Low offers
- Thread starter scott
- Start date
Hi Scott
I think anything under market value is a low offer. It works best with motivated vendors. If you regualy offer 20% less than value you might get blacklisted by the agents for being a pain in the @$$
Some developers do it all the time by dealing direct with the public. You may need to go out looking for little old ladies with older houses, the recently unemployed and couples nearing divorce....... how well you want to sleep at night will determine what discount off market rates you will offer them, not something for those of a caring/sharing nature to take on.
bundy
I think anything under market value is a low offer. It works best with motivated vendors. If you regualy offer 20% less than value you might get blacklisted by the agents for being a pain in the @$$
Some developers do it all the time by dealing direct with the public. You may need to go out looking for little old ladies with older houses, the recently unemployed and couples nearing divorce....... how well you want to sleep at night will determine what discount off market rates you will offer them, not something for those of a caring/sharing nature to take on.bundy
Hi Scott, are you making an offer to a private seller or to an agent? Which State are you in? Have you bought any other properties?
Stephen
TOTS
I have recently bought my first. I would only deal with agents at this stage. I live in NSW
Scott
how well you want to sleep at night will determine what discount off market rates you will offer them, not something for those of a caring/sharing nature to take on.
Bundy1964
Yes this would be a consideration but...
Scott
Stephen
TOTS
I have recently bought my first. I would only deal with agents at this stage. I live in NSW
Scott
how well you want to sleep at night will determine what discount off market rates you will offer them, not something for those of a caring/sharing nature to take on.
Bundy1964
Yes this would be a consideration but...
Scott
I agree that continual lowball offers to RE's is simply going to reinforce (over time) to the RE that you are a bit of a tosser.
Using a lowball offer at the beginning of a bargaining negotiation might be a bit different, but you then have to be serious about the property at a realistic price, not your lowball price.
Of course, the vendor could be the tosser, wanting a lot more than similar sales suggest the market is willing to pay, and if your 20% lower offer is reasonable on those grounds and, eg. you tell the real estate agent why, I don't think this is unreasonable.
Either way, the success rate will be relatively low. I'm sure this issue was covered in a Dolf De Roos book or something and pointed out how much time and effort you will go to making lowball offers on everything.
Using a lowball offer at the beginning of a bargaining negotiation might be a bit different, but you then have to be serious about the property at a realistic price, not your lowball price.
Of course, the vendor could be the tosser, wanting a lot more than similar sales suggest the market is willing to pay, and if your 20% lower offer is reasonable on those grounds and, eg. you tell the real estate agent why, I don't think this is unreasonable.
Either way, the success rate will be relatively low. I'm sure this issue was covered in a Dolf De Roos book or something and pointed out how much time and effort you will go to making lowball offers on everything.
Can you explain that further, TOTS? I can't decode your "clue".
Sorry Kevmeister, I was refering to the way an agent conditions the vendor in order to have the vendor accept the offer the agent wants accepted. If the agent thinks he has an offer any offer that appears to be reasonable he will and under law must submit the offer. I am happy to discuss this at length but lets do it outside this venue.
Stephen
Stephen
Scott,
A tactic I used to success this past summer was, offer a deposit cheque along with your offer and let the agent/vendor take it with them.
Very hard to resist when its in your hands I guess.
Costa
A tactic I used to success this past summer was, offer a deposit cheque along with your offer and let the agent/vendor take it with them.
Very hard to resist when its in your hands I guess.
Costa
TOTS, I generally prefer to keep everything "in" the forum because then other people can learn from the knowledge. The point, after all, is to share knowledge openly, not to covet it.
RE's are required by law to submit offers but I've also heard/read that there's nothing to stop them doing this:
RE: The Vendor wants $250K.
Prospective Purchaser: I'll offer $175K.
RE: OK, I'll call the Vendor and submit that offer.
RE (on phone to Vendor): Hey Mr Vendor, I just got an absolutely ridiculous offer from someone for $175K for your property. At that price I don't recommend you sell.
RE's are meant to act on behalf of the Vendor. I bought a block of land in 1988 where the Agent was telling me something like "The Vendor wants $56K, but I think we can get them down to $50K, perhaps a tad less."
(Back then (aged 21), the idea of haggling over the price of a block of land hadn't even occurred to me!)
What are the legalities of this "conditioning" you are referring to?
Sorry but I can't elaborate here as it may put some of my clients offers in jepody. However "conditioning" is where the agent tells the owner his property is worth $230K when the agent really believes its worth $200K.
From the moment the agent lists the property he then "conditions" the owner telling him interest in the property is at $175K. These fictious offers impact on most owners, then when an offer comes in at $185-$200's the owner feels the agent has dragged out more money from the buyers, and the market wont pay any more.
Stephen
From the moment the agent lists the property he then "conditions" the owner telling him interest in the property is at $175K. These fictious offers impact on most owners, then when an offer comes in at $185-$200's the owner feels the agent has dragged out more money from the buyers, and the market wont pay any more.
