Negotiating in Brisbane

[KangaBanga]

Hi all,

Recently made a big move from Sydney to Brisbane to look for my PPOR. Leaving 4.66million people behind.

Would like to know what is the common practice in brisbane for buying a house. Do you sign on a contract before the agent submits offer to seller or can you send an official email offer/ paper letter to the agent?

I have read on the forum that the offer can be made by email. then if accepted, contract is filled in and the sale to be handled by the lawyers.

I just find it cumbersome if the price or conditions change during negotiation, the lettering on the contract would become messy with all the changes made.

 

[RPI]

Hi KB

Standard practice is contract filled out and signed by you. Then you cross out, make changes and initial. It can get very messy.

Good luck.

 

[RyanMcHarg]

All offers that I take to vendors are on contracts for sale\purchase.

There are a few reasons for this, but it is standard with most agents that I know in Brisbane.

 

[wylie]

Put your offer straight onto a contract. Once it is signed, you cannot be gazumped like happens in other states with a "letter".

I've never done it any other way - and who really cares if the contract gets messy with a few counter signings?

 

[KangaBanga]

thanks guys for the reply,

now the fun part,

i made an email cash offer with only B&P needed last week on thursday with expiry on saturday afternoon after the saturday open house for 4% below the asking price. we are talking a property for sale 900k.

agent called back same day, said owners seen the offer but would like until after the saturday open house to consider. also said owners may negotiate if i increase my offer and they have an offer 20k more than me but subject to finance which they have turned down.

Today mondays agent calls in the morning asking if I have decided to increase my offer? I was a bit blurry so I said I would discuss with wife first. Agent then advices me to increase my offer and says another couple are inspecting for a second time.(agent has said someone was doing third inspection when we first saw the place) Also says seller can take the higher offer anytime.

I just replied by email I stand by my offer.

My question now is how much of a discount do you guys normally go with cash offers? I mean if you are not lowballing and buying a PPOR in Brisbane.

From what I can see on RPDATA the suburb has been on the downtrend past 2 years and recent year its down by 6%. Also house has been listed for 1 million for sale past 2 years on onthehouse.com.au multiple times as per onthehouse(i know may not that accurate). Agent's explanation was owners only registered to sell on computer system but did not actually go to market/advertise for sale. Never heard of something like this.

comments from the experts?

 

[UrbanPlanner]

Put your offer straight onto a contract. Once it is signed, you cannot be gazumped like happens in other states with a "letter".

I've never done it any other way - and who really cares if the contract gets messy with a few counter signings?

How do you go about placing offers on multiple properties when you only have the funds to purchase 1 (maybe 2). I'm starting to look at Brisbane and plan to fly there for a weekend and organise as many inspections as possible and I've heard of people placing offers on multiple properties. If I make multiple offers using the standard O&A contract and present this to multiple agents and offers are accepted, am I bound to those contracts?

 

[wylie]

I've never made offers on multiple properties. I guess you could sign contracts on one or two knowing if they are both accepted, you will be happy and can settle.

Or you could inspect as many as you want, make offers one at a time with a time limit on having the offer accepted or declined. You can choose the ones you prefer, and if they are not accepted, do the next down the list long distance. You don't have to be in the same room as the agent to sign a contract.

 

[citystar]

Good to hear you have access to RPData, I find this a valuable part of my property investing toolkit.

I would check the price the vendors paid for the property. This will give you a benchmark to base what their expectations will be. You know they wanted approx one million dollars the past few years and they have now dropped the price by 100k based on your post. Without knowing the details of the property, it sounds like they bought at the wrong time and are now selling at the wrong time. I would speak to the sales agent and offer your argument supporting your offer but be prepared to walk away.

It took me three months of open homes, auctions and enquiries before I found a place in south Brisbane that ticked all of the boxes. Many vendors out there who bought in 2007-08 that expect to make a profit based on the price they paid at the top end of the cycle. If they are realistic they would be happy to break even.

 

[KangaBanga]

surprise, agent replied almost immediately with

[Should you reconsider increasing your offer, please let me know and likewise, I will advise if the sellers choose to start negotiating with your offer.

The sellers have now decided to put a price guide on the net, likely to be 'offers over $895k', which gives a clear indication of where they will sell and is lower than I expected.]

Owners bought for 920k 4 years back. Sorry actually it was listed only as for sale but agent told me they were looking at offers 900k+

Just checked the listing, now after a month and 2338 visits on realestate.com it has become only once a week inspection from 2x previously and only on wednesdays.

Would it be possible the agent didn't even present my email offer to the owners? I had already filled in a consent to correspond via email form.

Next moves?

 

[PrimeProperty]

The best way in QLD is to sign a contract, We operate differently to NSW where most contracts are exchanged by the agents.

This helps to prevent gazumping but it also shows you are fair dinkum with your offer and the agent is more likely to treat it seriously.

 

[D.T.]

The best way in QLD is to sign a contract, We operate differently to NSW where most contracts are exchanged by the agents.

This helps to prevent gazumping but it also shows you are fair dinkum with your offer and the agent is more likely to treat it seriously.

Does this mean theres not really a way to put multiple offers out for fear that they might all get accepted if you're only intending to buy one?

 

[PrimeProperty]

Sounds to me like the agent is playing games. IF he has another buyer I don't think it is ethical to advise you what their offer is (not a sign of a good negotiator) which may work in your advantage.

I don't believe the explanation of the on the house information - if the property is on the net it is on the market. I would say they tried to sell but over the past 6 - 12 months the upper end of the Brisbane market has struggled. That said, with low interest rates, a new government and returning business and consumer confidence the market is starting to move.

It really comes down to how much you want the house. If you want it, ask him to prepare a contract as per your emailed offer and get him to come to you (the more time he invests in you as a buyer the more likely it is that he will push his buyer to take your offer - negotiating 101!). Put a time limit for acceptance of your offer as well, say 48 hours.

If he is a half decent agent, at the very least he should get the contract counter signed on terms that the seller will sell at - then you can decide if those terms are acceptable to you. If YES, initial changes and the property is yours!

 

[PrimeProperty]

Does this mean theres not really a way to put multiple offers out for fear that they might all get accepted if you're only intending to buy one?

It does become complicated in QLD given that if you are signing contracts they can be binding. I would suggest including a Due Diligence special condition giving you 14 days DD. (your solicitor should be able to provide you with one - if not - email me privately and I can get you something).

Drafted correctly, this could act as a get out of jail free card without having to pay any termination penalties. Thus, if you have multiple offers accepted in close time, you could conduct your DD - and determine which property is the best and terminate the inferior contract.

Also, once you have a contract accepted, it would be prudent to contact the agents and withdraw your other offers.

Regards Jason