What to do when a property is already under offer???

[Mindmaster]

The only IP i've bought so far was not under offer, no competition so I'm not sure of how to buy an IP that is under offer. Do you guess what the competition are offering and try to make a slightly larger offer?

Take this place for example http://www.realestate.com.au/cgi-bi...r=&cc=&c=97713523&s=vic&snf=rbs&tm=1241181346 It is the kind of place i'd buy.

It is priced at $225 to $245k. I'm assuming the initial offer would be at least $245.

So would would people here suggest doing? Make an offer of say $250k?

 

[Propertunity]

The only IP i've bought so far was not under offer, no competition so I'm not sure of how to buy an IP that is under offer.

Why would you want to? It is a lot of stress about a pretty average kinda place. Find one that isn't under offer.

Do you guess what the competition are offering and try to make a slightly larger offer?

Now that's just crazy talk. Then the original offering ppl up their offer above yours? Where will all this lead for you?

It is priced at $225 to $245k. I'm assuming the initial offer would be at least $245.

Big assumption and don't expect the vendor's agent to tell you the truth about the other offer either (unless he's a bad agent)

So would would people here suggest doing? Make an offer of say $250k?

Move on to another. Source properties that are not advertised so you don't compete. Be the first one the REA calls when he gets a new listing. Before he takes the pics even.

 

[Rixter]

Find out what term/s the vendor is wanting. Then ask if the current offer meets them. If it doesn't, then pitch your offer to vendors terms or hot buttons. Asking price is not the only factor!

In other words, find out what the vendor wants then give it to them! (providing it fits your circumstances)

Hope this helps.

 

[Ms Jade]

When I first read your question my gut response was to encourage you to put in an offer - until i saw the property. There is nothing particularly great about this place as an investment, Mindmaster. Sorry, i don't mean to offend you. but this is a garden variety Frankston Nth 3 bedder. Unless it is your dream home I have no idea why you'd want to pay top dollar for it. I say top dollar because you could buy a better house for 10-20k more in Frankston proper for the price. Granted there is not much stock available, and coupled with the FHOG things are going a little crazy. I would wait for a better buy if it were me. There will always be a good buy on the horizon.

 

[Sailesh Channan]

Talk to the agent to discuss the current offer. Some times they will accept back up contract. This means if the current contract fails then your contract is presented next.

 

[Mindmaster]

When I first read your question my gut response was to encourage you to put in an offer - until i saw the property. There is nothing particularly great about this place as an investment, Mindmaster. Sorry, i don't mean to offend you. but this is a garden variety Frankston Nth 3 bedder. Unless it is your dream home I have no idea why you'd want to pay top dollar for it. I say top dollar because you could buy a better house for 10-20k more in Frankston proper for the price. Granted there is not much stock available, and coupled with the FHOG things are going a little crazy. I would wait for a better buy if it were me. There will always be a good buy on the horizon.

Thanks for your opinion Jade.

That property is just an example of what I see as a good buy (sounds like I'm mistaken) that is under offer to help with my question. I often see properties under offer and I have/had no idea how do deal with that kind of situation.

Now after teh great input, I have a much better idea.

Now curiouis on what your ideas of a good buy are

 

[Perp]

You need to be familiar with the laws that are applicable to the state in which you are buying. In particular, at which point the prospective purchasers have an exclusive right to buy the property. It can vary a lot!

For example, in QLD, once you have a contract signed by both parties, it's "all over", nobody else can step in. In NSW, it's completely different; I think you can still get gazumped up until the contract goes unconditional.

You need to know where you stand, whether you're the one who's got a contract, or the third party wanting to "muscle in".

 

[Ian (WA)]

Ozperp,

Just seeking clarification for Qld.

If a property is "Under Offer / Under Contract"........it cannot be trumped (gazumped)???

I would have to rely purely on the previous contract to fall over before my offer could be considered, even though I can submit such an offer in the interim?

Can you confrim please?

Cheers,

 

[Perp]

If a property is "Under Offer / Under Contract"........it cannot be trumped (gazumped)???

I would have to rely purely on the previous contract to fall over before my offer could be considered, even though I can submit such an offer in the interim?

