Asking price 50k Range

[tiger]

The house I have my eye on has an asking price with a range of 50k between highest and lowest amount.

I know very well that other houses in this region are selling pretty cheap, even though the agent of course says that the vendor will only consider offers near the top end of the range. I've had agents of other houses I've inspected 2 weeks ago call me back and practically drop 40k off the asking price to try to get us to buy.

This one is listed at 240k-290k - we want to spend about 265k max but prefer much less.

Would putting in an offer of 255k ruin my chances here? Why would they list at 240k if they wont consider that as an offer? I'd love to offer 240...

The house is on the central coast near Gorokan if that helps.

 

[peastman]

Your first offer should be made as a starting point for negotiations. But for a low offer to be taken seriously you have to let the agent know you are a serious buyer. By making an offer in writing together with a $1000 intial deposit would help. Also if you can make it attractive to the vendor in ways that does not cost you, for instance settlement to suit the vendor, or waive the 7 day cooling off, would all help.
So start low and see how you go.
Good luck.

 

[tiger]

Would the $1000 be refundable if we didnt buy it?

 

[Perp]

If the offer's not accepted, yes, of course you get your $1,000 back.

If the offer is accepted, then your $1,000 forms part of the deposit.

 

[tiger]

Is a Residex postcode report the best way to arm yourself with knowledge of recent sales in the suburb/street?

 

[peastman]

As a start, have a look here.
http://www.homepriceguide.com.au/auction_results/index.cfm?source=apm
Its free.

 

[Aaron Sice]

with a $240k min price i would offer $245k + $1500 deposit + normal or quick settlement with finance pre-approved.

coming in at $240k will see the vendor counter at $270k - almost guaranteed (yes there are exceptions so please avoid boasting about your awesome stories).

having finance pre-approved with a decent cash deposit will help your lower position.

remember though, the ball is in your court - you make the rules here. if their game doesn't fit your rules, then find another property. don;t get sucked into that "they just want $5k more" deal - set a limit mentally, play your poker face, and stand your ground.

 

[boomtown]

Ignore the asking price. Its irrelevant (unless its lower than what you value the property at).

Offer what its worth to you with a slight discount to leave room to negotiate and walk away if you dont get the price that you want.

 

[tubs]

Why do they bother with the range if the wont take offers that are actually inside the range. Why not start the range at the lowest price they'll take.

Ranges annoy me. I'd ignore it anyway and just offer what you think its worth.

 

[Aimjoy]

This one is listed at 240k-290k - we want to spend about 265k max but prefer much less.
Would putting in an offer of 255k ruin my chances here? Why would they list at 240k if they wont consider that as an offer? I'd love to offer 240...

Tiger,

Yes the vendor wants $290K. Chances of them getting that - practically zero.
Chances of your offer of $255K ruining your chances - practically zero.

I'd offer $240,001 as a start. But in reality be prepared to pay what you think it is worth and NO more.

Buy a residex report by all means. OR try www.onthehouse.com.au for a freebie.
OR what I do:
Ask the agent to give you their RP Data report on the property - its all about how cheeky you want to be.
Failing all that - engage a Buyer's Agent to do the negotiating for you

All the best with it.
Aimjoy

 

[mystery]

Tiger,

We've always ignored the price range.... We work out what market value we place on the property and put an offer in accordingly.

For example, we paid well below the asking range for an Elizabeth Vale property in July last year. The range was $195k-$205k, but we went in with a first and final walkaway offer (remember, .. Adelaide was a very hot market last year) and it was accepted. In SE Qld .... we paid $21,000 under the asking price in a very hot market in April 2007.

Our strategy is that we make sure we have at least 6 properties on our list that fit our criteria when we stat negotiating (we always let the agent know we are negotiating on other properties). This takes the emotion out of the negotiation and allows us to detach from the outcome. Be prepared to walk away and move to the next opportunity if the vendor won't negotiate.

We put an offer in on each property on our list around the same time. If one falls through then we continue with the others until one bites and more often than not .. they do. When the first one bites and we get the price we're after or better then we withdraw all other offers verbally and then in writing straight away. Some vendors get offended by low offers, .. tough!! ... this is business, you can always negotiate up if you start low.

Start low and test the water, ... see what they counter with .... this will give you an indication of what the vendor is expecting .... you just might be surprised, but you have to be prepared to walk away if they won't drop to your perceived market valuation.

Good luck

Martin

 

[Lukey13]

Our strategy is that we make sure we have at least 6 properties on our list that fit our criteria when we stat negotiating (we always let the agent know we are negotiating on other properties). This takes the emotion out of the negotiation and allows us to detach from the outcome. Be prepared to walk away and move to the next opportunity if the vendor won't negotiate.

We put an offer in on each property on our list around the same time. If one falls through then we continue with the others until one bites and more often than not .. they do. When the first one bites and we get the price we're after or better then we withdraw all other offers verbally and then in writing straight away. Some vendors get offended by low offers, .. tough!! ... this is business, you can always negotiate up if you start low.

This is a similar strategy to what I use:

A few months ago I purchased an IP which was listed at a price I thought was already excellent value.

I waited until the end of the week, put in an offer $20K below and advised the agent that I was putting offers on 2 other nearby properties simultaneously (even gave her some specifics of the other properties to make it seem more legitimate) and that I would take whichever property for which the seller would come to the party. By the afternoon, my offer was accepted with an extra $2.5K added to it.

My lesson here was even though I thought asking price was already great value, it's worth pushing it that bit further because you never know. Despite the RE agent politely saying my offer was ridiculous too! I would've agreed to full asking price anyway.

Now I've got an inner CBD property near an upcoming major shopping development with a rental yield that pays (post-tax) for all interest - I just pay rates and body-corp out of pocket.

 

[boods99]

The idea of putting a few offers in on different properties simultaniously sounds like a pretty good strategy, but what happens if they all get accepted by the vendors? In WA, if you present an offer on a standard offer and acceptance contract, and the vendor signs it, it then becomes binding...What is everyones thoughts?

Boods

 

[mystery]

The idea of putting a few offers in on different properties simultaniously sounds like a pretty good strategy, but what happens if they all get accepted by the vendors? In WA, if you present an offer on a standard offer and acceptance contract, and the vendor signs it, it then becomes binding...What is everyones thoughts?

Boods

Good question Boods

In SA, NSW and Vic we have been able to just give verbal offers whereas as you point out in WA and also Qld it is normal to put the offer in on a signed contract. Ultimately you still have a cooling off period, so this gives you a get out. Yes, .. my strategy would be more difficult to implement in WA and QLD, but as it is something that I use doesn't mean it will suit everyone's taste.

I guess it goes back to the original question of offering under the price range ... the aim was to offer low to see whether the vendor is motivated. By going in way under the asking price it is highly unlikely that to many of the offers would be accepted at the same time and without a counter offer above your initial offer.

Martin

 

[Perp]

The idea of putting a few offers in on different properties simultaniously sounds like a pretty good strategy, but what happens if they all get accepted by the vendors?

This strategy is generally employed with outrageously low offers. If they're all accepted, and you can borrow enough to settle all of them, then I would be rapt! Means you've got some serious profit headed your way...

 

[fernfurn]

This website is awesome, thank you very much Peastman. just looked up our suburb and found a discount of 8% is fairly normal, makes me feel much better about the offers I am about to put in.