Advice on making an offer

Discussion in 'The Buying & Selling Process' started by varun80, 30th Oct, 2019.

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  1. varun80

    varun80 Active Member

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    Hi

    I’m currently looking to buy an investment property in the western suburbs of Melbourne and it is a buyers market from what i’ve seen. I put offer on 4?properties usually 10-15 less than the asking price and in all cases the agents tell me they have more offers, somehow negotiate me closer to within 5k of what they advertised the property for but then I eventually pulled out cos of doubts.

    i want to see what experience ppl have. Example if the property is advertised for 630-670, is it ok to make an offer of 600? Then negotiate from there? Currently i’ve been offering more like 615 and the agents use their tactics to get me to 625 somehow. After i pulled out a few weeks later they advertise the property for 10k less which means it is clearly a buyers market.

    in short i want some negotiating tactics from experienced ppl
     
  2. Westie

    Westie Well-Known Member

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    I haven't been in your situation myself (been doing H&Ls), but what I've read on here is you tell the agent the offer's $x and on the table for 24 hours (or 48/72/...) only, take it or leave it.

    I'll probably get roasted for saying it, but an extra $10k isn't much in the grand scheme of things. If it gets you into a house of your choice, so be it?
     
  3. The Y-man

    The Y-man Moderator Staff Member

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    Well, there's no law as such for it.... so perfectly ok from a legal sense! :) Doesn't sound too "lowball' IMHO

    1. If it was a buyer's market, you would have bought by now.
    2. so they list is for 10k less - why didn't you buy it at that point?

    The Y-man
     
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  4. varun80

    varun80 Active Member

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    When they listed it at 10k less, my doubt is if the market is dropping even further. If there are no buyers in the market then I do have a chance of waiting and buying at a cheaper price.

    Not sure If i agree that if it were a buyers market I would have bought by now is correct. I've been offering and sussing out the market which means on other properties I will be able to bid lower and have a chance of getting one where the seller is prepared to sell. But I'm not an expert on this stuff anyway :) which is why I'm here looking for advice form experienced ppl
     
  5. varun80

    varun80 Active Member

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    The house is really not of my choice. I'm looking at investment stock, so emotions are low. I'm looking for a ok property at a good bargain price
     
  6. Brady

    Brady Well-Known Member

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    1. Forget what the property is advertised for
    2. Figure out what you think is a good bargain price
    3. Offer that amount with decent terms
    4. If accepted, proceed happy days bargain - if not successful move on and stop wasting time.
     
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  7. The Y-man

    The Y-man Moderator Staff Member

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    I suggest doing the opposite - a good property at an ok price.

    The Y-man
     
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  8. thatbum

    thatbum Well-Known Member

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    How do you know if you bought something at a bargain price though? Genuine question, because you haven't really talked about how much you think any of these properties are worth relative to the asking price.
     
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  9. varun80

    varun80 Active Member

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    So my thought process is that whatever they are advertising it for, I end up offering 15k less, they somehow negotiate and bring me within 5k less. The thing I forgot to mention is all agents usually tell me the same thing, I have 2 offers already, 1 is higher than yours but it has strange conditions which the seller does not like, vendor says I need at least this blah blah. But eventually even after I am pulling out, the property is either on the market or re-advertised at a lower price. This tells me that my initial offer shoudl be about 10-15k less, and then the negotition process ends up in the middle, still 10-15k less than the advertised price.

    Hope that makes sense, I'm not the best sometimes in articulating myself
     
  10. varun80

    varun80 Active Member

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    Thanks :) sounds like a good advice. You know much about the Pt Cook suburb?
     
  11. varun80

    varun80 Active Member

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    Thanks. From your experience, if I put in an offer of 10% less than the advertised price (eg: 655k advertised price, I offer 620) do you think the seller/agent will be offended? Or should I really be worried about them being offended?
     
  12. Trainee

    Trainee Well-Known Member

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    More concerned with your definition of 10%.
     
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  13. thatbum

    thatbum Well-Known Member

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    Do you understand what I was saying though? I'm worried you have no idea what the property is worth!
     
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  14. Brady

    Brady Well-Known Member

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    Why would they be offended, it's a offer on bit of paper.

    You need to work on the low emotions



    But to be clear the advertised price is pretty much irrelevant.

    My two best buys.
    1. Exactly on the asking price $335,000, contract signed within 2 days of listing. The property was a great pickup and easily worth 10-20% more. Agent even said after contract was getting calls with offers well over the accepted price. I moved fast, provided the offer unconditional, advised my offer would be removed if they went to open on the weekend. They agreed I gave the price, gave them terms they wanted happy days.
    2. Property advertised for $460,000 I bought the property for $270,000
     
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  15. Trainee

    Trainee Well-Known Member

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    this approach assumes the asking price is realistic and you think its a bargain if you get it for 2-3% less.
     
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  16. varun80

    varun80 Active Member

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    I have some idea - looking at online websites, comparitive sales. But is there a better way of finding out without hiring a professional valuer?
     
  17. EK01

    EK01 Well-Known Member

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    You need to form better relationships with the selling agents. IME, most (not all) will tell you everything you need to know about the sellers expectations and circumstances such that you can then tailor an offer that might be acceptable to both parties with a bit of to and fro (personally, I never want my 1st offer accepted anyway, I prefer to die not wondering).
     
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  18. The Y-man

    The Y-man Moderator Staff Member

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    Nah, sorry, that's across the bridge.

    The Y-man
     
  19. thatbum

    thatbum Well-Known Member

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    Yes, you need to know the property and other comparable properties better!

    Doesn't it worry you that you're mostly just going off an asking price when buying an asset worth 6 or 7 figures???
     
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  20. pinewood

    pinewood Well-Known Member

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    If you know the market well, you will know when it is a bargain and when it is not and what to offer. Don't be in a hurry esp if it's an IP. Attend as many viewings in that area as you can and keep track of what prices they sold for. Don't just go by the internet. By watching the market you will have more confidence as to what to offer for a property you're eyeing. And yes there is negotiation tactics involved but knowing the market puts you ahead of a lot of other buyers. Also read through as much as you can on this forum and books, again the more knowledge you have all round the less you are prone to making mistakes.
     
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