Q. I have literally fallen in love with a penthouse that I saw last week and was prepared to pay close to the asking price to make it mine. However my buyer’s agent has informed me that after further investigation and analysing the block historically and looking at comparables in the same area that it is way overpriced. I am now in such a dilemma as I love this place but it is not just a little overpriced it is at least a six figure sum more than my advisor is telling me it’s worth, what should I do?
A. Unfortunately there are some properties on the market that are just not being marketed at their correct value. Whether the Estate Agent is being super ambitious or the seller is being speculative and just trying his luck either way it makes no difference and yes when you are looking at high end properties there will always be a chance that a buyer will come along just like you – fall in love with the place and if they are cash and not dependant on finance be able to buy the place regardless of its true value. If however you are financing the purchase through a lender then you could run into trouble as the surveyor is likely to down value the property if as you say it’s not worth what you are paying for it, this could however work in your favour as it would at least confirm to the seller that it’s not worth what they are asking and if they really want to sell they would maybe consider renegotiating the price. Whatever you decide, if you know for sure it’s not worth the money then I really wouldn’t advise you to proceed with the purchase, if we were talking about a small amount between say 10 – 50k then obviously it would likely recover that in 5 years’ time and if you’re planning on keeping the place long term this wouldn’t really effect you in the long term if you are buying the home of your dreams, however when you are talking about 6 figure numbers then I would say, walk away and go find something else that is a better investment for your money.