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

[oakmont]

No need to rush in my friend. I used to know nothing about properties, but the more open houses I went to, the more experienced I got. I even prepared myself for auctions on renovators by costing renos etc. even if I was unsuccessful at the auctions it did not matter, as my research did not go to waste, as it prepared me better for the next one that came about. Now I have a database on how much everything cost as a result.

I also used to be emotional like u, esp if I miss out, but with practice this is no longer the case.

FYI, I'm still looking for my second property, so im not some guru or anything. Always be prepared to step back if gut feel says no, esp if it's for a ppor. Good luck

 

[willair]

I kind of have got a figure in my mind to put down on the paper, just wondering about the number of days in the clauses. The agent has talked me into squeezing to the minimum days (7 days for finance, 7 days for building and pest), and even 21 days for settlement. According to him, the owner wants to sell ASAP. Although I did not hear any specific reason for a quick sale.

Would you think I could get into any trouble to minimise these days?

Edit: I expect to get my pre-approval tomorrow without much trouble.

Just tell them you want 60 days,and step back and think what the agent wants is not your problem,also if the vendor wants a quick sale then tell them to drop the price also not your problem,and the more you look into
flats-units more then 20 years old is they all need work,that's why the vendor-agent wants a quick sale,it's your money..

 

[ozcherry]

Thank you all for your input. This forum is fantastic. I will come more often

 

[Propertunity]

... Yes, it is too cheap and makes me doubt there might be some hidden issues. But it seems impossible for me to find out.

No, not impossible at all. You just needed to do a strata search as you were advised earlier.

 

[Propertunity]

The agent is really quick. And it seems i have missed out by a couple of thousands.

A not unexpected result, given your inexperience, but still a good learning experience. I suppose with so many voices offering advice, it is difficult to know which to listen to. Cheers,

 

[Jake Milne]

There is nothing wrong with a quick settlement time; especially if you have your pre-approval.

When you make your offer there is a page on the contract that will have a section called "Loan (refer to general conditions XX)"

Under this section nominate your lender (e.g. Lender: Commonwealth Bank) and the amount you're applying for. Apply for an amount higher than the value of the property. (e.g. if the property is being purchased for $500K make the lending $510K on the contract.) This way if your bank valuation falls short you'll still be okay.

Where it says "Approval date" write: "7 clear business days from exchange"
This way the timer only starts ticking once you've swapped contracts and that should buy you extra time.

If your bank val falls short or your finance is delayed contact your conveyancor/solicitor straight away and have them apply for an extension. The vendor is unlikely to drop you at this stage and will usually wait for your finance to come through.

 

[Jake Milne]

Originally Posted by ozcherry
The agent is really quick. And it seems i have missed out by a couple of thousands.

When was this said?

 

[ozcherry]

Originally Posted by ozcherry
The agent is really quick. And it seems i have missed out by a couple of thousands.

When was this said?

It was this morning. It is a bit pity. But with all your help, i am pretty happy with the figure i put there. But it is really hard to win this number guessing game.

Big thumb up for everyone replied here. You've helped me a lot. I learned a lot from your stories and advices.

P.S. For future reference, when i received the RE's call "owner accepted someone else's offer...your offer is the 2nd highest...the difference is about a couple of thousand dollars...". Am i supposed to raise my offer or accept the fact that i've missed out?

 

[vaughan]

It was this morning. It is a bit pity. But with all your help, i am pretty happy with the figure i put there. But it is really hard to win this number guessing game.

I'm a big fan of putting in the BEST offer up front and being prepared to walk away if it's not accepted. That way there are no guessing games.

 

[ozcherry]

Hi vaughan, thanks for your input. Yes, if i put my BEST offer up front, i will probably get it. But the problem with that is i will probably pay too much than necessary. So i put quite some effort in "guessing" -- how other buyers would be thinking, what the vendor's reasons for asking a really low price. Like us, everyone was thinking of buying a bargain; the vendor wants to sell it quick, which might indicating hidden issues, where repairs or other sorts of fees we need to put a buffer for.

In other situation, like if i found a "dream house", which i really really want, i may need to use this BEST offer strategy

 

[Jake Milne]

ozcherry sorry that you missed it but it's a good lesson. Be prepared to walk away from deals if you don't get the price you want. There is always another one just around the corner.

 

[Melbournian]

that's true - be prepared to walk away.
i wouldn't be suprised if the agent comes back and says the other purchaser's finance fell through or some other reasons.

there are many variables to play with when making offers such as the settlement days, finance or building inspection conditions etc. As long as you are confident and ok to walk away, it should be ok.

Some of the agents are all mind gamers - and will say there are multiple offers or when you put an offer, they will say there is another offer etc just to bring the price up a bit. When i try to get a good deal - i just put a all lowball cash offer with a week settlement valid for a day and bring a cheque and write the 10-30% deposit and ask they to call the vendor straightaway. If the refuse, i just tear the cheque and walk away. On a few occassion, they called the vendor straightaway and basically accepted as any cash offer should be considered seriously by the vendor.

 

[Jake Milne]

Melbournian is 100% correct - you can always include pressure on your offers... i.e "this offer expires at 5pm on the (enter today's date). That way they'll take you much more seriously.

 

[Jtkumnick]

some good advice on this post, also some terrible advice.

Some general facts:
* More conditions- less chance of getting the property.
* Special clauses- less chance of getting the property.
* Long settlement (over 30 days in QLD) - less chance of getting the property. (unless vendor specifically wants it)
* Pressure clauses (ie offer expires in 24 hours) - less chance of getting the property.
* Telling vendor its a First & Final offer- great chance of losing the property by $1,000.

If you want to get the best price put a cash, unconditional offer with a 21 day settlement, on the actual contract form, with a deposit 3% or more.
If you cant do that (most cant) be willing to compromise.

* Get a solicitor you can talk to BEFORE making any offers. Have them on speed dial and run anything out of the ordinary by them.

 

[Jake Milne]

I think it's a matter of perspective Jt...

Personally if I can't do business on my terms so I'm covered, at the price I'm willing to pay I'm not going to do business... There's always another deal around the corner so there's no way I'd play into the hands of the vendor.

As far as your advice is concerned though; I do agree A cash offer with a quick settlement is a great way to get a good response from a vendor... and would most likely increase your chances as the front runner in a competitive market.

Guess it just depends on how much you want a specific property and how much you're willing to give to get it