First Home Buyers Defy The Market!
April 07, 2014
One of the great pleasures in life is the ability to make a difference to someone else’s life, no matter how small. Saturday 14th June 2014, I saw the fruition of years of coaxing, encouraging and strategic discussions! Holly bought her first house but not alone.
Holly has always been on board with the concept of co-buying property. In fact, she is one of Home Addressed’s fiercest advocates. She knew she couldn’t buy a house where she wanted, on her own and certainly not in the time frame she wanted. The obvious way forward was to team up with her partner, Anthony and together, pool their resources and create choices for themselves.
I was set a mission by Holly and Anthony, to hunt around and find a property that matched their criteria. It had to have 2 bedrooms, a bathroom, garage and some yard for the pooch and it had to be under $490K…oh, and it also needed to be inner west of Melbourne. If you know anything about Melbourne real estate, you will understand the considerable challenge this posed, however, I was determined to help these two worthy candidates who were following my advice and co-buying.
Amazingly it wasn’t long before I found a couple of suitable properties. I then spied a property that ticked all the boxes and more. It was located in the inner west, in an up and coming suburb, huge potential, in a street that is well sought after as it is flanked by lush green vegetation…trees, shrubs and environment atypical of city living. It also had 3 bedrooms and two bathrooms, all under budget. What a find!
Holly was very excited by the prospect of buying and more to the point, owning this great townhouse, as was Anthony. They called the agent and negotiated a price well below the $490K that they had set and it was accepted. The champagne made an appearance and dreams started to take extraordinary shape…at last, they were first home owners!
Life we know, has a myriad of challenges and things of course, were running too smoothly. Within two hours of accepting the bid, the owners changed their minds…the price was too low and they were going to go to auction.
The euphoria experienced only seconds ago, came crashing down with the brunt of disappointment. Going to auction meant that they could lose their prize to another couple or worse…investor!
Holly texted me to deliver the disappointing news. I suggested I attend the auction and negotiate on their behalf. Relieved and grateful, my offer to them was accepted.
Saturday morning arrived and I could feel the palpable nervousness of the two. Auctions are a daunting experience for the first home buyer, let alone an auction for a house that was theirs for the briefest of time!
We met outside the townhouse and checked for all the tell tale signs you look for that might serve to your advantage. There was a small crowd, two couples and an older couple, presumably investors. We felt confident that the odds were in our favour, or perhaps we just felt that a wonky sense of fairness and justice would prevail and Holly and Anthony would get another crack at signing on the dotted line. The auction began with all its ritual. No-one would dare to dip a toe in, an impasse right at the beginning…it was going to be a long auction. Finally the auctioneer opened with a vendor bid of $400K. Holly timidly raised her hand to offer another $10K and for a while, it looked like we had clenched the deal at a dramatically reduced price. It was not to be as another bidder offered a further $10K. I cautioned Holly to place bids of only $5K to slow the momentum and as the hammer fell, they were declared the winning bidders. They had won the prize to negotiate.
What followed was a series of tooing and froing. The vendors were not going to budge on what they wanted and Anthony was quite resolute that nor would he. I urged him to consider at least another $5K as they would still be well under their budget and it would be a great buy. It was an offering that would get the vendors to compromise and a further $2.5K was added to the mix.
This time, the champagne could come out and it would be drunk! It was a highly successful ending for our two first home owners who had employed a co-buying approach to their strategy and come out with a fabulous property that can only grow in its capital value. Together, they had vanquished a market that has turned its back on the first home buyer. They had not only bought at an impressive price but had negotiated some excellent settlement terms that suited them.
I congratulate Holly and Anthony for having the courage to explore smart buying strategies and making it work for them.
I would encourage anyone who is feeling shut out of the housing market to take this example and forge ahead. It can be done if you enlist the help of a co-buyer. With extra resources, there is no reason why you can’t be moving into your own home too.