Offer - What should I do?

Hi guys

Just want to ask your advice in what you'd do in my situation.

Hubby and I saw a 3brm place yesterday at 5.30pm. Advertised PS was $530-$570k. We both liked it, did some figures and came up with the offer price of $551,800. Reasonable and fair price for the area. Not a bargain, but it's OK and we don't mind not getting a bargain because this one will initially be our PPOR and then an IP a few years down the track.

REA told us an earlier offer of $530k had been rejected. There was a young couple there who seemed really interested and I even overheard them telling the REA they will make an offer in the morning.

We came back to the REA's office at 7.00pm and put an offer down in writing, subject to finance and building and pest inspections. I told him offer will expires by 10am the next morning (today). He said he will see the vendors tonight and see what they think.

9.30am: REA called me and told that I need to put in $5K more and it's mine. I said, "no, that's the final price". He said he'll get back to me.

9:45am: REA said I've lost it as another party offered more. This was the first time that I've heard that there was another party. I asked how much? He said more than $3K more.

We still really wanted the property, so we called back and said, "Ok, our offer is now $555,000" (ie, $3100 more). He said that's not enough. I increased it by $100. He said he's not about to play "dutch auction" with me and that he's at the dentist surgery and have to go.

Should I increase my initial offer by $5K as he wanted? ie, taking it to $566,800? I'm thinking if he didn't take $3100 more, he is really not acting in the best interests of the vendor, as it is actually more than the other party's offer (albeit by only $100) (if there is another party).

What should I do? Any help appreciated.
 
We still really wanted the property, so we called back and said, "Ok, our offer is now $555,000" (ie, $3100 more). He said that's not enough. I increased it by $100. He said he's not about to play "dutch auction" with me and that he's at the dentist surgery and have to go.

Should I increase my initial offer by $5K as he wanted? ie, taking it to $566,800? I'm thinking if he didn't take $3100 more, he is really not acting in the best interests of the vendor, as it is actually more than the other party's offer (albeit by only $100) (if there is another party).

What should I do? Any help appreciated.

If the vendor has already signed on the dotted line to the other party - too late.

You'll need to wait if they fail out on other conditions (or they may disappear as part of a ruse - but going on what the agent said - dentist or not - I think there is a real buyer. Otherwise, he would have said, "Ok, I'll see what the vendor says")

Also, your offer is not necessarily better for the vendor - the other party may be uncondtional. In my experience (as a buyer and vendor), a $554k uncondtional is better than a $600k conditional.


Cheers,

The Y-man
 
You should clearly ask the Agent what it will take to buy the property.

If he comes back with an amount then you can evaluate whether its worth it for you. If he doesn't then probably its no point pursuing him.

Ask him what makes the other persons offer superior, money or conditions?
 
Thanks Y-Man. So you reckon it sounds like there is a genuine other party?

Apparently the other party has put in a written offer, but the vendor hasn't signed yet (as of 10.30am this morning).

I think you're right. The REA did say there are conditions on mine, implying the other party has no conditions.

I'm willing to scrape the finance condition, but not the P&B condition.

Worth a try, or should I just leave it?
 
Removing the finance and other clauses might make your offer stronger, but you need to be certain of your finance situation before proceeding. In a hot market, vendors often aren't keen on waiting for conditions to be met.

Also keep in mind, that the selling agent you're dealing with might be getting as much as 1% commission on the sale. By offering an extra $100, you're giving him an extra $1 in commission - it's not worth his time or effort.

If the deal falls through on your finance clause, he's got to start again and he's got an upset client.

If you really want the property, your best course is probably to beat the existing offer by $5k-$10k, with no special conditions. This does put you at risk however.
 
As a vendor I wouldn't be too stressed about a building & pest inspection, unless I was aware that there is a problem...

You're probably okay to keep these.
 
I think you have messed up by thinking that $100 more is going to secure the house when this is about half a million dollars, you need to get real here! The agent is right, your wastling there time!
 
Thanks Y-Man. So you reckon it sounds like there is a genuine other party?

Apparently the other party has put in a written offer, but the vendor hasn't signed yet (as of 10.30am this morning).

....

I'm willing to scrape the finance condition, but not the P&B condition.

Worth a try, or should I just leave it?

IF they haven't signed, the vendor will probably be ok with just a P&B, as it is generally much harder for you to pull the pin on the contract (short of a major structural issue with the property).


Cheers,

The Y-man
 
Thanks guys for your advice.

