Help! How do I know how much to offer?

[Jacqi B]

We've seen a gorgeous house that we want to buy.

http://www.trademe.co.nz/property/re...-415083003.htm

it's 'price by negotiation' which the real estate agent tells me is 'like a tender but without the paperwork' - which really doesn't help me as I have previously only ever bought houses (in the UK) when an asking price is listed.

She also told me that
"The rateable value on the property is $385,000. The most recent sales in the area (same street) have been
13 Katarina Grove $410,000 3 bedrooms double internal garage rumpus
15 Katarina Grove $440,000 4 bedrooms double internal garage rumpus

the one I want 4 Katarina has the same rateable value and number of bedrooms as the one that went to $410,000

So how do I know how much to offer?
Deadline in 2nd November at 1pm

[natandmark]

its down to how much you are willing to pay, but run the risk of paying well over what someone else is willing to pay for it.
or how little you think you will get it for, but run the risk of not winning the bid.

it sounds like a sealed tender, win win everytime for the seller,
I would have thought 'by negotiation' meant haggling over the price,
seems the seller wants people to start bidding silly money without knowing anyone elses interest.

[Jacqi B]

its down to how much you are willing to pay, but run the risk of paying well over what someone else is willing to pay for it.
or how little you think you will get it for, but run the risk of not winning the bid.

Well, yes, I realise that.

I would have thought 'by negotiation' meant haggling over the price,

so would I, seems very strange

seems the seller wants people to start bidding silly money without knowing anyone elses interest.

well they wont be getting silly money from me!
I'm telling myself I wont get it, so I wont be (so) disappointed when I don't.

[Super_BQ]

Good attitude is to never set your heart on a house. I saw this mistake happen to back in February when my cousin's wife did this and realised they paid WAY too much for it (not factoring after the earthquake which made it worse).

I would low ball at $380K or less. If you're seriously shopping, choose 10 houses that you like and just low ball it all. You'll get better value for higher priced houses that are bigger but that all depends on your budget.

Never let the real estate agent know you have $ or willing to keep paying more and more. Even in a tender listing because real estate agents always go back to the top 2 or 3 highest offers to start a price war.

Above all, get a proper house inspection. I don't like seeing houses that are fitted out with all the fancy furniture and beds because they are quite dubious in hiding blemishes on the walls or damaged carpet areas.

[Jacqi B]

Thanks for your reply, SuperBQ.
I shall, of course, have a building check, etc.

I'm curious as to why you suggest offering $380k when a similar house in the same road went for $410k.

[glennmoore]

It is frustrating isn't it? What was the rateable value for the houses in the same street that went for over $400K? Did they both sell well above RV, or at RV?

I bought my house in Wellington above RV, however several other houses in the area went for a similar proportion above RV and mine had better fittings etc.

I also made the agent justify the price (mine was BEO over x, though).

[James 1077]

Price by negotiation should mean that there is negotiation in it - not give an offer and hope it isn't too high.

I would go low and work up if it is truly by negotiation. If it is actually by tender then I would walk away.

Oh, and if you are that dead set on it then get a valuation done. a few hundred bucks when you are spending $400k+ is nothing!

[72andsunny]

I'm curious as to why you suggest offering $380k when a similar house in the same road went for $410k.

Note: I have no experience in buying property in your area. Around here, the locals are loathe to pay more than RV for a house. When was it last valued? If you haven't already, you can check its QV at http://www.qv.co.nz/

Not to say that qv is particularly accurate either, but it's something other interested parties will be looking at. (If you apply for a loan from Westpac, they'll give you 5 free valuations...you don't actually have to take the loan.)

I'll second BQ's offer. If you're anywhere close, you'll get a call from an agent about a higher offer from another buyer, and the agent is certain that $420k will secure the house for you.

[Kanga]

Put emotions in a box:

a. get a registered valuation done
b. decide what the house is worth to you (research mortgage costs, significant renos needed and what else you could afford locally, plus have a wee peak at those boxed up emotions)

Do not yield to estate agent pressure! When we bought we had a mad weekend going to all the open homes of 'other options' to be sure our gut feeling was right.

[72andsunny]

get a registered valuation done

My 2 cents (do people say that here, even though there are no pennies?): Registered valuations are a waste of time/money. We had looked into it, but decided against springing for it when the valuer asked if I was the buyer or the seller. I was given the impression that the "value" could be adjusted for negotiation purposes.

Look at as many houses as possible, and decide what this one is worth to you...and don't pay any more than that.