Low Bidding

B

Belu

How low is too low?

Really, it is a buyers market at the moment. My max to spend is $265k, and I am starting to look at options where people have had the add up a while and are asking for high $2's, so around $280-290k.

Do you think coming in at say $260k would really throw them off? Talking private sale of course, not an auction.

Also, if my upper limit is $265k, should I come in a bit lower at $255k, so if we get to that $265k it looks like I have lost out a bit to the deal?

As always, thoughts and comments more than welcome :)

Cheers

Ben
 
Nothings out of the question, They just laugh at you or accept your offer.
From what I understand sale prices are averaging 6%-8% below asking price and is on the increase.
If you want to end up at $265k I'd definately start well below and give yourself room to move.

If $265 is 6%-8% below asking then you could safely start looking at $282k-$288k or more if you like. I think there are more and more people making lowball offers now and its only going to increase. Most of these people would bank on 1 in 20 being accepted. So start lowballing, sooner or later you'll get a nibble
 
shady said:
Nothings out of the question, They just laugh at you or accept your offer.
From what I understand sale prices are averaging 6%-8% below asking price and is on the increase.
If you want to end up at $265 I'd definately start well below and give yourself room to move.
Click to expand...

Agreed.

One of my IP purchased in 2005 was advertised for $207K, and having done some research on the past sales around 1/2 km radius of the target property, I thought, I should start my offer on a very low starting price of $175K.

One day after the offer was made on the contract, I nearly fell off my chair when the seller's REA came back to say that the offer was accepted. I was subsequently informed that the bank valuation of the property was $185K.

There is no such thing as too low a price, just the exercise by buyer and seller to find the mutually acceptable price.

Cheers,

LC
 
I've offered under the asking price on all 3 houses I've bought/buying without people calling me a raving lunatic (you'll have to excuse the really small numbers, put zeros on the end if it makes you feel better). First for sale at $55k, offered $40k, they accepted $42k. Second for sale at $27k, offered $25k, they took it (should have offered $20k lol - I was specifically looking for a house between $15-20k at the time). Third for sale at $76k, offered $60k, they took $65k. Should have kept the first one ... it was 10 mins out of the Adelaide CBD, but I sold it in 2001. Cest la vie.
 
Usually I will base on what I think the property is worth, regardless of what is in the advertise.

Lets said the property advertises 280k+, and my estimate is 260k-280k, depend on the vendor's conditions, I may start off at 260k or 270k, put the price in too low is seemed to waste everybody times, and you may miss out the chance. IMHO....:p

Now if the property advertises 350k+, and my estimate is 260k-280k, I will try to find out if the vendor will stand firm around that figures, if yes, simply leave it and move on, don't waste time, if no, apply the first scenario....:D

My 2c.

Super.
 
Put in whatever offer you want.
In my area of Ipswich atm there are few buyers and getting ANY serious offers from them are few and far between.

I listed one of mine high for a start at $285k to see what interest there was. There have been open house viewings regularly and good advertising. Every fortnight I reduced the price until finally I got one offer. We haggled and the house is now under contract for $235k. Thats around 18% reduction on original asking price. (My rental assessment is $220 pw.)

At the start of listing, I would not have considered the offer, but after weeks of listing with little interest it was the best offer and it was on a contract, not merely a verbal promise.

There was competition of a house across the road which has been trying to sell for the past year. They have suddenly become quite negotiable on their asking price also.

Make your offers, but be finance approved first and be prepared to put your offer on a contract. Even insist on it for the agents who won't consider your offer. It is the seller who makes the final decision, not the agent.
 
I have pre-approval but it would still hinge on the valuation. Do I put down subject to finance or subject to valuation?
 
This morning looked at a prospective PPOR listed with a price range of $499k-$539k.

In a few days we will look at offering $480k & subject to the sale of current PPOR. There is a fair bit listed in that area but it is selling slowly, if at all. Places around my PPOR (next suburb over) are still selling ok at this point in time.

The current owner purchased in March last year for $470k and are selling 'due to a change in family circumstances' whatever that means?
House has been listed for 2 weeks on Monday. They will want more than $480k but at this stage I can still walk away from it if need be (although it is the almost perfect house for us).

I dont care if this offer is out of the range (discussed this on another thread) worst the owner can do is laugh & say no.

Cheers
Stella
 
Last edited:
Family breakup ? That would definitely be a change.

Job transfer. Everything I can think of means motivated vendor.