Stephen
Hi all,
Scott.....Is it a worthwhile practice to low ball offers on many properties in the event that you might eventually get lucky with one?
It worked for me although i wasnt really planning it.
Between talking to the tennant and my Re, agent i saw the vendor was in trouble and they needed money the house was structurally fine although it is going to need a little t.l.c. the vendor said to the tennant that im sick of this place im trying to finish my own house. Now im not going to gloat over someones elses misfortune but to me that was a good clue to jump in . picked it up quite cheaply for the area and im happy.(settled yesterday)
But to awnser youre question no low ball offers will only get you known very quickly for the wrong reasons i.m.o.(also some books say this as well)
As my r.e.a. said they wanted offers and you gave them one! I guess if anything i had a feeling for the situation after looking and talking to people if that makes sense.
If you were travelling regularly to diffrent areas of Australia and didnt get to well known.......... maybe, iwouldnt.
"Dook"
Scott.....Is it a worthwhile practice to low ball offers on many properties in the event that you might eventually get lucky with one?
It worked for me although i wasnt really planning it.
Between talking to the tennant and my Re, agent i saw the vendor was in trouble and they needed money the house was structurally fine although it is going to need a little t.l.c. the vendor said to the tennant that im sick of this place im trying to finish my own house. Now im not going to gloat over someones elses misfortune but to me that was a good clue to jump in . picked it up quite cheaply for the area and im happy.(settled yesterday)
But to awnser youre question no low ball offers will only get you known very quickly for the wrong reasons i.m.o.(also some books say this as well)
As my r.e.a. said they wanted offers and you gave them one! I guess if anything i had a feeling for the situation after looking and talking to people if that makes sense.
If you were travelling regularly to diffrent areas of Australia and didnt get to well known.......... maybe, iwouldnt.
"Dook"
Hi Stephen,
I agree with your comments on the conditioning process, as this is the same process which is rampant at auctions across the country. But you've lost me with one of your other comments...
If Kev was asking you to expose some unethical real estate practice, and doing so would jeopardise a client, isnt this implying said client is engaged in unethical practice?
I also noticed in your profile that you are involved in educating people as to real estate scams and practices... and your signature says Be Informed . I thought this forum would be the perfect avenue for you to elaborate on underhanded or unethical tactics while informing the rest of us at the same time.
Just a few thoughts,
Jamie
I agree with your comments on the conditioning process, as this is the same process which is rampant at auctions across the country. But you've lost me with one of your other comments...
If Kev was asking you to expose some unethical real estate practice, and doing so would jeopardise a client, isnt this implying said client is engaged in unethical practice?
I also noticed in your profile that you are involved in educating people as to real estate scams and practices... and your signature says Be Informed . I thought this forum would be the perfect avenue for you to elaborate on underhanded or unethical tactics while informing the rest of us at the same time.
Just a few thoughts,
Jamie
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Jamie and all, you are right about the unethical practices, but I nor my clients are involved in it. I was refering to certain methods of handling agents and using their methods of conditioning against them in order to achieve the result you want in buying a property.
By disclosing my clients strategies on this forum could put their efforts and potential purchases in jepody. While I am happy to discuss issues in these forums I also have a business and clients to protect. Sorry if this seems a little criptic but I cannot break client confidances.
My web site will be released to the public in mid Feb. so all may be clear then, in the meantime ask agents why they charge a commission and not a fair fee for service. In Victoria there are only two agencies advertising flat fees and I developed both systems.
By disclosing my clients strategies on this forum could put their efforts and potential purchases in jepody. While I am happy to discuss issues in these forums I also have a business and clients to protect. Sorry if this seems a little criptic but I cannot break client confidances.
My web site will be released to the public in mid Feb. so all may be clear then, in the meantime ask agents why they charge a commission and not a fair fee for service. In Victoria there are only two agencies advertising flat fees and I developed both systems.
TOTS
Your email inferred that an RE Agent has a LEGAL obligation to submit all offers. Is this true?
I am in WA and once queried this with the REIWA last year and was advised verbally that this was only a moral obligation (ie. Code of ethics etc).
I have found that RE agents often get around this obligation by not writing up the offer if they think it is lowball.
On any offer I now make (high or low), I ensure the offer is fully written up before I actually advise what my offer figure is.
If the agent queries or baulks at the prospect of presenting my offer to their vendor, (as was once the case when I made an offer on a property about 10% below asking), then I would take them to task by presenting the offer directly to the vendor.
Not a situation I wish to be placed in, but it happens.
PS: I would also like to know more of the ‘conditioning of agents’ although I’ve often thought that being an Agent was an untreatable condition!
Rgds
Joe D
Your email inferred that an RE Agent has a LEGAL obligation to submit all offers. Is this true?
