Opinions needed - how to make offers without seeming too keen?

[tess85]

Hi fellow forumites

Hubby & I are heading off to a few inspections tomorrow (both auctions and private treaties)

We have no idea what our strategies should be when it comes to making verbal/written offers.

Private Treaty

We attended a property last week where, at the 1st inspection, we made a verbal offer of 450k on a place that was asking 470k. My dad reckons that, by making a verbal offer on the 1st inspection, it showed the agent that we were very keen on the place and that he wouldn't ever discount it for us after that.

So how do we get the best price by Private Treaty without seeming too keen? Do we stick with verbal offers or jump straight to the written offer?

Auctions

We aren't keen on buying at auction because you can't have all those clauses that you can have for Private Treaty sales (eg. subject to satisfactory building / pest report etc).

Also, being first home buyers, we don't want to be subjected to all the stress of bidding at auctions etc... we were thinking that a pre-auction sale would be the way to go.

How do we even broach this subject with the agent? And again - do we make verbal pre-auction offers or just jump straight to written ones?


Thanks in advance we are going househunting tomorrow and oh so nervous!

 

[tess85]

I should also mention that we do research using the onthehouse and oldlistings websites to decide our offers. We always start off pretty low though, thinking it is a buyers market... is this strategy ok?

 

[MarkB]

So how do we get the best price by Private Treaty without seeming too keen? Do we stick with verbal offers or jump straight to the written offer?

As I recall in NSW it is all done verbally until exchange of contracts (opposing lawyers draft up the contracts and then the parties countersign).

Getting the "best price" is a bit more complicated than whether your offer is written, verbal, or signwritten in neon lights.

To get the best price, you need to:

• Know your market (what something is really worth, which could be less or more than the REA thinks it is worth),
• Know all you can about the vendors (debt / death / divorce / dumbarses),
• Be a good negotiator, and
• Be prepared to lose the deal*

*But don't be one of the equally dumbarses and turn your back on a place over a few $. If your research says the property is a great investment and stands to make you $$$$, then quibbling over a few $ is bad business in my book.

 

[tess85]

great advice. I'm amazed at how much stuff I can turn up on the net. With oldlistings and onthehouse in conjunction, i can see what a property was advertised for and how much it actually sold for

it's great in our case because we are looking at 2BR units in medium-sized blocks, so there are HEAPS of sales data in the past 2 years!

At the moment we're prepared to lose a few properties by having offered too low to start off with. We want to buy by mid-year 09 so we are in the early stages of looking/offering.

i do agree it's dumb to quibble over, say, $1k and lose one's dream home. thanks again

 

[HiEquity]

So how do we get the best price by Private Treaty without seeming too keen? Do we stick with verbal offers or jump straight to the written offer?

I will qualify this by saying I am ignorant of the vagaries of the NSW market. However, in my experience not "being too keen" is the best defence against seeming that way. IMO verbal offers are a waste of time. A written offer outlines your interest and the exact limitations / conditions of that interest in a professional way - it makes it look like you do this every day and this is just another house of many you could buy...

But again the best defence is not to actually be too keen and to know your values - when to walk away.

How do we even broach this subject with the agent? And again - do we make verbal pre-auction offers or just jump straight to written ones?

Just put in an offer on your terms stating you won't be bidding at the auction. They can take it or leave it - just be prepared to leave it and move on to the next one. In the current market you probably have that luxury more often than usual.

 

[BayView]

I should also mention that we do research using the onthehouse and oldlistings websites to decide our offers. We always start off pretty low though, thinking it is a buyers market... is this strategy ok?

Absolutely.

If you are buying for investment, work out what the property is worth to YOU to buy, and make one offer only. If not accepted move on to the next one - it's just a house, there's a million more.

It apparently is a buyer's market, but sometimes Vendors haven't been told about it.

Low-balling will often require you to give something to the Vendor - a short settlement. It's hard to go low and get a long settlement usually, b ut you never know until you ask.

If it a PPoR, and you fall in love with it, then offer what you can afford based on the asking price and your research. Low-balling may not be the best strategy in that situation.

 

[tess85]

thanks for the tips. It's for our 1st PPoR. Haven't seen any that we are in love with... yet. Just a couple that we were ambivalent about, made low-ball offers on ($20k under asking price), rejected. We're looking to buy over the next 6 months so still taking some time to get used to the whole house-hunting experience.

 

[craigb]

I have a terrible poker face and i have to bite my inner cheek, as not to give it away???

 

[want2bewealthy]

Its a very good weapon to have a print out on street or unit recent sales as I 'saved' myself 30k upon my last purchase with it,
I personally dont 'screw' REA's on price but I like to buy at the right price and save what I can.

I got the sales data from my broker who had quick access to them,

I also just straight out told the agent I was keen and had the funds to purchase so he knew I was serious but I think my main weapon is that I dont buy with my 'heart' Im running a buisness here and if the numbers dont add up I dont buy,

I told him that Im so-so about the property and if the vendor didnt want to accept my reasonable offer then I'll simply find one that will very easily, that puts pressure on the seller because they know they have a sale if they decide to meet my demands, Ive also layed out everything on the table so they can see where Im coming from and Ive done my research. I think that most vendors never really think about these things and that also helps budge them, it worked out very well for me, 30k instant equity.

 

[tess85]

nice work!

I've done that for the apartments/town-houses we've inspected (tracked down the info on the "onthehouse" website). I find it's harder to do the same thing with semis/houses though.

 

[buzzlightyear]

Verbal offer first but I would also state with the price

* expiry date/time of offer
* a specific % deposit (if less than 10%)
* settlement time (you could push this out initially and then "concede" in coming back to a shorter time later in the negotiations. But you may given the deal go for a quick settlement to sweeten the low-ball offer)

It should be short, sharp and sweet, if you know what the property is worth to you.

