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Thread: BBO BEO House hunting help!

  1. #21
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    Quote Originally Posted by Debbie
    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?.
    Debbie,

    Many properties dont have any prices on them. In that case - all you really have to go on is the GV/RV (Government or rating values). Thats the value on which the rates are worked out.

    The Prices are set as:

    BBO/BEO
    GV / RV - well yeah - but how does that help - it may have been from 2-3 years ago, and still doesnt tell you how much people want for the place.
    A Set Price - my prefered option - tells you just what you need to know.
    Or No price as its going for Tender or Auction.

    If the ad says tender or auction - your only way of getting a guide price is to phone the agent and try and get a number out of them. I found that this was in no way helpful - even if they did tell you a number. Often they are trying to just get you interest with a silly low number which the seller would never accept adn is often nothing like what the agent told the seller the house was worth.

    Thats why we got a valuation before we made an offer. This place was advertised with a price (I stopped going to see houses without prices). They wanted $650K, but the valuation came in at $606. So we knew ahead of time that if we could get it at that price - we would not be overpaying.

    You do also have the option of getting reports of sites like QV and Terranet. They can sometimes tell you what the house last sold for, as well as giving you heaps of other useful info about the house and the area.

  2. #22
    Join Date
    May 2005
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    Kent UK 2 Northshore NZ
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    Thanks everyone for your help, (good forum this).
    I still don't understand how the housing system works but I do at least feel that we can afford to buy a home I will like there.
    Crisis of confidence adverted now it's back to $ watching.
    Debbie

  3. #23
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    Aug 2005
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    Avalon mentioned this court case -

    http://www.nzherald.co.nz/section/st...ectid=10389991
    A real estate agent has escaped conviction in a groundbreaking case over how close the advertised price guide to a home must be to the price the seller hopes to get.

    Agent Timothy Whitehead advertised a home in the Wellington suburb of Northland at "buyer inquiries over" $380,000 though he knew the owner's bottom line was $400,000.

    He was charged by the Commerce Commission under the Fair Trading Act for making misleading representations.

    But Judge Bridget Mackintosh ruled that the advertised price was close enough to the amount the owner expected so as not to be misleading.

    "In my view an advertised price guide of not less than 90 per cent of an expected sale price is clearly a price that is close to, or in the vicinity of, the expected sale price," her written decision said.

    Consumers Institute chief executive David Russell said the ruling was "disappointing".

    "You can be sure if it was a retail shop that advertised its price at 10 per cent less than they were actually going to charge, then they would breach the Fair Trading Act," he said.

    "The only difference here is that it is a bidding situation so the sale price is not known.

    "The real estate agent knows bloody well they are not going to accept the lower price."

    Mr Russell said the case had established a clear precedent.

    "If you see 'buyer inquiries over', or whatever silly term they use, you can add 10 per cent to it and if you pay much more than that, then it's off to the Commerce Commission."

    Mr Whitehead said he was pleased the court had found he did not engage in misleading conduct.

    "Negotiation is integral to real estate transactions, and that is a different sale concept to buying food or clothing where you expect to pay the price asked," he said.

    The president of the Real Estate Institute, Howard Morley, said there was often not an exact price on a property and some were hard to put an exact figure on.

    He believed the industry had been more careful about "price banding" in the last couple of years but the practice allowed parties to negotiate where vendor expectations were much higher than buyers wanted to pay.

    "The Commerce Commission has been saying for some time the gap has been too big so now there is a ruling it's quite legitimate."

    Property valuers could be out by 10 per cent on the worth of a property and that was considered to be reasonable.

    It would not be acceptable for an agent to use "buyer inquiries over" if the gap was more than 10 per cent and in most cases it should be much less.

    At the time he was charged, Mr Whitehead was working for Harvey Group member Celestine Realty in Wellington. Ross Barraclough, a director of Celestine and Harveys, had defended Mr Whitehead, saying he was trying to sell a house initially advertised at $450,000 which drew little buyer interest.

    A disgruntled would-be buyer had complained about the price advertised.

    Kensington Swan senior associate Hayden Wilson worked for Mr Whitehead in the initial stages of the case and said the judgment provided clarification.

    "Assuming that it doesn't get appealed, I think it will set a precedent in terms of that it tells real estate agents what they can and can't do," he said. "It also tells buyers who are looking at adverts, when they see a 'buyer inquiry over' they now have a clear signal about what price they can expect."

    The Commerce Commission said it was too early to comment.

  4. #24
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    Thanks Oregonkiwi! I didn't know that case had been settled. We are on the verge of possibly putting an offer on a second house (our offer on a first house came in 2nd out of 3 offers presented at once). The agent this time literally sat down with us and said the value of the house is somewere between the BEO and 10% more than that. He wrote out the exact numbers and said bid between them. Of course that's still a pretty wide range to decide on.

    This second house --- I called about veiwing it earlier in the week and the agent said, Why not just wait to come to the open on Sunday. My OH worked late, and we got there 5 minutes before the open house ended, but he was already gone. We called. He said he could come back and show it to us before and appointment later. He came back but said he had exactly 5 minutes before he had to leave. We ran through the house getting a quick look while he kept looking at his watch, and then he told us he had to go, but that he had another (conditional) offer, and if we wanted the house we had to draft an offer right then. We said we couldn't move that fast. Needed to think a bit. We offered to take a longer look with more time for questions first thing in the morning, but he phoned us back to say that he couldn't hold the first offer until morning and it was now or never. Again we said we need to know more first. So he presented the other offer that night, and we looked yesterday morning. We want to offer on the house, but he said now we can only make an unconditional offer, and that still gives the other purchaser three days to go unconditional. I have been down to council and a builders report is being done today as well as a title search. But what a nerve wracking business. If we had just had a little longer on our first inspection. Now I feel like I'll be booting the other poor buyer out if we do make an unconditional offer and he can't go unconditional in three days.

