Can you contract with tenants at a certain rent?

Im currently trying to negotiate a property,

and ive low balled, naturally it was rejected, I have a certain price that I am willing to up to but its at least 10-15% lower then what I think and the agent has hinted they will accept!

My price is based on market research, compartive sales and potential,

that been said all the young REA keeps on going on about is how much it was independantly bank valued at 6 months ago in a quiet market and how much an independant rental appraiser who specialises in that area has valued it....

here are my arguments, ive had 2 valuations done on a completely different property in a different suburb by different people on the same day and it came up to $100k difference, we are talking i nthe $500-$700k price range, so hence it doesn't mean anything in terms of trying to convince me to pay more!

2nd point is that the rental, the claim of $420 per week, if you do a re.com.au search, its basically the 2nd most expensive rental there, other properties that could be considered slightly better, are only asking $350 per week, so that is before negotiations..

so my question is, can I say to the agent, well put your money where your mouth is and get me a tenant at $420 per week, even $380, and I ll add another 10% to my offer price????

can a contract be drawn out to incorporate this??? or it just doesn't happen??
 
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Im currently trying to negotiate a property, and ive low balled, naturally it was rejected, I have a certain price that I am willing to up to but its at least 10% lower then what I think its worth.
PM you've been making these low ball offers for a while now and getting nowhere. This strategy works in a flat or falling market or with a distressed vendor sometimes. We are presently in a rising market in SYD & MEL, although I'm not sure of where exactly you are trying to buy. If you continue with this strategy (and you are to be congratulated for giving it a go) then you risk annoying the REAs who are already starting to not take you seriously.
Realistically, go off comparable sales by all means but while you dilly dally around trying to score the bargain of the century, the market moves on.

My price is based on market research, compartive sales and potential,
It is only on comparable sales.

so my question is, can I say to the agent, well put your money where your mouth is and get me a tenant at $420 per week, even $380, and I ll add another 10% to my offer price????
You can 'say' anything you like.

can a contract be drawn out to incorporate this???
You can draw up any kind of contract you like and have it sealed if you can get both parties to agree the terms and it does not contravene any laws.

or it just doesn't happen??
It is not going to happen - no.
 
so my question is, can I say to the agent, well put your money where your mouth is and get me a tenant at $420 per week, even $380, and I ll add another 10% to my offer price????

QUOTE]

What would stop the REA from having a "friend" rent the place for 6 months at the higher rate...just to have pay you lots more money?
It would pay the REA to top-up the small difference in rent.
 
What would stop the REA from having a "friend" rent the place for 6 months at the higher rate...just to have pay you lots more money?
It would pay the REA to top-up the small difference in rent.

Exactly....and rental guarantees that developers offer work in this same manner. $40pw over market = $2Kpa. So if I up the price by $40K (PMs 10% more) then it will cost me only $4K for a 2 year rental guarantee and I'm still $38K ahead. Doh! :confused:
 
so my question is, can I say to the agent, well put your money where your mouth is and get me a tenant at $420 per week, even $380, and I ll add another 10% to my offer price????

QUOTE]

What would stop the REA from having a "friend" rent the place for 6 months at the higher rate...just to have pay you lots more money?
It would pay the REA to top-up the small difference in rent.

yeah, exactly, I thought of that after I posted.

agent could get a tenant in at the market rate and pay the difference in some way
 
If your research tells you all the rent is worth is <$350/week then either convince the agent/vendor of this and pay the appropriate price for the property or walk away. Simple as that.

If comparable sales and comparable rentals say the property is worth less then you would be silly to buy it and you would expect that everyone else would work out the same thing so the property wont get sold. If it gets sold for the asking price then bad luck, you wouldn't have got it anyway. If it doesn't sell then you are still in the game, maybe wasting time but still in and you could eventually get it for a reasonable price. If the agent doesn't want to listen to reasonable talk then move on.
 
I have a certain price that I am willing to up to but its at least 10-15% lower then what I think and the agent has hinted they will accept!


You are in control of what you buy, but the Seller is totally in control of this particular title deed.


If your highest is 10-15% lower than the Seller's lowest acceptable price, then you are SOL.


The only thing you can do is put your very best foot forward and wait to see if it is accepted. If it is - great. If not - lower your sights and look for something more in your price range.
 
Im currently trying to negotiate a property,

and ive low balled, naturally it was rejected, I have a certain price that I am willing to up to but its at least 10-15% lower then what I think and the agent has hinted they will accept!

Whereabouts are you looking PM, in Melbourne, inner, outer?

Also, I find that agents invariably inflate the ''rental potential'' of properties for sale.

If you're going to low-ball in this market, make lots and lots of offers, then you might marginally increase your chances of success.

Equally, by doing this you could just be wasting time and missing a lot of fairly priced opportunities.
 
You could certainly include in the deal that the agent will also manage the property and top up rents to $420pw for a period of time.

That being said, you're getting $3,500 extra a year, but at what negotiation cost?
 
PM, as Propertunity says, you have been making very low offers (and trying to include unusual conditions) without success.

Just how good is your research? The fact that you are so far off the mark suggests that maybe your figures are not sufficiently accurate. 10% to 15% difference in the price range you state (around $500K to $700K) is up to $90K - a huge difference in anyone's reckoning.

You can "low-ball" all your like, but in these days of the media spotlight on real estate and values the chances of buying a property with a very low offer is slight and probably only possible with a private sale from an uninformed vendor.
Marg
 
I appreciate everyones feedback... I really do,

however, I think either ive portrayed the wrong situation or many have confused me for someone else..

Admittedly in the past few months ive made offers on 2 properties only..

yes, I admit to lowballing in the hope of getting a good deal (not necessarily the bargain of the century), especially int he current climate.

the first property, I missed out by $5k just when the deal was about to be signed.....bad luck

the 2nd one, was a severe lowball, (obviously not expecting to have a chance), I believe the advertisment asking price was severely too high, the low ball it was intented to show the agent of that I don't believe its worth anywhere near their asking price, and to find out if they have a more realistic reserve/minimum acceptance levels. The agent keeps on telling me, everytime I see/talk to him, this is over a space of 2 months, that they have an offer on the table which is basically AT the asking price, so on at least 3 occassions, to which i have suggested, they take the offer as it will be the best they will get unless you get lucky...........

....property is still unsold.......
 
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