 

[MissHoney]

Its a very good weapon to have a print out on street or unit recent sales as I 'saved' myself 30k upon my last purchase with it,
I personally dont 'screw' REA's on price but I like to buy at the right price and save what I can.

I got the sales data from my broker who had quick access to them,

I told him that Im so-so about the property and if the vendor didnt want to accept my reasonable offer then I'll simply find one that will very easily, that puts pressure on the seller because they know they have a sale if they decide to meet my demands, Ive also layed out everything on the table so they can see where Im coming from and Ive done my research. I think that most vendors never really think about these things and that also helps budge them, it worked out very well for me, 30k instant equity.

Can I ask, how do you find the REAs when you go down this path? When I've used street sales data I have found some agents to be aggressive towards me, saying to me such things as "don't take any notice of RP data, it has sales to family members etc...not reliable...". There are agents recently who have tried to put me firmly in my place when I've pulled out recent sales history.

Do you have any clues on how to do the above in a diplomatic manner? We are negotiating for 2 properties at the moment (hoping to get 1).

 

[The Y-man]

Do you have any clues on how to do the above in a diplomatic manner?

Walk. They will come chasing after you.

Cheers,

The Y-man

 

[want2bewealthy]

Can I ask, how do you find the REAs when you go down this path? When I've used street sales data I have found some agents to be aggressive towards me, saying to me such things as "don't take any notice of RP data, it has sales to family members etc...not reliable...". There are agents recently who have tried to put me firmly in my place when I've pulled out recent sales history.

Do you have any clues on how to do the above in a diplomatic manner? We are negotiating for 2 properties at the moment (hoping to get 1).

He said the same thing to me, not reliable, could have been private sales, all that sort of thing, I just didnt budge and said, this is what I think this property is worth at this present time and I will pay that, if the vendor doesnt agree with my offer then Ill buy something else next week. this puts the pressure on their shoulders, my advice is to seem reasonably keen and make the REA know you will buy at your price, but let them know that there are hundreds of others on the market at any given time, also tell them that its a rental property and youre only interested in the figures, not emotions.

 

[MissHoney]

He said the same thing to me, not reliable, could have been private sales, all that sort of thing, I just didnt budge and said, this is what I think this property is worth at this present time and I will pay that, if the vendor doesnt agree with my offer then Ill buy something else next week. this puts the pressure on their shoulders, my advice is to seem reasonably keen and make the REA know you will buy at your price, but let them know that there are hundreds of others on the market at any given time, also tell them that its a rental property and youre only interested in the figures, not emotions.

Thanks for this good advice w2bw. I thought it might have just been me...you know how some people just don't dig you the way you think they should. This RE was one of them...just didn't dig my somewhat cheeky but assertive manner.

 

[AdamP]

At the moment its a buyers market. Make a low offer and don't worry about any reactions they give. I'm not sure on whether all real estate agents went to the same real estate school but when making an offer they always do the same thing if its below the asking price. They will either make a small remark about its a bit low but lets see what happens, to whoa that's way too low they will never accept, to Whoa thats way too low im not even writing that down, which they eventually did anyway after just not saying anything and staring at them for 30 seconds. (admittedly I might have deserved that last one considering I put in an offer $100k less than the asking price).

But guess what, they came back with a counter and didn't out right reject it. I withdrew my offer on it eventually as I didnt want to sit there making counter offers for weeks on end.

But its 6 months later and its still on the market for a lot less

I can say though, i did enjoy myself in the negotiation. Each one is a learning experience.

 

[tess85]

^^ so did you buy that place in the end??

They will either make a small remark about its a bit low but lets see what happens, to whoa that's way too low they will never accept, to Whoa thats way too low im not even writing that down...

We got the 2nd reaction - "whoa that's way too low they will never accept"... the agent refused to take our verbal offer to the vendor. He said the vendors wanted 470K when we offered 450K... so we backed off. Is it common to go back to the agent after a couple of months if the place still hasn't sold?

 

[AdamP]

You can go back, im not sure if it would be common to go back, thats a question for other forum members.

But being the cheeky guy I am, I would probably go back 3-4months later if it hasn't sold and offer $420k. You can always preface it with, "you know how the first offer is normally the best"

 

[Sheryn]

Identify the behaviour and tell them....

..... I have found some agents to be aggressive towards me.....

Miss Honey
Coincidence, Hubby and I were out walking today and ran into a Real Estate Agent walking his 2 dogs in the park (has been a REA for years and years). Hubby knows him via his son who has physical & mental disabilities.

Anyway REA said he enjoys walking his dogs in the park as it 'calms' him down as he has to make lots of phone calls morning and afternoon. If he doesn't walk his dogs the REA office staff complain to him that he is in an aggressive / bad mood and the whole office has a bad day.

So he monitors his behaviour daily!...

I would suggest not dealing with someone who is 'aggressive' (pushy) and to manage this person I would be honest and say something along the lines of "We/ I personally find your behaviour aggressive and pushy. I want our/my experience of buying a house or investment property to be pleasant and satisfying - your behaviour will rob me of this opportunity".

A phone call may be the best way to deliver the above message.


Regards
Sheryn

 

[Sheryn]

If unsold offer less...

Is it common to go back to the agent after a couple of months if the place still hasn't sold?

The first month a property is on the market is 'The golden month' you have unsatisfied buyers looking at anything new on the market and new entrant buyers looking at property for the first time.


IMHO
If a property has not sold in within the first month it is overpriced for the market OR the seller has an agenda eg. seller is buying a block of land and building a new PPOR so doesn't really need to sell for 6 months and has put a premium price on the property.


Regards
Sheryn