BBO BEO House hunting help!

[jess]

This forum is the best, both for information and also for realizing you are not the only one feeling like you might be in over your head!! Thanks for the great responses. Smiler, I will start emailing more in addition to seeing houses. It's easier to ask from my armchair anyway. And Pineapplehead, I think if I can get over feeling like my questions are idiotic, and start talking to the agents more, they will share a lot more info as you suggest.

I went to an open home yesterday for a house listed with just a price, no BBO. The agent was from Totally Kiwi Real Estate, and she said they try to always list their houses with a price that's pretty much on the mark. Good place to look get a feel for actual prices? They're at totallykiwi.co.nz

Yet another question... if you go to an auction actually planning to bid, should you have something in hand from the bank that says you are approved for a mortgage up to a certain amount? We only want a small mortgage, so it shouldn't be a problem, but how much do people do before the auction? Have they usually already done their inspection of the home by that point?

Thanks again,
J

[incredible hulse]

Hi Jess, We have just gone throught the whole house buying process in Kapiti after looking at what felt like every single property in Raumati, Paraparaumu and bits of Waikanae ! We had some really interesting experiences as we put in 3 offers on different properties before we purchased ours (which was a BEO). I guess we were looking at the expensive end of the market but we found the sellers were totally unrealistic in their expectations and a lot of properties are not selling or selling for less than the agents want them to. The first property we looked at did not have a price - we offered 20% over GV and the vendors were holding out for nearly 50% over GV. The second property was tender - we were the only people to submit a tender and were about 12% over GV. The vendors turned this down and are actually holding out for a price which is 3 times over GV !! Neither of these proparties have sold. The 3rd property was a non-advertised price and again the vendors wanted over 50% about GV - again this is still on the market. The property we finally bought we got for almost 10% below the BEO figure, and got a valuation done which confirmed we had paid the correct price and that the BEO was totally unrealistic. From what I have seen the agents are trying it on bigtime and don't feel afraid about offering below the BBO/BEO figure. We offered over 100K less than BEO on the first offer we made. Most of the properties are passing at tender and auction and we would quite often get calls from agents on the day after an auction asking if we would like to buy a property at X price.

Drop me a pm if you want some more specific details if I can be of help
Cheers
IH

[Smiler]

Jess

A pleasure! and don't worry, I'll be asking detailed questions on the rest of the process when I'm finally let loose on the real estate agents.

[Avalon]

I have to say my opinion of NZ estates agents is that if you assume they are basically all lying snakes - then you wont be too far wrong - and the few that arent will be a pleasant surprise.

An agent is actually in court at the momnt for advertising a property at BBO $380k when the seller had expressed a wish for $400k "in the hand" after all fees had been paid. It may be a good test case and put an end to these horrendously misleading numbers.

My best advise is a/ not to rush into anything and do LOTS of research. Talk to as many people as you can who know the areas you are looking at. It may look great - but is it? You need to find out what the specific concerns are in each area - especially any sunlight issues - because if the sun doesnt get onto your property for part of the day or even year - you are going to be VERY cold!

b/ Get a valutaion on any property you are interested in. It will cost a couple hundred bucks - but it tells you what its really worth - from someone who works for you not the seller.

c/ DONT use any companies recommended by an estate agent. Chances are they are paying "Commision" aka Kickbacks - to the agent and are therefore NOT independent.

d/ Check out some auctions and see what happens. Watch out for "Vendor bids" where the agent bids the price up on behalf of the Vendor. Its totally legal to do that here. We went to one auction where we had been told the house was expoected to go for "top 400's". The bidding started at 600. There was only one guy bidding (and lots of interested watchers). He bidded against the agent only - and ended up paying $780K. I cannot for the life of me work out why he didnt just stop. But ho hum - not my money.

