When the figures simply don’t add up!

I read an article in the Sunday Telegraph on the weekend which featured a property up for auction that was riddled with termites. The story called “$800,000 for Sydney termite 'dump' with no floor” went on to describe how buyers got carried away with the bidding process to purchase this so called ‘renovators delight’ which is currently in an unliveable state.

The winning bidder said that he felt around the $120k mark would be required to fix up the property however based on the description given and my considerable experience with renovating properties I would have an educated guess that the cost will be closer to $250k. In addition, there’s no question in my mind that the seller received a higher price than the property is worth when considering its decrepit state, block size and market comparables.

It’s a situation that is all too common where a couple of buyers who don’t have a good understanding of current market values push the price up beyond fair value. It is another example of why it is so important for buyers to do their market research.

It also highlights the importance of buyers obtaining renovation quotes before purchasing a property so they’re not guessing as to the likely cost of repairs. Quotes will also help bidders to set a sensible limit and ensure they don’t over capitalise.

Full article:$800,000 for Sydney termite 'dump' with no floor