Property auction rip off
The purchase price for real estate is determined by comparative sales in the area. Since most property – houses and units in Australia – are sold at auctions, it is expected that the sale price will be excessive. The reserve is generally placed at the last comparative sale price. Even if this reserve is placed under this value, the vendor or seller is unlikely to accept less.
The reserve is the buy purchase price!!!
The building industry exploits this reserve. The bank property valuators use these sales figures during the mortgage application process. The developer will always add a little extra onto the sale price which means the buyer will not get a 100% mortgage and will have to fund the difference!
The images that follow are for a typical wooden Queenslander for sale in Morningside. This suburb is about 15 minutes away from the Brisbane CBD. Typical middle class area, nothing special.
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According to the South East Property Price Guide, there have been 6 comparative Morningside sales now in November in the $500-599k range.
Five minutes away from the CBD in West End, you can get a 65 sqm bachelor unit for $400k, $1300 rates and $2500-2700 in body corporate fees.
Still, would you buy this 3 bedroom, 1 bath, no garage, wooden Queenslander property at the expected bargain auction reserve of $560,000+?
