This week alone I have had two offers on a property that I have had on the market for a number or weeks. This property is not in the most desirable location but is not of a location you would be scared for your family. But this property has been totally renovated. It is a 3 bedroom house with nice open plan area with a brand spanking new kitchen and bathroom, and it’s been done with great quality.
This property was bought by the owners for $240,000 just over 2 years ago and at the time would have been a reasonable buy. But when they bought it was run down and needed a complete makeover which is what they have done. The owners recognise they over spent on the renovations but a change on circumstance means that they need to move. Now the renovations cost about 50 grand to complete so the capital investment made by them is approx 290,000 if you just add the two together but the owners are happy to part with a gross figure of 270,000. So after their fees etc you can do the sums anyway.
But to get to the point this week I had two offers presented to me from buyers. And both these offers are below the original purchase price. Now this is just really puzzling me. I really don’t know what’s going through these purchasers minds to think that they can get away with this robbery. It’s just not on.
To justify this argument a month ago the house next door which is very similar design but still original sold for 260,000? But buyers don’t seem to give about that. Fair enough to the buyer that there are a number of forced sales out there where a bargin can be achieved.
I’d like to quote some local statistics for New Plymouth. In May just gone sales volume was down 45% on May 207 to only 96 units. But the average sale price went up over the same time 2.1%. But why is sales volume down so much. Why do the buyers have such little confidence in the housing market?
Well I have asked this question to almost all buyers. And they have all come up with about the same answers. The two main factors were the rise in interest rates and the cost of the repayments and the second was that “oh did you read the paper, oh did you hear the news last night, and oh did you see the program on TV last night”. Quite frankly myself I am getting fed up with the possible publicity and the bad light that the media give us. See here is a classic example. I watched the news last night and it was going on about the media and the REINZ. Now I believe that this is true. The REINZ actually have a case because the fact is its bad and making people nervous. Media is the Backbone of our society. It’s shoved in our faces and no matter where we go we have access to it at our finger tips and quite often not by choice as well. Maybe the media need to have a legislation change as we are facing to give them some guidelines on to how to present media coverage and articles. I can appreciate that bad news sells better but crickey enough is enough.
Anyway I sidetracked from my point a bit there. But from this buyers are on a different planet. I’m sorry but if you’re a buyer out there you cannot expect sellers to just give you their property. The fact is that if it was you selling your property would you even consider an offer less than your original purchase price if you have just spent 50 grand on the property. Put yourself in the seller’s shoes and realise how you would feel and if you wouldn’t like it done to you why you would do it to another.
If you have anything to add to this please let us know. It may be of a similar situation that you have experienced or maybe something about the media. Happy blogging.