Negotiating the price further down

Hello everyone.

My wife and I decided to look for our first investment property. We chose the Western suburbs of Sydney. I found a place that appears to generate sufficient rent and a tenant who is willing to stay. So after looking at the property I spoke to the agent and asked for about 5% reduction in the price. The agent called back and said the owner agreed. Which I found a bit odd as usually the person selling at least tries to negotiate back.
We did residex report of the property and the price estimate came back about 20K cheaper than we bargained for (so the original asking price was even higher).

I feel like I should have offered a lower price to start with. My idea was to do a pest and building inspection and if there are reasonable problems with the property I come back to the agent with a list of problems and my price estimate report and ask for a lower figure. Obviously if the house has major problems I will probably walk away as its not worth it.

Do you think this is a good idea to further negotiate the price down? Also About four years ago I believe the owner did a small renovation on the kitchen and bathroom. Does the residex report take that into account?
Thank you for any input.
Hi Sasha

Without knowing more about the individual property I can't comment on the negotiation or price- after all, there could be a myriad of reasons why your first offer was accepted (above market, motivated vendor, inexperienced agent etc) however if it is a price that is fair, according to your due diligence, then go for it. Not all negotiations need to turn out to be protracted and stressful affairs :D

A warning about Residex reports, however. As these are generated from a database based on statistics alone, they do NOT take into account factors that would otherwise influence value ie: renovations, infrastructure changes, zoning, location, home features etc. You need to conduct your own research of the market, prices, comparable sales, current market trends/movements and additions/renovations to any property before appraising it accurately.
Best of luck.
Thank you Jacque for the reply.

Would you say its normal to further negotiate the price after the pest and building inspection?
Hi Sasha

Of course it is. If you feel that you'd rather withdraw the offer now (it happens all the time so the agent will be used to it) and submit a lower one, based on "further research" then that's your call too. Best of luck with it all.
Great. Thanks for your help. I'll report back after all is finished with details for any other newbies who may be interested in reading.
The autovals are pretty good but need to be taken with a grain of salt, residex, APM, RPdata can often show large variance so you really need to not rely on them fully.