Offer lower than asking 'range'?

[chunho01]

I'm going to buy my first IP soon. I have researched the suburb for more than a month and I have finally found a suitable one. BUT...

Problem: Asking price that is just slightly out of my budget.

Based on research, I do believe the lower amount in their asking range is actually quite fair. They asked for $400,000 - $430,000. My max possible limit is $390,000.

Strategy: Offer lower with short settlement.

Now I confirmed with both my conveyancer and broker that they would be able to do a quick 30-days settlement for me. So I am intending to throw in $375,000 to begin with, hoping to sandwich my way up to max $390,000, instead of throwing in $390,000 at the very start.

Opinions?

 

[D.T.]

Find out how long its been on the market for (online tools), talk the the agent about why they're selling and what the seller needs. Offer to pander to some of their needs in exchange for a lower price. Maybe it is shorter settlement they want, maybe its something else.

Justify your offer - this gives the agent something to condition his client with. Maybe find comparable properties that recently sold for less or point out some flaw that it has.


Whatever you do, dont get hung up one this one place. Put 10 offers out. 1 will tell you to f off, 3 will ignore you, 5 will counter offer higher and 1 will accept.

 

[wylie]

If you think $400K is fair, you could offer lower, but if I was the vendor, unless I was absolutely desperate I would be so annoyed I would do all I could not to sell to you.

I love a bargain as much as the next person, but not when I've screwed someone over to get it. I would offer $390K and say that is my highest offer. But that is just me.

We recently sold to the same low ball buyer who offered us $50K less than his final offer. He then stuffed us about and decided not to proceed (until his lawyer told him he had to).We had another buyer lined up but went with the low ball chappie only because his offer was cash unconditional, and the other buyer was subject to building and pest and sale of their house. Had we not been selling to settle a legal matter, I would have taken the "subject to" just to spite the lowball chap. Any goodwill we had went out the window.

 

[chunho01]

Do I go 100% sincere and honest?

And by 'pandering to their needs', can I try something different like:

'oh, so your client is looking to move after 60 days. I offer $390,000, a quick 30 days settlement, plus after which they could stay free of charge for the remaining 30 days after settlement.'

I do not intend to screw anyone over, I am just trying to create a win-win. And is $375,000 a 'lowball' already if the lowest asking is $400,000?

 

[r3ckless]

I've done a similar thing. There was no price guide and offers only. The duplex next door is also for sale and has a price for sale. Mind you the place I am after has better/bigger land. My initial offer was the same amount as next door is asking, and willing to comply with either short/longer settlement, and unconditional as per the vendors request. Got knocked back. The next day I offered $15k higher thinking i would get it. I made it perfectly clear to the REA that I am not willing to enter negotiations and that I am adhering to the vendors every requirement and willing to enter unconditional rather than wait a few weeks for auction. They still rejected my second offer and said if I go another $15k it'll be done. In hindsight, I wish I played the traditional low ball offer and eventually make my way up to "market value"

 

[r3ckless]

Do I go 100% sincere and honest?

And by 'pandering to their needs', can I try something different like:

'oh, so your client is looking to move after 60 days. I offer $390,000, a quick 30 days settlement, plus after which they could stay free of charge for the remaining 30 days after settlement.'

I do not intend to screw anyone over, I am just trying to create a win-win. And is $375,000 a 'lowball' already if the lowest asking is $400,000?

IMO, I do not think it is low ball at all. Yes its lower than asking, but you are also offering quuick short term settlement in addition to free rent for following 30 days..... IMO REA are just too greedy knowing they can get top dollar

 

[Jamie M]

It can't hurt trying.

Find out what's motivating them to sell and see if you can sweeten the deal in other areas for them (longer/shorter settlement period, rent back period, etc).

Cheers

Jamie

 

[FrugalOne]

I always find questions like this to be like trying to pick this weeks winning lotto numbers. In that you don't know the answer until it has either happened or not happened. And because you really can't apply any logic to the randominity of how the numbers are chosen - unless of course if you are a chaos mathematician

You can try this tactic, that tactic. Start low. Start high. Find out this. Find out that. And then you've got the agent in between it all, so you really don't know what the truth is or isn't - unless you actually do know. And sometimes your "gunt instinct" or "intuition" or whatever you call it will help you work things out along the way.

Whatever method you use it should be done with whatever thinking process you apply to it. And based on what you are confident about. And based on the particulars that you actually know surrounding the individual property for sale. That's not to say that you shouldn't ask for advice. But be open to possibly gaining from getting advice, as well as losing from advice if you choose to take it. As advice given may not actually be relevant to the particulars surrounding a property that is for sale.

I've found sometimes it's best just to get the bloody truth out there and stick to it. If you think it's worth $x. Offer $x. And wait. Unless, within your way of thinking you wish to get a better deal, and think you can. In which case, can you handle missing out possibly because of your own tactics to get a better deal? Or work out what it is worth. Adjust it with whatever process you need to. Then offer $y, and stick to it. You need to justify your own actions, not someone else.

Good luck

 

[Big Will]

Do I go 100% sincere and honest?

And by 'pandering to their needs', can I try something different like:

'oh, so your client is looking to move after 60 days. I offer $390,000, a quick 30 days settlement, plus after which they could stay free of charge for the remaining 30 days after settlement.'

I do not intend to screw anyone over, I am just trying to create a win-win. And is $375,000 a 'lowball' already if the lowest asking is $400,000?

I would be careful about allowing the vendor to stay in after. Make sure a rental agreement is done up and you are allowed to do you presettlement inspection.

Cause who is responsible for damages on the property in the 30 days between settlement and them leaving? How will you get the money back if there is damage.

I guess just make sure you get your bases covered.

 

[wylie]

I do not intend to screw anyone over, I am just trying to create a win-win. And is $375,000 a 'lowball' already if the lowest asking is $400,000?

If you were selling your house and your range started at $400K, would you think a $375K offer was "lowball"? Would you feel like you were being screwed over? (I am assuming, of course, that the house is not overpriced compared to its perceived value and/or in comparison with other houses for sale in the area.)

 

[Jake Milne]

I'm assuming this is an auction quote as it's a range. If it is, and it's in Melbourne too?

 

[MightyWill]

Really depends on the market in that area. As you know, the market and seller responds differently in each area.

If owner gets no serious offers over the first couple of inspections and that block/street/complex is hot, then the owner and agent will start to realise that it may be over priced. If owner and agent get nothing at all in 4 weeks, they will most likely go for your low ball or meet you half way.

In Sydney metro, if you advertise for 400 plus, it usually goes anywhere from 410 to 450. Only if it's a good joint.

As you know, the ones with uniqueness will always go for top dollar. A med to high rise complex, a corner unit will always go a lot higher than a unit sitting in between two units. Sellers are aware of this and will wait it out for at least a month before lowering or considering low balls.

 

[Harro]

Our opinions don't count. The vendors is the one you need concern yourself with.

How would you feel if an offer came for your property well below the stated range?

 

[Corey Batt]

Lowballing is a numbers game, you might have 14 say no, and have one come back and accept. Generally the only people accepting lowballs are due to extenuating circumstances. Find these people who need a guaranteed sale and it can make for a bargain.