Snagging a private sale, quickly, in a hot market.

[Richard Feynman]

There's no harm in asking, right?

So:

• Ran into guy who wants to sell his place.
• He wants to save on agent fees and sell privately.
• He moved out 3 months ago and is currently renting.
• He's going to sell this place (crazy) to buy in the suburb he started renting in 3 months ago.
• In his own words, he's "not an investor".
• His tenant has 9 months left, and is probably paying $30-$40 below market rent.
• A recent sale in his complex (level above) has given him the idea his place is probably worth $20k less than the recent sale. His place has a superior floorplan, he claims.
• He mentioned there was a huge levy raised a few years ago to revamp the place (tile outdoor areas, repaint etc) but he paid it all up front. It's likely that other owners are still paying it off (I'll do a strata search to confirm). I reckon this reduced price of the recent sale as the buyer would have inherited that burden.
• He is getting a "valuation" done soon, and by that, I mean, he's going to be asking agents what they think it'll go for. I don't think he's very astute.. Either way, I think it'll come in a good bit over what he's thinking it's worth.

I'm arranging a private inspection ASAP, hopefully before anyone else gets a look in (a handful of others are now also aware he plans to sell). If it aligns with my expectations, and ticks the boxes, the price he thinks it's worth is a steal, $15-$30k below market value, easily.

So, anyone want to offer some food for thought, suggestions, strategies etc to secure this place quickly, at what HE--not the market--thinks it's worth? Moving quickly is vital; not only because I have competition, but if he gets a few vals done, his price expectations will justly rise.

I'm always open to input so fire away. Negotiation/bargaining tactics, special contact clauses to sweeten the deal, offer strategies etc. Go nuts. I'm all ears.

Cheers in advance.

 

[cu@thetop]

Get your lawyer to put in a contract with a due diligence/finance clause and a deposit ASAP to stop him talking to anyone. Stitch/sign him up immediately. Get your own valuation that you can show him. Tell him he would have had to pay commission on that price so he would have ended up with less in hand so you will split the nominal commission amount and take half of it off the purchase price as you had to prepare the contract etc.

 

[JacM]

Make the vendor feel comfortable about the process by keeping great communication happening. This helps them feel in control of the process rather than feeling it is being inflicted on them.

 

[Alex P Keaton]

[*]He mentioned there was a huge levy raised a few years ago to revamp the place (tile outdoor areas, repaint etc) but he paid it all up front. It's likely that other owners are still paying it off (I'll do a strata search to confirm). I reckon this reduced price of the recent sale as the buyer would have inherited that burden.

So, anyone want to offer some food for thought, suggestions, strategies etc to secure this place quickly, at what HE--not the market--thinks it's worth? Moving quickly is vital; not only because I have competition, but if he gets a few vals done, his price expectations will justly rise.

I'm always open to input so fire away. Negotiation/bargaining tactics, special contact clauses to sweeten the deal, offer strategies etc. Go nuts. I'm all ears.

Cheers in advance.

How old is the building? Are you able to get a hold of the minutes of the meetings or talk to the strata company. Check to see if more works are in the plans. Maybe that's why he is wanting to sell because there are expenses (More repairs coming up) & Also if he has previously paid for some work maybe the committee are talking about introducing a sinking fund as their kitty may be getting low. Strata fees may be going up too.


I had a $2600 roof bill I had to pay for after 2 years of owning my place. Luckily at least we had $20,000 in the kitty so we didn't have to introduce a special levy or increase our strata fees. It was an expense I wasn't expecting.

A few weeks ago I was checking out this old apartment complex in Mount Lawley and they were asking a crazy $400-450 k. Only valued at $390k. After doing some research it turned out it would be a huge money pit. Lots of work needed to be done including a cosmetic Reno and landscaping in the next five years. A $500 special levy had to be implemented over the five year period to pay for it.

The complex had some work done in the past which meant the strata fees and sinking fund fees were already high to begin with. And now this $500 special levy. The property was also unrenovated and had a pool. I've decided to stay away from old buildings now and stick with new/near new.

So be careful not to rush into anything.

Good luck

 

[impala67]

I didn't have anything new to add...it's been a few days...

1- inspection?
2- offer made?
3- has he had agents quote it yet?

 

[Richard Feynman]

Vendor wasn't willing to arrange an open prior to the weekend.
Vendor spoke to a few agents.
Vendor now wants > $35k more.
Vendor will get it.
But not from me.

Thanks for the input everyone. Some brilliant ideas and input. The only thing that got in the way on this was me being unwilling to make an offer prior to an inspection.

(also still chasing finance but a clause on the offer would have addressed that).

I'll still pop down on the weekend to have a squiz.

 

[starter]

Why didn't you make and use the cooling off period to do the inspection? If you're worried about the 0.25% could have inserted a subject to inspection clause or something like that.

 

[Richard Feynman]

Why didn't you make and use the cooling off period to do the inspection? If you're worried about the 0.25% could have inserted a subject to inspection clause or something like that.

Soon after I posted, he spoke to an agent who'd opened an apartment in the same complex on the weekend, who disclosed that he'd been blown out of the water with an offer well above the price guide. That killed it.

I'm not not in a rush and will find a superior asset in the near enough future. Happy to pay market value if I must, but I'll be doing my best to buy under as I did on my last one.