Made an offer for a house...

[Strannik]

Well i found a perfect house for myself and made an offer on it.
House is listed for 320k
I offered 270 as it is on a busy road and needs work.
The agent contacted the owner and said to me that the lowest he can go is 290
I took a time to think till monday.
Now i'm wondering, should i stand with my offer, or should i offer 280?

House has been on a market for 2 months now and owner had few offers of 260-270 before, but because there is a possibility that the land might be rezoned for commercial use in a future owner is reluctant to go down in price.

On a side note: There is a tenant living there atm. Now he has one bedroom as an "office"
When i walked in a was literally shocked. He had bench grinder set up there, tools and toolboxes all over the floor.

 

[rj]

Why go straight to 290? Id offer less, they worst they can say is no.

RJ

 

[Strannik]

i'm thinking whether i should offer 280 290 is what the owner wants and 270 is what i have offered
and 320 is listed price

 

[harrywyborn]

Always make a lowe offer!!

Hey Mate,

You did the right thing in making a lower offer. Now that the vendor has came back with a counter offer, its your turn to make another counter offer. You are taling about 280 ot 290, why not just go to 275. And let the agent know that this is your upper limit. The agent has been kind enough to let you know his clients rock bottom (Hardly, agents use these sort of tactics all the time. I know as i used to use them myself when i was an agent.) So its time to get tough with your agent. Be strong and confident and advise the agent that this is the most the banks will lend you. Now when the agent hears this they might start thinking i might lose my commission here. So the agent might be a bit more pursuassive when presenting your offer to the vendor.

Also you have done the right thing in not making a higher offer or offering the higher price of 290. The reason being is if you did offer 290 striaght up now, you would probably walk away with buyers remorse. Buyers Remorse is the feeling of did i do the wrong thing, you wil be asking yourself should have i offered this instead, could have i got it cheaper ? Also the vendor asks themselves the same questions. But could have i got more is usually the big one on there minds.

Good luck, and maybe somewhere in the middle of where you bth are now might be a good price.

 

[Bargain Hunter]

Strannik,

What have you based your offer on, market feel, capital growth, yield?

The advantage of being an investor is the ability to distance yourself by crunching the numbers, and by having superior knowledge of the area. If you have done your homework then you know what the property is worth to you.

Go up to that value but never over it.

In regards to rezoning, we have areas around us where people bought 20 years ago ready to make a killing when the area was rezoned. They are still waiting.

Good luck with your purchase.

Regards

Andrew

 

[willair]

House has been on a market for 2 months now and owner had few offers of 260-270 before, but because there is a possibility that the land might be rezoned for commercial use in a future owner is reluctant to go down in price.

Strannik,
This vendor must be desperate to drop the asking price from 320 k
down to 290k that fast then imho stay at the the first offer.
But i would take the time if the property is in Brisbane and ring
up the BCC and ask the question,what can i do with this property
is this property zoned/lmr/or res a,and what land area .
Stay with your first offer and if they don't like it walk.
good luck willair..........

 

[skater]

What is fair market value for the house? You made an offer & they were quick to drop their price $30k. This to me suggests they are sick of waiting & want the place sold.

I would up my offer a little, bearing in mind all the time the value of the house. Don't be pressured by the agent into spending more than what the house is worth, but don't lose out on a good deal either.

 

[kissfan]

Hi Strannik.

I would not contact until Monday as you have already told them that. Between now and then, let them (vendor) make the next move or at least sweat it out.

If you've heard nothing by early Monday afternoon, you could then ring the agent to ask have they heard anymore from the vendor. Let the agent know you are looking at a few more properties and that a couple are looking good (whether you are or not).

If, going on your research, $270K is a fair price to pay, stick to your guns. If you think that it is worth a bit more, maybe up your offer.

Don't get emotionally caught up thinking you have to snare this property, there are others out there.

Regards
Marty

 

[Strannik]

To shed more light on the property:

According to the agent owner now is in England, retired and no intention on coming back to Australia so he sells all his investments around the world.
He held this property for around 15 years.

Now the property is second from a corner on a busy road. The guy at the corner runs a small caryard on his property, and has been trying to get the house rezoned for commercial use for some time now.

According to the agent the owner sees that as big advantage and thinks the property is worth that money.

Currently rented for 250pw but rental is due for increase. House is completely brick, needs renovation but nothing major.

Double lock up garage.