    Oops! That was a bit of a rant.

  5. #25
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    Blimy and I thought UK agents where all snake's. So in general if a house has a price say $400K are you going to be expected to pay say $420 . As all the folks back in the UK know the asking price is hardley ever paid, it's always under....Having read this post I now feel some what worried that we may end up in a cold over priced shed ...David with a realestate crisis..........

  6. #26
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    David - Yes, it's the same in the US as the UK... you put a sale price on the house that you would take, and people usuallly bid under. But in NZ they're generally looking for more than the BBO/BEO amount - which could make a home listed as BBO $400K cost anywhere between $400K (if you're the only bidder and they need to sell) and $440K. Depends on the owner's situation. But they can and will take offers even higher than $440K if there are a lot of buyers bidding against each other -- this happened to us with one house designed by a well known local architect. On the other hand, the offer we just had accepted by the owner's of different house was less than 5% higher then the BEO even though there were two bidders.

    A few just list a straight forward sale price, especially those listed by Totally Kiwi, and they are looking for around that number. Then you get the ones that are MWP - marketed without price - which leaves you with absolutely no idea - except by comparing it with other houses you have walked through and know more about. The houses listed as Auction seem to be split between those where they are hoping for a bidding war to really drive up the price (if there's no bidding war, they often do not sell at auction - just go on to be listed as BBO or MWP) or those houses they need to sell by a particular date, in which case the house will sell and sometimes at a good price. The trick is an auction sale is unconditional, so you have to do any inspections like a builders report, LIM check and title search before the auction. This means paying hundreds of dollars without knowing what will happen at auction.

  7. #27
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    This is taken from an article in the Christchurch Press that was published after the recent ruling on price baiting:-

    Concerns over bait pricing in the property market are not backed by reality, with many houses failing to reach advertised prices, a snapshot survey suggests.

    Christchurch real estate agents said there was little evidence of bait pricing -- where properties were advertised at unrealistically low prices to attract buyers.

    A snapshot survey by The Press of 20 homes advertised this year and settled recently shows only two of them fetched more than the asking price, with 14 of them falling below the advertised sum.

    A further four netted the asking price.

    .......


    SAMPLE OF PROPERTIES

    * Peer Street, Upper Riccarton. Townhouse. Asking price, negotiation over $269,000. Sold for $269,000.

    * Springs Road, Hornby. Roughcast house. Asking price $220,000. Sold for $210,000.

    * Montague Street, Hornby. Permanent-material house. Asking price $265,000. Sold for $259,000.

    * McFaddens Road, Papanui. Weatherboard house. Asking price, over $255,000. Sold for $250,000.

    * Rayburn Avenue, Papanui. 1920s house. Asking price, over $329,000. Sold for $335,000.

    * Rocking Horse Road, South Shore. Brick and timber unit. Asking price $348,000. Sold for $340,000.

    * Hills Road, St Albans. Four-bedroom house. Asking price $283,000. Sold for $278,000.

    * Ferngrove Place, Parklands. Four- bedroom house. Asking price, over $439,000. Sold for $435,000.

    * Clifton Terrace, Sumner. Four- bedroom house. Asking price $555,000. Sold for $495,000.

    * Wilsons Road, St Martins. Permanent-material villa. Asking price $389,000. Sold for $335,000.

    * Sawyers Arms Road, Papanui. Victorian cottage. Asking price $269,000. Sold for $260,000.

    * Oram Avenue, New Brighton. Three- bedroom cottage. Asking price, over $215,000. Sold for $190,000.

    * Trafford Street, Harewood. Three- bedroom house. Asking price $395,000. Sold for $380,000.

    * Highfield Avenue, Dunsandel. Three- bedroom house. Asking price $205,000. Sold for $192,000.

    * Martin Avenue, Beckenham. Character house. Asking price, over $375,000. Sold for $363,000.

    * Lincoln Road, Addington. Brick townhouse. Asking price, over $320,000. Sold for $285,000.

    * Gracefield Avenue, central city. Three- bedroom house. Asking price, over $295,000. Sold for $295,000.

    * Pimlico Place, Bishopdale. Five- bedroom house. Asking price $335,000. Sold for $322,000.

    * Bowenvale Avenue, Cashmere. Brick and tile house. Asking price about $380,000. Sold for $380,000.

    * Othello Drive, Rolleston. Four- bedroom house. Asking price, over $379,000. Sold for $380,000.

  8. #28
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    Oct 2005
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    Wellington, NZ
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    In my experience it is often impossible to tell in advance what a seller would accept, the NZ market is all about negotiation and unfortunately the professionals are often out to get the house to sell as high as possible.

    Personally I would recommend getting the property professionally valued as soon as possible (preferably same or next day) and comparing this with the RV. Your offer should fall somewhere between these, any higher, you won't get finance, any lower you wouldn't even be considered. I then arranged my finance with a lender in advance so I knew what I could offer. Finally put in a low offer (but not ridiculously so) to open negotiations, explain that you already have finance (this will get their attention, but don't disclose the figure) and are prepared to negotiate and ask for their counter-offer...

    Once you have extracted a figure out of them you are on the home straight...

    M

  9. #29
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    Sep 2005
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    Scarborough, North Yorkshire.
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    Ta for the advice I feel some what better about things now and perhaps we can even afford a shed with heating!!..............David

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