Urgent- how to give offer for a property with very low asking price
- Thread starter ozcherry
- Start date
I am pretty sure i know the property you are talking about. The listed price was ridiculously low and i made an enquiry straight away, i would have paid full asking price of 275. Now i see they have changed it to say "plus offers". I wonder whether a bidding war will ensue now?
Good luck with it. I think Im out... Don't like it when there is a buyer frenzy!
Good luck with it. I think Im out... Don't like it when there is a buyer frenzy!
No don't do that,because it's very hard to go down from a high offer,very easy too go up from a low one,be very carefull with something like this because re agents are trained in going for broke..imho..
Thank you all for your advice!
I have been a bit overwhelmed and now i am trying to relax a bit and prepared it is just a learning experience.
Now my question is when you usually go to see your solicitor? Is it before signing an offer or after the offer has been accepted by the seller? I was wondering whether i could just sign an offer on the spot with those "subject to" clauses(finance, inspection, strata search).
I have been a bit overwhelmed and now i am trying to relax a bit and prepared it is just a learning experience.
Now my question is when you usually go to see your solicitor? Is it before signing an offer or after the offer has been accepted by the seller? I was wondering whether i could just sign an offer on the spot with those "subject to" clauses(finance, inspection, strata search).
Get a copy of the contract and forward it to your solicitor or get the REA to CC & email it to them for you.
Then speak with your solicitor about it
other thing to remember.........
The deal of a lifetime comes around once a week.
Over our time in prop - we have been drawn into specific deals, and you tend to get yourself caught up in the moment.
If you are feeling overwhelmed - take a step back and centre yourself on the fact that if you dont get this deal, you will most likely find another one at some stage in the near future.
The deal of a lifetime comes around once a week.
Over our time in prop - we have been drawn into specific deals, and you tend to get yourself caught up in the moment.
If you are feeling overwhelmed - take a step back and centre yourself on the fact that if you dont get this deal, you will most likely find another one at some stage in the near future.
Hi ozcherry glad to hear your making your first offer on a property.
A few words of advice:
Don't rush in; the timing of your offer is important if you want to secure the property for a good price. Sometimes it's good to act fast but that's usually when the vendor is motivated. Other times it's better to gather all of the information you need to make an educated offer that you can back up if the vendor or agent challenges it.
Before you make an offer call the agent and ask:
"how much are you chasing for this property?"
This will give you an indication as to what the vendor wants.
"how did you come up with the listing price, what comparable sales did you use?"
Careful how you word this; it's important that you don't get the agent off side - this will help you research some other information to fight their listed price.
"what's the lowest amount you'd be comfortable taking to the vendor"
This will let you know how much the agent wants so he can get the sale.
"how long does the vendor want settlement to be? Is it on a specific date?"
This is a sneaky way of finding out if the vendor has already bought another property. If there is a specific date then they need the unit to be sold for finance reasons (usually).
After you've found this information out you should have a much better understanding of what a realistic offer can be. You can definitely offer lower than what the agent is comfortable with but you should have done some homework to support it.
HOMEWORK:
Once you've done your homework, have a good idea of what you're willing to pay and know how motivated your seller is decide when you're going to call the agent and make your offer.
If the property is just coming on the market the vendor may not be motivated to sell in hope of getting a better offer; OR they might be happy with an off-market sale as it saves advertising costs and is a quick turn around.
If you do decide the time is right do not be specific with your verbal offer to start off with. Say that you're around the figure they've listed at but you can't quite get there - suss out the lowest amount the agent will take again.
Make a verbal offer and have a buffer in place so you can negotiate.
If your offer is low they'll most likely refuse it blank or counter offer. If they refuse I'd recommend waiting until there is more motivation, you might miss it this way but that's better than paying more than you want. If they counter then counter back with a offer that is still lower than theirs and say:
"This is my final and best offer." - it might not be your best offer but in that second... it is.
See if they take it... if not you can always offer again in time.
If it's accepted document the offer in writing. As others have suggested sometimes it's much stronger to submit your offer in writing first. That's another approach and you may decide to do as well.
GOOD LUCK
A few words of advice:
Don't rush in; the timing of your offer is important if you want to secure the property for a good price. Sometimes it's good to act fast but that's usually when the vendor is motivated. Other times it's better to gather all of the information you need to make an educated offer that you can back up if the vendor or agent challenges it.
Before you make an offer call the agent and ask:
"how much are you chasing for this property?"
This will give you an indication as to what the vendor wants.
"how did you come up with the listing price, what comparable sales did you use?"
Careful how you word this; it's important that you don't get the agent off side - this will help you research some other information to fight their listed price.
"what's the lowest amount you'd be comfortable taking to the vendor"
This will let you know how much the agent wants so he can get the sale.
"how long does the vendor want settlement to be? Is it on a specific date?"
This is a sneaky way of finding out if the vendor has already bought another property. If there is a specific date then they need the unit to be sold for finance reasons (usually).
After you've found this information out you should have a much better understanding of what a realistic offer can be. You can definitely offer lower than what the agent is comfortable with but you should have done some homework to support it.
HOMEWORK:
Go to realestate.com.au and click on the "SOLD" tab. Research the recent sales and compare them with the one you're interested in.
Get an RP Data or Residex report for that property. Take note of the sales history for this property, the sales in the area, and the CMA (current market analysis) estimate.
