Regret Buying 1br at Auction for $749k :(

Hey everyone,

I feel a bit disgusted with myself. After several months of property searching and bargain hunting, and watching property prices increase and all those bargains disappear, I decided I'm going to buy a property no matter what by the end of this year.

I live in Sydney. I want a place close to work (in Surry Hills), and I own a car so I wanted parking. I have lived in the Alexandria area previously and really like the area, and think there's future investment property as Redfern becomes more gentrified. My other criteria is (1) low density; max 3 storeys, (2) no major building issues, and (3) <15min walk to Redfern station (which has the north shore line; which I take regularly).

There was only 1 (yes, one) 1/1/1 unit that met the above criteria in Alexandria. Everything else was either high density concrete boxes, had serious building issues, or were not the location I wanted.

This unit was beautiful. It's north-east facing, super light-filled, it's top floor, it was built in 2014 and is loaded with amenities like correctly-sized ducted air conditioning (kept it cool in a 40c day), and has a reasonably big balcony. The location is also good for me, because I can walk to redfern station in 13 minutes.

I went to auction, and I ended up paying $749k for the price. The other bidder was $746k. I am really regretting it because I'm really a bargain hunter at heart, and I feel disgusted for spending so much time to save $10 or whatnot, I ended up spending so much money for an (admittedly nice) 1br apartment. It is auction so I do not have a cooling off period and cannot back out.

I can afford it fine, but I just… feel bad. Has any OzBargainer spent more than they wanted to on property? How do you get over it?

Comments

        • Huh? Bought a 2011 4b house on 900sqm 30km from cbd in 2018 for 340k. Just had my loan refinanced, the new bank valued it at 440k..not bothering with RE quote, but it would be higher.
          Brisbane.

          • @Steakz: Brisbane not anywhere near as crazy as Sydney or Melbourne in terms of price appreciation. It is like Sydney and Melbourne people live on a different universe.

            Sydney and Melbourne people don't realise Australia's economy is fundamentally supported by agriculture and commodities exports vs places like New York / London / Paris which is supporting by services which is more mobile and higher value add.

            Australian government tried to pitch Australia's history of good management of the super pool as a service to rest of Asia until AMP imploded.

        • +1

          The apartment I used to live in was 3br 2bath, was 399k when they bought in 2010. 340k they started with, then got to 240k before they pulled it off the market. REA ask me for an offer, I said 200k flat when it was 340; they laughed at me. However I was 40k off the mark. This apartment is a 20min bus ride to the CBD.

          Edit: Corp fees are 200 dollars a quarter.

          Apartments is never a good buy in Brisbane, but DINK and cheaper mortgage then rent, it makes sense.

    • Same in any other place apart from shitney!

    • +8

      Sydney and Melbourne have the bubble premium. Everyone is living in a bubble.

    • +47

      He can have 5000 bed room at Afghanistan tho.

    • Shh stop talking about Brisbane kid have move Regional Queensland if price keep going up

    • Or a dog house in hk…

    • +1

      Problem is I don't think I could handle all the Maroons supporters!

    • Welcome to Sydney

  • +193

    I bought a cheeseburger at full price and didn't notice it was $2 on the app. I can afford it fine, but I just… feel bad

    • +12

      Was it the only burger that met your criteria?
      - ketchup on top of the bun
      - more greasy than Rudy Giuliani
      - easy to poo out

      • +20

        I am really regretting it because I'm really a bargain hunter at heart, and I feel disgusted for spending so much time to save $10 or whatnot, I ended up spending so much money for a cheeseburger.

        • +24

          You could have had 5000 cheeseburgers at Afghanistan!

        • +3

          Dude come to Brisbane and you can buy a cheeseburger meal 20 mins from the city in a quiet street for… exactly the same price.

      • +1

        The Rudy comment got me to the stage of upvoting but too lazy to do it. The poo comment sealed the deal.

    • +5

      I would hold onto that burger for 10 years. Then try and sell it for $4

      • But what if you starve in the meantime?

    • +5

      FOMO is real

    • +1

      Also get the $2 one you will feel better, until you eat it.

