Then we took advice and purchased reports on the estimated market value of the property and the comparable properties in the vicinity, and decided the asking price didn't measure up. So we backed out of that one.
This week, we shortlisted 3 properties after a week of back-to-back inspections. Top of the list was a house in a prestige street close to the Plaza and school. The sort of street that commands starting prices of $300K. Due to the amount of legwork we've been doing, we have a fairly good idea of streets and prices, so the moment we saw this listing on the Internet and the price they were asking, we rang the agent to request an inspection the very next night.
Because of the location, we weren't surprised when one other family turned up for the inspection. The property had everything: huge allotment, walking distance to everything, great resale value, great rental potential (in fact, it's currently tenanted).
The only minus was that it's unrenovated. Next to its neighbours, it's what one might call "the worst house in the best neighbourhood". Which was fine by us, since it was commensurate with the asking price.
Because the agent had received 2 other offers, we had to get our act together rather quickly. We got the agent to send us the Contract Note and Section 32 Vendor Statement, sent a copy to a conveyancing lawyer who specializes in fixed fee pre-purchase advice (which makes more sense than signing the contract in a hurry and then seeking advice), and went through the
documentation ourselves.
While studying the plan of subdivision, we noticed an annotation: "Reserve No. 1 (Electrical Substation Purposes) 60 sq m."
The substation is actually ON the rear of the property. We hadn't even noticed it during the inspection. Red flag!
Called the Council for information (they said it wasn't something they handled), called the electricity service provider for the area, did some hasty research on the health impact of living near an electrical substation.
Research opinion is divided on the link between the increased incidence of cancer and leukaemia in children and how close they live to electric power stations (not enough evidence, not enough people tested over a long period etc). But why knowingly risk our health?
Besides, even if we had no problems with the property, the next buyer might consider the presence of the electric substation an adverse factor and this would certainly affect the resale price.
So we're passing on this bargain.
And we thank God for helping us pick up on the anomaly.
Second on the list is this other property, also walking distance to school and Plaza. Other than the polished floorboards, there's nothing about it that stands out (maybe we're suffering house hunting fatigue, haha).
There's an interested party who wants a second look at the property, so if we're serious we have the option of making an offer "subject to the Section 32" and putting down a holding deposit, which we've verified with our lawyer is the proper course of action.
Third on the list is - was - a 2-bedroom unit that is exceptionally large for a 2-bedder. Very tidy, extremely liveable, with the advantage of a covered outdoor area and low-maintenance yard (very important!).
The only thing we couldn't agree on was whether it represents good value. The land component is small (as it's a unit) and the asking price was the equivalent of a lower-end 3-bedroom unit. I liked the property, but CA felt we'd be paying for the house rather than the land, and since houses depreciate and land appreciates etc etc....
Anyway, that decision has been taken off our hands. The agent called yesterday to say a couple had made an offer - without even seeing the Section 32!
We're learning so much about the house buying process and having so much fun. Now if only we could bill for the hours of legwork and research done...
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