Case study · Richmond
They budgeted $1.3m to $1.4m for a home that needed a major renovation. They bought a finished one for $1.625m, fifty thousand below their own limit.
| Suburb | Richmond, VIC 3121 |
|---|---|
| Purchase price | $1.625m |
| Original budget | $1.3m to $1.4m, expecting a major renovation |
| Prepared to pay | $1.675m |
| Saving against their own ceiling | $50,000 |
| Buyers | First home buyers living and working overseas |
| Method | Passed in at auction, negotiated after |
| Renovation required | None, the work was already done |
The clients were living and working abroad and buying their first home in Melbourne. They had family here inspecting and reporting back, which helps, but family are not valuers and they are not negotiators.
What the clients wanted was someone with real estate experience acting for them while they were not in the country, so the judgement calls were being made by somebody who does this for a living.
They came to us with a specific pocket of Richmond and $1.3m to $1.4m, and an assumption that came with it: at that number they would be buying something needing a major renovation.
That was a fair read when they formed it. The market shifted while we were searching, and we found a property that met every one of their post-renovation requirements, already finished. It sat above their original range, so we put it to them with the arithmetic rather than the photographs. A house at $1.35m plus a major renovation does not land under $1.625m, and that is before counting the year it takes and the risk of the works running over.
They agreed, and told us they would go to $1.675m for it. Their parents inspected and agreed too.
A cheaper house plus a renovation is almost never cheaper.
The property was going to auction. We did not bid it up.
Letting a property pass in and taking it into negotiation is a judgement call, and it only works if you have read the room correctly. Get it wrong and someone else buys it in front of you. We assessed that the competition would not carry it, held off, let it pass in to us, and negotiated from there.
They had told us $1.675m. We bought it at $1.625m, fifty thousand below their own ceiling, on a property they had originally thought was out of their range entirely. A finished home in the pocket they wanted, no renovation ahead of them, bought by clients who never attended an inspection.
Distance costs you two things. You cannot inspect, and you cannot read a room you are not in. Family can solve the first one. Only someone who negotiates in this market every week can solve the second, and an auction is exactly where it matters.
Buyer advocacy by LP Advisory, Melbourne. Suburb-level detail only. Prices are indicative and shared with permission; some details withheld for privacy.
Yes. A buyers advocate can inspect, assess, run due diligence, bid or negotiate and manage the purchase on your behalf. In this Richmond case the buyers never attended an inspection and secured the property at $1.625m.
It means bidding did not reach the vendor reserve, so the property is not sold under the hammer. The highest bidder generally gets the first right to negotiate with the vendor immediately afterwards, often at a lower price than a competitive auction would have produced.
Not always. A home at $1.35m plus a major renovation rarely lands below the price of a comparable finished home, once the works, the holding costs, the time and the risk of overruns are counted. In this case the finished home at $1.625m was the better financial outcome.
It is a judgement call that depends on reading the level of genuine competition in the room. Done correctly it moves the purchase from a public contest into a private negotiation. Read it wrong and another buyer secures the property ahead of you.
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