Neg's with stubborn banks!

[JWR]

Hi guys,

I am still fairly new to this game so need advice if anyone has had this eperience.

I am negotiating on a property. Totally trashed inside but a thing of beauty from the outside.

It is a mortgagee sale listed for 140k.

I am happy to pay this as its still very cheap but would obviously rather pay less.

My first offer of 120k was rejected and the counter offer was 139k wtf right!

The agent said the banks will not negotiate as the valuation came in at 140k. Its been my experience that the banks will still negotiate lower so I am puzzled as to their stubborness?

I upped my offer to 122k initially but they again rejected and wouldn't go lower.

So I upped again to 130k this arvo but stating I wouldn't go higher - and the reason for upping is because the rent will be much higher than I thought (240-250 I thought and 280-300 was rent appraisal.)

I know it will be gone soon if it sits on the market as it is quite hot now - so don't want to lose it - and it is easily the most compelling buy - interior just scares people I think.

How would the experienced forumites deal with this one?

James

 

[twobobsworth]

The bank is protecting themselves from being sued.

 

[Aaron_C]

Yes they won't budge on it. That is one of 100s of properties in possession...they know someone else will come around eventually. Plus, as twobobsworth said, they have to get at least the valuation price for the mortgagor to avoid getting sued.

 

[JWR]

Oh right - didn't think of that.

Further info - property was passed in a month ago at 110ish.

So the market is clearly telling them the price is too high right?

What would it take for them to come down?

 

[Sunfish]

I'm left wondering who's being stubborn?

 

[JWR]

haha - I am just trying to manage my risk!

Nobody went broke from underpaying...

 

[Aaron_C]

Back in the old days when a mortgagee took possession of a property they could do with it as they pleased. In fact, the excess didn't even have to go to the mortgagor.

However, now with the intervention of the law etc they have to take into account the interest of the mortgagor. Although it is unlikely the mortgagor would have any equity left after all the fees/charges etc are paid out.

Time to move on...

 

[Propertunity]

So the market is clearly telling them the price is too high right?

Not necessarily. It could be telling them that there is no-one in the market that wants to pay what their valuer says it it worth currently.

It may be that the market is full of low ball offering, predatory investors, that the bank has little time for ......etc.

What would it take for them to come down?

It may also be a case of a MI being invloved.
The bank may want to say 'yes' but the MI does not want to have a claim to setlle or chase the absentee vendor for the difference - so they are saying 'no'.

 

[marg4000]

You admit that the price is "very cheap" but you are not prepared to pay it.
Clearly the bank knows the value of the property and is not prepared to give it away.
Stalemate.
Your best option is to walk away.
Marg

 

[kathryn d]

Pay the price..what is a few extra dollars !!!

Get the bank to hold the mortgage for you..and maybe they will discount the interest rate

 

[BMan]

if its such a good deal when would 10k more make it not worth it?

 

[JWR]

No it is still well worth it.

I just want the extra money for my next purchase! $1 extra than I need to pay is overpaying.

I have kind of resigned to the fact I will need to pay at least 135k but will be fihting hard to get it for less.

Thanks for the help.

 

[Dazz]

haha - I am just trying to manage my risk!

Nobody went broke from underpaying...

Nobody made wealth by driving past a property in 20 years time and saying to their kids "I could've bought that house for a screaming bargain.....".

don't want to lose it - it is easily the most compelling buy

Your actions and words are not consistent.

 

[Piston Broke]

Nobody went broke from underpaying...

Your negotiating against yourself lol

 

[kathryn d]

Everyone wants to get a bargain.

Sometimes paying full price is the best bargain.
Maybe add some conditions you want..like early access, or longer closing.

We have paid full price on many properties, happily, because it was the conditions we really wanted.

 

[JWR]

I will buy it - just a matter of price.

Do banks ever allow flexibility of terms in morgagee situations?

Will try 12 months settlement with early access if I pay full price (so I can recoup 10-15k of rent back) but will push and most likely get 3 months settlement with early access.

 

[boods99]

I will buy it - just a matter of price.

Do banks ever allow flexibility of terms in morgagee situations?

Will try 12 months settlement with early access if I pay full price (so I can recoup 10-15k of rent back) but will push and most likely get 3 months settlement with early access.

If you have not settled, then you will not be getting the rent...
Have I misinterpreted?

Boods

 

[mattnz]

I have paid full price for my last 2 properties and am about to pay full price for the next also, to get the terms I want. Some times the terms are more important, especially in a situation like that. Pay full price, get a long enough settlement to complete the renovations and then get the reval on completion to get all the reno costs and deposit paid for free. Then move onto another deal.

 

[JWR]

So I got them down to 137.5k

Little victory I suppose.

Normally I would be firm and insist on my price (125k or under most probably). And given enough time and no competition I would most probably get it.

However with the interest rates coming down I fear if I leave it until the open inspection on Sunday someone else will come along and take it (which has happened a few times last year to me already!)

If only I had time...

I'm thinking I should counter offer at 135k tonight and will sign at either 135 or 137.5 by tomorrow arvo to make sure its mine.

Any other advice?

 

[Aaron_C]

No one likes chiselers. You are acting like one.