Browse Forums Buying Land 1 Aug 19, 2009 12:51 pm We're going to buy a block of land in a small estate. The lots have been on the market since July last year and friends of ours were one of the first to buy a lot. Today my friend told me that the bank has valued their lot for nearly $80 000 less than they paid for it. The developers will not negotiate on price, claiming it's not fair on existing owners to discount price. I'm concerned that if we buy the lot we are considering which still bears the July 2008 price, then we will also have a low bank valuation which wont help with getting the construction loan. Does the developer sound like they are being unreasonable to anyone else? It's taken 13 months to sell just half of the blocks, too. Re: Buying land - developer wont budge on price 2Aug 19, 2009 1:01 pm If you're asking for a considerable discount then I can understand where the developer is coming from. Why not buy subject to finance, and if the valuation comes back too low you can just move on and find another block? Custom European Cabinets - Melbourne Kitchen Specialist PM for business details as website currently being updated! Our Crazy Owner Builder Journey! Re: Buying land - developer wont budge on price 3Aug 19, 2009 1:43 pm I guess land is worth what people are prepared to pay, so if the developer wants to sell the land then they will drop the price accordingly... however if they are happy to sit and wait for higher offers then they are not likely to give you a big discount. I agree that buying subject to finance is a good idea (we did this, as well as subject to a soil test). If you are keen on the land, then offer what you are prepared to pay and see what happens. Re: Buying land - developer wont budge on price 4Aug 19, 2009 1:51 pm We've yet to put in an offer because we've been told by the developer that they don't negotiate on price. I'm just surprised at the stance they have taken given that it's taken a year to sell half the blocks so far and they have dropped in value. We are going to put in the offer subject to finance and see what the bank says... Re: Buying land - developer wont budge on price 5Aug 19, 2009 2:14 pm It's probably been a long time since land values have actually dropped but historically it's normal to sell the land slowly or in stages. My estates been selling for over 4 years now and the developer is still not in a hurry to sell. It's called land banking and the strategy is the longer they hold onto the land the more it will be worth. The first blocks they sold in my estate were around 170k and the latest are over 250k for lots that are actually less desireable. This is probably how they are making most of their profit - sell only what you need to for finance reasons and hold onto the remainging lots for as long as possible to capitalise on growth. Funny they are concerned about existing values in the estate as they have no problems making people pay 1.5 times what the earlier buyers may have. Anyway, I think times would need to be quite tough for them to actually start dropping prices. Just my opinion.. Re: Buying land - developer wont budge on price 6Aug 19, 2009 3:48 pm our estate wouldnt budge on price either but we loved the area so much that we sucked it up and bought it anyway and im so glad we did because the back 4 months after we bought it valued it for $30,000 more than what we paid as our area is so much more in demand and popular now and its gone up again now. if you love the block and thats what you want then buy it, you never know your friend may have just been unlucky, or get it valued befor you buy it Al & Caitie- Building the Hamilton 278 (Coral) at Narangba Re: Buying land - developer wont budge on price 7Aug 19, 2009 4:04 pm zircon We're going to buy a block of land in a small estate. The lots have been on the market since July last year and friends of ours were one of the first to buy a lot. Today my friend told me that the bank has valued their lot for nearly $80 000 less than they paid for it. The developers will not negotiate on price, claiming it's not fair on existing owners to discount price. I'm concerned that if we buy the lot we are considering which still bears the July 2008 price, then we will also have a low bank valuation which wont help with getting the construction loan. Does the developer sound like they are being unreasonable to anyone else? It's taken 13 months to sell just half of the blocks, too. Remember though that the bank always under valuate... what suburb is the land located in? Re: Buying land - developer wont budge on price 8Aug 19, 2009 9:03 pm If you have the spare money and can see growth in the area then I don't think it is a problem. I'd be careful personally though. We bought a block for 230k in 2007 in an estate selling blocks at 290k - and the estate is STILL for some reason trying to sell at 290k when you can get a whole house starting from 430k. At the end of 2008 we had it valued so that we put a house on it. The bank valued it at 230k and the house at exactly the amount we had paid the builder. If we had bought the land at the higher price of 290 then I believe we would have had to come up with 10% deposit for the loan AND 60k to cover the valuation difference. *Built with Gemmill Homes in WA* Slab - 1st June 2009 Plate Height - 17th June 2009 Lock Up - 18th August 2009 PCI - 5th October 2009 Hand Over - 15th Oct 2009 https://forum.homeone.com.au/viewtopic.php?f=31&t=20844 Re: Buying land - developer wont budge on price 9Aug 19, 2009 9:22 pm When I bought a riverfront block 10 years ago then insisted the actual sale price be the full price, but it was also in the contract that they gave me back $10,000 as a "landscaping allowance". That way they saved face & it was recorded that the property sold at full price. This time I bought a block of land, nothing had moved in the small estate for the best part of a year, unfortunately a couple of days before I went to make an offer on the block another block sold (and they got a good discount as the vendor needed some money). I had to pay almost full price this time, but I went in, made an offer (making it clear that I would not budge), and waited 3 weeks until they accepted my offer (sweating a little bit as they kept coming back with counter offers, but I stuck to my guns). Yeah I don't know why I came to a forum. Place is full of wierdos/pedos thought internet may help but I suppose I'll try my luck with someone in person. Cheers. I tried… 0 6441 Wow I hadn't realised things had gotten that pricey in just a couple of years since I built, that is crazy with how much land is now costing if you aren't lucky enough to… 3 7105 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35326 |