Made an offer, got a response, what to do

G

GFree

Hi, I'm new here. :)

My girlfriend and I are first home buyers and after about 6 months of searching have found a nice little property which satisfies our requirements almost completely. The minimum price the vendor wanted is $340K, so we offered $330K. I got a response from the agent saying that the vendor wanted to know if we could go up to $340K.

Now we really like the house, and I suspect the fatigue of looking at houses is making us a little weary of saying no. The way I see it, we have three options: (a) raise to $340K, (b) suggest a new offer of perhaps $335K and state it's my highest offer, or (c) stick with $330K and effectively say take it or leave it.

What should we do? Is there an option (d)? It's probably a good thing I'm the one talking with the agent as I suspect my girlfriend would likely fold and go straight for (a). :) Our lack of experience means it's hard to know what works and what doesn't in the real estate business.

Sorry if this is a very typical question but the more advice I can get, the better.
 
If the property is worth it (and I can't stress that point enough), so if the property is worth it, offer to "meet them in the middle at $335K, you can't be fairer than that". But don't say it is you highest offer (unless it is). And if the property is worth $350K, don't stuff around quibbling over $5K when it is still $10K under value.

Other than that, take the issue away from price. i.e. stick to your $330K but offer some other kind of sweetener. i.e. maybe they want to rent back from you at a reduced rental for 6 months or something else. Find out (apart from price) what they want. What is their motivation for selling? Maybe they need cash in a hurry - offer a quick settlement or release of the deposit.....for example.

All the best with the negotiations.
 
well I can't believe you would consider saying yes. of course it works... but you have to play the game. you have to paint a picture to the agent. go back to him, tell him you really haven't got a cent more than $330k but your mum will lend you $1000 on her credit card... say whatever who cares. have fun and see how far you get. if in a weeks time the negotiations die and you really want the place, you can always buckle then. you think if you say in a weeks time that $340k is fine the vendor will say no?
 
It's fairly new; saw it two weekends ago and I think that was the first time it was open for inspection as well. I know the owner is moving into a retirement home in September which is why he's selling the place.

I guess I'm just concerned to be outbid if I'm a stickler. Remember we're new at this! Maybe I keep forgetting we've got some leverage as we're the people with the money, but it's other potential offers I'm worried about. Which is why I'm tempted to buckle.
 
have you presented your offer in writing (please tell me yes?)

assuming yes... just keep him dealing with you.

it's your deal but if it were me - I would try that line about the $1000 and get the offer back with any counter. if he rejects just keep going back until the guy gives in. the vendor seems like an old bloke that probably has a serious amount of equity and nothing to spend it on. present the bleedign heart first home buyer line, how much you love the house and will never bulldose it and will tend to the rose garden daily and raise yor children there. make the offer as clean as possible and settlement to suit his needs.

my 2cents. or just pay $340k and be done with it :eek:
 
The offer was made in writing, yes. The agent said I could make a verbal offer but I prefer putting pen to paper for this sort of thing, and after reading things a bit it seems it was the right idea.
 
GFree,

All your options are valid however does (c) also mean you are willing to walk away from this property?

If you are buying for yourself, and the price is right, and your heart is set on this property then close the deal rather than play games. It's only $10k.

If your heart is not set on the property and you are willing to risk losing it then play the game. Ausprop's suggestion re: going back with a small increase and giving justification for the same is a good one providing you are comfortable spinning BS.

Otherwise the 'meet you halfway' option is always an acceptable fall back.

Option (d) that hasn't been mentioned is waiting. Again this is only if your heart is not set on it and the price needs adjustment. This option paired with one of the others is a good combination as it shows that you have had to go away and make some hard decisions before coming back to the agent a day or two later.

My experience when selling is that the first offer is usually the best so if the REA is still talking to you chances are that you are on or close to the money. The REA's role is to get a higher price than offered. Your role is to buy under advertised price at a value that you feel is right.

Let us know what you do and how it pans out.

Regards

Andrew
 
What are your comparable sales telling you it should sell for?
research is the key. If it's under market value and they have a half decent agent then they will know they will get $340k or whatever and you don't stand a chance. If your research is telling you others similar have been selling for $330k then play hard ball, there will always be another one.

But I suspect that if you have been looking for 6 months then this one must be good value so pay the price, it will be insignificant in the long run.

Gools
 
Then they end up with $10k of shares and miss out on the house. That's handy..... :rolleyes:

If other comparable houses are selling for $340k then you may well miss out. The Adelaide market is still travelling nicely.

Gools
 
Seeing as this is a PPOR and if it's your dream home I'd try meeting them in the middle initially and offer the extra $5K to start with. Then if they don't accept that and if you desperately want it and you believe it is worth the extra $10K then I'd pay it. I don't mind paying a bit extra to secure a PPOR if it's absolutely what you are looking for. I was a bit stubborn with my current PPOR and agent finally got me to go $2K higher but looking back I would have even gone $10K higher knowing what I know now. Nothing like it came onto the market for months afterwards and I'd have either been waiting a long time (whilst also watching prices increase as they did back then) or have to sacrifice and buy something not exactly what I wanted.
 
Hi again. I called the agent this morning and coughed up another $5K to bring the offer to $335K. He said he'd take it to the vendor so we'll see what happens. We've already decided that if this still doesn't work, we'll probably end up going to $340K anyway because as with Biggles' experience, it doesn't seem likely that a house as nice as this will be around again for $340K. No harm in at least trying to haggle a bit though.
 
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