Why did a property sell 50% above the quote range?

By Janet Spencer

Why did a property sell 50% above the quote range?  Special value to a special buyer?

Buyer Solutions team inspected a villa unit in Balwyn North last month in Corhampton Road. It was an unrenovated, modest unit with some good attributes. The client we were working for at that time didn’t wish to renovate and the property was a bit tired to rent out in its current condition.

The selling agent described the unit as:

“Perfectly positioned in a coveted, quiet and convenient location a stroll to tram, parks, shopping, schools and cafes this charming original single level home invites magnificent scope and opportunity for buyers. Boasting its own lovely garden street frontage, you will be impressed with the homes light filled grand proportions, offering a large lounge room, open family/dining and kitchen, private sunny courtyard, two bedrooms with BIRs, bathroom, laundry, separate toilet. Superb potential for a contemporary renovation; the future advantages are endless.”

The quote range on the property was $700,000 to $750,000.

So, why did it sell for $1,121,500?

As an agent I see good value at this figure. Let me explain.

To the right buyer, a property can have special value. The right buyer in this case was the owner of the back unit.

This subdivision only had 2 units on the block and a lot of communal land by anyone’s standards for North Balwyn.

Curious?

I checked out when the owner of unit 2 bought and it was in June 1987 and they paid $146,500.

So, if you had $146,500 to $1,121,500, that totals $1,268,000.  Cheap for a block of land measuring a grand 867 square metres in prime Balwyn North location.

So, was the buyer smart to pay this for the property? As a professional property buyer, I say YES.

It will be interesting to observe the future of this property.  Will it stay two units or will it be redeveloped into a superb new home site or possibly new townhouses?

A good buyers agent should be strategic, provide advice to achieve your property goals and maximise the purchase experience for their buying clients.  We would have endorsed the decision to bid up big for the right to own the whole block.  A sensible investment when you know the real story.  Not an outrageous overspend as some of the neighbours were gossiping as they left the auction.

For up to date information on what’s happening in real estate in Melbourne, contact me at jspencer@buyersolutions.com.au or 0418 101 146.

Housing Affordability, Housing Market, Investment, Investment property

auction, balwyn north, Buyer Solutions, buyers agent, Janet Spencer