Making a low offer. What are my chances?

[Scout]

Hi all,

I've found a property which has been on the market for two years (!). It is rather unusual and hence there has been not a single offer made. However, I think that the property can be improved without too much extra $$ being plunged into it, but it will require a bit of creativity, and it has potential for further development.

So, I am thinking of taking around $60,000 off the asking price (about 20% reduction). The sales agent is willing to take this offer, with deposit, to the vendor. Is this a good sign or am I likely to offend the vendor (my partner is a bit of a softy and thinks that I would, but I don't really worry about it since all the vendor can say is, "no" and that will be the end of the matter. No skin off my nose.)

What's the verdict amongst the experienced investors here? Do I have a snowball's chance, given that the REA is willing to go with the offer to the vendor? Is this a postitive sign? Or is the REA keen to do anything to get paid for their efforts at long last?
Cheers.

 

[ok180]

Just put in your offer. What have you to lose? If the agent is keen to present it that probably means they havent had an offer anywhere near that good.

Why dont you knock 80k of the price lol

 

[agent 86]

Scout,
Have you read this current thread ?http://www.somersoft.com/forums/showthread.php?t=25112
Good stuff in it.

 

[Scout]

Why dont you knock 80k of the price lol

I'm feeling fortified . Why not. If that's way too low, they will not take it to the vendor anyway.

There was an earlier post on low-balls which I've only just now seen and read. Best not to talk 'offers' but just sign contract.

After all, I would not want it at a higher price; it's simply too terrible to keep it in its current condition (aesthetically it sux sky high).

 

[simonjulie]

Hi Scout
If you are going to make a low offer on a property you have to be able to back it up with a good deal to the vendor.
Find out why they are selling and solve their problem.
real money often talks louder than loud low ball offers.
Kind regards
Simon

 

[Scout]

Scout,
Have you read this current thread ?http://www.somersoft.com/forums/showthread.php?t=25112
Good stuff in it.

Yes, I did after I posted mine. It was very helpful. The gist of it is: don't mess about making excuses for the low offer, just sign contract with the price I'm willing to pay. Nifty. No hard feelings. It's a game as they say.

 

[dags]

was there any reason it has been on the market so long?
what were the results of your building/pest inspection?
maybe get your solicitor to do a caveat search.
No point buying a bargain if its a piece of crap.
I hope i dont sound negative, just some things to consider

dags

 

[caramellokoala]

You will never know if you don't put it in.

Before you make your offer take a couple of PM's on inspections with you to get their thoughts on how much it would rent for and why.

I did that recently on a property that had been on the market for 4-5 months and I knocked $100k off the original price it was listed for.

Good luck

Cheers

CK

 

[Scout]

was there any reason it has been on the market so long?
what were the results of your building/pest inspection?
maybe get your solicitor to do a caveat search.
No point buying a bargain if its a piece of crap.
I hope i dont sound negative, just some things to consider

dags

Apparently its been on the market so long because it simply looks awful from the outside. Internally it is in perfect condition apart from the kitchen which needs upgrading and the bathroom which needs sprucing up. And it has tons of space inside and two double LUG.

The external can be improved by changing the cladding and working on the landscaping a bit. I have worked the cost of all these upgrades into what I am willing to pay for it. I am well aware of not wanting to take over a nightmare of a house when it comes to reselling, and so I have to make some very necessary changes to it pretty quickly and with the money I have 'saved' in the buying price.

It has the added bonus of being able to build a "real" house next to it and gain some very nice coastal views.

It is otherwise amongst houses that are beautiful externally and cost around $500K. It is simply the ugliest house in a street full of mansions.

The best way to describe it would be to say it is unusual (and ugly) in its construction.

 

[Scout]

You will never know if you don't put it in.

Before you make your offer take a couple of PM's on inspections with you to get their thoughts on how much it would rent for and why.

I did that recently on a property that had been on the market for 4-5 months and I knocked $100k off the original price it was listed for.

Good luck

Cheers

CK

This purchase is actually for my own PPOR not for rental. But it's a good idea to determine rental potential nevertheless since it is likely to become a rental in a few years time. I'll have to check on that. Thanks.

 

[kissfan]

Hi Scout.

They (the vendors) can only say no, no harm in trying. As long as you are not offended by a 'no' answer, go for it.

Regards
Marty