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Mrs A
Mrs A
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asking price vs offer price and cost of reno's

Thu Jul 30, 2009 11:50 pm

what is everyone's rule in terms of asking price vs offer price?
I mean how low do you go?
when we purchased our unit it was offers over 240k(or 250k cant remember :oops: ) we offered 220k and ended up getting it for 230K. we purchased when times where good, and just before the boom so we are alittle out of touch as to how the market is now and what sellers expect and will go for.
we are now looking at buying a house. we have found one we like and if its still available after our holidays we will seriously consider putting in an offer. it is for sale for 449k, but its in an area which the current med house price is only 440k.
its a Deceased Estate and in original 80's condition (as in wall paper, carpet, bathroom, kitchen etc) but seems to be solid and well cared for. there is loads of potencial and is a good layout and size.
it does have a pool but its unfenced, 3 bed 2 bath 645sqm block.
what is wrong with it/ could do with a makeover is and cost wise we are thinking that it will cost us :
the pool will need to be fenced - 5k to comply
wall paper to be removed and panted- 2k-3k at diy
carpet lifted and wooden floors to be polished- 2k-3k at diy
bathroom 1 to be updated (second is just a shabby one anyway in the laundry so ok to leave the way it is) 5k
kitchen to be updated. 6k
outside areas to have new pavers installed. 4k
misc-4k
so all up about 30k worth of renos (please advise if we have under quoted ourselves on the reno costs).
I know the land value alone is 285k.

so long story short what would you start your offer price at knowing that the mean price in the area is only 440k (and there are some really nice places for just over the 500k mark), that there is 30k worth of renos (atleast), including a non compliant pool and that it is a Deceased Estate?
I think that 420k is fair and I dont really want to go more than 430k really if we go in the 420's that would be great, is that too low?

thanks
 
MrsKo2b

Re: asking price vs offer price and cost of reno's

Fri Jul 31, 2009 12:29 am

I say go with $240k subject to finance, building & pest. Then again it really depends on how much interest the property has because someone else might be willing to pay more for it hence offer a higher price.
 
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kristen_86
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Re: asking price vs offer price and cost of reno's

Fri Jul 31, 2009 10:36 am

It sounds like you have already done your research ;) We knocked some off the price of our unit by telling the estate agent that we were concerned about the value, considering most 2 bedroom units in the area were selling for a bit less. Originally the owners were refusing to go down as they had already dropped the price once, but after explaining our reasoning they accepted! So maybe even put in an offer for a bit less again, say $420-25 and see what they say. That gives you a bit more negotiation room as well, plus there is a little bit of psychology involved because say you offer $420,000, and that is rejected or counter offered, if you offer $430,000 that seems like a lot more money, when in fact it is still below their asking price.

It really depends on how much you like this property as offering much lower can backfire. That being said, you will have to spend a bit of money to get it up to scratch (especially the pool fencing), which is another consideration in the price.

Good luck!
 
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mellyk83
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Re: asking price vs offer price and cost of reno's

Fri Jul 31, 2009 10:41 am

I say go with the $420 what the worse they can say is no and then u go from there. When we brought our house in 2004 asking price was 270, we offered 252 and it was accepted we just sold and brought a block of land which was originally advertised for 239,000 then went to 229,000 which then we offered 200,000 they said no we went to 202 and they said yes so really worse they can do is say no but then if they say yes think of the money u can spend on renos :D
 
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zoltansprincess
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Re: asking price vs offer price and cost of reno's

Fri Jul 31, 2009 11:14 am

I think it depends so much on the suburb. Also, I would budget more for the kitchen and bathroom, but less for the wallpaper removal and painting. We painfully removed wallpaper from all of our living areas and hallway and all it cost was the price of scrapers, a bucket and our effort! To paint our whole house cost under $600. I would also consider the cost of updating light fittings and adding power points if required, fixing any existing plumbing/electrical issues, replacing gutters in a few years time if they are old and in need of replacement. The house must be in a good area of Brisbane considering the price. We paid a lot less than that last year however we bought just under 20k's from the city. For us, the house already had an ok kitchen and bathroom (renod 9 years ago) so the renos the house needed weren't that expensive ($15k to do everything we wanted including paint, flooring, dishwasher, air con, built ins, gutters etc etc). In saying that though after negotiating on price (10k off the asking price), we did get another $4k extra off to replace gutters and deal with part of the laundry. The price was good at the time though, slightly below what others in the same area and condition were selling for, so if it had been more expensive we would have wanted more off the price. So technically the money we got off the price matches the amount we wanted to spend on the house to get it looking modern and nice, but we didn't plan it like that. If the house needed a new kitchen though I would have wanted a lot more off the price, as a new kitchen and labour can easily cost $15k+
 
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TinaBeans
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Re: asking price vs offer price and cost of reno's

Fri Jul 31, 2009 2:58 pm

We put in our offer, subject to building and pest etc. When the building report came back, our conveyancer helped us negotiate a $5k reduction to fix a few things highlighted in the report.
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