My offer got rejected, what to do now?

[HelloWorld]

Hello everyone,

I gave a verbal offer to the agent and was told a day afterwards "it was too low". And told "I don't know how you arrive that figure..."

A bit of details:
The house (3 beds, 1 bath, 2 toilets) has a size of 600m2, with an asking price of 400k.
It was sold $325k in mid 2007. I believe the owner has renovated the kitchen and bathroom since this time.

My offer was $350k, subject to finance/building/pest. The house has been on the market like 3 weeks and agent told me I am the only offer he's got at the moment. The agent mentioned if there are other offers, he will let me know.

I did mentioned I will have a look at other houses in the area (to not show emotional attachment to this house)

Am I doing this right? Advise welcome!!!

 

[Edmond Dantes]

what are other similar properties selling for *now*? sold for $327k in mid 2007 is irrelevant in my opinion. It's what the market is willing to pay now.

 

[Perp]

It's all part of the agent's job to try and talk you up in price. If you had solid reasons for your offer and don't want to pay more, stick with it. If it's rejected, you can always make a further offer if you wish. But you shouldn't make a revised offer unless this offer - in writing - has been rejected or countered.

 

[HelloWorld]

what are other similar properties selling for *now*? sold for $327k in mid 2007 is irrelevant in my opinion. It's what the market is willing to pay now.

There's 2 sold last month that are similar in land size, 3 beds, location to transport: $364k and $369k. But these had asking prices that were not high as $400k.

 

[HelloWorld]

It's all part of the agent's job to try and talk you up in price. If you had solid reasons for your offer and don't want to pay more, stick with it. If it's rejected, you can always make a further offer if you wish. But you shouldn't make a revised offer unless this offer - in writing - has been rejected or countered.

I know it's the agent's job. Thanks for the 'revised offer' advice.

If someone put in an offer like $370k, do you think the agent will contact me for a second offer? or the agent will not contact me because i am 'a hopeless case'?

 

[Perp]

If someone put in an offer like $370k, do you think the agent will contact me for a second offer? or the agent will not contact me because i am 'a hopeless case'?

In Queensland, the agent has to present all written offers to the vendor, and I imagine it's the same in SA. I would then expect the vendor to counter-offer, i.e. come back with the same contract with the price crossed out and $395K (or something) written on it, which, if you counter-sign, becomes the agreed contract.

Depending on how far the vendor's price drops in response to your offer, you can decide whether you want to make further offers or not.

If the vendor just says "no" and doesn't counter offer, unless you're super-keen, I'd be tempted to wait a few weeks before making another offer, so the vendor's a bit more "motivated to sell" for your next offer.

But I would be surprised if the agent didn't try to keep you playing the game of ping-ponging offers, unless they know for a fact the vendors are holding out for $399K or more, and know you won't go over $375K.

 

[Ausprop]

as Perp said... must be in writing to be an offer, therefore you are yet to make an offer. all you have done is have a bit of a chat with a real estate agent.

as to "And told "I don't know how you arrive that figure...""... none of his business

 

[Corey Batt]

Written offer, request to see signed receipt of offer from vendor if he says it was rejected. IIRC the requirement is that all written offers are to be presented to the vendor within 24 hours..

3 weeks isn't a lot of time on the market, a lot of areas are hitting 90 days on market before sale. This isn't to say there aren't highly contested areas within Adelaide which shorter turn arounds.

PM me the address if you like and I can order you a residex report. Give you an idea of other sales in the area, if you get the 'no houses in the area sell for THAT price!'.

It has been my personal and clients experiences recently that the agents aren't proactively fishing for counter offers. Though I can't say I've known too many agents who have ever been that proactive.

Be careful if you're willing to offer more, but they don't ask for a counter offer. They might take this as a sign to attempt to take your for a ride.

 

[Brady]

Hello everyone,

I gave a verbal offer to the agent and was told a day afterwards "it was too low". And told "I don't know how you arrive that figure..."

A bit of details:
The house (3 beds, 1 bath, 2 toilets) has a size of 600m2, with an asking price of 400k.
It was sold $325k in mid 2007. I believe the owner has renovated the kitchen and bathroom since this time.

My offer was $350k, subject to finance/building/pest. The house has been on the market like 3 weeks and agent told me I am the only offer he's got at the moment. The agent mentioned if there are other offers, he will let me know.

I did mentioned I will have a look at other houses in the area (to not show emotional attachment to this house)

Am I doing this right? Advise welcome!!!

What do you think the house is worth?

You said similar houses sold for $364k & $369k, do you think the one you made an offer is worth less than these properties?

You mentioned different asking prices, in my mind thats irrelivant.

It all comes down to what do you think its worth, if its $350k and they wont accept $350k then walk away.


If you think its more, then offer more.