I called the REA back and asked him if the other offer was more attractive in terms of conditions or money. He said money. The other party has the usual conditions too - finance and P&B.

I said I want to make a final offer, and would he take it to them? He said that the vendor has already verbally accepted the other offer. I said, but they haven't signed right, so there is no contract yet. I said I will make one final offer with no finance condition attached. My final figure is $566,800 with no finance clause. He said he will have to be fair and give the other party a chance too to give a final offer. I said fine, just get back to me in an hour.

So I'll let you guys know in about an hour's time how it all goes!
 
That sounds good. I think you have given it a good shot. If this still doesn't buy you the place and then there is always the next one.

Don't get into a bidding war with the other party.
 
Isnt it just funny how other interested parties suddenly appear out of the blue after you put in a offer...and those 'new' offers are always no more than than $5,000 more, by this stage I would have just walked away final offer take it or leave it, if I lose, so be it.
 
Isnt it just funny how other interested parties suddenly appear out of the blue after you put in a offer...and those 'new' offers are always no more than than $5,000 more, by this stage I would have just walked away final offer take it or leave it, if I lose, so be it.

me too.. but it's all about emotions. If you're looking for a PPOR and haven't found anything for a while, you tend to do that... it's natural I'd say. For IPs is different. But PPOR makes it "special".

I'd walk away too, but try to convince your wife :)
 
Ok guys, am really ******** right now.

After 2 hours, REA finally called me back. He basically said that the vendors decided to take the other offer, even though mine was "marginally better" by a few hundred dollars, and with no finance condition. He said the vendors decided to take the other offer because they felt an ethical obligation to take it as they have already accepted it verbally. He thought that was a bit strange too, although he said they were of "the old school".

I wonder if there are other reasons why they didn't accept our offer?? It's not like they've signed on the dotted line already!!

But I'll move on, plenty of others for me out there.

Thanks everyone for your helpful advice.
 
He said the vendors decided to take the other offer because they felt an ethical obligation to take it as they have already accepted it verbally. He thought that was a bit strange too, although he said they were of "the old school".

I wonder if there are other reasons why they didn't accept our offer?? It's not like they've signed on the dotted line already!!
I don't think so; I think they're ethical people. I applaud their stance and would like to think I'd act similarly. You told them at 9:30am that you'd already made your final offer. You shouldn't say that if you don't mean it; the vendors assumed that "final offer" meant "final offer", and they're people of their word, assumed you were the same, and acted accordingly.

I don't mean to imply that your tactics were unethical, as I know lots of people play these games in real estate negotiations, but if you are going to play these games, you run the risk of having it backfire. (As it did in this case.)
 
The written down offer WAS our final price, and we were prepared to lose it if it wasn't accepted. Then we changed our mind. I guess next time I won't say it's our final price, or don't give it as a first price?

Anyway, you're right, I did say to the REA that personally if it was me I would've done the same thing so I do applaud them for their stance. But it still made me wonder if there are any other reasons??

I can't help but become cynical about REAs, with all the stories I read on this forum about unethical agents, playing games etc.
 
I reckon he,s playing you,;)
I'm suspecting that there is no oher buyer and that this guy is trying to get the price higher. I'd walk away
Umm, given that the RE agent's statements are that the property is sold and no further offers will be entertained, what possible motive could there be to say this if it's not true? :confused: If they did accept the offer, then I'd be concerned that I was being played, but I can't see any incentive to "play" you in the opposite direction.
 
Umm, given that the RE agent's statements are that the property is sold and no further offers will be entertained, what possible motive could there be to say this if it's not true? :confused: If they did accept the offer, then I'd be concerned that I was being played, but I can't see any incentive to "play" you in the opposite direction.

I assumed BV and painter didnt read the bit about the house being sold when they posted
 
Umm, given that the RE agent's statements are that the property is sold and no further offers will be entertained, what possible motive could there be to say this if it's not true? :confused: If they did accept the offer, then I'd be concerned that I was being played, but I can't see any incentive to "play" you in the opposite direction.

Yes, I agree.

I reckon he wasn't happy that I didn't take the bait the first time around with the suggested increase of $5K. At this point there was no mention of any other parties. When I refused the $5K increase, he simply said that he'll call the vendors and get back to me.

On the 2nd phone call, that's when I found out there was another serious party.

Anyway, no use crying over spilt milk, so to speak.

I need to brush up on my negotiating skills. Is there anything that I should've done differently? Any other approaches that I could've used?
 
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