I put an offer and have agent come back 9k higher - need some opinions

Hi all,

I'm back from holidays and putting offers again.

I put an offer on a 3 BR villa in Sydney's West. The asking price is offers around $245,000. I put an offer of $230,000. This is based on the most recent sale of a renovated villa in the complex for $230,000. Albiet the one I am looking at is more modern than that one. This property has been on the market for a few months now. According to the agent, the vendor's liabilities are greater than what I am offering. RP Data suggests vendor (who is owner occupier) purchased it for $218,500. This is a retiring couple. The upside I see is that this is probably the best villa (internally) in the area on the market right now. As well as there are other 3 BR villas (unrenovated) listed for $250k+.

The vendor was naive enough to tell me that they bought it in this renovated condition 8 years ago. While the agent was trying to market as if they had spent a lot of money renovating the place...

So the agent has come back with $239,000 and again re-iterated their "liabilities". It's not much of a benefit to me to offer much higher (may be slightly more than what I already have) as the property will be quite negatively geared.

I have told him that I will call him after 7pm. I am considering doing my numbers and possibly offering another $900. Feeling a bit stingy about it. But negotiation is part of the game...

I'm also open to offering them 4 weeks settlement (of course once I have my bank contact agree to this)

Any suggestions? Comments?
 
I called the agent to increase the offer by $900 along with favourable settlement terms to the vendor.

The agent was pissed off and said he had another offer of $232,000 which has been rejected and the best they can do is $235,000. He shut the phone saying "it's now in your hands". :cool:

He also said that they had "Refinanced" and hence have greater liabilities. How is it possible to "refinance" a property purchased at $218,500 and now is worth around $230,000?
 
Well if they paid 218k eight or so years ago 235k seems like a good buy.

Then again if it is negative geared it may not be best for your portfolio.

It doesn't seem to be a settlement timeframe issue but rather price due to their liabilities.

Where are the couple going once they sell? Maybe they could rent back to you (which would make your lower offer more attractive than others)

Or if they haven't found another place to live a longer settlement would be beneficial to them (and you as prices go up over time).

Ask the agent those questions when you speak to him - or better yet explain the situation to the vendors and perhaps you can work out an arrangement.

Vendors are not businesspeople generally so they don't care as much about money sometimes - and so if you can understand their needs and give them what they want/treat them right, you may get a few $k off or better terms/conditions (i.e. maybe a higher price for all the furniture etc...)
 
*snip*
According to the agent, the vendor's liabilities are greater than what I am offering.
*snip*

IMO, this is not your problem. If they can find someone to pay what they need to "cover their liabilities", then good luck, but you should not come up UNLESS you can justify the increased price (say it's at the top of your range, but still a good buy - don't miss out for the sake of a few ,000)

JWR makes some great suggestions, too. You may prefer to negotiate on terms rather than price.
 
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JWR, they are moving to Central Coast to live with their daughter. She has built a granny flat for them.

How do you know it may not be best for MY portfolio. Hehe.

No body is treating them poorly. They can accept the better offer - IF there is any. Why isn't the agent communicating with the $232k offer? Why should I have to consider the agents fee.

Wobby, you are right. I will discuss with my family. Possibly meet them half way on $234,500.

Also, it kinda defeats the purpose of buying "below" market. Though I have to admit, lots of similar UNRENOVATED properties are listed for $260-$270k....I'm after built in equity or willing to get sweat equity. Don't want to regret not doing that AND don't want to regret missing on the deal for a few ,000.
 
There will always be other opportunities if that's what you are worried about.

I would NOT offer more for nothing.

I'd go to the vendor direct and speak with them. They probably don't need as much furniture as current if they are moving into a smaller place and probably won't even want it all - so get some of that.

Looked the house up on re.com and found it (only joking - the fact it is -ve geared leaves me concerned - though maybe depreciation makes most of it back?)

Regardless of other offers or not - if they NEED more money they won't accept your offer - so for you to go up you need something in return. But I am sure they don't need it as their children can pay the few k.

Most important thing is speaking with them directly
 
The agent has lied,
"The vendor was naive enough to tell me that they bought it in this renovated condition 8 years ago. While the agent was trying to market as if they had spent a lot of money renovating the place..."

You can safely assume there other lies.
The Vendor's liability, is the vendor's problem.
Offer the property's value to you, and give 24hours
 
I called the agent to increase the offer by $900 along with favourable settlement terms to the vendor.

The agent was pissed off and said he had another offer of $232,000 which has been rejected and the best they can do is $235,000. He shut the phone saying "it's now in your hands". :cool:

He also said that they had "Refinanced" and hence have greater liabilities. How is it possible to "refinance" a property purchased at $218,500 and now is worth around $230,000?
I


In the peak of the market that place may have had a nab vakuation of 260 or more

90 % of that and u can work it out.....


Ta
rolf
 
Don't think speaking with them directly is possible.

Also at the moment negative gearing does not concern me. I want a few in metro before moving towards cashflow. The capital growth/equity in these will help buy others...It's a snowball effect.
 
I don't think where you are buying is considered metro - but maybe I am wrong? I'm assuming around Mt Druitt - and you can get cash positive there if you look hard (often needing a granny flat out the back)

How did you speak to them in the first place - do it again!
 
So a retired couple with liabilities greater than their house value. Perhaps they don't have the income to pay the mortgage. Perhaps it really is a time issue after all.
 
Well you know where they live :p so knock on their door.
^Ditto^

Very often in our purchasing,
the agent has not communicated the offer to the vendor,
has no other offer,
lies to try get an increase (to the amount they promise the vendor).

Talk directly to the vendor
get an agent in to estimate, they always promise exorbitant $$amounts​
 
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I talked to my property manager and a few others who suggest that it's an okay price - though not much equity in there. Thanks for the suggestions, I'll see what I can do.
 
Well you are not trying to get an ok price you are trying to get a great price so you can get into the next property more quickly.

I'd be giving this one a miss personally - maybe get a house in Emerton/Whalan etc... for 200k with reno needed and put a granny flat out the back.
 
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