Best way to secure a property on private sale

Discussion in 'Investment Strategy' started by Stan, 19th Mar, 2018.

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  1. Stan

    Stan Well-Known Member

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    Had a chat with my mortgage broker and he said he can get finance in 2-7 working days.

    We just drove to the property (9pm) and the area feels nice and safe.

    What do you think of requesting an earlier inspection so we have a head start among other buyers? First inspection coming up this Saturday. What do you think @The Y-man @Marg4000

    Would that show our hands too much?
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    Probably no harm.
    1. Have you got an B&P inspector lined up at short notice? (if you are getting one)
    2. Is the vendor's sec 32 ready? - you could ask for that to be sent prior

    The Y-man
     
  3. Marg4000

    Marg4000 Well-Known Member

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    Why are you so fearful of “showing your hand”?

    They want to sell. You want to buy.

    If you are really interested, phone the RE agent and arrange an inspection as soon as possible. With a strong offer and a time limit you may be able to get a done deal before the first open.

    I have two friends who sold properties within two days of listing. Often the first offer is the best offer.
    Marg
     
  4. Stan

    Stan Well-Known Member

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    I was actually thinking of taking the risk and not getting B&P. I've read a few threads here and quite a handful of buyers don't get B&P.

    My second option is to get a B&P during the cooling off period (based on this thread here - Advice on putting unconditional offer on a Private sale)

    Section 32 isn't ready yet. My plan here is to get it asap (before inspection) and get my conveyancer and mortgage broker to review it so we can put in an offer Sunday-Monday.

    I think its more because when they know we really want to property, they are in a position to ask for 10-20-30k more eventhough we are planning to offer them at the top of their quoted range.
    .
     
  5. The Y-man

    The Y-man Moderator Staff Member

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    It could be a while before it is ready - we have seen properties where it was the 4th week of opens, and the sec 32 still wasn't ready!

    The Y-man
     
  6. Stan

    Stan Well-Known Member

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    Hopefully, the sec 32 doesn't take that long.

    I have a feeling that the longer it takes, we won't be able to match the offers coming in eventhough we are going unconditional.

    The plan is to move fast and close fast.

    Let's see how it goes.
     
  7. The Y-man

    The Y-man Moderator Staff Member

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    Really comes down to the age and general (visible) condition of the property.
    I must admit, for some reason I didn't do a b&p on our own home when we bought it - and it probably was because it was in quite good nick and we could get under the house easily.

    Things did blow up some time later, but they were really "maintenance items" like the ducted heating unit.

    Other IP's we haven't bothered with B&P were ones where we thought would be development or major reno candidates sometime in the near future, and we needed to make a short sharp offer.

    The Y-man
     
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  8. Stan

    Stan Well-Known Member

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    Update on the situation so far.
    Got the S32 on Monday (yesterday) and conveyancer reviewed it and everything is okay. Nothing big except the vendor's conveyancer has a reputation for being very hard to deal with.

    The second week's inspection is coming up this Thursday and Saturday afternoon.
    Called REA to see if we can inspect the property on Wednesday and told him maybe we will put an offer in. He asked how much we would offer and I told him straight up the number which was the absolute highest in their SOI.

    He replied saying it might not get accepted because:
    1. It won't blow the vendor's socks off (eventhough it was the highest price on the SOI).
    2. They still have two more weeks of inspection to go.
    I replied back saying this will be an unconditional offer and we need an answer by Saturday if not we will move on if the price doesn't suit both of us.

    What do you guys think?

    Now thinking back, did I make a mistake of making an offer over the phone instead of in the writing and in-person? He was quite reluctant to put the offer to the vendor. I also think he might convince the vendor to wait for another two weeks for higher offers.

    Thoughts?
     
    Last edited: 27th Mar, 2018
  9. The Y-man

    The Y-man Moderator Staff Member

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    You did fine.

    The agent is obviously very confident of getting over that price.

    The Y-man
     
  10. housechopper2

    housechopper2 Well-Known Member

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    Agreed. Unfortunately you identified yourself in the beginning that the property is worth more than the offer you gave.

