# Buying Property in Australia: Negotiating Real Estate Prices and Property Auctions



## firedragon (Mar 31, 2012)

Hi everyone,

in this thread, I would like to discuss two questions about purchasing a property in Australia. Some of you may have been looking at buying a new home or may actually have bought one. 

First, let me ask how negotiable real estate prices are in Australia. As far as I know, real estate prices can be highly negotiable here in Germany. I have heard that some investors who deal with property usually offer as little as 40% of the asked price and use that as their basis for negotiation. I do not know how successful this approach is.

My question now is how negotiable are prices for real estate in Australia. Is there a chance to purchase property for significantly less than the asking price? I am aware of the fact that the real estate market in Australia is flowering and seems to favour sellers, not buyers, at this point in time. However, I can imagine that some sellers may be more interested in a quick sale. So what is your experience in this regard?

Second, I'd like to hear about your experience with property auctions. Has anyone taken part in one of them? I have read tons of pages and I will definitely try some real estate forums later. But I am still interested in first-hand experience from other expats.

I look forward to the discussion and thanks for any information.

firedragon


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## Bbay2Oz (May 10, 2010)

firedragon said:


> Hi everyone,
> 
> First, let me ask how negotiable real estate prices are in Australia. As far as I know, real estate prices can be highly negotiable here in Germany. I have heard that some investors who deal with property usually offer as little as 40% of the asked price and use that as their basis for negotiation. I do not know how successful this approach is.
> firedragon


Depends on the state. In Melbourne and Sydney a majority of the sales take place via auctions.

Prices are negotiable only if it is a private sale - i.e the property didn't sell at the auction or the vendor has chosen not to sell his property at auction.

I have never heard of any cases where the vendor has dropped his asking price by 60% and the chances of success in this approach is next to zero - at least in Melbourne and Sydney. May be 10-15% depending on how inflated the asking price was to begin with and the property failed to sell at auction. 

You have research the suburb well and look at recent sales. This is an excellent site that provides sales data for free. 

Australia Home Sold Price, Property Sales Data, Victoria, New South Wales, Sydney, Canberra, Brisbane, Adelaide and Perth






firedragon said:


> Is there a chance to purchase property for significantly less than the asking price? I am aware of the fact that the real estate market in Australia is flowering and seems to favour sellers, not buyers, at this point in time. However, I can imagine that some sellers may be more interested in a quick sale. So what is your experience in this regard?


Be patient. There will always be a bargain when there is a desperate seller as has been our experience. At the moment the market is a bit crazy but hopefully prices will become stable or even come down - who knows. 



firedragon said:


> Second, I'd like to hear about your experience with property auctions. Has anyone taken part in one of them? I have read tons of pages and I will definitely try some real estate forums later. But I am still interested in first-hand experience from other expats.


I would personally never buy at an auction - waste of money as you have to pay for pest and property inspection reports with no guarantee of securing the property in the auction. 

The best bargains and negotiating powers comes with properties that failed to sell/get any interest. I'd also look at unrenovated properties so long as they are structurally sound - cheaper and offer better value for money in most cases.


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## happybuddha (Sep 28, 2012)

Bbay2Oz said:


> Be patient. There will always be a bargain when there is a desperate seller as has been our experience. At the moment the market is a bit crazy but hopefully prices will become stable or even come down - who knows.


Would you please share your experience ? 
I was told that a 5% down payment is all that is required, of course, the interest projections also will vary with the actual amount. 

What would be your suggestions for a first home buyer ?


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## mithu93ku (May 30, 2013)

happybuddha said:


> Would you please share your experience ?
> I was told that a 5% down payment is all that is required, of course, the interest projections also will vary with the actual amount.
> 
> What would be your suggestions for a first home buyer ?


5% down payment with 5% interest rate would be a great deal! 
Folks, I have no knowledge about property buying , hence , do not take it seriously.


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## Bbay2Oz (May 10, 2010)

happybuddha said:


> Would you please share your experience ?
> I was told that a 5% down payment is all that is required, of course, the interest projections also will vary with the actual amount.
> 
> What would be your suggestions for a first home buyer ?


Down payment is 10% not 5%. The balance is payable after 30/60/90 days depending on the payment terms. Usually 60 days.

We bought a property that was passed in auction. We didn't attend the auction - somehow missed looking at this house. I am glad we missed this auction as I'm sure I would have let my emotions take over and would have ended up paying a stupid price because the house ticked every requirement of ours. It was on the market for more than a month and the vendor reduced his price quite a bit. There was one other party who was very keen but we ended up offering a little more than his best offer and bought the property. 

Firstly, start saving like crazy for the deposit - the higher the deposit the lower your debt

Don't borrow more than you can afford just because the bank is willing to lend you silly amounts of money.

Stick to your budget and factor in repayments with an interest rate of 7% - i.e. planning for interest rate rises in future. 

You should buy with the intention of living there for the long term - i.e. 10-15 years. 

Make sure that when you put in an offer with the condition that it is subject to a satisfactory pest and property inspection report - this is not possible when you buy at an auction. 

Don't be in a hurry to buy. There is nothing wrong with renting even if others have you believe otherwise. We rented for 2 years here (and 15 years before that albeit overseas) before buying.


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## mithu93ku (May 30, 2013)

Dear Bbay2Oz ,
How it works when Someone's want to buy a property with Bank loans?
What is the down payment then?
What happens when someone is newcomer with PR? Does bank provide loan who have no credit history?

Regards,
Mithu


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## Bbay2Oz (May 10, 2010)

mithu93ku said:


> Dear Bbay2Oz ,
> How it works when Someone's want to buy a property with Bank loans?
> What is the down payment then?
> What happens when someone is newcomer with PR? Does bank provide loan who have no credit history?
> ...


If it is a PPOR (i.e your principle place of residence) then banks will require a minimum deposit of 20% (or lower if you take mortgage insurance). You also need to consider other costs you will incur (stamp duty, registration..).

I would not advise you to buy immediately on arrival unless you have already done your homework in advance. In any case by the time you've settled down, opened your bank account, got a credit card and saved up for a deposit you would have built up a pretty decent credit history. 

If you still want to go ahead and buy immediately upon arrival without having any credit history in Australia then you could arrange for a letter from your previous bank (with whom you have a credit history) to write a reference letter providing details of your credit history. You'd be better off checking with a bank here upon arrival.


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## Lisa White (Nov 8, 2015)

I am glad to have bumped into this thread. I am planning to buy one soon, and it does pay to get information from people who are going through or have gone through the same. 

Some of my friends suggested that I hire a property conveyancing solicitor (on top of all other things) to take care everything on the legal side. I would like to know if anybody has done it too...


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## scurry (Jul 30, 2018)

You can try to research some sites in real estate ..


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