Unconditional approvals?

Hi everyone,

This weekend i put in an offer and signed the contract subject to finance. Later on the evening the agent calls back to tell me a few more offers have came in and they are higher then mine.

Furthermore, he advises me that for me to continue to offer on the house i need unconditional approval from the bank because the other offers he recieved are unconditional.

He also advises me if i wish to offer with subject to finance still, the offer has to be ALOT greated then X amount.

Can someone give me their thoughts on this?

I have to let him know tomorrow.

Paul
 
ok, few things:

1. has the vendor accepted and signed your offer?
2. how long ago was the offer given/signed?
3. does the offer have a cooling off period (usually 3 days?)
4. was the offer made during or close to an auction time?
 
ok, few things:

1. has the vendor accepted and signed your offer?
2. how long ago was the offer given/signed?
3. does the offer have a cooling off period (usually 3 days?)
4. was the offer made during or close to an auction time?

1. vendor hasnt accepted any offer yet.
the agent it seems is trying to get the best offers from numbers of ppl and presenting it to vendor, as im told.

2. i gave the offer sat morning and signed sat morning, and he called back sat evening.

3. cant answer that.

4. the house is to be auctioned on 19th sep but vendor willing to sell prior, hence why agent taking offers.


Cheers

paul
 
If the house is going to auction, then they're highly unlikely to accept a conditional offer, or at best, you'll have to obtain finance approval prior to the auction, eg only have a week or so to obtain finance, which will be tight unless your LVR is low, income high, no complications (ie PAYG earner, no structures, no refinances required, etc).

With regards to having higher offers... maybe, maybe not. More likely, the agent's playing games to try and increase your offer. :(

If it's for an IP, and you don't mind missing out, figure out how much you want this particular IP, and at what point the deal changes from "fantastic" to "good", and don't offer any more than this.

You could try saying to the agent "Oh, I was really only interested at this price, but if there are others around who are willing to pay more, then the vendor should definitely run with that because I can't go that high", and see what reaction you get. If the agent seems unwilling to cease negotiations with you very easily, then your offer is more important to him than he's letting on, and that's probably because there are no other offers. ;) Of course, there's a chance (small, IMHO) that he'll say "OK then, thanks for your interest, bye". If that happens, you need to be prepared to walk away. But if, as I suspect, the agent tries to keep you interested, then you've gained the upper hand - they need you more than you need them, and you've made that clear.

If it's for a PPOR, you intend to hold for a long time, and you really, really want this house, then it's up to you to decide how much you're willing to pay for it. I don't consider my PPOR an "investment"; it's a lifestyle choice to live in my own home (no inspections, can change it however I want, etc), so dollars aren't the primary consideration. If you would be devastated to miss out, then you may decide to make a BAFO (best and final offer).

In either case, I would not increase my offer until the vendor makes a counter-offer, or you obtain some concession. Just increasing your offer because they've asked you to makes you look like a pushover, IMHO.

So if it's a PPOR that you really want and you're prepared to pay, say, $50K more, go back and offer $25K more, but put an expiry date on it, eg vendor has to sign the contract by COB tomorrow for the higher price to be valid.

If you feel able to make an unconditional offer, then I'd make the cancellation of the auction, and cessation of inspections and advertising, one of the conditions of the offer.
 
4. the house is to be auctioned on 19th sep but vendor willing to sell prior, hence why agent taking offers.

If I was the vendor, there is now way in heck I'd consider a conditional offer so close to an auction. If you drop out using you conditions, would have pay for another campaign all over, as well as putting the sale back another month.

Cheers,

The Y-man
 
If I was the vendor, there is now way in heck I'd consider a conditional offer so close to an auction. If you drop out using you conditions, would have pay for another campaign all over, as well as putting the sale back another month.

Cheers,

The Y-man

What if my offer was 341k when the advertise price range was 310-340k?
the only condiition i have is subject to evaluation.
 
What if my offer was 341k when the advertise price range was 310-340k?
the only condiition i have is subject to evaluation.

That's an interesting condition - is it a brand new or unusual property (i.e. difficult to value)?


An advertised range of 310-34k could indicate a vendor expectation of around $360-370ish (if in Melb) at auction.

Cheers,

The Y-man
 
I have been down this road a couple of times now and forwarded offers prior to auction.

In all cases they would only accept unconditional offers.

I have heard of this condition before, "Subject to bank valuation" not really sure how this will help your situation as you will still be competing with cash offers, it would possibly need to be a very attractive offer to eliminate the competition.

Is property in Melb? From what I am experiencing RE agents are under quoting, unfortunately I have found and price range has little to do with what property fetches on the day. I had a RE agent from Melb admit today that they are underquoting to attract interest on the day of auction, unbelievable.
 
yes in melb.

offers are already over 340

so im out of the picture. boo.

price are ridiculous atm, 340 + for a bloody unit thats 19squares on 330msq land.
 
yes in melb.

offers are already over 340

so im out of the picture. boo.

price are ridiculous atm, 340 + for a bloody unit thats 19squares on 330msq land.

That actually sounds cheap for Melbourne!! I'm guessing it is a fair way out of the city for that price.
 
G'Day there Paul

Welcome to the Forum

Melbourne's market is very unpredictable at the moment

You will have been given a pre-approval for a certain amount of dollars.

Those dollars, plus your own funds, equals the maximum price you can pay for a property, taking into account stamp duty and other purchase expenses

When you have reached that limit, no matter how much you may like the property, you must be prepared to walk away.

The vendor (via the Agent) seems to be sending out mixed messages. Auctions are currently well attended and some properties are achieving unexpected results.

A customer of mine auctioned their home two weekends ago. They were hoping for $500,000 and the property was valued at $500,000. It sold for $600,500. Very nice house, but standard residential weatherboard so what prompted the buyer to pay $100,000 over the odds?

If you are looking to buy up to the low $300 thousands there are plenty of properties, particularly townhouses, in that price range.

Offer only what you are comfortable with. Auction sales are unconditional sales and are binding 'on the fall of the hammer', so if the property goes to Auction and you are the winning bidder then that's it, you've bought it.

So you have to ask yourself whether you are prepared to bid at auction. If you are, then are you prepared to make an unconditional offer on the property beforehand?

The end result would be the same.

If you want the comfort of knowing that your lender has had the chance to value the property and that you have a firm offer of a loan, then perhaps this is not the property to be pursuing as the vendor seems to want to achieve an unconditional sale which is probably why they have chosen to put it to the market via auction in the first place.

Hope this helps

Kristine
 
Hello Paul,
All offer before auction need to be unconditional if you are hoping getting any result.
I am suprised that the agent didn't tell you about this when you put in your offer.
IMO, giving the current market conditional it is unlikely vendor to accept offer before aution even they are unconditional.
 
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