Hi all,
Just went round to do inspection of one of my IPs when cornered by next door neighbour. Says he is selling up, and has not signed up with REA yet to sell. REA told him house should fetch 285-300K, but in today’s market I reckon about 280K. House round the corner has been unsold at 265K for a while.
He is offering it to me (without REAs) for 285. I said would consider. But in all honesty, I am soooooooo wanting it, yet I think 275 is much better more realistic in current market.
What do you all think??? Is it worth losing, I mean it’s next door, which offers future op for redevelopment!!!! Pay the 285?????
Please advise….
JO
I’m facing the same dilemma. I’ve got a property in Tasmania and my neighbour is keen to sell – we’re having a boundary dispute and I’ve worn them down. The price they’re asking is more than it’s worth, but if I buy it I’ll have a 2,000+ sqm site across the road from the beach. I’m thinking of a future development (in time for the next boom). For the sake of an extra $10K I’ll be buying it.
ScottHi Jo,
If you are thinking development down the track, I wouldn’t be worried about an extra 10k now. I would offer him 275k first though.
My latest purchase they wanted 330k, I offered 270k, they settled on 300k. Same though I can develop later, I probably would of paid an extra 10k.
RoboHi Scott,
Sounds to good 1/2 an acre on the beach, is it a surf spot?
Robo2 Questions to ask youself – 1) is there a DEFINITE option to redevelop/rezone and is it realistically going to make you lotsa $$$ at some stage with all costings, etc taken into account, and 2) How will you feel if you lose the property (and the $$$$ potential) for a lousy $10k.
If the answer to Q1 is very positive, haggle like crazy but don’t miss it for a (relatively) few bucks – opportunties re adjoining props and resultant development options don’t come along every day..
Happy haggling.
theloanarranger
Not sure whether there’s any surf, Robo. I’ve never been there. It’s on the north coast.
Thanks for the reponses everyone.
I will be going to take a second look at the property tomorrow. It’s a lovely house, in fact, probably too nice to consider pulling down in later years. Had it been an older home, I may not have had my doubts, but it is in such good condition that it would be a huge waste. I paid $212 for mine almost 2 years ago, and now to pay $285 so that I can re-build say units later may be a costly exercise. ($407,000 for land????) Mind you I have made money on mine over the last 2 years in good rental return.
I will have a clearer idea tomorrow.
Thanks again,
Jo
Mmmmmmm. If the house around the corner is worth less that 265, why is this one worth 285 (which is really what the owner is getting, as it sounds as though he is saving the agents fee, not you!)
Im with the loanarranger, find out NOW from council about any future developments possible ie easements, covenants, etc, else you may not be able to do anything
Is it in nsw? I seriously think the bottom has fallen out of the market. There are almost no buyers, and everyone wants to sell now to avoid the VTT. My view is that unit prices are to crash and burn, and houses will correct and plateu for a while.
Hi Jo
snap it up …. $10,000 so what, dont be short sighted, think of the big picture.
In the scheme of things, $10,000 in terms of repayment is maybe an extra $50.00 pm.
Redevelopment potential and resale would be what I would be focussing on.
Go for it.One thing you could put to the neighbour is the following:
Find out how much it would cost in RE fees, then maybe reduce it from 285 by half that fee, so that way it could be a win/win situation all round.
He gets more than if he went through an RE and you get it for less as well.
Thank you all again, for your inspiring comments.
I have, as a result of reading same, re-considered the venture. I didn’t go back for a second look at all, but rang the local council instead to enquire about re-development options.
While the prospects were favourable, the sums didn’t add up. Basically, to pay so much for a property, only to drop it to rebuild, would be foolish, and not very profitable in the short term, and even in the long term, it is still not feasible, as the rental return is not substantial enough to justify its purchase.
I can get a better return, and equal growth, in a cheaper property, in the same street….yes, the one around the corner for 260 (which I could probably negotiate down to 240). But I would prefer to shop around a bit more, maybe sit a little longer, and wait for a better bargain.