I am in WA and once queried this with the REIWA last year and was advised verbally that this was only a moral obligation (ie. Code of ethics etc).
I have found that RE agents often get around this obligation by not writing up the offer if they think it is lowball.
On any offer I now make (high or low), I ensure the offer is fully written up before I actually advise what my offer figure is.
If the agent queries or baulks at the prospect of presenting my offer to their vendor, (as was once the case when I made an offer on a property about 10% below asking), then I would take them to task by presenting the offer directly to the vendor.
Not a situation I wish to be placed in, but it happens.
PS: I would also like to know more of the ‘conditioning of agents’ although I’ve often thought that being an Agent was an untreatable condition!
Rgds
Joe D
Hi Scott,
From January last year until September, I made around 10 offers on properties through agents at prices above the median price for the suburbs concerned yet below the vendor's asking price. Not once were we counter-offered, each time the offer being rejected or not presented by the agent with the agents often being extremely rude.
In late September, a friend mentioned that another friend of his had a house that they were having trouble renting and that maybe they would be inclined to sell. The house was in need of tlc before I would move my wife and child into...the fleas just about carried the wife away during the inspection.
As the inspection was late on the friday night, we faxed an offer to the owners (not even vendors yet as they weren't thinking of buying until we planted the seed) on the saturday morning. They counter-offered that afternoon and we accepted straight away...for 19% less than the median price for the suburb.
As luck would have it, the agent that was looking for a tenant for the house had signed up a tenant just before close of business on the friday but did not inform the owners until monday morning....needless to say that the principal of the real estate business was darker than midnight mass in Janolan Caves after missing out on selling the house for them! We were lucky to get the house and some holding income until our renovation plans get through council and building approval.
So Scott, to answer your question, lowball offers sometimes work but a lot of times don't.
Glenn
From January last year until September, I made around 10 offers on properties through agents at prices above the median price for the suburbs concerned yet below the vendor's asking price. Not once were we counter-offered, each time the offer being rejected or not presented by the agent with the agents often being extremely rude.
In late September, a friend mentioned that another friend of his had a house that they were having trouble renting and that maybe they would be inclined to sell. The house was in need of tlc before I would move my wife and child into...the fleas just about carried the wife away during the inspection.
As the inspection was late on the friday night, we faxed an offer to the owners (not even vendors yet as they weren't thinking of buying until we planted the seed) on the saturday morning. They counter-offered that afternoon and we accepted straight away...for 19% less than the median price for the suburb.
As luck would have it, the agent that was looking for a tenant for the house had signed up a tenant just before close of business on the friday but did not inform the owners until monday morning....needless to say that the principal of the real estate business was darker than midnight mass in Janolan Caves after missing out on selling the house for them! We were lucky to get the house and some holding income until our renovation plans get through council and building approval.
So Scott, to answer your question, lowball offers sometimes work but a lot of times don't.
Glenn
Fantastic Tots
Can't wait till your site comes out
Finally , someone who can put all of the ignorant, uninformed people on this forum out of their misery.
Can't wait to hear from someone who specialises in " Schemes, Scams, Frauds, Guru's & deceptions ".
see change
Can't wait till your site comes out
Finally , someone who can put all of the ignorant, uninformed people on this forum out of their misery.
Can't wait to hear from someone who specialises in " Schemes, Scams, Frauds, Guru's & deceptions ".
see change
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B
brains
Guest
"PS: I would also like to know more of the ‘conditioning of agents’ although I’ve often thought that being an Agent was an untreatable condition!"
Rgds
Joe D
Aint that the truth.................
Rgds
Joe D
Aint that the truth.................
Joe D thanks for you questions yesterday, Real Estate Law does vary from State to State. WA is quite different in the way it takes offers to clients and ANREPS in your State went through a huge fight with the Gov. and RE Industry to get people to sell their own properties. Largely they failed and they were crippled financialy now operating a "Bronce, Silver, Gold service" and they still missed the point (but thats another story).
Even if in WA it isn't a legal obligation it is certainly a moral one (act in the best interests of their client?)
Going directly to the owner is a hit and miss affair depending on the agents relationship with the owner. Pressure can be applied to the agent by suggesting if they don't pass on the written offer for a written response signed by the owner, then you have no option but to address the offer to the owner personaly and report them to the Licensing authority, not the REIWA as they ar the mouth piece for the agents.
I can only say again look at how the agents operate and use their techniques against themselves.....
Even if in WA it isn't a legal obligation it is certainly a moral one (act in the best interests of their client?)
Going directly to the owner is a hit and miss affair depending on the agents relationship with the owner. Pressure can be applied to the agent by suggesting if they don't pass on the written offer for a written response signed by the owner, then you have no option but to address the offer to the owner personaly and report them to the Licensing authority, not the REIWA as they ar the mouth piece for the agents.
I can only say again look at how the agents operate and use their techniques against themselves.....
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