Is the agent just trying to get more money for the owner?

[Jake Milne]

What's the average discounting for the suburb?

At 630 it's a 3.1% discount from the quote... at 615 it's a 5.4%

If the average discounting is only 2% in that suburb then, generally speaking, you've done well... If it's 7% then maybe try harder... These are just general rules of thumb and can be good guidelines butaren't the best for specific examples though.

Like others have said it's really about comparable sales. If similar properties in the same or neighbouring streets are all selling below the 630 mark then it's really risky paying that amount. If there are a mixture of results and properties in same/similar condition, land size, etc are selling for more then increase your offer.

There's nothing wrong with walking away from the deal, another one will come up... There's also nothing wrong with paying a little bit more than you originally intended if the property is going to be worth it in the long run...

 

[gottabespotless]

Move on and continue inspecting and making offers on other properties... and let the agent know that you are doing so. If you truly believe that the property is worth only $615 000 and that's all you're prepared to pay for it AND the vendor won't accept this then... move on - if the agent continues to call re this property, be firm with your $615 000 offer - if it still hasn't sold in a few weeks, go back and offer again but learn to walk away.

 

[mattysavager]

Does the agent know that you have been staking out the opens and continue to show interest in the property? The fact that you continue to take his calls and continue to be open to negotiations would indicate to him that you have not reached your 'walk away' price.

If he senses the above, then he knows you are keen. You have already bumped your price up 15K without too much hassle, and the agent/vendor may suspect you have more money in your back pocket. Some buyers in your position would then go to 625K after their 615K is refused.

The agent might be feeding you BS about the number of inspections on weekdays and other offers/expressions of interest - or he might not.

The point is that you don't know, so you make your best and final offer. As you have clearly not 'walked away' at $630K, the agent/owner thinks you have not reached your limit.

If you have reached your 'walk away' price, then walk away. If you don't walk away, and continue to hover around, then the seller is unlikely to accept your offer of 615K.

Also, (and I'm definitely not saying that this is the case here) it seems that many buyers have this idea that they make an opening offer, and then the buyer and seller both come down in equal increments until they meet in the middle. This almost never happens. Someone else might come along tomorrow and offer them 660K.

This notion is especially false in the current Brisbane market, as most 'experts' are expecting a turn around in the market, and we are seeing buyer levels rise. Owners also are privy to this 'expert' information and don't love to discount in a 'seller's market'.

Just my $.02. Matt

 

[fullylucky]

Does the agent know that you have been staking out the opens and continue to show interest in the property? The fact that you continue to take his calls and continue to be open to negotiations would indicate to him that you have not reached your 'walk away' price.

If he senses the above, then he knows you are keen. You have already bumped your price up 15K without too much hassle, and the agent/vendor may suspect you have more money in your back pocket. Some buyers in your position would then go to 625K after their 615K is refused.

The agent might be feeding you BS about the number of inspections on weekdays and other offers/expressions of interest - or he might not.

The point is that you don't know, so you make your best and final offer. As you have clearly not 'walked away' at $630K, the agent/owner thinks you have not reached your limit.

If you have reached your 'walk away' price, then walk away. If you don't walk away, and continue to hover around, then the seller is unlikely to accept your offer of 615K.

Also, (and I'm definitely not saying that this is the case here) it seems that many buyers have this idea that they make an opening offer, and then the buyer and seller both come down in equal increments until they meet in the middle. This almost never happens. Someone else might come along tomorrow and offer them 660K.

This notion is especially false in the current Brisbane market, as most 'experts' are expecting a turn around in the market, and we are seeing buyer levels rise. Owners also are privy to this 'expert' information and don't love to discount in a 'seller's market'.

Just my $.02. Matt

Good point. The venders just came down on their price. $625k signed.

Should I accept or stick with my original $615k?

The agent is saying the vender has come down, meet half way.

half way between 615 and 635k is 625k.

This weekend is the vender's last open inspection (3rd one). If there is low turn out will the vendor sell cheaply?

I should have ignored the agent's calls... but I find it a bit rude. the agent is calling me all the time.

