How to approach our pre auction offer

[schmick]

Hi Guys,

Well, we've finally found a place that meets our requirements. It is due to go to auction on the 7th of November. We are wanting to put in a solid pre auction offer.

I'm wondering how I should approach this offer. The S32 was only made available today, which to me seemed strange, given Auction day is only a little more than a week away and the property has been listed for approx. 3 weeks.

Anyway, I've found out via the Agent that the Vendor's motivation is due to them wanting to upgrade their PPOR as they have just had an addition to the family. I understand they are currently looking around the Highett area but have not yet found anything.

When the advertising campaign started, they were wanting a 120 day settlement. Last week the agent advised that they would consider 60 or 90 days now to open up the property to a wider market. I'm thinking interest hasn't been has 'hot' as perhaps they maybe first anticipated. My offer will be based on flexible settlement, minimum 60 days but up to 6 months if required. Davidmc recently had some success with this. Rob has also provided me another option being shorter settlement but with an option to 'lease back' the property at favorable terms.

In regards to the offer itself, the Agent has not mentioned they would consider a pre auction offer, nor have I indicated to him that we were wanting to make one. How should I approach this? I'm thinking of just making an appointment to meet with him and have with me a fully signed, initialed unconditional contract and a cheque for 10% deposit. Would I need a cover letter attaching? Alternatively, should I have a friend call and try ascertain this information for me first?

I'm wondering which option would have the most impact?

Lastly, when is the best time to present an offer? I've read that submitting an offer at 3pm with a 7pm deadline can be useful because this is a difficult time for an agent to contact other potential buyers who are on their way home from work, picking up kids from school, or preparing dinner etc. (Source: http://www.jamesbuyeradvocates.com.au/agents.html)

I'm thinking submitting at 3/4pm in the afternoon on Thursday and having a deadline of 10am Friday. Needs to be wrapped up prior to the OFI on Saturday if acceptable by the Vendors.

Looking forward to any feedback.

 

[The Y-man]

S32 can be often very last minute.

Will your offer be unconditional?

Cheers,

The Y-man

 

[schmick]

S32 can be often very last minute.

Will your offer be unconditional?

Cheers,

The Y-man

Y-Man,

Offer will be unconditional.

Was thinking of putting in subject to building and pest, but the property is strata and strata report has come up OK (seen last 12 months minutes).

 

[Propertunity]

In regards to the offer itself, the Agent has not mentioned they would consider a pre auction offer, nor have I indicated to him that we were wanting to make one. How should I approach this?

I'd ask

 

[schmick]

I'd ask

Propertunity, as an experienced buyers agent, do want to make the call for me if I gave you the details? =)

 

[Propertunity]

Propertunity, as an experienced buyers agent, do want to make the call for me if I gave you the details? =)

Hi schmick, a couple of things:
1. I'm a licenced BA in the state of NSW - so that does not allow me to act for people in property transactions in Vic
2. I see nothing wrong with you asking the Q yourself.
Some people (not you) like to play their cards close to their chest - fair enough, but asking a REA if a vendor is open to pre-auction buying if the offer was strong enough does not give away any perceived advantage you might have IMO.

I purchased a property for a client pre-aution last week. I said to the selling agent - "Are your vendors open to selling prior to auction?"
The answer I got was :Yes, the only reason they are going to auction is that they want a definite sale and are committed to a move. They will sell but subject to auction conditions i.e. 10% deposit and you sign unconditional. (We ordered P&B, finance OK). We made a strong acceptable offer - end of story.

 

[schmick]

Hey Guys,

Just got off the phone to the agent.

Feedback, on price range not all that positive, despite my favorable terms for the Vendor. Guess I should have anticipated this given the current Melbourne RE climate.

I think I should have kept my mouth shut on what I was willing to offer though. Of course he told me he felt the Vendor wouldn't even consider my price, despite me offering him up comparable recent sales and that the offer was at the higher end of the quoted range. A positive was that I didn't get suckered in to saying that we may consider something higher.

