Does this offer letter sound reasonable to you?

S

Sunder

Hi All,

After a massive absence, I'm back and asking for advice!

Could anyone give me feedback on this offer? I know the usual process is to slightly lowball and come up, but after inspecting 12 properties including one other rejected offer, we are kind of keen to just get an offer accepted, so we're going in at what we think it's worth, rather than below.

There's not a lot in this suburb, with most selling around 3-4 weeks after listing. This house will be a PPOR, but we don't need it till Nov, with some flexibility until Dec. Of course, we would like to exchange before September 30 for obvious reasons.

Any comments would be appreciated. I am faxing this on Monday morning.


Thanks,

Sunder.

Dear Mr <Real Estate Agent>,

Thank you for showing us around all of the properties on Saturday. We especially liked Unit , number , Street, Suburb. We are keen to make an offer on this unit, however, in comparing recent sales in the same complex of units, we note that your client’s asking price is a little higher than comparable properties, with recent ones in the complex selling for between $335,000 and $378,000.

We are prepared at this time to make your client an offer of $378,000. While we understand that this might be slightly below their expectation, if I can ask you to communicate to your clients that we have pre-approval, and would only subject the offer to the standard building inspections and finance finalisation, we would appreciate it.

We understand that your client is currently occupying the premises and as we are not in a hurry, we are prepared to be very negotiable on exchange and settlement dates, whether they desire a quick sale and settlement, or wish to remain in their property for some time. However, we regret that our negotiability on price is somewhat limited.

We would love to suspend our search for property, as this property meets almost all our needs. However, to ensure that we can confidently put offers on other properties if this offer is not accepted, we would like to put a time limit on this offer at close of business, Friday the 31st of July, 2009.

I would like emphasise that this is a genuine offer, and we are not “low-balling” your client hoping they will meet us in the middle. We are prepared to courier you a deposit the same day that this offer is accepted (subject to bank opening hours).

We look forward to hearing the feedback from your client.

Yours sincerely,

<us>
Click to expand...
 
I think the basis of your offer is fine.

Would you like me to correct all the grammatical mistakes? Not that most REAs I've dealt with would notice I suppose :(

My suggestion is below. It is a bit firmer and less wordy than yours. That is just a personality thing I'm sure. REAs can't do your long sentences ;)
Also 48 hours is more than enough time for them to decide.

Dear Mr <Real Estate Agent>,

Thank you for showing us around the properties on Saturday. We especially liked Unit , number , Street, Suburb. However, in comparing recent sales in the same complex, we note that your vendor’s asking price is higher than comparable properties. Recent sales in the complex have been for between $335,000 and $378,000.

We are prepared to make your vendor a firm offer of $378,000. When putting that offer to them, please advise them that we already have pre-approval, and would only make the offer subject to satisfactory pest & building inspections and formal bank valuation.

If it will assist your vendors, we are negotiable on settlement dates. We can settle quickly so they can move on, or have a delayed settlement if they wish to remain in their property for a period. However, we have limited room for movement on price.

This property meets almost all of our needs. However, we are putting a time limit on our offer of close of business tomorrow, Tuesday, 27 July 2009. If we cannot cut a deal by then, we need to move on to other properties.

If this is acceptable to your vendors, please advise asap so that we can handover a deposit cheque and organise the signing of contracts.

Yours sincerely,

<us>
 
I agree with Propertunity. Don't leave the offer open too long and don't mention "lowballing" at all- just put the offer in.
 
Sunder

Propertunity has taken the emotion out of your letter and I think that is a good thing when dealing with business people.

Suggest also use Propertunity's letter.



Sheryn
 
Personally, I would not mention that "This property meets almost all of our needs." as this could give the vendor a slight upper hand in negotiations.

Also the term "cut a deal" is a little colloquial for a formal offer such as this. I would phrase it "we advise that, in the event that an acceptance with terms suitable to both parties is not obtained by close of business,Tuesday, 27 July 2009, this offer will be deemed to be formally withdrawn."

Just my opinion...
hope all goes well, good luck.:)

Boods
 
Hey Sunder,

Same as boods99,

If you are non negotiable on price, I would exclude the "This property meets almost all of our needs."