    • +1

      ^ this is why I always check apps and Ozb for deals. I walked into Guzman Gomez one day late afternoon, dead empty. Standing there browsing on OzB for Guzman deals and came across the $9.95 burrito deal when ordered via app. So I'm standing there downloading the app, creating an account, ordering the burrito lol while the worker is asking, "Can I help you sir?" 😄

    • refund the burger n say it tasted funny….
      then drive thru n order the $2 one..

    • I forgot to get the free chips and drinks with a hungry jacks burger the other night. Have not been the same since.

  • +16

    yep, been there done that, fomo and emotions get to most of us sometimes. Bought a new 2br 2 years ago without even negotiating the price because agent said developer doesnt do any discount, a few months before all the aparments started collapsing like dominos. Was so stressed while I had it, bought with the intention to live in but ended up renting it out. Made some losses trying to sell it a few times, finally was able to sell it last month at the same price bought (so obviously made a loss with other expenses), but it was the happiest day of my life. I wasn't able to get over it for quite some time but eventually I had to accept that I made a mistake, and with time you will too. If it's too much to bear just wait until you're able to sell it for a higher price (if you want to sell). Time heals everything even a regret and eventually we have to move on.

    • How much did you pay and what area?

    • -3

      “ finally was able to sell it last month”

      “I wasn't able to get over it for quite some time”

      Yeah sounds like at least a couple of restless nights during the mourning period 🙄

  • +6

    Yea crazy prices to live in syd, I could get a 6bd 2 storey town house in Adelaide for that price and still have money left over then if I want Sydney I'll just fly there for the weekend….

    • +4

      Don't even come here for the weekend man haha, I would much rather Adelaide, so chill (live in Sydney).

    • +5

      I grew up in Sydney on the waterfront.. i see no attraction to living in Sydney at all! So glad to have bailed 20yrs ago.

    • +1

      Agree; from Perth, lived in Sydney the last 8 years, and basically biding my time until I can GTFO.

      • +3

        Missing Chicken Treat?
        Confess!

        • +2

          Not gonna lie, it’s one of the first things we - and all our mates - get when we come home for Christmas.

          Cicerello’s is up there too. Along with trying to merge on the Kwinana Freeway.

          • @sw00p: Gosh, memories!
            Remember their chicken hot dog in the early 90s? Wish they'd brought it back.
            Now they're doing all sorts, according to their online menu.

  • +1

    Yeah that is a bit much, you paid for the location though am I right?

    • +4

      I paid for the low-density-ness (not a high rise) as well as this being a top-floor, north-east facing unit.

      Location is Alexandria

      • +5

        your level of regret will be tied to the number of dog boxes that go up within your vicinity. I work in the mascot/alexandria area and if I didn't know any better I would say Harry Triguboff owned the suburb. The concrete jungles sprouting up around there means in summer it is around 5 C hotter than the east and the quality (or lack thereof) of neighbouring high rises may have a spill over effect onto your apartment. The only real way you would likely get your money back from a resale is if international students are allowed to come flooding back in, you secure a good tenant and flog it to a less informed investor. That's my 2c for the Alexandria area. But they do have some awesome brunch places though!

      • +1

        It's a very popular area so if you want to be in an area like that I wouldn't be so disappointed with yourself, 1 bedders in popular areas are great for investment they always get snapped up by renters if you ever want to turn it into an investment property and get a different PPOR later.

        Just out of interest what's the attraction with the top floor? I know alot of people are similar I just never quite understood it is it the views? Personally I like being lower in my building at least because its cooler and don't have to spend as long waiting/in the lift.

        Thanks for sharing

        • My attraction with top floor is you feel like you have more space because you don’t hear anyone above you; and you hear less and get less pollution from the road (if you’re near a busy road).

          If you go north-east aspect, the temperature shouldn’t be a big issue.

      • +1

        sounds excellent, i'd legit be be stoked with getting that. been looking around the inner west for 5 years now and struggle to find anything liveable - every auction i go to rockets to 1.2m or there abouts, despite 'price guides' being around the 700-800k mark.

