Auck seems to be in a bubble plateau, offering 20% below MV.?

[OnTheMove]

Im seeing a lot of properties on the market for 8 months then just removed. Or I am seeing properties sell for much less than their value in 2017, some of them $200k less on a $900k property.

Given the recent uncertainty and worry around a crash due to our amount of personal lending vs our incomes and our property values along with a number of world economists stating we are the 1st or 2nd most likely to crash, of course plenty have different opionions.

Either way as a buy reno and sell person, I have a property I want to offer 20% less than MV (which I have formulated from over 100 recent sales in the area),

In NZ is it compulsory for the agent to put all offers forward?

The property is actually fine as it is needing near no work, but its already 90k below CV, the couple have bought elsewhere and are desperate to sell, ie motivated vendpr.

Another $50k and we are there, Convincing the agent why my offer is valid is the key issue.

[Nick G]

Legally agents have to present all offers. Look up the REA Code of Conduct and point out the relative clause.

[BlueSky]

They should..
Does the numbers work?

Whereabouts?
Hobsonville too, are selling well below ...

[OnTheMove]

They should..
Does the numbers work?

Whereabouts?
Hobsonville too, are selling well below ...

Whangaparaoa. Seems all vendors are still stuck in Boom la la land. I think the 2 booms and the Government bailing out the property market has people thinking property can only go up. Yes we havnt had major crashes in the market as some people say, its never happened before it wont ever happen. But we never had two EXTREME Booms like the last 2 decades either.

I feel rude trying to explain to Agents about NZ's teetering property market due to all the issues that gave us the 2nd most likely country to have a major property crash. Instead I feel it would be easier to print some graphs and email them haha.

But seriously, the agents too are in la la land. Its like Ive offended a top Japanese Sushi chef when I suggest the property is no longer worth what it was in 2017 and that a tired 3 bedroom HOUSE is not worth $800k, $400k gets you a reasonably nice new build (given the local land is selling around $500k a 600sqm block), so when I offer $900k for a tired house that has good bones but needs at least $50-100k to get it to semi modern standards they Agent was all offended and Im unrealistic and no property goes down in Auckland.

[OnTheMove]

Legally agents have to present all offers. Look up the REA Code of Conduct and point out the relative clause.

Thanks Nick, Im use to the Aussie market which is the same, so when he was all butt hurt I thought maybe he doesnt have to present my offer.

I feel like its just easier to wait for China or the US to have a minor down turn and do the work for me than try to make agents see reasonable sense.

It seems protecting an investment with the old 20% less than market value is impossible in NZ now due to the booms.

One thing I have noticed is a LOT less houses on the market. Im not sure what that is a sign of. Apprehension? Also all the ones Im looking at that are asking 2017 prices have been on the market 6+ months.

[Bob Kane]

I feel like its just easier to wait for China or the US to have a minor down turn and do the work for me than try to make agents see reasonable sense.

Agents work the market.
If yours is the best offer, they'll talk to you.
If they have better offers, you'll be pushed aside.
I presume you think you know the market better than the agents?

[OnTheMove]

I presume you think you know the market better than the agents?

No need for the churlish like question mate. haha :-)

Im less in a daydream about the world economy and where NZ property sits in that than the agents I speak to.

I hold 6 months data for every house sold in each suburb. I break down price of sqm for land and for houses. It appears the houses that are honestly not that special are asking esentially $900k, I think I can build a lot cheaper than that. Whether i think or I do know the market better than the agents is irrelevant. They are sticking to the prices people stuck in 2017 are asking for. I will just wait for the inevitable if I dont get a interested party. I have no benefit of paying prices above the market value or the potential correction.

All Im saying is Agents seem to be lost when offered 20% less than asking, because they believe their own propaganda. You do get the odd one selling at Market Value, but most just sit, waiting, I can wait longer.

[DaveW]

You don't need to explain or justify your offer to the agent. They are brokers, they take your offer and present it to the vendor. The vendor makes the decisions.

[OnTheMove]

You don't need to explain or justify your offer to the agent. They are brokers, they take your offer and present it to the vendor. The vendor makes the decisions.

Thanks Dave. Its just prior to our two mad property booms, people were more approachable and still are in Aus market.

