BBO BEO House hunting help!

[jess]

I'm so confused. We're just starting to look at houses for sale. I'm not used to not having a buyer's agent like in the states, and I've been going to open houses, and listening to the questions other people ask. That's been a help. As has the forum and other sites. I know I can look at the rateable value and that I need to get the inspection and LIM.

The thing I can't figure out is why I go to an open house that says BBO a certain amt. and then overhear the agent say the house will go for at the very least $50,000 more than the BBO amt! I know the O stands for over, but that's quite a big difference! Would you say my experience is common or the exception? I'm trying to figure out whether to start looking at houses listed well below my price range in order to find one that's actually within my range.

The house I like best so far had a tender date that passed, but it's still on the market, because they didn't like the tenders they received. I don't know if that means they probably got offers below the BBO amt they listed or that they probably want a lot more then the BBO amt like the other house listed above. Since it's tender, I have no real guide for what we should offer if we decide on that one. Is it generally a certain amt more than the rateable value?

I'm at a loss trying to figure out which houses are actually in our range so I don't waste all my time looking at ones that aren't. And the agents mostly try to say as little as possible of course. I need to learn a lot more about valueing and what the BBO really means!!! Any ideas about the best way to do that?

Thanks very much!
Jessica

[jess]

Well as soon as I posted I saw the 'Value of a House' thread, which I had missed in a search earlier. Still, if anyone has any other advice to offer, I'm all ears. Thanks, J

[k-k]

Hi Jess

We were in the same position, totally confused by the buying terms. We spoke to an ex estate agent who explained the terms. If it wasn't in the other thread you read, BBO is 'buyer budget over', and BEO is 'buyer enquiry over'. Basically we were told the seller will be expecting anything upto 20% more than the BBO figure.

We've been watching house prices for a few months and in the Kapiti area some are going for a bit over their BBOs and some are going way over. Some agents will give you lists of their sold properties and the selling prices but they are only for properties sold over 2 months or so ago.

What has annoyed us is when they put PBN (price by negotiation), that gives you no idea what the seller wants and even the agents don't like to list the property like that.

Hope this helps a bit, you know where I am if you want more details of what we've found.

Karen

[willsken]

This will be interesting. We looked at houses when were over there, just to get an idea and I found the whole thing quite confusing. I suppose this is a taste of things to come for our whole lives for a while!

[jess]

Well thanks to you both - I'm glad to know I'm not the only one who finds it confusing. I am going to go to the auction of a house that we loved in the area we want to be, even though I've been told it will go for about 60,000 more than I want to spend on housing. That way I will at least see how much it ends up selling for. Maybe that will help give me a little bit of a benchmark to measure against.

And thanks for the 20% info Karen. I think I'm going to need to adjust for that a bit more when looking!

What about a house that just lists a price straight out with no BBO or BEO? Anyone know if that means they are usually expecting that much $ or whether they generally expect more?

Thanks,
J

[k-k]

Hi Jess

I'll be interested to hear your thoughts on the auction. We went to the monthly auctions at Harcourts and out of 11 properties only 3 sold at the auction. It's also very strange as in some cases the auctioneer seems to be bidding against himself with no-one in the room putting bids in. This is because the sellers have set a reserve price and the auctioneer bids up to that price. If anyone puts a bid in but not enough for the reserve they have the first chance to negotiate with the sellers after the auction.

More times than not the property is back on the market the next week with a BBO price. It seems such a waste of time to me. It is however a good way of finding out how much the seller wants because if it doesn't sell at auction the estate agents will tell you at what value the bidding stoppped at.

In the UK, a house auction usually means you can pick up a property cheaply, here it seems to mean the sellers are greedy and are hoping for a bidding war to bump up the price.

Good luck house hunting
Karen

[pineapplehead]

Oh, and that auction should be fun, Jessica. Or heartwrenching... I've caught a few examples on TV, and it seems such a strange way to negotiate. I'll see if I can get more infor from people who have recently purchased and I'll PM you.

[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.