    At least you have preapproval now and other properties lined up - you should be able to nail one of those over the next few months.

    Good luck
     
  11. Stan

    Stan Well-Known Member

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    The plan now is to sit and wait.

    A few scenarios now that I can think of:
    1. Best case scenario - Vendor accepts our offer or he/she shoots us a number a few $1000s higher than our offer which we would gladly accept.
    2. Second scenario - Vendor comes up with a number and we start a negotiation process.
    3. Third scenario - Vendor continues on with the campaign (lowest chance of winning the deal).
    @The Y-man What would you do differently? Put the offer in person vs over the phone? Wait for more offers first then jump in instead of being the first?

    I think we were the first serious offer because when I asked the agent if they received any offers, his reply sounded like they receive very little to no offers at all.

    @housechopper2 We are lining up our next target properties as we speak :)
     
    Last edited: 27th Mar, 2018
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  12. The Y-man

    The Y-man Moderator Staff Member

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    Over the phone is the way my chief negotiator does it. When they reach a certain number range, the Agent says "come in, let's talk".

    The ball is in their court, so time to wait.

    The only other thing you could have done in your conversation with the agent, when told it "would not blow their socks off" to ask how much they are expecting ~ they would give some sort of high end aspirational figure

    The Y-man
     
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  13. kaibo

    kaibo Well-Known Member

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    It helps to know the agent but questions you could ask include
    1. What is the process of the private sale? is it after an acceptable offer comes in then everyone is asked to submit one final offer and what kind of time frames?
    2. What settlement terms does the vendor prefer?
    3. How much will the offer need to be for the vendor to consider?
    4. You should submit the offer as if its rejected then they will need to adjust the SOI price

    It pays to have been in the scene over time and know what you are talking about. Agents can tell you a lot and most are good people
     
  14. Stan

    Stan Well-Known Member

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    Is it better to make a written offer instead of a verbal one? Is the rea obliged to present verbal offers to the vendor? I have a slight feeling, he may not present our offer to the vendor after our conversation.

    1. According to my conversation with the rea, if the offer isn't a "wow" offer, they will continue with the campaign. So eventhough we offered the highest price in their SOI, it isn't an offer that would stop their campaign.

    2. He told us the vendor is flexible.

    3. During the inspection, I tried to get this number out of him but he's pretty good at dodging that question. His reply was something along the lines of "I don't have a crystal ball to predict what the vendor would accept."

    4. That is what I was thinking too. Maybe the next one.
     
  15. The Y-man

    The Y-man Moderator Staff Member

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    As a vendor, you get a report of how many went through, interest level, etc
    If you are interested, you tell the agent to follow up and get a written offer.

    Either the agent isn't talking to the vendor or vendor doesn't want to know.

    If the offer is at the top of SOI - could start implicating underquotes......

    The Y-man
     
  16. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Yep, go in with your highest offer and accept where the cards may fall.

    Have seen people miss out on properties they where really keen on over 5 - 10k which equates to $3.55 - $7.11 in extra interest per week.
     
  17. neK

    neK Well-Known Member

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    But they'll happily buy a new car or go on a holiday.... oh well.
     
  18. Stan

    Stan Well-Known Member

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    Yeah, I think they were underquoting.

    Just got an update from the rea that they received an offer that they are happy to sell for which is way above the top of the SOI.

    Top of SOI is ~$630k (our offer).
    And I suspect the highest offer is ~$670k.

    What I am trying to understand here is the way a private sale is conducted.
    I thought we would at least get a reply (reject, accept or negotiate a higher price) since we offered at the top of their price range. If it was at the bottom or mid-end, ignoring the offer would be understandable.
     
  19. Eric Wu

    Eric Wu Well-Known Member Business Member

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    the REA is probably too busy to secure the other offer, he might come back to you after the contract is signed. a "sale" is the top priority for the REA at any moment unfortunately.
     
  20. The Y-man

    The Y-man Moderator Staff Member

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    Understanding underquoting

    Could be time to let the gov know.

    The Y-man
     
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