Urgent- how to give offer for a property with very low asking price

O

ozcherry

Urgently need your advice!

I am a first home buyer and expecting to give an offer for the first time on a property this afternoon. It is a unit coming out on Saturday evening with an asking price below $300k, which is well below its value (should be $350K or above). So i emailed the agent straight away, considering it might be annoying to call or text on the weekend. I called the agent first thing this morning and he apparently was on another call and when he called me back, he said the property would be open this afternoon.

I am thinking of signing the offer on the spot this afternoon if everything as expected. But i am worrying there might be a lot of interest, as it is like a steal at this price. What should i do to increase my chances of getting it? How much should i offer? The current asking price still marked as "negotiable". Should i just offer the asking price, or increase it a bit, e.g. $300k? Would there be any other clause in the contract i could do something about to increase my chances?

I have done a bit research on this property and did not find anything negative. It is close to city, transport, not affected by flood (it is Brisbane), and last time sold in the 90's.

Thank you!
 
An update: i just saw the price tag changed from "negotiable" to "+ offers". Apparently the agent has received many inquiries.
 
You have to find out the reason it is being sold cheap.

For instance, is it because the vendor is having the bank closing in, a divorce or something else causing distress? ;)

Or is it that the BC just voted to spend $50K replacing the roof of the block and ther is no money in the sinking fund and so they are raising a special levy of $x to pay for it all?:eek:

Dig deeper BEFORE you even think about making an offer. If all the ducks line up in a row, don't just offer anything, or you'll just be one of the many punters standing in the line. :rolleyes:
 
Ignore what the agent has said about multiple offers and interest.

If you have already done your due diligence and find that the property is a suitable - go to the RE agent and sign the section 32 with your offer. The RE agent will then need to provide this offer to the vendor.

I have found that if you provide a verbal or emailed offer, it is likely that your offer will be rejected or that the agent will simply leverage it to get a better price off another potential purchaser. That's not to say they won't do the same with the signed section 32 however.

Try to remove the emotions involved with purchasing property (especially your first one!). Submit the offer that you are comfortable with and if it doesn't work out, take it as a learning experience and continue your search.

Good luck!
 
ozcherry said:
Urgently need your advice!

I am a first home buyer and expecting to give an offer for the first time on a property this afternoon. It is a unit coming out on Saturday evening with an asking price below $300k, which is well below its value (should be $350K or above). So i emailed the agent straight away, considering it might be annoying to call or text on the weekend. I called the agent first thing this morning and he apparently was on another call and when he called me back, he said the property would be open this afternoon.

I am thinking of signing the offer on the spot this afternoon if everything as expected. But i am worrying there might be a lot of interest, as it is like a steal at this price. What should i do to increase my chances of getting it? How much should i offer? The current asking price still marked as "negotiable". Should i just offer the asking price, or increase it a bit, e.g. $300k? Would there be any other clause in the contract i could do something about to increase my chances?

I have done a bit research on this property and did not find anything negative. It is close to city, transport, not affected by flood (it is Brisbane), and last time sold in the 90's.

Thank you!
Click to expand...

Whatever you do

1. Contract Subject to Finance
2. Contract Subject to Satisfactory Strata report

and what else your solicitor suggests

ta

rol
 
Propertunity said:
For instance, is it because the vendor is having the bank closing in, a divorce or something else causing distress? ;)

Or is it that the BC just voted to spend $50K replacing the roof of the block and ther is no money in the sinking fund and so they are raising a special levy of $x to pay for it all?:eek:
Click to expand...

How do you find the situation of the vendor? Just ask the RE?
How do you find out the sinking fund special levy? Should i call the BC?
 
I guess the reason the asking price was so low is because the RE is not familiar with this suburb. I had a look at their selling property list and found all of them are houses and in further away suburbs. This is the only close to city unit. They probably have realized this from the overwhelming responses, that is why they changed to "+ offers".
 
7smurfs said:
If you have already done your due diligence and find that the property is a suitable - go to the RE agent and sign the section 32 with your offer. The RE agent will then need to provide this offer to the vendor.
Click to expand...

Sorry but what is section 32? I have never sign a contract before. :)
 
Should i offer the maximum price i am willing to pay straight away? Or if i start from somewhere lower than my budget, will i get a chance to increase it if there are other buyers putting offers?
 
Should i ask for a copy of the statement from the BC and the contract before viewing the property this afternoon? There are still a few hours.
 
Thank you for all your input. I have written down the clauses to be there in the contract. It feels overwhelming. I don't know where to start. For the estimated value etc. i am currently using onthehouse, would you think i need to get a report from RP data?
 
ozcherry said:
How do you find the situation of the vendor? Just ask the RE?
Click to expand...
Yes

ozcherry said:
How do you find out the sinking fund special levy? Should i call the BC?
Click to expand...
Hire a strata search company to do a report for you. As rolf said, make your offer subject to a satisfactory strata report.

You sound a bit overwhelmed. Consider using a buyers agent up in Brissy who can structure your offer, do some research, and advise you. Usually this service is called an "Option 2" and is considerably cheaper than a full search, since you have found the property yourself.

Maybe give Andrew Allen a call - http://www.allenrealestate.com.au/
 
1. Put a sunset clause in the contract, 12/24/36 hours. Stops the vender waiting around for a better offer forces them to decide there and then, puts the pressure back on them.
2. Put in your offer with "First and Final Offer". Be prepared to walk away if you don't get it. Gives the vender the impression you are looking elsewhere and if they want your business they will have to take your offer. Your offer has to be the highest you would want to realisticly want to pay so you will need to do your sums. If you want to live in this as your PPOR you will be there for many years conceivably, so what's the damage in putting in $50K extra to secure the deal. The property mught be say valued $600K in 15 years. The extra $50K would mean you would have a profit of $250K instead of $300K. How would that sit with you.
3. Put a deposit down that would match the agent's fee. For $300K that would be about $10K. That will sit in the trust account and the agent will then be itching to get his grubby little hands on it and start working for you, not the vendor.
 
Propertunity said:
You sound a bit overwhelmed. Consider using a buyers agent up in Brissy who can structure your offer, do some research, and advise you. Usually this service is called an "Option 2" and is considerably cheaper than a full search, since you have found the property yourself.

Maybe give Andrew Allen a call - http://www.allenrealestate.com.au/
Click to expand...

I 2nd that, based on the questions you are asking, seems like you might be trying to do too many things within a short timeframe. Best to get independent expert to help you sort this out as quickly as possible to avoid missing something that you might regret later.

Cheers
 
ozcherry said:
Urgently need your advice!

$300k? Would there be any other clause in the contract i could do something about to increase my chances?
Click to expand...

I would also do exactly as Rolf has already mentioned to get control of the property for the time being whilst you/solicitor conduct more thorough due diligence.

1/Make your offer subject to finance from bank/lender satisfactory to the purchaser.

2/ Subject to Pest & Buildings inspection satisfactory to the purchaser.

3/ Subject to strata report search satisfactory to the purchaser.

......and other conditions recommended by your chosen conveyancing solicitor.

I hope this help.
 
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