I read a book on negotiations it's never good to say this is my final offer.

So far I have given inital offer of 600k and increased it to 615k.

 

[BayView]

Yes, in contract!

the owner has also signed but put $635k.

Agent says now owner will accept $630k

I have moved from $600k to 615k.

Historically no house in the street and next few streets have sold for higher than what I have offered. Other houses in the area that is closer to the bus stop/shopping have sold for less last year.

I think I gave the owner a really fair offer.

If I was the Vendor I wouldn't think $615 was fair if I was asking for $650 Plus.

I would think it is a bit of an insult and tell the agent to tell you to go away and not waste all our time.

If the owner has seen other similar houses sold for the figure he wants, then he won't be dropping much.

What is the place really worth?

 

[willair]

.

So far I have given inital offer of 600k and increased it to 615k.

That was your first mistake,make one offer and stand by it,tell the agent also your are about to make another offer on paper on another property and watch their face to see the truth,because anyone that thinks Brisbane is about to go gangbusters again is pi##ing into a high speed star delta fan..

 

[Andrew_A]

...
I read a book on negotiations it's never good to say this is my final offer.

So far I have given inital offer of 600k and increased it to 615k.

Which book said that?

I'm always saying this is the final offer, good to be able to mean it as well as usually you will be prepared to walk away or offer on another property, have a time deadline as well can help.

Remember it's really your final offer.. for the moment, things can change in a few days or week but there can be power in saying no and meaning it

 

[Peterw]

I find the comments about the value of the property interesting. Generally, no 2 properties are identical, they will have some differences. Looking at comparable sales, does not always give you the answer either. When a sale is recorded, you never see the terms and conditions of the sale. On one sale, the terms may have been ideal for the seller, so they may have given a bit to close the sale. The next sale, the terms may have been more suited to the buyer, so they may accept the sellers position. In recent times, I have even seen valuations done by registered valuers quoting a "range" rather than a fixed figure. The ranges have be roughly at 5%. Your negotiations put you at approx 3% apart, so in my mind, that is a relatively small range. When one of the parties tries to take the higher ground, then more often than not, things will not work out, however when both parties act reasonably, both get the outcome that they want, and can move forward. I cannot tell you how often, we have either no buyers or just one, and then out of the blue we get more. Time may not be on your side. Just my 0.02 cents.

 

[fullylucky]

That was your first mistake,make one offer and stand by it,tell the agent also your are about to make another offer on paper on another property and watch their face to see the truth,because anyone that thinks Brisbane is about to go gangbusters again is pi##ing into a high speed star delta fan..

This is my first IP, so I have no exp but just wondering what is your background? Are you a pro investor? why do you think Brisbane won't go gang busters?

I think interest rates will go down making getting loans easier and cheaper thus the demand to buy houses will increase. An increase in demand = increase in price and increase in quantity traded. Economics.

 

[fullylucky]

Which book said that?

I'm always saying this is the final offer, good to be able to mean it as well as usually you will be prepared to walk away or offer on another property, have a time deadline as well can help.

Remember it's really your final offer.. for the moment, things can change in a few days or week but there can be power in saying no and meaning it

I forgot which book but it just says for negotiations it's never good to say the word final. From both sides... since it kind of agros the other side makes them hostile and not want to sell or buy to / from you.

Try to look for win-win situations even thought the deal is a win lose negotiation. like change settlement date long/short, include other fixtures etc.

I didn't easily increase from 600 to 615k. Made the agent and owner work for it.

I really feel i have given them a fair price. above what other houses, (better location, same area.) I put myself in their shoes and I would accept my offer...

I'm seriously thinking if they don't accept i won't buy. Ill just buy another IP or not buy at all.

 

[willair]

This is my first IP, so I have no exp but just wondering what is your background? Are you a pro investor? why do you think Brisbane won't go gang busters?

I think interest rates will go down making getting loans easier and cheaper thus the demand to buy houses will increase. a increase in demand = increase in price and increase in quantity traded. Economics.

lucky,just having difficulties understanding your question,if this is your first ip ,then why post some crying game story about bed bugs in your rental property??..
Myself i think rates will go the other way,and more quickly then most think as for the investor elite means stuff all to me,everyone has a explosive force within them to be unleashed into the investment world with or without "OPM"..