  • +59

    I get the buyer's remorse every time I buy something online and forget about using Cashrewards or Shopback. You must feel 750k times worse

  • +14

    Value is what someone is willing to pay. It may have been cheaper yesterday, and it may be cheaper in the future, but today it's worth $749k.

    Live and enjoy it with no regrets.

  • +19

    This thread was deja vu moment

    Then realised OP posted on Whirlpool as well:

    https://forums.whirlpool.net.au/thread/90y7wmk3

    • +7

      This thread was deja vu moment. I can read it again fine, but I just… feel bad

    • I thought I read it, but could not remember where from…. Thanks.

  • +5

    I always go to auctions expecting to not buy. Reason, people are driven by emotion more than rational value. Most people don't have the patience to learn to think on the go without panicking. Problem when you panic is you give away a lot more than you would otherwise willing to.

    That is why on TV fix them up shows it is always auction at the end, never a private sale. Generally I go to auctions to see what kind of mug punters get taken by the beasts.

    • +21

      I've actually come 180 degrees on my view of auctions as a buyer. I used to think it was a mug's game because it all became about emotions. And while that probably remains true, it also means that I can turn up, with my price in mind and see what everyone else is prepared to pay.

      If I like the price, I bid … if not, I don't. Maybe it's just learning to control your emotions when there's large sums of money involved.

      I've had too many bad experiences trying to negotiate on off market/private treaty arrangements. You never really know what's going on. You just get quoted a "dreaming" price and get the run around in the hope you'll pay it. I find you just end up wasting time because neither party really knows what the place is worth … you'll only really know in an auction setting under the principle that it's worth what someone's willing to pay for it. I feel a lot more comfort on price knowing that I'm buying within my budget AND that at least one other party has been willing to effectively pay the same price.

      My last experience on private treaty was where I put to the bloke I'm prepared to pay $x, but need to know by the end of the week (long story, but I genuinely needed to do the deal that week). Heard nothing for three weeks. Guy rings me up to try to extract more coin, but simply told him, "sorry mate, we needed to have this conversation three weeks ago, I'm no longer able to do a deal". The guy literally didn't know what to say. Rings my wife separately thinking he'll be able to get her to fold, but the deal had passed. The dribbler ended up selling it for less than I was prepared to pay if only he'd been sharper with his negotiation.

      • +8

        If I like the price, I bid … if not, I don't. Maybe it's just learning to control your emotions when there's large sums of money involved.

        Usually regret comes from people who are frustrated with search and in hind sight figured out they overbid. OP is so in love with a criteria that there is only 1 available and therefore must go bidding. Property is basically just musical chairs, if you miss out another one will come around. It is just a matter of time.

        I've had too many bad experiences trying to negotiate on off market/private treaty arrangements. You never really know what's going on. You just get quoted a "dreaming" price and get the run around in the hope you'll pay it. I find you just end up wasting time because neither party really knows what the place is worth … you'll only really know in an auction setting under the principle that it's worth what someone's willing to pay for it.

        If you are well researched then you know what you are buying and you make an offer with a time limit, I do what you do and put the offer in Monday or Tuesday with Friday time limit. Go for a look on the weekend and put in other offers the following week. Those that are advertised in dream land or just fishing around I usually take a pass. There is one that I am looking at with range of $650k - $700k once stamp duty discounts were announced went to $660k - $720k. I believe it would sell at $650k or even $670k but the vendors are obviously looking for a whale who can't negotiate and wants more like $690k and now closer to $720k.

        • +9

          There is one that I am looking at with range of $650k - $700k once stamp duty discounts were announced went to $660k - $720k.

          This is the other thing that gets me on these "for sale by private treaty" arrangements these days … none just have a price, they all have these BS ranges. And even that is usually after the listing simply says "Contact Agent".

          To use your example, there was a time when a property would be listed at $700k. You knew the punter was hoping for $700k, will take ~$670k, but may end up needing to settle for ~$650k.