That's correct, provided it's "under contract". In QLD, you make an offer, it's accepted, and you and the vendor sign a contract - albeit with conditions (ie subject to finance etc). Once you've both signed, the buyer has the exclusive right to purchase, unless a condition is breached and the contract voided.

 

[Ian (WA)]

Thanks Ozperp.....just wanted to be sure.

Good luck for your US deal.

Cheers!

 

[Ms Jade]

Thanks for your opinion Jade.

That property is just an example of what I see as a good buy (sounds like I'm mistaken) that is under offer to help with my question. I often see properties under offer and I have/had no idea how do deal with that kind of situation.

Now after teh great input, I have a much better idea.

Now curiouis on what your ideas of a good buy are

Hey MM, it doesn't mean that you're mistaken. It was just my opinion. As the saying goes, it's probably worth what you paid for it.

There is always the possibility, especially with finance approvals right now, to snafu a property that is already under offer. I have heard that many buyers are asking for 2 week extensions on their finance clause & sometimes 2 weeks more. What you can do (and I have done) is put your best offer in writing to the vendor. This is not just based on price but on as few conditions as possible. In my experience, that means no "subject to finance" clause. Say in your offer that if for any reason the buyer can not go unconditional by the required date that you are prepared to offer $xxx not subject to finance. The vendor does not have to give the first buyer an extension and may instead go for your offer.

BTW, haven't had much of a look but quickly found this one as worth a look:
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

 

[Ms Jade]

And I'm sure any forumites looking around the area would have circled this one.4/2 houses are always a plus in Frankston!
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

Only problem with this one is that the work's already been done. Still, may be the cheapest house in Frankston Sth. I count it as a plus that it's going to auction as that will put buyers off around here. Don't know what they're thinking going to auction unless they need a quick sale (as auctions force buyers to act in a certain timeframe). Worth a look JIC no one wants to bid:
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

 

[Property Meister]

And I'm sure any forumites looking around the area would have circled this one.4/2 houses are always a plus in Frankston!
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

Only problem with this one is that the work's already been done. Still, may be the cheapest house in Frankston Sth. I count it as a plus that it's going to auction as that will put buyers off around here. Don't know what they're thinking going to auction unless they need a quick sale (as auctions force buyers to act in a certain timeframe). Worth a look JIC no one wants to bid:
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

so does anybody know how much the south one went for?????

 

[Mindmaster]

Hey MM, it doesn't mean that you're mistaken. It was just my opinion. As the saying goes, it's probably worth what you paid for it.

There is always the possibility, especially with finance approvals right now, to snafu a property that is already under offer. I have heard that many buyers are asking for 2 week extensions on their finance clause & sometimes 2 weeks more. What you can do (and I have done) is put your best offer in writing to the vendor. This is not just based on price but on as few conditions as possible. In my experience, that means no "subject to finance" clause. Say in your offer that if for any reason the buyer can not go unconditional by the required date that you are prepared to offer $xxx not subject to finance. The vendor does not have to give the first buyer an extension and may instead go for your offer.

BTW, haven't had much of a look but quickly found this one as worth a look:
http://www.realestate.com.au/cgi-bi...r=&cc=&c=95139511&s=vic&snf=rbs&tm=1242377721

Thank you for your very good ideas for negotiating for those properties that are already under offer. So having full prepproval on a loan and basically being able to put money on the table in front of the seller can be a big advantage.

Just checked that listing on rea.com that you gave almost a week ago and it is still for sale. A reassuring sign. I am sometimes nervous that good properties sell so fast it is hard to get to them.

 

[Ms Jade]

MM, there's never any guarantee with the bank of course, even if you get pre-approval. But if you know that someone will definitely give you the funds then this is a very strong position. You don't have much bargaining power if the vendor is waiting for the first buyer to get finance & then you also offer "subject to finance." they will probably just give the first buyer an extension. You have to make the REA realise that you are a serious and qualified buyer. No conditions means that they are certain to get their commission as it's not easy for them when offers fall through either.

As far as good properties selling, there will always be a good deal around. just with the shortage of stock + FHB grant it will be harder. I think that investors are driving the activity in Frankston Nth again, whereas Frankston proper has more home buyers.