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??
-NickHi 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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