before buying. $800 travelling costs sounds like a lot. What about the free train travel that pensioners are entitled to? Maybe you don’t both need to go.
Hi Jawz,
Just as an aside comment – have you looked at the area and asked the question “Is this where we want to live?”
While the purchase price may sound attractive are you and your family going to be able to live there with the ‘limited’ (an assumption based on price) services available in the area.
I would also suggest that the entry price is a little high given the substantial works you have identified as being required.
You could be making a $25K expensive mistake.
Derek
[email protected]
http://www.pis.theinvestorsclub.com.au
0409 882 958thanks all for your insight.
the free pensioner train trip is no longer availiable and only offer half price fares. this would result in a 600 dollar return fare just for seating then with the cost of food and fuel to get around until a return trip is availiable is approx 200 dollars my partner is very sceptical and doesn’t really have any positive thoughts so far so therefor I am doing all the info searche’s and he doesn’t want me to go there alone as he wants to see it as well yet he doesn’t want to go alone and for both of us to go it is not possible to leave the kids with a family member or a babysitter as the are not willing.
the area is only small but it is in town and has both primary schools and high schools and a hospital ect. the Idea of actually signing with conition of building and pest inspection has come up yet once again my partner is not willing to do so
maybe it is better to just leave it as he is that dissinterested in making the effort to inquire more into it.
he says he wants to own a house and that the price is good but wants to leave it at that.
i am lost with what to do
also the realestate is failing to reply to questions and a request for more photo’s and simply sends have to view property
maybe it’s not meant to be.It would be unwise to purchase without a building/pest inspection if it looks like it needs work (as there will be more to do than your eye will pick up on). Fixing up a place can be very expensive – especially putting on a new roof – but will be necessary if you own it.
While it may currently be tenanted (in a ‘livable’ condition) the property will continue to deteriorate if it isn’t fixed. You can’t live in the house if it gets a leaky roof, if support structures are destabilised by white ant, if the hot water system doesn’t work , if the plumbing is shot… and a house is a long term investment. You could end up paying many times its asking price in fixing it up.
Have you checked out council and water rates for the area? There are many expenses associated with owning a home that as a tenant you will not have had to pay before. Make sure you go over all expenses associated with buying and owning a home (taxes, duties, interest rates, etc).
Have you checked with the agent whether the tenant is on a lease? If there is already a contract in place you may not be able to move in as planned.
On a personal note, I wouldn’t purchase a home without knowing the area. You may find that you hate the rural town in which the house is located, and you will be far away from family and friends. The long distance will make it difficult to visit anyone, and some small towns are very clique – you’re either a local or an outsider, and it can be a very isolating experience. Only visiting the town will give you a sense of what it is like – whether people greet you in the street or treat you with suspicion.
If you do decide to make an offer – in addition to others advice of including a clause about passing the building and pest inspection – offer a lowball initial figure. The worst they can do is say ‘no’, in which case you can increase the offer. On the otherhand, they may accept a lower price.
Do a google search on the property address to see if any info comes up – such as past asking prices, or how long it’s been on the market.
There are a number of property info services that can give you the recent sales history of a property or suburb for a reasonable range of prices (though this won’t be of as much use if the house has not been bought/sold in recent years).
http://www.residex.com.au
http://www.propertyvalue.com.au
http://www.homepriceguide.com.au
http://www.rpdata.com.auYou can also get some sales and valuation information from the State Valuer General – also for a range of prices. But be aware, that the valuations are generally on unimproved land, the amount on which people are charged their land tax/rates, and doesn’t necessarily reflect market values.
http://www.nrm.qld.gov.au
http://www.dli.wa.gov.au
http://www.lands.nsw.gov.au
http://www.allhomes.com.au (ACT)
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