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  • Auction v Tender

    Apologies if this has been dealt with before.

    We are getting ready to sell our house in Wellington. It is large (4 bed 2 bath), in a nice suburb, good nick, looks nice, good parking, but small section. So not really a 'first home buyer' type place or somewhere for a family with small kids - I think the buyers will probably be a family with school age / teenage kids trading up from a smaller house.

    We have talked to two real estate agents who are telling is opposite things about auctions. One says bad idea, the other says it's the best option.

    Thoughts?

  • #2
    Harcourts for auction and Tommys or Leaders for tender?

    The good thing for a seller at auction is you get to negotiate with the highest bidder in the room if your reserve is not met. Since they are in the heat of the moment and are close that can be good.

    Tenders mean people can make their bid prior, a lot of buyers don't want to deal with an auction. You can get a moonbeam bid in a hot market, what else similar is out there?

    Either way, I suggest getting Open2View pictures, a building report and LIM prepared and offering them for any interested parties, the more information you make available the more people will be comfortable bidding.

    I'd ask the agents to send through recent results and also try to get them to comp marketing fees a bit. Know some good agents if you want an intro.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

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    • #3
      I don't think that one way is better than the other. It depends on who the buyers are.
      You can find me at: Energise Web Design

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      • #4
        Huh, isn't that the kind of property James is after? I wonder if he's bought, he never updated.

        Personally, I tend top shy away from tender. As a buyer I prefer Asking Price > PBN > Auction > Tender

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        • #5
          Auctions tend to get the lowest highest price. Good if people get carried away though.
          You can find me at: Energise Web Design

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          • #6
            I don't mind tenders and auctions because you might get to negotiate direct. Bought last month after an auction didn't sell for that reason. I definitely don't like spending money on DD for them tho.
            Free online Property Investment Course from iFindProperty, a residential investment property agency.

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            • #7
              Hi drelly

              No luck so far

              Have stopped bidding aggressively as the agents are giving me the tentative price which is now beyond my budget.
              So see no point in wasting half a day twice a week in filling up the tenders and depositing them only to find that I have been outbid by a huge margin

              Lets see what October brings as LVR kicks in and Spring listings should increase the supply
              Else happy to rent till such time there is sanity in the prices
              The rents in AKL are lower then last year although prices are up by 20%
              The house I am renting will come up for renewal in the year end and whereas I am paying $480, indications are the landlord would like to renew at $500
              So just 4%'increase with half the rent increase been taken by the council by increased rates

              How long will speculators keep increasing the prices without getting any return ?

              cheers
              Last edited by jamesnz; 21-09-2016, 12:55 AM.

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              • #8
                Originally posted by jamesnz View Post
                Else happy to rent till such time there is sanity in the prices
                What is sanity? Down 10%? From memory even at that level it was above your budget... You may end up renting forever...

                Might be prudent to lower your expectations... After all we are in an expectations crisis.

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                • #9
                  Hi there

                  A 10% correction in prices from current level is what I am hoping for
                  Most of the properties I am misssing by 50k to 60k
                  In my personal opinion, we are in the last phase of price increases and the speculators are flogging a dying horse
                  There are a few major events over the next few months which can bring a turmoil in financial markets

                  The 8 year cycle 1992, 2000, 2008 , 2016 ?
                  Rates increase by FED
                  Trump getting elected as US President


                  Also with NZ elections round the corner, everyone agrees that property prices will be the main point of discussion for all voters and how the parties intend to bring them to affordable levels can make or break the chances

                  Cheers
                  Last edited by jamesnz; 21-09-2016, 12:33 PM.

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                  • #10
                    I hope you're right for your sake. I think it much more likely that in 5 years you'll be saying: "I remember when I could have bought that 1 million dollar house for 650K but I wouldn't pay any more than 600."

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                    • #11
                      How would trump getting elected drive NZ property prices down?

                      Straws anyone??

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                      • #12
                        I think Wellington has 10-20% to go.

                        Hype - did you sort my Howick place???
                        Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                        • #13
                          How would trump getting elected drive NZ property prices down?
                          It won't. He'll be great for America.

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                          • #14
                            Here you go James

                            Good suburb - check
                            In your budget - check
                            Renovated and modern piles etc - check
                            Has sat on the market for a while so vendors will be motivated - check

                            If you bought $25K under the asking price, so $525K, 20% deposit, and rented the bedrooms at (guess) $150 per room each...

                            Deposit (20%): $105K
                            Loan: $420K
                            Ann interest (4.5%): $18,900
                            Other costs: $1.5K ins, $2K rates, $1K maint
                            Total costs: $23,400

                            Rent income (50wks): $15,000
                            You keep putting your $500 pw in, so $26K per year. $8,400 will cover your costs ($161 per week!) and the rest builds your wealth by reducing principal.
                            Total going in: $41K - just chuck anything you don't need for costs at the principal.

                            You'll be debt free in 15 years with probably a $900k-$1mil asset by then. You might want to turf the flatmates at some point and have a family so maybe 20 years.
                            Free online Property Investment Course from iFindProperty, a residential investment property agency.

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                            • #15
                              Hi Nick

                              Could'nt understand what you are saying

                              i buy this 3 bedroom house and stay in it as well as give the 2 spare bedroom on rent ?

                              Already have a baby on the way so no question of a flatmate
                              Want an independent house

                              Thanks for advising
                              Last edited by jamesnz; 21-09-2016, 09:33 PM.

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