 

[fullylucky]

I'm not trying to be rude just wondering why you think property won't take off.

I live with my tenants as my current PPOR is catered for dual living.

I wasn't crying a story just wondered what other people's thoughts are on the matter.

I think interest rates will reduce because looking a the fix rates they are lower than the std var rates. I think the banks are not stupid. They won't be offering services that will cut into their own profits. I'm sure they have a team of economists that advise them how the interest rates will change and their risks. Based on that advise they come up with the fix rate values.

 

[alexlee]

Banks fund their fixed rates using fixed rate funding.

Rates going up or down don't affect their profit margin (though it affects volume).

You can't predict future variable rates using the fixed rate. The yield curve can flick around like a snake on PCP.

 

[SRB]

If you are taking the agents calls then you are still interested. I suspect you will lift your offer because you aren't prepared to just walk away for real. And if the agent is chasing you, he has picked up on that.

Be direct ... tell the agent the price is 615k, the offer is good for a week and after that dont call me and stick to it, even hang up on them. You make your profit when you buy a property so be disciplined especially with an IP. If its only worth 615k to you then move on and be clear to the agent you have.

Negotiating - a good saying I heard is that whoever makes the first offer in any negotiation loses. That's why I despise "contact agent for price" listings in this slow market, rarely do I even bother looking at them. It just smells of a vendor dreaming. If the property is way over priced, then lowball or walk out, if its well priced, put your value on it and offer close to it but be prepared to walk.

If I find a place I like I ask the agent for comparable sales in the area, and to justify asking price, after all, they have already delivered that sales pitch to their vendor so they know the answer. If they can't, I walk. Good agents don't take you for an idiot, they do what they can to help you meet what their vendor wants and if they can't, its probably because they know the vendor is off the planet. Its a slow market, therefore, buyers hold the advantage so use it.

 

[kero]

i must say lucky, you have got some heavy weight members here contributing to the thread.

not in the slightest rude manner, are you having cold feet with the purchase? i remember when i first bought my first property. i was asking a lot of what if this and what if that question.

 

[fullylucky]

I'm still interested in the property, I don't have cold feet.

I gave the vendor a deadline of 3 business days with my offer.

I stood by my offer of $615k. Just waiting on what they will do.....!

 

[fullylucky]

I just signed earlier tonight.

The final price was $718k

Also every time I mentioned $600k I mean to say $700k throughout this thread.

I just didn't want to use the real number.

So in conclusion:

Advertised price: $749k+
Initial Offer (B): $703k
Counter (S): $730k
Counter (B): $715k
Counter (S): $725k
Counter (S): $720k
Counter (B): $717k
Counter (S): $717k

 

[alexlee]

In a lot of ways, this is still only the first step. Have you done pest and building inspection yet? Then you have to finalise the loan and hope the valuation comes in where you want it. Line up a quantity surveyor. Get insurance starting now. Then there's that dry pool in the back yard.

 

[fullylucky]

In a lot of ways, this is still only the first step. Have you done pest and building inspection yet? Then you have to finalize the loan and hope the valuation comes in where you want it. Line up a quantity surveyor. Get insurance starting now. Then there's that dry pool in the back yard.

I got pre approval for 600k loan from CBA. I have the deposit ready. I have to redraw it out of my existing home loan... I worked very hard to pay it off now it has to come out

I am going to take tomorrow off work.

I have alot to learn. I was hoping people on this forum can help me and walk me through it...

The agent gave me a sheet of paper with BSB and Acc number. And the deposit amount but he didn't fill out the property address?

If I just transfer him the money he won't say he didn't get it?

Also the agent said I need to give him my solicitor's details? How do I go about that?

I haven't done pest and building I think I have 14 days to do that.

And 21 days for finance.

 

[Rolf Latham]

I have to redraw it out of my existing home loan... I worked very hard to pay it off now it has to come out

umm maybe you should speak with a tax adviser ??

ta
rolf