What the average buyer faces in the market place.
Q: How many hours does it take to spend Six Hundred Thousand Dollars?
A: About Three hours if you are a property buyer looking for a half decent house in the market at present!
Picture this couple....John and Jane (both 35 years old) buying their first property and they have a 20% deposit. They are not having children for a few years so decide to buy a house up to $600,000, less the deposit which gives them a $480,000 mortgage, give or take a bit. They have been to see about 30 properties, of which 10 were during work time, 5 after work and the other 15 on a Saturday over a five week period.
During the fifth week when they had nearly lost all hope they get a call from an agent who has befriended them saying they have just the property but the owner is not letting anyone through until the weekend, so they make a time after lunch as they have something on that morning. In the meantime they drive by the property and it looks like just what they have been waiting for.
Little do John and Jane know that the agent has called thirty other people on their books looking for similar property in that area as well as sent it out to their wider database of 500 people. Friday night Jane notices the property on the internet and it has been visited 561 times. A little confused they drive by the property at 8.00am on Saturday morning only to see another couple inspecting the property. John stops and confronts the agent only to be told that the agency has several inspections on the property that day.
When John and Jane inspect the property at 1.30pm they are the last inspection, the agent tells them that three other offers are to be put forward to the owner that afternoon at 4.00pm and if they liked the property they should do the same. They look through the property for an hour and decide at 2.30pm that they will accompany the agent back to their office and make an offer.
There is no list price for the property and it is a little different from others they have looked at previously. The agent asks what their budget is and on being told $600,000 suggests that it is just within their budget, but it would be best to make an offer just over to make sure they had the best chance. The agent says they cannot discuss the other offers but all will be presented at the same time. John and Jane discuss it quickly and decide to make an offer of $605,000 with standard finance and building inspection clauses.
About 4.30pm the agent calls to congratulate them as they are now the new owners. Wednesday the next week the bank calls John to tell him that the valuation for the property came in at $570,000 and that the bank will not approve finance. John later finds out through another agent in the area that his offer was $30,000 more than the next highest one. Two weeks later the property sells for $575,000, John and Jane have the opportunity to put forward another offer but confused about the market and the overall situation they keep looking, and looking but not feeling confident to make a decision.