Try to stay emotionally detached if possible.

 

[Tim86]

In my experience the agent won't bother contacting you if you've put in a low ball offer and someone else puts in a higher offer.

But don't worry. Just keep putting in low offers and eventually you'll probably get someone willing to accept.

 

[Shaneelastic]

In my experience the agent won't bother contacting you if you've put in a low ball offer and someone else puts in a higher offer.

But don't worry. Just keep putting in low offers and eventually you'll probably get someone willing to accept.

Ive put in 10 low ball offers the past 1 year. Finally snagged one through a second offer. Don't let it get to you

 

[mikezen]

Ive put in 10 low ball offers the past 1 year. Finally snagged one through a second offer. Don't let it get to you

how do u do it? do u email with a sunset clause? how far under r u going? 20%? what areas were u looking in ...on/or in areas w low buyer activity?

cheers
mike

 

[Tim86]

The newest property I just got was listed back and forth between tender and $450 000 for about 12 months. Then it came down to $440 000 a few weeks ago. I sent them an email and told them I wouldn't waste my time inspecting the property unless they were will to go down to at least $410 000. The agent said yes to that. I inspected it and then offered them $400 000 flat. They came back with $410 000. I didn't return their calls for a week. Then I came back with $405 000. We settled with the price of $406 000. So around 10% less then their original asking price. We should make about $200 000 by splitting the block.

The house before that we put in an offer of $305 000 when it was listed for $300 000 and above. We didn't have any conditions on our offer and we beat people offering $340 000. House is now worth about $420 000 after a $7000 reno. (was a deceased estate).

Low ball offers tend to only work with forced sale though. Just have to have a few things line up and you can get massive discounts from market value. Well at least you can when the market is ****

 

[HelloWorld]

Thankyou all for your comments: they are all very helpful for a IP noob like me

I got a feeling the property should be ~$360k, so when I made a verbal offer of 350, I didn't consider this to be 'low ball'. (Asking $400k)

I remembered the agent said the owner just bought a house thru the same agent: so moving to new house and selling this one.

I am tempted to give the agent a call after a week's time...but I agree I shouldn't raise my verbal offer if I didn't get a counter offer.

Some of you mentioned written offer (contract): what's the point of writing up an offer if the agent/owner doesn't seem interested in my figure (via a phone call)? Don't I need the agent to supply me the contract (template) first?

 

[Perp]

Some of you mentioned written offer (contract): what's the point of writing up an offer if the agent/owner doesn't seem interested in my figure (via a phone call)? Don't I need the agent to supply me the contract (template) first?

Last - and easy - things first: yes, you need the agent to supply you with a copy of the contract.

Why put offers in writing? Because the agent isn't the one you're buying from; the vendor is. Putting your offer in writing obligates the agent to present it to the owner, who may feel differently than the agent assesses.

Sometimes seeing an offer of cash in writing changes the vendor's position; sometimes the vendor misleads the agent about their expectations to try to "motivate" them to get a higher price; sometimes the agent simply misreads the vendor. There can be a million reasons why the agent may not really know what the vendor will accept.

As Ausprop correctly highlighted, if you're doing things verbally, you're just shooting the breeze with the agent, but you really have no idea what the vendor's position is - and their position is the only one that matters. You find out by presenting a written offer and seeing how they react.

 

[HelloWorld]

Last - and easy - things first: yes, you need the agent to supply you with a copy of the contract.

So should I ring up the agent to get him to send me a blank contract now?

Or should I wait for a week and call him (to see how's things) then and get the blank contract?

 

[Perp]

So should I ring up the agent to get him to send me a blank contract now?

Or should I wait for a week and call him (to see how's things) then and get the blank contract?

I would ask for a contract now, and submit it with the $350K (offering a higher price makes you look too keen, I think) and conditions you wanted. Just say that you want to make your offer formally, and have the vendors accept, reject, or counter your offer.

But hey, I'm a straightforward kind of gal.

 

[Sean M]

great feedback!

 

[Corey Batt]

Verbals aren't worth much at all to agents. Had this conversation with an agent just the other evening over drinks. He mentioned that a common tactic for verbals is to not bother contacting back, as if they cant be bothered filling out a written offer it is most likely not serious, and if they are serious they will contact again. Once second contact is made, agent has the upper hand.

Best practice is to request a offer document from the agent. Whilst a contract is generally better, agents are wary of having to write up a contract for every low balling punter. All the major franchises provide offer documents, where you can also request time conditions etc.

In conclusion verbal = not taken seriously
written = forced to take to vendor for consideration

 

[Perp]

All the major franchises provide offer documents, where you can also request time conditions etc.

I generally agree with you, but note that's not universal. In Queensland, offers are made via contracts; there is no alternative "offer document".