          Nowadays we have to go through all this baloney in what effectively is just a silent and non-transparent "auction" where the probabilities are you are simply bidding against yourself.

          Don't even start me on "Expressions of Interest" or "Offers Considered"!

          • +2

            @Seraphin7: Agreed. Those without a price range I don't really look at. In Victoria there is an information sheet and usually it is some outrageous price listed.

            Similar property in the same suburb can sell for $100k difference, same size block, similar condition. It just depends on people getting emotional and falling in love with it.

          • +6

            @Seraphin7: "Contact agent" 🤬

    • +2

      Auctions work off emotions, only point to use them when the market it hot, perfect time not to bid.
      When the market is cold, sellers will typically use private sale as you can't see what you are up against as a buyer.
      Whilst I have never bid at a house auction, should you get lucky and the bidder turn out is poor you get to see the market demand, and likewise can start to dictate the price.
      Personally I bought mine as a private sale during the depths of the GFC, best purchase I have ever made.

      • I bought my first place for $482k not long after GFC. Looking at Domain price history, the seller bought it new for $460k nine years earlier. Not bad if I do say so myself.

  • +10

    I thought you weren't going to worry about it anymore? https://forums.whirlpool.net.au/thread/90y7wmk3 :)

    I'd honestly just let it go and enjoy the new apartment! You've got yourself something you seem very happy with (other than the price) and in a location that suits you.

    • As above… its a home after all. Switch off and enjoy.

  • +1

    Atleast you bought in Alexandria. I did the same mistake for a unit with similar criteria like you and next to train station in a suburb in western sydney. I bought for 100K less than you. There was never a day that I did not regret it. Finally, I bit the bullet, gave it on rent, bought another affordable house in a not so great suburb but has good connectivity. Pretty happy as of now. Waiting for the right moment to sell it off. However, because of its location, it is giving me good rent. Not really covering off the expenses on the apartment, but not bad.

  • +2

    Deal is done and dusted, if at this stage bank is still happy to finance then that is already a good sign that it's not just you who valued it at that price.
    Take comfort knowing you have done your due diligence, especially with your strict criteria that narrowed the options down to 1, and that you have bought a tangible asset.
    What is the worse that can happen? You sell it at the price you bought or +- 5%. Another consolation view is you bought at a time when apartments are priced at its worst, which means good chance it is onwards and upwards from here.
    Take into account the unquantified benefits, eg. your own home, a great inner-city location, great view and vibes from your "beautiful, north-east facing, super light-filled top floor", and you already stand to gain so much more.

    Obviously this post is also to console myself as a new home buyer 🤞🏻💪🏻

  • From what I've been reading and hearing online, I see a lot of times places saying for newer buyers to stay away from auctions. While there may be a chance to nab a bargain I just feel Sydney is the area where there are a lot of well researched people hoping to do the same that its hard for a newer buyer to come out in front.

    Still though it sounds like its a good place? I don't really know if bargains exist on housing besides the few unicorn places out there where people just get in at the right time, right way or know the right people, just because its such a hot commodity. It would be like trying to buy a PS5 right now, some people are just happy to pay RRP, while others are paying scalper prices.

    Its hard for me to fully get why you went for the apartment as its very different to what I'm looking for, but if you're going to hold for years, I can only imagine the prices increasing considering other bidders were similar.

  • +11

    In 5 years time - forum post…

    My 1 bedroom unit in Sydney has just doubled in value. How should I fully utilise my equity? Thanks fam.

    • +2

      Invest in European luxury car of course….

    • Bank loan rates would have to go to close to 0% for that to happen. (we're talking RBA rates of -3%)

    • +1

      lol, I just wonder, what kind of economic miracle would double the property price in such a short timeframe?

      All the effort from RBA - Job Keeper, Job Seeker, billions of debt, mortgage holidays, etc combined with no income growth - and we barely stopped the prices from falling.

    • +1

      Or, in five years' time…

      My 1 bedroom unit in Sydney has just doubled in value. I now need a 3 bedroom house that was $2m which has now doubled in value also. Am I stuck in my 1 bedroom forever?