Many thanks again,
Jo
Just a quick update on my last post…..
Although I had decided not to purchase, the neighbour had (as stated in my original post) “cornered me” (literally) into thinking about buying his house. He said he wanted to save himself the commission and do ME a favour. So I came home, thought about it, posted the question….
Only to find out this morning, that he had signed the papers with the agent last night after I left!!!! What the……
Ah well, who cares!
Jo
Maybe he reads this forum [evil4]
Originally posted by depreciator:Not sure whether there’s any surf, Robo. I’ve never been there. It’s on the north coast.
Which town is it in Depreciator. Am originally from Nthn Tas and should be able to give an indication.
A.
Thanks Sizzling_duck,
I guess if he could read english he might. I daresay I am safe on that note.
Jo
Hi Jo,
You haven’t really told us how big the land is and why you think it could become a development site.
He may well not have given a sole agency which means that he is still able to sell it to you pivately.
At the very least )if you want to proceed) obtain a building inspection report so that you can use this to negotiate the price downwards.
Same goes for a valuation.
Cheers,
Pisces
Hi Pisces,
To answer your question, the land size is the same as the one I own (approx. 750spm) which effectively would give me a very nice 1500sqm, if I wanted to build say 4 or 5 units. But as I said his house is in too good a condition to drop, mine not so, but still a costly exercise. I can better spend my money elsewhere.
BTW I have just heard it is in one of the REA windows already, priced at 296,000. No thanks, too much for me. And it is solely listed I believe; REA a friend of his!!!!
Thanks again for your thoughts,
Jo
Is it possble to create a second block ?
Is it possible to build a second dwelling (no, I mean Is it possible to build TWO additional dwellings) at the rear under the Dual Occupancy Act ?
Jo, I note that you haven’t as yet addressed my question as to what makes you think the site could possibly be rezoned for medium density in the future.
Pisces
Pisces,
There is the possibility of building ONE additional property at the rear of (either) his or my house, however if both properties are pulled down, following subdivision, council will most likely allow the construction of units.
I am not quite sure what you are asking me, thus the reason for not answering adequately.
What makes me think it is a good site (or opportunity) for development….size, location, and just because I want to?????? [blink][blink]
If I have not answered sufficiently, please do not hesitate to restate your question….I can be a bit darft at times (this must be one of those times).[blush2][blush2]
Jo
>>There is the possibility of building ONE additional property at the rear of (either) his or my house, however if both properties are pulled down, following subdivision, council will most likely allow the construction of units.<<
Perhaps it may be possible to build another dwelling at the rear of e-a-c-h of the blocks by using the one driveway for both of the new dwellings. To a great extent it very much depends on whether there is room at the rear of each block to fit another dwelling and whether there is room for a driveway between the two existing dwellings.
What makes me think it is a good site (or opportunity) for development….size, location, and just because I want to??????
If it isn’t zoned for medium density at the moment what reason would you possibly have for thinking that in the future Council may rezone the area ?
If you talk to the chief townplanner he may possibly, if you read in between the lines, give you some clues like : “We are working right now looking for suitable locations as we do foresee a need for some further medium density rezoning” and (when you ask what criteria he uses he may well say something along the following lines) “Normally we would look for land close to the station or close to the shops etc”
It would, in my opinion, be worth it to employ another townplanner to do the talking for you as he speaks the same language as council’s planner.
However, the way you are talking it appears as if council may already be in a position to approve a medium density development.
If that is the case what about being prepared to pay the full price to the neighbour provided he gives you time to put a plan into council (by way of granting you an option to purchase).
There isn’t any need to go into great details filling the neighnour in as to what exactly you have in mind to do.
Having sufficient time (to prepare a plan and for Council to deal with your application) and no real commitment to actually proceed with a purchase, you eliminate a lot of the risk.
Cheers,
Pisces
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