Also - a worthwhile read - especially if you want to understand the Auction process - a Book called "Dont Sign Anything" . The associated website is:
http://www.jenman.com.au/index.php

HTH

[Debbie]

I am now distinctly worried.
OH has been in charge of the property research (and has been using realenz to access agent sites) the property that he's been looking at hasn't had BBO or BEO next to the prices on the internet ads. Do agents always list that the price as BBO or BEO in the ads next to the price (if it applies) or do you only find this out when you make enquiries. From reading this thread and the suggested links it seems that most houses have the BBO or BEO and yet we are not seeing it in the net ads, are we looking in the wrong place?.
We have based our financial plans on being able to pay the price listed for the property. It sounds as if we could have undercooked this by between 20% and 50% .
Debbie

[katandbob]

I am now distinctly worried.
OH has been in charge of the property research (and has been using realenz to access agent sites) the property that he's been looking at hasn't had BBO or BEO next to the prices on the internet ads. Do agents always list that the price as BBO or BEO in the ads next to the price (if it applies) or do you only find this out when you make enquiries. From reading this thread and the suggested links it seems that most houses have the BBO or BEO and yet we are not seeing it in the net ads, are we looking in the wrong place?.
We have based our financial plans on being able to pay the price listed for the property. It sounds as if we could have undercooked this by between 20% and 50% .
Debbie

yeah this thread has given me a headache!....I think I will act like an ostrich till we arrive then look at houses when I have the help of friends that have done this before to take me under their wing and come with me as an interpreter!!! You now who you are guys...
Kat

[Debbie]

yeah this thread has given me a headache!....I think I will act like an ostrich till we arrive then look at houses when I have the help of friends that have done this before to take me under their wing and come with me as an interpreter!!! You now who you are guys...
Kat

I would like to be able to do the same but feelling decidedly wobbly about the whole thing at the mo and this could end up being a deal breaker. We don't want to get to NZ and find we can't afford a family home. Any one with info re my previous post please come forward.

P.S sorry the standard of spelling and grammar in my posts has disintergrated beyond repair. I blaim estate agent induced stress and all the gin.
Debbie

[incredible hulse]

Debbie - I have found that most houses are not advertised with a BEO/BBO figure. There are only a few agents who seem to use this way of marketing - I think this is because they do not have valuation skills and also they are trying to look for the mug buyer. This has the added effect of giving vendors unrealistic expectations of the price they will receive and houses at the top end of the market are just not selling it appears to me. Most houses are not selling at Auction or Tender at the moment - I am not sure if this is because of vendor greed or lack of buyers, but an example I have just found out about in the last couple of days was a house I looked at in Raumati Beach which I think this sums up the current marketing by agents and market. The plot of land was superb - total beachfront, big section (with subdividing potential), etc but the house was grotty to say the least ! It had been bought 2 years ago for 815K and the agent was trying to invite bids of 1 Million+ (it was due to go to Auction). It didn't sell at auction and is now on the market at 830K (not BEO/BBO but a for sale price). I suspect if someone offered 815K they would get it.

Agents will try and direct you to a price but this is normally in excess of what the property is worth. My advise would be don't worry about offending agents and play hardball. From some info we have just received on the past 3 months worth of housesales in the Kapiti region it would appear that houses are going for on average 5-15% above GV. There are always examples of this not happening and some things going for 50%+ above GV but this would appear very rare at the moment. There are sometimes cases of things going for GV value or even below this.

Most adverts should give GV details - it will give a rough idea of prices and is a start to looking, but the only real way you can get a feel for the market is to be here, do the open homes and see the market. You'll soon realise there is a lot of rubbish houses here, but also find something you like as there is a lot available

IH

[jess]

As IH said, they are not all BBO. And I had an agent tell me today that any agent who's expecting more than 10% over a BBO/BEO is being misleading. They should take 5% over for a cash offer that can close in under 6 weeks or 10% over for a conditional offer or more than 6 weeks to close. Maybe like Avalon said the recent attention given to cases of agents being misleading will help a bit?

The rateable value has been only somewhat helpful to me, because we visited one house where they were asking for the RV because it was in awful shape, whereas at another house down the street they wanted way over the RV because they had put in a garage, refinished the floors, and redone the kitchen. So the RV is helpful, but it doesn't factor in all the improvements.

IH is right about needing to be here and go to open homes. I went to the auction of the house that is right size in the area I want, and I saw what the bidders were willing to pay - unlike most, it actually sold at auction. That's been the most helpful thing so far. Once you see what buyers are willing to pay for a few of the right properties in your area, then you start to feel more confident about what a house like that should go for.

I'm at least starting to feel slightly less at sea. Soon we will have the money from the house sale, and I want to be educated before we do anything silly.

[Avalon]

I'm at least starting to feel slightly less at sea. Soon we will have the money from the house sale, and I want to be educated before we do anything silly.

Trust me - the research now is going to pay off in heaps when you come to buy.