Project Pemberton: Offer

Well you've found your block, and it is time to put in an offer. What do you do?

Like almost all land for sale in the country it is through a real estate agent. The asking price was $AUD99,500 (2002). But what does that mean, really?

Sifting through papers we'd gathered during the block hunt phase we found various lots for sale nearby. We noticed a few things we had going in our favour: one or two other lots had previously been at a higher price and then reduced; two lots had been on the market for at least 2 years; there was plenty of houses available in the area due to the recent downturn in the timber industry - the reason why Pemberton was settled in the first place.

What ensued was nearly 6 months of too-ing and fro-ing between the owner, the real estate rep and us. Mostly because the owner lived overseas and, well, I'm not someone to "rush into things". We first pitched $AUD85,000 and eventually settled, many iterations later, on $AUD90,000 (2002). Hindsight shows that if we held our ground a bit more we could have knocked the owner down somewhat further but I'm not that experienced a negotiator. $AUD90,000 at the time neither represented a bargain nor a rip-off.

Rather fortunately, we bought the block just before the area went into a price hike; the value of the block doubled in 3-4 years! It didn't take long until I looked back and thought "bargain." ;)

Now let me give you the offer tips I discovered:

Other investigations revealed that when this block was first realeased it was sold for $AUD55,000 in around 1995. That represents approximately 5% growth for. Not a big money spinner for the owner, but better than your average fixed term cash. It's nice to feel comfortable that what you are buying might be an expensive toy - but at least it is not a depreciating one.

The road up to the property. Ah the serenity.