It feels like I have kicked the agent in the balls when I suggest the price is well over inflated.

But Im doing the right thing protecting myself with price correcton risk mitigation am I not?

Do you explain your opinion on over inflation and possibly over priced, do you show them recent similar sales, or do you simply put an offer in subject to whatever clauses you like?

[DaveW]

Thanks Dave. Its just prior to our two mad property booms, people were more approachable and still are in Aus market.

It feels like I have kicked the agent in the balls when I suggest the price is well over inflated.

But Im doing the right thing protecting myself with price correcton risk mitigation am I not?

Do you explain your opinion on over inflation and possibly over priced, do you show them recent similar sales, or do you simply put an offer in subject to whatever clauses you like?

Simply put in your offer. Say you are an investor and this is your best offer to present to the owner.
Get past this point first and let's see where that takes you. If the vendor comes back with a counter offer then we can talk about the figures that back up your offer. But first get your foot in the door.

[OnTheMove]

Simply put in your offer. Say you are an investor and this is your best offer to present to the owner.
Get past this point first and let's see where that takes you. If the vendor comes back with a counter offer then we can talk about the figures that back up your offer. But first get your foot in the door.

Thanks Dave. As some peace of mind, do you understand why I am low balling with -20% MV offers? It just seems Kiwis have gotten so use to paying the asking price. But as an investor, 20% not only protects my investment against potential market corrections, it makes my profit up front, the renovation and staging is just to sell the house if im flipping, its the initial purchse price that makes my gain, whether i flip or I hold and rent. Its both my profit and also my correction risk mitigation.

Does that make sense to you? Do kiwi investors still make there gains up front in purchase price, especially given a flattened market in Auck?

[DaveW]

Thanks Dave. As some peace of mind, do you understand why I am low balling with -20% MV offers? It just seems Kiwis have gotten so use to paying the asking price. But as an investor, 20% not only protects my investment against potential market corrections, it makes my profit up front, the renovation and staging is just to sell the house if im flipping, its the initial purchse price that makes my gain, whether i flip or I hold and rent. Its both my profit and also my correction risk mitigation.

Does that make sense to you? Do kiwi investors still make there gains up front in purchase price, especially given a flattened market in Auck?

Yes, many are doing your approach here in NZ it's a numbers game.
It's up to the vendor to accept or negotiate your offer or not. Willing buyer, willing seller.

[OnTheMove]

Yes, many are doing your approach here in NZ it's a numbers game.
It's up to the vendor to accept or negotiate your offer or not. Willing buyer, willing seller.

I really needed the moral support. Thank you.

It might take 200 offers before a yes. Is that what you meant by a numbers game.

I think its important to know the agents in the area and simply tell them what you are looking for.That way you will hipefully get a call before it goes to advertising. But even on trademe there are properties stating motivated vendors, yet they list a peak 2017 price, which puts me off. Should I ignore the asking price given they have stated they are must sell motivated vendors?

[DaveW]

I really needed the moral support. Thank you.

It might take 200 offers before a yes. Is that what you meant by a numbers game.

I think its important to know the agents in the area and simply tell them what you are looking for.That way you will hipefully get a call before it goes to advertising. But even on trademe there are properties stating motivated vendors, yet they list a peak 2017 price, which puts me off. Should I ignore the asking price given they have stated they are must sell motivated vendors?

Yes. Just make sure to have a condition in your offer to protect you against multiple offers being accepted.

[OnTheMove]

Yes. Just make sure to have a condition in your offer to protect you against multiple offers being accepted.

How do you mean Dave? Usually I ask for condition of inspection (if its something I havnt seen in person) and surveying, if its a reno and sell I try to get 60 days early access and develop it so its ready for sale the day of me technically owning it (yes I know thats risky).

Would you put in an offer on a house you havnt seen in person but love the potential of, with condition of inspection and sureying.

Are you saying just add "and no further offers considered"?

Auckland is hard work to make a buck out of at the mo. I like New Plymouth but the prices match Auckland. Wellington is kind of ok because it still has some old houses for the picking.

But I feel safer sticking local and I have strong like for Whangaparao, even if prices are mad.