  • +5

    I regretted buying an RTX 3090 and had to sell it immediately to make me feel better. I can't imagine $700k lol.

    • had to sell it immediately

      For a loss, right? ;)

      • +13

        I regret buying my PS5 and had to sell it immediately… to the highest bidder at 200% cost

      • I did actually. I just wanted it gone!

    • Username checks out

    • I'd take it off your hands for half price.

  • +28

    Its pretty flash
    https://www.realestate.com.au/sold/property-apartment-nsw-al...

    Except when theres a downturn in the property market, you're always going to pay top dollar for a place that's fully updated with no scope to add value.

    • +4

      lol creepy.

      But looks nice.

      I feel disgusted for spending so much time to save $10 or whatnot

      I would change your mindset away from this. When you invest in an asset class, there is normal volatility.

      And you're only thinking like this because of potential drop. If it was going up in value, you'd no longer have this thought.

    • +9

      I like the last pic of the real estate agent, "Proudly Sold By Shaun Stoker", he does look proud he got so much money for it.

      but it is a nice place OP, enjoy it.

    • +15

      I mean, it's a shoebox, but it's a nice shiny shoebox lol

    • Damn that looks baller

    • That's a pretty nice layout. Not much in the way of wasted floorspace from corridors and such.

      • +23

        Lol that's because it's basically one room.

      • +2

        It's one open plan living space, I can't see where you'd even put a corridor.

    • this place is worth every dollar of 749k in the location it's in, it's not your average in neither location, outlook, condition, or layout. If he'd bought a 2br in the same area it would have cost at least as much facing a wall or basement. The fact is young professionals who've left home and want to live the life of Patrick Bateman and don't know a hammer from a nail are lining up to buy places like this in Sydney, even if it puts them way under in debt because "live for the moment" and it goes with the handbag.

    • +1

      I hope op has $40k worth of furniture to put in there. It would look shite with fantastic furniture instead of staging furniture.

      So friggin tiny. My family room is nearly the size of that apartment and my laundry is just slightly smaller than the balcony. Don't know how you do it but enjoy my friend.

    • Water/council rates is ~$2k a year and strata is ~$4k. That's a hefty cost for a tiny 1br flat!

    • OP will regret the post now.

      /Is that bedroom window looking into someone else's bedroom?

    • Wow its got a nice view and looks great, but so small.

      Why is this unit worth $100,000 more than other surrounding units?

      • in my mind…

        • north-east facing orientation on top floor; only 1 common wall
        • relatively lower density / more land value
        • location: you can walk to redfern station in <15 mins…
        • amenities

        i hope that adds up to $100k?

  • +5

    Yeah I paid $410k for a 3 bed place on 500m2 of land 4 years ago. Wish I could have bought a 1 bed apt for $749k.

  • If OP is not bragging he/she has an issue of the whole "Auction" concept is.

    If I remember correctly from my high school textbook, Auction helps the seller to capture the highest price that any available potential participating buyer willing to pay.

    The seller is always in favor.

    Don't feel bad as it was the price you felt the flat worth at that moment.

    There is "no bargain" in an Auction by definition because you won't win an auction if you were only willing to pay less than anyone else who also participates.

    • +7

      'Auction helps the seller to capture the highest price that any available potential participating buyer willing to pay.'

      I think it's incorrect.

      I believe auctions helps the seller to capture the highest price that the underbidder is willing to pay.

      i.e. underbidder in this case here was willing to pay $746k, sold for $749k.

      What if the buyer (highest bidder) was willing to pay $850k but only needed to pay slightly more than the underbidder ($746k).

      Without this particular underbidder (@ $746k), the buyer (who was willing to pay $850k) could have purchased it for even less (subject to reserve).

      • +2

        It all depends how you look at it.

        In "academic economics", an auction flushes out the highest price of the underbidder and the winner pays a small margin on top of that. The buyer is happy because they paid no more than necessary to win. The seller is happy because all parties came to market and put their best price in an open and competitive setting. It is an "economically efficient" outcome.