During the call he did let on that the Vendors next purchase would be substantial. 4 bedroom home in a bayside suburb. Still haven't found anything though. At this time I did reiterate my flexible terms.

I'm still unsure on just how much interest the property has attracted. I've been to both OFI's since listing (3 weeks ago) and whilst plenty of people have been through, their body language seemed disinterested. Maybe because of the size and/or because the property feels like it's in a 'retirement' village! Haha. I also noted that nobody really engaged the agent post or during the inspections.

Hmm, what should we do from here if anything at all? I told him to mention our discussion to the Vendors in passing and he had my number if it was of interest.

Interesting also that the advert on realestate.com was pulled earlier today. Still yet to resurface, is this normal? Maybe to get peoples attention as I'm sure it will soon again appear as a 'New' listing?

Feeling very frustrated at present, moreso because this place was going to be a PPOR for a few years or so. It was much easier and pleasant buying our current I.P (former PPOR) in Brisbane! =(

 

[lccorp1997]

Hi there,

From the vendor's intention to upgrade, the property sounds like an apartment in an inner city suburb. I made a successful bid for one of those before auction about 2-3 weeks ago, so here's my feedback. Hope it helps.

My offer will be based on flexible settlement, minimum 60 days but up to 6 months if required. Davidmc recently had some success with this. Rob has also provided me another option being shorter settlement but with an option to 'lease back' the property at favorable terms.

If they can get a higher price at a 60 day settlement imho most vendors will just suck it up and go for that. So imho the fact that you are willing to offer up to 6 months settlement is not really an advantage.

Feedback, on price range not all that positive, despite my favorable terms for the Vendor. Guess I should have anticipated this given the current Melbourne RE climate.

I think right now "favorable terms" are a prequisite before the vendor will even consider the offer.

I think I should have kept my mouth shut on what I was willing to offer though. Of course he told me he felt the Vendor wouldn't even consider my price, despite me offering him up comparable recent sales and that the offer was at the higher end of the quoted range. A positive was that I didn't get suckered in to saying that we may consider something higher.

In my case, I paid above the quoted range because I was confident that if it went to auction, it would fetch a higher price. After looking at recent sales in my area, no regrets.

I guess it all boils down to how badly you want to secure it. Currently in Melbourne vendors have the upper hand and they know it; they won't consider negotiating on price because if you don't buy it, someone else will.

I feel that if your offer isn't attractive, don't bother making it - because they will just go to auction. The offer has to be able to make them stop and reconsider.

Generally if I wanted to secure it before auction would put in an unconditional offer for at least the top of the price range or slightly above.

 

[schmick]

Hey Guys,

Did any inner Melbourne people attend the auction a 9/83 Miller St, Fitzroy North today? I was travelling so wasn't able to attend...

Interested to know how it went if anybody attended...

 

[JamesGG]

Did any inner Melbourne people attend the auction a 9/83 Miller St, Fitzroy North today? I was travelling so wasn't able to attend...

I wasn't there, but the agent has already uploaded the results to the sales database.

Sold for $590k.

 

[schmick]

I wasn't there, but the agent has already uploaded the results to the sales database.

Sold for $590k.

James, thanks for the sale price...

Just out of curiosity, what database do these sales get logged to? Is this a Residex/RP Data subscription? Or something entirely different?

Can anybody get access to this?

 

[JamesGG]

Just out of curiosity, what database do these sales get logged to? Is this a Residex/RP Data subscription? Or something entirely different?

No worries mate.

I spent a year or so working as a real estate agent in a former life. Since then, I've kept my REIV membership current and still have access to Property Data Online (PDOL). That's the REIV database that most agents subscribe to and upload their data. I think that PDOL is only an insider's thing but I'm sure the other subscription services would have comparable info.

I noticed too, bye the way, that there's a three bedroom place listed earlier this week with a $580k-$630k range, just down the road from that one. Might be worth investigating...?