Thank you everyone for very helpful advice.
I do not want to annoy the seller as it will not be help us get the property.
The property is advertised for 799K but we only want to offer 750K. That is our max.
Offering say 720K - 730K sounds too low and I feel it might annoy the seller.
The agent asked me if that was my first and final offer. I simply said that is how much I am willing to pay.
That approach is perfect , and at that stage if the agent asks if you are prepared to pay more I would have just repeated what you said . If he pushed further you can keep on repeating or you could add something along the lines of " at this stage I'm not sure , we're looking at other properties and it's a matter of where we see the best value " If you're going to come back and make a higher offer I wouldn't say you're going to do that but I wouldn't say this is our one and only offer or our best and final offer , If you say that then the agent can repeat that to the vendor and use that as an excuse to not contact you if they get another offer . If I'm still interested in a property I'll always try and keep the communications open with the agent .
If it's a property that you don't have an emotional connection with and it's just an investment and there's alternatives and you're not going to come back with another offer then I'd have no problems saying that It's my one and only offer . We have done this in the past and in a way you can condition the agents into the fact that you only make one offer and in reality it's a good learning exercise .
In 2001 when we bought the PPOR we're just selling we went round making offers that we could afford on properties we couldn't . While we didn't end up buying any of those , it was interesting to see how much some vendors would drop and come back with low counter offers . It was interesting noting how we reacted to making really low offers ( we hadn't done it before ) , watching how the agents reacted to that , how they'd try and talk you up , sticking to your position , saying " unless the vendor has told you otherwise you have a legal obligation to pass the offer on " and seeing what happened afterwards.
That experience did pay off was post GFC when we bought two units in Mosman . Asking price was 1.275 ( fair market price probably 1.1 - 1.2 ) . we offered 800 K ( for the two - a one bedder and a two bedder ) and ignored the agents comments and stuck to our position . Agent came back with they won't sell for below 900 which we were happy to pay . A one bedder , same layout , two levels up recently sold for 750 ...
What ever the agent tells you , you really can't believe the full extent of what they tell you . They have an obligation to tell the truth but there are many ways to spin that truth or leave out relevant interest .
eg we have several other parties interested in the property may well mean at the first open four people where interested enough to inspect it
The seller is an elderly man with few IPs. He is serious but not desperate to sell.
May mean he's a smart investor and is withholding the truth from the agent He is desperate , he's got all his portfolio up for sale because he's son's been an idiot and dad needs to raise 100 K to give to his son so his doesn't go bankrupt . Which ever property gets a half decent offer he'll sell and then take the rest off the market .
Supposedly around 1/3 of sales are stressed and many of those won't tell the agent .
When we sold our PPOR we weren't stressed , We had it on the market twice and on the first occasion went with the standard type of add , took it off and went back with " motivated vendor , has bought elsewhere " . Supposedly the market was weaker when we went back but with the change in add we had double the numbers going though . We were motivated ( to get as much money as possible ) and we had bought elsewhere (in the preceeding 18 months we'd bought four IP's and a downsizer ) . That wouldn't have been the interpretation most people would have put on the phrase " motivate vendor , has bought elsewhere " but it was the truth .
Work out what your position is and stick to it . Most people expect the first offer won't be the only one. For some serious investors it's almost like a game , trying to get a bit more out of people .
Prior to Christmas is a time where both vendors and buyers want resolution .
The problem now is I have mentioned my best offer to the agent.
He hasn't written the letter of offer yet.
.
No Problems ..
We reviewed our financial situation and realised that $ ... is in reality more than we can afford / prepared to pay . We think it's worth ( what they're asking ) but we can't afford that .
We saw another property which we think is a good alternative , we prefer yours but have reviewed what we're prepared to pay at this stage
We've been watching the market for a while and in reality we think $ is more than it's worth . this is and investment and we don't want to over pay.
or just pretend you didn't mean it . " Oh did I say that ?? ...
or the BEST EXCUSES !!! my wife's thinks that's over the top . I really like the property and think its worth that , but she doesn't think it's worth that and we've agreed we both have to agree . ( good cop , bad cop !! )
My wife always uses me as an excuse when she's talking to agents and vice verse
So much to learn (through practice).
I'll do better next time.
Spot on .. I cringe when I remember how we handled the first offer we made ...
It's a learning process and asking questions here is the best way to speed up the process.
Cliff