This may give the RE agent a nerve to start picking at, and especially if you are considering this to be a PPOR, knowing that it would be more of an emotional decision than an IP purchase.

I like the way in which Propertunity reworded as well.

Good Luck.:)

Cheers,
 
I know what the last 2 posters are saying :) The reason I actually like the phrase "This property meets almost all of our needs." (and I wasn't mine it was the OPs), is this:

It says: I'm serious but it also says it does not suit me completely and it does not tick all my boxes - so I'm on the line but I could just as easily wriggle off and find an other property which is a 100% fit for my needs.

Anyhow, it just semantics now - the offer needs to go in and let's see what happens from there.

All the best with it Sunder.
 
Propertunity said:
I know what the last 2 posters are saying :) The reason I actually like the phrase "This property meets almost all of our needs." (and I wasn't mine it was the OPs), is this:

It says: I'm serious but it also says it does not suit me completely and it does not tick all my boxes - so I'm on the line but I could just as easily wriggle off and find an other property which is a 100% fit for my needs.

Anyhow, it just semantics now - the offer needs to go in and let's see what happens from there.

All the best with it Sunder.
Click to expand...

Exactly what I was thinking.
 
Thanks Propertunity, I agree your letter is much more formal and is much clearer in conveying my points - even to me!

Faxing off now! I have set a longer date for the offer to be treated, because I know the vendor is currently in London. Other than that though, I'm using everything else.
 
Sunder said:
Thanks Propertunity, I agree your letter is much more formal and is much clearer in conveying my points - even to me!

Faxing off now! I have set a longer date for the offer to be treated, because I know the vendor is currently in London. Other than that though, I'm using everything else.
Click to expand...

It may be too late, but if it were me I wouldn't increase the time given to the vendor to decide simply because they're overseas.

In fact, I'd otherwise be sending it later in the day. With a vendor in the UK, there's no advantage to you in faxing in an offer at midday, compared to 3.30pm or 4pm in the afternoon. The vendor isn't going to have more time to consider it - it'll simply give the REA a few more hours to suss out your competition for the property.

If it were me, I'd be giving the offer to them late today (but with enough time to make sure they can get the offer to the vendor), with it exploding either tomorrow or Wednesday at the latest. 48 hours is usually acceptable, but if the vendors are in the UK they will probably need to make a decision on it by the start of business on Wednesday (our time). This means there's only a day for the REA to suss out alternate offers. Put the pressure back on them. Don't give them the rest of the week.
 
The offer was actually rejected, they want $390 minimum.

I told them I would talk it over with my fiance, but most likely will be making other offers before considering making a counter offer.

If I make a counter offer, where should I go from here?
 
I suggest you put your best & final offer next and make it clear that if this is rejected you have to move on to other opportunities.....and mean it ....don't look back.
 
I might wait a month, and maybe increase the offer $5k, and as you said, make it absolutely clear it's a final and best offer, rather than have a bit of wishy washy language.

In the mean time, there are some apartments around $420 that are a little nicer that if I could get down to $390, I'd be more interested in.

I'm thinking nobody accepts a first offer, so my strategy of telling them my first offer was firm was probably a bad one.
 
Sunder said:
I'm thinking nobody accepts a first offer, so my strategy of telling them my first offer was firm was probably a bad one.
Click to expand...
As Propertunity said, telling them it's a final offer is only a good strategy if you mean it, otherwise you've lost your negotiating power. :)
 
Really? There's no law to say you can't go back and make another offer, even if you said the last one was firm. You might lose credibility in that they might not believe you when you say the second offer is final but that's up to them to take that risk. I made an offer on a PPOR I REALLY wanted but pointed out a negative thing to try and get it for less, so put in an offer $15K less than they were asking and said it was all I'd offer. They rejected it, the agent said they wanted closer to asking price (which was comparable to other sales in the block) and I hesitated to see how he'd react. Finally I got it for just an extra $2K (on a $360K property this is loose change), and SO glad I did (knowing what I know now, I would even have gone up to what they asking).
 
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