Now the current lease expires in 2 months. If i reach a deal with the owner what path would be better, take the house with the tenant or make a settlement after the tenant is gone? I plan to live in this house and run my home business from it so this property is ideal for me, but obviously i don't wanna overpay.

 

[Aceyducey]

Strannik,

How much do you think the property is worth?
And how high are you willing to go?

It's perfectly legitimate to say that $270K is your last offer if that's what your numbers say.

Only increase your offer if you feel you can make the deal work.

As Kissfan says - lots of other deals out there.

Cheers,

Aceyducey

 

[lizzie]

Now the property is second from a corner on a busy road. The guy at the corner runs a small caryard on his property, and has been trying to get the house rezoned for commercial use for some time now.

According to the agent the owner sees that as big advantage and thinks the property is worth that money.

in my opinion - the possibly to sometime, perhaps, maybe down the track the zoning might change has nothing to do with the value of the house now. if it was definate that the zoning is changing, that would be different - but charging more because of the possible potential in the future is rubbish.

i too know of people that have bought in an area on an assumption of zoning changing - only to still be waiting 15+ years later and still unable to do what they bought the land for.

i agree - maybe up it $5k with a blurb about the bank, about interest rates going up next month, about the flat market etc - but not until monday or tuesay.

 

[caramellokoala]

Strannik

If it were me, I would be going along in person to see the agent with a cheque in my hand so that they know you are serious. Tell the agent your offer still stands and leave it at that. Perhaps you could throw in that you are not paying for what it might be worth in the future but what it is worth today.

The perferct property comes along regularly so if you miss out on this something else will come your way.

Cheers

CK

 

[Strannik]

that's what i might do
on Monday or on Tuesday...

 

[Strannik]

according to my calculations the property should be worth around 290k, that is if i got everything correct

 

[Jacque]

Now the property is second from a corner on a busy road. The guy at the corner runs a small caryard on his property, and has been trying to get the house rezoned for commercial use for some time now.

According to the agent the owner sees that as big advantage and thinks the property is worth that money.

So, if I've read this correctly, the owner of the caryard has tried (unsuccessfully) to get the property you're interested in rezoned?
If there was any chance of this happening, surely he would be making an offer himself?

Anything "according to the agent.." should be taken with a grain of salt. Don't forget that they are salespeople and work for the vendor. Fullstop.
Stick to the facts and forget the rezoning. It's of no benefit to you at this point in time, regardless.
Do your DD and work out a fair price for the property. If you are prepared to walk away, put a time limit on your written offer and tell the agent you are busy looking at other properties (which I'm assuming you are!) and need an answer asap. Make your lower offer more attractive to the vendor by offering something else he wants (shorter settlement, bigger deposit etc) and, as has already been pointed out by others in this thread, remember that there will be other properties.
Good luck with it all and keep us informed

 

[Strannik]

The owner of the caryard is trying to get his property rezoned. It's not a full blown caryard, he just has about 15 cars parked in his yard. He's pretty much running it illegaly, but because he doesn't create problems for neighbours nobody complained yet.
The property i'm interested in is next to his. From my calculations fair price for this property based on current rental returns is around 290.

Another thing is that i haven't submited a written offer yet, the only thing i did was send an e-mail to agent that i'm willing to submit an offer of 270.
He called me this morning at 8 am and said that the owner is not willing to go lower than 290. I have a feeling that he is just trying to make me increase my official offer, before it will all go on paper.

Another problem is - there is a tenant currently living there and i don't really want to settle until he is gone, because it's going to be my PPOR.

I think i will call the agent on Monday and tell him that i'm not prepared to pay more than 270 for this property when i can get similar property closer to the city for 290

 

[rj]

Sorry to go offtopic here - but is this Strannik from supraforums.com.au???

RJ

 

[lizzie]

I have a feeling that he is just trying to make me increase my official offer, before it will all go on paper.

then get your original offer on paper!! ... i always make offers on paper, seems to carry more weight, even if it just an attachement to a formal e-mail.

then see what happens.

 

[Strannik]

Sorry to go offtopic here - but is this Strannik from supraforums.com.au???

RJ

lol yes, i doubt that you'll find another one in Australia

 

[Strannik]

then get your original offer on paper!! ... i always make offers on paper, seems to carry more weight, even if it just an attachement to a formal e-mail.

then see what happens.

Btw where can i find a sample of a formal offer?