Be fearful when others are greedy and greedy when others are fearful
Recently a client came to us with want seemed to be a fabulous apartment. It has all the trappings of a great property, 133sqm internal plus balcony and car space, great double story floor plan, sexy development and in the heart of Paddington.
Our client came to us with all the facts and figures based on the word from neighbors and other sources, as he rented in the building. The knowledge of strata issues and the fact that the Body Corporate were in the midst of a court case against defects in the building did not deter him.
We went through our formalities of due diligence we were one of 12 buyers that had a strata report seeing an opportunity in the lucrative Paddington market.
There were visible signs that the property was not “right’. Walls that moved, masonry that moved, water penetration, no drainage on balconies to name but a few. However the design and aesthetic looked very appealing and the price quoted was way under what a comparable property in the same suburb would sell for.
What blew my mind was NO ELSE did a building inspection not even the current owners. There was an insurance claim on the current property. An insurance company only replaces what is there they don’t rectify. So if a lemon is a lemon it’s replaced with lemon. This case was in the Supreme Court for a $3,500,000 claim. The original builder went bankrupt passing on the job to another company.
This property was one that looked way better than it was and the auction went off spurred on by the confidence of each bidder and grew in confidence by other people bidding. However we knew better. Our clients were the only ones that new the truth and there was no hand in the air on this one. We walked away and they were saved.
We don’t always do building inspections on strata but look at the report and the physical signs and you may want to get a Building Inspection too.