Best offer or start low

We recently put an offer on a property over east which I believe is worth alot more. The property is advertised from 350k, its a large block with proposed zoning. Rpdata says its estimated value is $430k, we offered 380k.

My question is..do you start with your best offer and hope for the best or do you start at the lowest asking price?

I'm stressing over the fact that we didnt start at $350k, do you think its good that we started at a reasonable price?

 

If it's a rising market and it's below market value, I will probably start with my best offer. Otherwise I may start with lowest asking price or below asking price (depends on the market value). I may also ask the agent the lowest acceptable price.

 

Depends on the market.
If its undervalued, I would ask the agent what figure they want.
There are ways to coax it out of them. They want the quick sale as much you as do.

Words to the effect of "based on my discussions with the bank manger, i can offer $x... is that sufficient? From here you need to learn how to read whether the agent is bored or excited.

Depending on how they respond, i would pressure them with words to the effect of, "what is required, if its a little more, i can speak to my parents and see if i can get some more money, but i need to know the figure that would make it a done deal"

 

You find out the vendors hot buttons that motivates them to sell and then pitch your best offer to push those buttons.

 

We bought our PPOR in a very quiet period for this suburb. Days on market were out to 99+ days. We went in hard and held firm and got the result we wanted. Brought them down only 7 ish percent but that was after they had knocked a fair bit off already to get us in the door. Ended up paying $500 more than the suburb median at the time for a very unique property with ocean views.

We sold our PPOR before this in a very balanced market. It was a case of houses not taking their first offer within that first 14 day period were simply sitting forever (99+ days).
We were offered exactly market price (we had had a lot of feedback and research - so obviously someone else had the same!) so we took it with no subject sale.

In other words, know your market. If you think you've offered low, then you have nothing to lose if there are plenty of other properties like it.

if not.....research is the key.

but it sounds like you've answered your own question.

 

It depends on the market, how long it's been on the market, whether or not it's likely to sell quickly...
If time is on your side, why not submit an offer in your lower price range? You can always go up, but you can't go back down.

 

I would engage the agent in person or on the phone and try to get an idea of how motivated the seller is without being to direct or have him directly disclose info he should not.

Then make a reasonable offer based on that.
Low balling only works when sellers are motivated and with a fast settlement.
And in a recession.

 

A question on offers

How do you go about making multiple offers on different property's?

Is it a case of making your offer subject to it being the first offer accepted?

 

Yes, I remember reading somewhere here just the other day some wording for putting into your offer stating you are submitting offers on multiple properties.

 

It really depends on the situation. For our IPs, we have always offered a discounted price, at least to start with. Our approach is, there's always another IP around the corner, so missing out on one (or a few) hasn't changed our approach significantly.

However we recently bought a property which will be our PPoR in a few years' time. This spot had everything we were looking for - a nicely sized, perfectly rectangular block in an established suburb, great location to local amenities including walking distance to the local primary school, fantastic location to the CBD, and (for us a 'nice to have' rather than a 'have to have', but we really were keen on the idea) a laneway at the back. As an added bonus, the vendors want to stay on for at least twelve months, which suits our purposes.

Anyhow, we offered a good price - it wasn't the asking price, but it was only a little bit less than they were asking. We did this knowing that they'd received other offers, but they hadn't immediately accepted them, which indicated to us that they really weren't prepared to move much. But they did accept ours, which made us really happy.

So, long story short, I guess for us it depends on the situation

 

I ended up getting the offer accepted turns out our best offer was enough to cancel the first home open which was the plan. I guess it really does depend on how desperate the owner is..

 

Great news Martinez22! Congratulations!

 

Well done and congratulations!

 

Congrats but as others had said it depends on the market and what you offer them quick settlement, long settlement. Before the Sydney Boom I used to put the stupidest offers in first and work from there. Only once did I get a first time acceptance and it was 22% off the asking price. Just short of doubling in value four years later

 

Thanks for your help guys !

 

Congrats @Martinez22