Hi I'm thinking of making an offer on a property that calls for an expression of interest. Being a newbie, I thought someone might be able to enlighten me on the best approach. The real estate agent has told me that I should put in my best offer and then on the closing date he will present the vendor with all offers submitted and work through the pros and cons of each. He has told me that he would expect the property to sell for high 3's to low 4's. he also said I can make a verbal offer, but a written offer is best if I am seriously interested. The property is a beachfront and they rarely come on the market, so it's hard to estimate its value. Someone has made an offer, but the vendor hasn't accepted it - suppose he's waiting to see what else comes up. Any advice? Thanks.
expression of interest ...
- Thread starter onthebus
- Start date
EOI puts all of the onus on the Buyer to know what the property is worth.
If you are serious, my only suggestion is to put in the hard yards to find out what it is truly worth.
If you want the easy road, and rely on what the agent says, then it's not realistic to expect a good outcome for yourself.
If you are serious, my only suggestion is to put in the hard yards to find out what it is truly worth.
If you want the easy road, and rely on what the agent says, then it's not realistic to expect a good outcome for yourself.
I'd see what others have sold for and offer less.
Another way would be to look at rental yield.
eg, you find out what the rent is x52 and then divide by the asking price. The higher the % the better the deal is.
Being beach front they could be expecting a premium price. Being close to the water you should consider that it could have a higher than normal maintenance and rental could be seasonal.
Don't get carried away and offer too much and also leave some money on the side in case the bank values it for less and doesn't lend you the amount you're asking for
Ignore everything the agent says about other offers.
If you are interested, put in your offer and make it valid for 24 hours.
Neighbour-over-the-back sold their house by tender (a similar process). Around 10 days before the closing date they got a good offer on paper, the agent talked the buyer up $25K and the contract was signed the same day by both parties. So much for the process...
Marg
If you are interested, put in your offer and make it valid for 24 hours.
Neighbour-over-the-back sold their house by tender (a similar process). Around 10 days before the closing date they got a good offer on paper, the agent talked the buyer up $25K and the contract was signed the same day by both parties. So much for the process...
Marg
You say this is your best & final offer with a deadline for acceptance.
If they say 'no thanks', your offer is withdrawn and you walk away to something else. No going back - that way the REA/s know to take you seriously the next time/s you say it. There will be others.
Hello OTB
Welcome to the forum
I'm a bit concerned about your phraseology here
An ‘Expression of Interest’ is a process to enable the Agent and the Vendor to determine if there is genuine interest in the property, and if so, in what price range. If it flushes out some Red Hot leads, so much the better!
An ‘Expression of Interest’ campaign is NOT a call for 'Offers'
You say that the Agent has advised you to 'put in' your best offer. Why?
If the Agent is taking written 'Offers' by a 'closing date' then this is more a 'Sale By Set Date' marketing campaign
Perhaps this is yet another example of the corruption of the language - Expression of Interest sounds like a cute phrase, so let's use it for just about everything - whereas 'Sale By Set Date' is a formal process involving Contracts
It might be a good idea to get a written explanation from the Agent as to what campaign is actually being run
Regarding making offers - the ‘Sale By’ campaigns can produce quite surprising results. One of my local Agents used this process for a few years but seem to have abandoned it lately. I made an offer on a property once by this method but would not do so again. I felt that I was boxing blindfold and resented being put in that position
However, as the prospective buyer, keep Caveat Emptor firmly in mind. If beachfront properties do not come onto the market very often (and there aren't all that many so they don't), and if you want the property, you will have to be prepared to pay for your desire
I bought at auction twelve months ago. I knew the area quite well and had decided how much I was prepared to pay for the opportunity for me. To my surprise, although I certainly paid a fair price, I paid well under what I had been prepared to pay.
Twelve months later, the property has forgiven me and is now worth at least what I paid plus costs
Sometimes, we can negotiate for a 'bargain' that is, go bargain hunting and either get the most bang for our buck, or negotiate well under the asking price or under the expected market value for a targeted property
But occasionally, there comes along that ‘One In A Hundred’ property and it is worth being bold to win the prize.
Bold does not mean foolhardy.
You mentioned that the Agent has said 'high 3's to low 4's'. Would you be prepared to pay mid 4s for the property, for the opportunity?
If not, why not?
At time of buying, you are the market. Fair Market Value is what you are prepared to pay for it. If you are prepared to pay $300,000 or are prepared to pay $450,000 that is your business and you will have your reasons for it.
Three months after I bought the property at Auction, we attended another auction in the next street, and I watched as the white-knuckled buyer just bid and bid until he got what he wanted. Did he pay over the odds for an asbestos covered knock down job? Who cares! He bought a great opportunity a step through to the sand, a place to build a lifestyle, not just a house.
So, OTB, think about what you are buying and why. If you are buying your own future lifestyle, that is worth $50,000 more to you than buying a yield and a deprecation allowance.
Beauty, as they say, is in the eye of the beholder
Value is in our own perception. People (friends and family) were appalled at what I paid for my opportunity but hey! It’s my opportunity and Mike and I will be as smug as bugs in a rug when the new house is built.
If this is your opportunity, go get it
But make sure you check and confirm what is actually happening first!
Cheers
Kristine
expression of interest, pricing & simultaneous settlement
Thank you so much for your reply Kristine and everyone else who posted. Lots for me to think about. Yep, it is a lifestyle choice, this one, and if I was successful, it would be home forever...
a couple of other questions... on real estate.com, and on the agents website, the property is sandwiched in between one property thats advertised at 300k and one at 365k - does this give any indication of the price? I'm curious because the agent told me high 3's to low 4's...
In order to be able to buy this property, I would have to sell two others and all 3 (my two that I've sold and the one I'm buying) would have to settle on the same day... has anyone done this and do you have any tips to keep your sanity during the process? (using portability with my current loans is the only way I can do this). I'm with CBA
Thanks again
Thank you so much for your reply Kristine and everyone else who posted. Lots for me to think about. Yep, it is a lifestyle choice, this one, and if I was successful, it would be home forever...
a couple of other questions... on real estate.com, and on the agents website, the property is sandwiched in between one property thats advertised at 300k and one at 365k - does this give any indication of the price? I'm curious because the agent told me high 3's to low 4's...
In order to be able to buy this property, I would have to sell two others and all 3 (my two that I've sold and the one I'm buying) would have to settle on the same day... has anyone done this and do you have any tips to keep your sanity during the process? (using portability with my current loans is the only way I can do this). I'm with CBA
Thanks again