Stella said:
This morning looked at a prospective PPOR listed with a price range of $499k-$539k.

In a few days we will look at offering $480k & subject to the sale of current PPOR. There is a fair bit listed in that area but it is selling slowly, if at all. Places around my PPOR (next suburb over) are still selling ok at this point in time.

The current owner purchased in March last year for $470k and are selling 'due to a change in family circumstances' whatever that means?
House has been listed for 2 weeks on Monday. They will want more than $480k but at this stage I can still walk away from it if need be (although it is the almost perfect house for us).

I dont care if this offer is out of the range (discussed this on another thread) worst the owner can do is laugh & say no.

Cheers
Stella
Click to expand...
 
Stella said:
House has been listed for 2 weeks on Monday. They will want more than $480k but at this stage I can still walk away from it if need be (although it is the almost perfect house for us).

I dont care if this offer is out of the range (discussed this on another thread) worst the owner can do is laugh & say no.
Click to expand...

2 weeks isnt all that long. Wait 6-8 weeks and if its still on the market you might be pleasantly surprised, especially if the marketing period hasnt been all that successful.

Not caring if the offer is accepted puts you in the drivers seat, Just where you want to be.

Good luck
 
Belu said:
Do you think coming in at say $260k would really throw them off? Talking private sale of course, not an auction.
Click to expand...

No....unless you are looking at one of my propoerties on the market, in which case I strongly urge you to come in at the highest possible amount of money, even to the extent of selling off other assets.... :D

Cheers,

The Y-man
 
Hiya,

The other thing to remember, mate, is that price is only part of the equation.

See if you can find out what the vendor wants. Asking the agent is probably the easiest way to achieve that goal.

The agency that I used to work for would almost always get at least two or three simultaneous offers on every property for sale. I learned very quickly that the one with the most cash on the table wasn't always the one that got accepted; rather, the terms of the contract often had more bearing on the outcome.

Settlement timeframes, finance clauses, lease-backs, building / pest inspections, etc. All make a difference. So if you know what terms the vendor wants, you might be able to succeed with a lower price.

Or, vice versa.

Good luck mate. Great to see you're ready to take that plunge and get into the market :D

Cheers

James.
 
Belu said:
I have pre-approval but it would still hinge on the valuation. Do I put down subject to finance or subject to valuation?
Click to expand...

Hi Belu,

I have enjoyed reading your posts over the past year. It is great to see someone become interested in property while they are studying, save up a deposit, and then be in a position to buy when they obtain their first job! :):D

Your stars must have aligned. The sun (or something) is smiling down on you!! Last year we were in the middle of a massive bull market. (In Melbourne anyway) Now we are approaching a downturn - great news for you!! :D

Some vendors still think we are in 2007. Watch properties on the net. Watch for subtle signs of desperation. The asking price may drop after a period of 4 or so weeks. Initially it will only drop slightly. Then it will drop again!!! Vendors will become more realistic. Don't buy then. Wait until the vendor is screaming in desperation for you to buy their property! (Basically they will sell at any price just to get rid of it!!).

Watch the agents. They are cagey. Try to extract as much info as you can from them. Befriend one or two. Don't tell them too much about yourself. (Especially financial details) You will obtain more information about vendors that way. Agents are also becoming desperate for their commissions. Commissions are beginning to dry up because stock is just sitting on the market. Oh dear!!:eek: (Great for you though!)

Take your time Belu. Don't be hurried!! Speak with property managers about good areas with reliable tenants. Some areas within suburbs attract great tenants, others don't. Pretend to be a prospective tenant. Go and inspect properties with pm's. Etc

Regarding conditions:

Put in lots of conditions in case you want to exit!!!! (You have a 3 day cooling off period in Victoria though and you don't have to give a reason at all to exercise this.) (Check the contract though just to make sure - don't take my word for it here, although I think I am right).

Some conditions that come to mind are:

1) Subject to finance. (Vendors hate this one, especially if finance has fallen through on previous offers!).

2) Subject to pest inspection

3) Subject to satisfactory building inspection

4) Subject to basically anything that takes your fancy!! Eg vendor fixing this, replacing that, etc etc!

Make sure you are happy with the property Belu. You don't want to place yourself in a position whereby you may need to sell it over the next couple of years.

Take your time and be very choosey!! Walk away from properties where vendors won't meet your terms! There are plenty to choose from now!! You have plenty of time to buy a great investment!

Regards Jason.
 
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