Buying below market value

I'm in the midst of finding my next deal, and this time I want it to be just that, a "deal".

I've put a few offers in at around 7-10% under market, but agents just seem to shrug me off. I'm guessing the properties I'm placing the offer on are just getting snapped up but still. How hard is it to get a deal these days? It is however a good sign that it sure aint hard to sell a house.

I once got $30,000 off asking price simply because this property was a unit and I bought one next door a year before and knew one sold last week for $30k less.
I told the agent I would walk away, and purchase another if the vendor didn't except. The vendor accepted on the spot, I was happy.

I've just placed an offer on a 5 bedroom (Yes I know, 5 bedroom rental..?) in decent suburb advertised for offers over $320,000
at $285,000 and half expect to never hear or be taken seriously from the agent again but we'll see.

I stated with my offer that I don't particularly like the 5 bedroom option as there would be more wear n' tear on the property and harder to find tenants. Plus I told them I'd want to renno the bathroom and kitchen (which is a load of bull but might score me some reason for discount)

So, any tips for negotiating?
 
Price is just part of it.. how about offering unconditional, with settlement that suits the vendor? Assuming you know your finance will come through in time..

I think the best way of getting a "deal" is to get friendly with a few agents, let them know you have finance pre-approved, can offer unconditional, and be flexible with settlement. The agents may contact you before it goes on the market..

Have you tried searching for properties that have been on the market for a long time? Vendor may be open to lower prices then.. ;)

Keep in mind some properties may not be a "deal" no matter how cheap you get it.. i.e. on a main road, next to train tracks, structural damage, easement going through, in a floodplain etc. I think it's more likely you'll get a better return paying market rate for good performer, than a bargain price for an under performer.
 
I agree completely VB, and well said. But the one thing I'm looking for is to increase my yield and profit from the start, and it can be done.
Some of the most successful investors I know, and have read about live by the motto of:

"If you can't sell the property tomorrow for more than you bought it for today, you've paid too much"
 
Buy in the gloom NOT the BOOM.

Easier said than done.

That's why none of us are, or even close, to Warren Buffett. He has said repeatedly the way to make money is:

"you should get greedy when others are fearful and fearful when others are greedy."

But he does realsie we're all mere humans and not an Oracle. So he goes on to say

"But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that"


Amazingly, with every crash/recession and every boom/bubble, no one listens. We're just sheep after all.

How many of us (myself included) are guilty of spruiking the property price rises now and raving about how great the market is, and how many (myself included) stayed away at around the time Lehman, Merrill Lynch, GM and AIG collapsed/nearly collapsed?
 
Didn't see you giving the rest of us buy signals during the gloom of a few months ago. On the contrary, you seemed extremely negative at the time.

My philosophies are those shared by Jan Somers.

1. The right time to buy is when you can afford it.
2. Its time in the market thats important NOT timing the market.
 
Easier said than done.

All I am really saying is - the best time to buy/negotiate was in June 2009, not now.

Back then, there was uncertainty etc. Now there is more confidence around, so sellers are achieving good prices and dont need to negotiate.
 
i have heard that offering unconditional settlement often outweighs the price, for some reason the vendor needs a quick sale or something and cant hold out for the extra money in a couple months
 
I think right now if you are buying in the city then making an offer well below asking price and getting accepted could be quite difficult as I'm finding most of the properties I put on my short list are gone in a few days. Seems to be a buy frenzy on at the moment which makes it hard when you have finance ready to buy and there is very little to consider.
 
And just to clarify.

I was buying in the recession, I was even in API because of it, So my philosiphy has also always been to buy frequently. And sometimes when I can afford it, too :D
 
All I am really saying is - the best time to buy/negotiate was in June 2009, not now.

Back then, there was uncertainty etc. Now there is more confidence around, so sellers are achieving good prices and dont need to negotiate.

Well you just explained it. That's why Warren Buffett is Warren Buffett.
 
I'd love to lowball on a house I'm eyeing off (desperately need a bigger place) but I really doubt I'd get the finance, despite the equity in our current house being almost enough to cover it. Might be a different matter if my old house sells or rents out though - and of course the current house would rent out really well if we moved.

Its a bit interesting being in lo-doc 60 land with an income that is an odd mix of Centerlink, international passive income, freelance income and hopefully rent soon too ...
 
Easier said than done.

That's why none of us are, or even close, to Warren Buffett. He has said repeatedly the way to make money is:

"you should get greedy when others are fearful and fearful when others are greedy."

But he does realsie we're all mere humans and not an Oracle. So he goes on to say

"But that's too much to expect. Of course, you shouldn't get greedy when others get greedy and fearful when others get fearful. At a minimum, try to stay away from that"


Amazingly, with every crash/recession and every boom/bubble, no one listens. We're just sheep after all.

How many of us (myself included) are guilty of spruiking the property price rises now and raving about how great the market is, and how many (myself included) stayed away at around the time Lehman, Merrill Lynch, GM and AIG collapsed/nearly collapsed?

Buy in gloom sell in boom is not that complicated or difficult. You just do the opposite of what the sheep herd does. History just seems to repeat itself. If you understand the fundamentals of a good investment (be it property or shares), then you can do this more confidently, and in the face of sensationalised news articles.
 
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And just to clarify.

I was buying in the recession, I was even in API because of it, So my philosiphy has also always been to buy frequently. And sometimes when I can afford it, too :D

Are you buying investments or paying to own properties?
Because that's what most people in API do.
 
Buy in gloom sell in doom is not that complicated or difficult. You just do the opposite of what the sheep herd does. History just seems to repeat itself. If you understand the fundamentals of a good investment (be it property or shares), then you can do this more confidently, and in the face of sensationalised news articles.

I hope you meant:p

Buy in gloom, sell in boom

cos you'd only be buying property half the times and doing both!!
 
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