My offer got rejected, what to do now?

[Shaneelastic]

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

vacant land, been on the market for 10 months
I do have to do the development, it was a 30 day settlement, verbal was accepted (the agent knows me and my business/professionalism so wasn't wasting his time), contracts signed 2 days later

 

[Dan_p]

I gave verbal over the phone. Agent took it serious went to the owner, she counter offered, we agreed, deal done.

Then we put the formal offer in and everything ran smoothly from there.

The agent is friends with the broker we went through, so he knew we had finance.

 

[HelloWorld]

An update: I have a written 'notice of offer' (not the contract) and email to the agent. Same figure $350k and conditions.

And yes I noticed the agent will have to notify me when the vendor has received this form.

I was thinking: if the agent made up a fake 'the other party' to come back with a higher figure than mine, is there ways to know if this is a fake?

 

[cimbom]

That is commonly done. The best thing to do is to stick by your offer and be prepared to walk away. In a few weeks, they might come back to you to see if you're still interested.

 

[S.T]

Yep, keep looking at other properties too. You may find a better one.

 

[Corey Batt]

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

Sorry should have specified, I was suggesting it was provided by all the majors within SA, as the OP is based in Adelaide.

Let us know how the written offer goes HW.

 

[HelloWorld]

Got reply from the agent: my offer was too low; they won't consider.

The agent did told me there's another person who made a verbal offer subject to their parents seeing the place tomorrow (open inspection on Sat), so technically no one has put in another offer (besides me).

Was my offer too low ($350k, asking $400k)? In your experiences, when will the vendor starts countering your offer?

 

[Corey Batt]

It is highly dependent on the initial listing price and whether that is within the realm of reality, vendors circumstances, time on market etc.

The market does appear to be picking up, with agents that I work with mentioning they are becoming a bit more aggressive with their strategies as buyers on the ground and CASH is popping up more and more.

Ive sent you a PM.

 

[HelloWorld]

I think the market might be picking up. The suburb is in Athelstone, SA.

 

[Brady]

I think the market might be picking up. The suburb is in Athelstone, SA.

Not too far away from my office.


Not sure about how it's been out your way Corey, but last 6 weeks I have been flat out. I was in the office Sat & Sun!

Each week my lists of clients that are either pre-approved or I'm aware are looking are calling with contracts.

Alot of agents I've spoken with are finding alot more people are actively looking to purchase, along with more realisitic vendors with fair market asking prices.


I've found alot of my investor/developer clients have been picking up deals the 1 or 2 days after properties come on the market offering asking price, though they know a good deal straight away.


Is the property you are trying to purchase as an investment or PPOR? Is it a house or a unit? House in Athelstone for $350k would be great buy, especially if it had an ok size block.

 

[Corey Batt]

I think the market might be picking up. The suburb is in Athelstone, SA.

Hit the nail on the head. The market today is of no resemblance to 12 months ago. Lowballing was quite possible for a lot of deals then, now it is seemingly becoming difficult to extract much of a discount off price.

Brady:

It seems to be the case all over Adelaide. A lot of young people moving into the market with significant savings, upgrader's and couples looking to their retirement planning. Multiple offers are on most properties, so it's first come best dressed.

It's nice to see some positivity in the marketplace.

 

[HelloWorld]

That is commonly done. The best thing to do is to stick by your offer and be prepared to walk away. In a few weeks, they might come back to you to see if you're still interested.

Just got a call from the agent; someone made an offer after the weekend (conditions similar to mine) but were unable to tell me their price.

This is quite strange idea to me: how can you counter their figure without knowing what it is? I thought it's okay to tell me their figure so I may beat it?

 

[cimbom]

It could be a lie to make you think the property is in demand so that you offer more.

 

[malau]

Just got a call from the agent; someone made an offer after the weekend (conditions similar to mine) but were unable to tell me their price.

This is quite strange idea to me: how can you counter their figure without knowing what it is? I thought it's okay to tell me their figure so I may beat it?

I had a similar situation recently. I inspected a house which probably need to be rebuild and the price is quite high. The agent called me few days later and said if I wanna put any offer as the vendor received a "good offer" and consider sell it before the auction. Then I asked if she can disclose the offer and she said they don't usually do... then back to your question: if I dont know the amount how can I put an "efficient" offer...

 

[Perp]

I asked if she can disclose the offer and she said they don't usually do... then back to your question: if I dont know the amount how can I put an "efficient" offer...

They don't want you to put in an "efficient" offer, they want your best offer. They work for the vendor.

It would be unethical for them to tell you the amount of the competing offer. (Yes, I know some agents do this, but they shouldn't.)

If, as a vendor, I got an offer of $410K from person A, followed by $411K from person B, I'd be highly suspicious and asking the agent some very hard questions as to whether they'd been acting in my best interests.

 

[HelloWorld]

Thanks for the explanation, Perp.

I know they want the highest price, while we want to pay the lowest price.

Still...what can I do now? add 5k more to test the waters? (I have nothing to lose) I think I can put int 10k more. There are other houses around in the market but I like this one because it's close.

Or is this my last chance: a 'win it or lose it' moment?

 

[Perp]

Still...what can I do now? add 5k more to test the waters? (I have nothing to lose) I think I can put int 10k more. There are other houses around in the market but I like this one because it's close.

Or is this my last chance: a 'win it or lose it' moment?

If you offer $10K more now and they accept it, you may wonder whether they would have accepted $5K less than you offered. I don't know. Does it matter? You'll have the security of knowing it's yours, at a price you can live with, and I bet you'll never think about it again after you've started organising settlement, if you're excited about having the property. (If it's an investment, you need to be more hard-nosed about it and I'd tend to only offer $5K more, initially.)

If you offer only $5K more, you can still make a further offer if they reject that, too, but you run the risk that somebody else offers $8K or $10K more in the meanwhile, and that other bidder secures the property at a price that you were willing to pay.

Would that hurt more than wondering whether you'd paid $5K too much? If I really wanted this house as a PPOR, it would hurt a whole lot more to miss out.

But I don't know how much you want this house, whether there are other houses out there that you'll love, or whether this one is something rare / unique. Also, if the market's moving, you may end up paying more by waiting.

Only you can weigh all those factors up with your own psychology...

Edit: Of course, there's also a chance you'll offer $10K more and they'll still reject the offer, in which case you can't afford it and you can get looking for your next option more quickly.

 

[HelloWorld]

It's for investment.

I like the idea of going 5k. If it gets rejected, I can decide to raise it quickly!

I just had this thought:
Last week I put in an offer of $350k. The vendor didn't counter this. This to me means that my figure is way off their target. Would you agree? If yes, why would the vendor bother to consider if I raise it to $360k?

 

[Perp]

Last week I put in an offer of $350k. The vendor didn't counter this. This to me means that my figure is way off their target. Would you agree? If yes, why would the vendor bother to consider if I raise it to $360k?

It may have been way off. Or the vendor may have been feeling optimistic that they'd get more interest, or... any one of a million reasons. You can drive yourself mad speculating.

The only way you'll find out what they'll accept is by offering, and trying to remain detached so that you're prepared to walk away and find the next one if they don't accept.

You could always assume you're way off, walk away to look for something else, and come back and re-offer $350K if it's still on the market in a couple of months. They may be more "receptive" if it is.

 

[HelloWorld]

The only way you'll find out what they'll accept is by offering

More updates: Called the agent to offer 8k more. The agent didn't even mentioned 'the other offer' but said will bring my offer to the vendor tonight and continue the negotiation...thanks for calling

What does this mean? The agent made up 'the other offer'?