        In practice, sellers hope for the "$1m above reserve" dream when bidders go crazy without realising that the majority of property auctions that sell do so right around the reserve price. Buyers obviously do get emotional in some settings, but again clearly not actually in most cases, considering again the sales results against reserves.

        Private negotiations end up being economically inefficient because parties are not operating with the most available information. Buyers either don't put their "best bid forward" because they can't see what others are doing and simply become frustrated by days/weeks of back and forth, or they end up "bidding more" than they need to because they can't see others' bids. As a result, you get more variability in results. They may "cancel each other out" across the market, but in a one-shot game you are more likely to get a winner and a loser in a negotiation situation than an auction.

        • +2

          What you're saying makes sense, auctions also make it so simple for the seller because every bidder bidding under the same terms whilst private sales can end up where the highest bidder also might have the less desirable terms eg subject to finance and B&P.

          Personally I still think auctions favor the seller too much. I think it's ridiculous that reserve prices can be set higher than the expected selling price that they lure people to the auction with

          • +1

            @donkcat:

            I think it's ridiculous that reserve prices can be set higher than the expected selling price that they lure people to the auction with

            I agree. This is an area of property legislation that needs to change IMHO. I would be quite happy with a requirement that he reserve price could not exceed the quoted price guide.

            I actually wonder whether or not disclosing the reserve price prior to the auction would have a fundamental effect either way and therefore whether you could go that far. We all know the charade that goes on even in a "clean marketing campaign".

            For example, a classic auction flow … price guide $1m - $1.1m … reserve $1.1m … opening bid $900k … carry on until the bidding gets to ~$1.05m … the great show of "consulting with the vendor"/"is the property on the market?" … "property is on the market" … property sells for $1.12m.

            Would the above typical auction be fundamentally different if the reserve of $1.1m was announced beforehand?

            • @Seraphin7: $1.1m should be the start of the price guide. Otherwise just giving people with false hope turning up for a potential bargain at $1m if not much demand on the day.

            • +1

              @Seraphin7: FTFY

              For example, a classic auction flow … price guide $1m - $1.1m … reserve $1.2m … opening bid $900k … carry on until the bidding gets to ~$1.05m … the great show of "consulting with the vendor"/"is the property on the market?" … "property is on the market" … property sells for $1.3m.

              The continual issue is that the reserve so much higher than the price guide.
              Agents excuse is market change so reserve changed

        • "academic economics", an auction flushes out the highest price of the underbidder and the winner pays a small margin on top of that. The buyer is happy because they paid no more than necessary to win. The seller is happy because all parties came to market and put their best price in an open and competitive setting. It is an "economically efficient" outcome.

          You got the academic part right.

          It is only efficient if you are bidding on a standard specific good and all information is available. Closest to this is the stock market because continuous disclosure requirements plus almost everyone can get to a computer to put in a trade.

          Problem with property is basically every one is different. Even in a block of flats there is ones that face different directions, maintained differently, have different appliances etc.

          • @netjock:

            Problem with property is basically every one is different.

            Indeed. This is the ultimate problem with any form of property valuation and why the more and more unique any specific property becomes, it's "value" can only only be determined by what people are prepared to pay for it (with all the usual caveats on the market being open, well-informed, willing but not anxious, etc.).

            Over the years I've come around to even with all the practicalities overlaid on the theory (many of which you've pointed out), the auction provides less variability in outcome for both parties than alternatives.

  • +5

    You liked the place, you bought it and can pay for it, just enjoy it mate! :)

    Life is too short to worry too much.

  • +1

    OP, you are bought the apartment to live in, it sounds like it meets all the criteria you are looking for such as location, size and aspect. It isn't easy to always find a place that meets your need all the time - so that alone you ought to be happy with.

    In terms of price? we can all speculate (this isn't a weekly catalogue special - lol)… As you'll live in it and you said you can afford it, don't over think it, you'll (hopefully) get over the cost of it over time, just view your mortgage as a form of "rent" rather than paying someone else's mortgage.

    • Yes. Chances are OP isn’t alone with that criteria, so there is the resale value if for some reason it doesn’t work out.

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