Talk to other agents in the suburb and ask them about the street and how much they'd list something like yours for.
Get an RP Data or Residex report for that property. Take note of the sales history for this property, the sales in the area, and the CMA (current market analysis) estimate.
Talk to other agents in the suburb and ask them about the street and how much they'd list something like yours for.
Once you've done your homework, have a good idea of what you're willing to pay and know how motivated your seller is decide when you're going to call the agent and make your offer.
If the property is just coming on the market the vendor may not be motivated to sell in hope of getting a better offer; OR they might be happy with an off-market sale as it saves advertising costs and is a quick turn around.
If you do decide the time is right do not be specific with your verbal offer to start off with. Say that you're around the figure they've listed at but you can't quite get there - suss out the lowest amount the agent will take again.
Make a verbal offer and have a buffer in place so you can negotiate.
If your offer is low they'll most likely refuse it blank or counter offer. If they refuse I'd recommend waiting until there is more motivation, you might miss it this way but that's better than paying more than you want. If they counter then counter back with a offer that is still lower than theirs and say:
"This is my final and best offer." - it might not be your best offer but in that second... it is.
See if they take it... if not you can always offer again in time.
If it's accepted document the offer in writing. As others have suggested sometimes it's much stronger to submit your offer in writing first. That's another approach and you may decide to do as well.
GOOD LUCK
And you still have a cooling off period after you've signed a contract
^ True. Cooling off period is when you should organise your building/pest/valuation inspections for. Do not make an offer subject to inspection, it makes it much less competitive.
The unit isn't as good as it looks in the photos and it even feels a bit shabby. The lower floor is brick, the upper floor is timber board ( I don't know the right word for it). The living room ceiling obvious had some leaking problem from the ensuit bathroom, which may still need serious work in the bathroom.
Just be careful. When we were looking for a unit for our son to buy, there was a very cheap unit at Kedron that had condemned staircases, one of which had a deadline for replacement, which if not done by that date, meant a $100K fine (from memory). The other staircase also needed work, and there was something about a $100K roof replacement. I think there were six units and I think I worked out it would be $30K or $40K per unit to have all this work done. My figures may be slightly out, but there were two in the block for sale. One had been renovated nicely (from the photos) and the even cheaper one needed totally renovation.
I recall a few months back someone came to this site who had actually bought one of them, and he was having issues with trying to offload it. I don't think he ever came back to say what happened. To be honest, even with the added cost to rectify all the problems, the unit was still probably a reasonable buy and in a great position but it was the "obvious" issues plus the "what else might be wrong"? that put us off.
So, if something seems too good to be true, it is prudent to dig deeper.
Having said that, we bought a cracker of a house, listed by an agent from a different area, and I believe it was underpriced due to them not knowing the area. There were five contracts going in, so we offered $2K higher than the $154K list price and got it by $1K.
Next lowest buyer tried hard to bully the agent into somehow not honouring our higher price, brought our solicitor into it, and we had a few hours of "what is happening?". It was not enjoyable. The "bully" buyers were local developers who wanted to develop the block and were NOT happy at missing out by $1K when they also paid higher than asking. Thankfully, the agent did the right thing.
I recall a few months back someone came to this site who had actually bought one of them, and he was having issues with trying to offload it. I don't think he ever came back to say what happened. To be honest, even with the added cost to rectify all the problems, the unit was still probably a reasonable buy and in a great position but it was the "obvious" issues plus the "what else might be wrong"? that put us off.
So, if something seems too good to be true, it is prudent to dig deeper.
Having said that, we bought a cracker of a house, listed by an agent from a different area, and I believe it was underpriced due to them not knowing the area. There were five contracts going in, so we offered $2K higher than the $154K list price and got it by $1K.
Next lowest buyer tried hard to bully the agent into somehow not honouring our higher price, brought our solicitor into it, and we had a few hours of "what is happening?". It was not enjoyable. The "bully" buyers were local developers who wanted to develop the block and were NOT happy at missing out by $1K when they also paid higher than asking. Thankfully, the agent did the right thing.
HI Ozcherry
I would like you to take a deep breath and ask yourself why this particular unit?
It looks to me like the agent has deliberately advertised the property at a lower price than they really want for it, just to garner a lot of excited buyer interest post July 1st stamp duty changes.
Today is Monday, you still have until Friday morning to make an offer before the vendor cancels his auction and saves him/herself the auction fee (perhaps $5000) which gives you an idea of price leverage. BTW< agents expect to get calls on the weekend.
I would like you to take a deep breath and ask yourself why this particular unit?
It looks to me like the agent has deliberately advertised the property at a lower price than they really want for it, just to garner a lot of excited buyer interest post July 1st stamp duty changes.
Today is Monday, you still have until Friday morning to make an offer before the vendor cancels his auction and saves him/herself the auction fee (perhaps $5000) which gives you an idea of price leverage. BTW< agents expect to get calls on the weekend.
Just have to ask how many units are in this block,is it just a standard 6-8 pack on above 800sqm's total land area..
Thanks a lot wylie for sharing your experiences. Yes, it is too cheap and makes me doubt there might be some hidden issues. But it seems impossible for me to find out.
The location is good, the size is good. Especially for the asking price it is excellent value.
It is not an auction. The RA I gathering offers today and will submit to owner tomorrow.
There are six units all together, with four at the back and two at the front. This is one of the four at the back.
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.
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.
