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Buying a house that's not for sale?

Discussion in 'The Buying & Selling Process' started by Fortune Favors the Bold, 11th Dec, 2015.

  1. Fortune Favors the Bold

    Fortune Favors the Bold Well-Known Member

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    I have an unusual question, and would love to hear some thoughts.

    My partner and I have identified a house that we really love and would like to purchase as a PPOR. The problem is that it's not for sale. The current owners bought it about a year and a half ago at auction.

    I know that it would be very hard to buy it, and even if we could it would be even harder to get a decent price.

    That recognized, if we were to try what would be the best way to go about doing so?

    We've been thinking, and because of our unique situation - a large amount of cash in hand and going overseas for the next year or so - there are a range of incentives we could offer the current owner, including, for instance:
    • Offering whatever settlement terms the owner wants (we could even do a six month settlement, or longer)
    • Offering 20% in cash upfront (rather than 10%) at time of purchase, and the remainder on settlement.
    • Offering for them to rent for a year after we've bought.
    These are just a few ideas. I know that this sounds a bit crazy, and maybe it is, but I'd love to hear your thoughts anyway.

    Thanks!
     
    Last edited: 11th Dec, 2015
  2. larrylarry

    larrylarry Well-Known Member

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    Make an offer they cannot resist.
     
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I walk into a car dealership and see a car that hasnt been made yet. Can I buy it ? No. You are likely wasting your time, money.

    You will overpay and even then there is no guarantee. The seller has the ace. They dont give ashite if you want to buy it. My house isnt for sale either. All these deadshite agents keep telling me someone wants to buy it and they havent yet. They have every reason why my price is too high. If its too high why hasnt it sold ??

    A market price is not what the market pays. Its what the owner wants. Tell em they are dreaming !!
     
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  4. wylie

    wylie Moderator Staff Member

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    I would drop a letter in their mailbox asking if they are interested in selling. If they call back it will be out of sheer curiosity to see what sort of money you are offering. If they don't reply at least you have asked.

    Who knows what has changed in the time since they bought?

    Everything is for sale if the price is right.
     
  5. York

    York Finance Broker Business Member

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    You have to keep in mind a couple things. Firstly, they only bought it a year or so ago. How likely is it that anyone who bought their PPOR around a year ago will want to sell again and move on? You need to put yourself in their shoes.
    The second point is as Paul has said, the property isn't for sale. That means the owners have no desire to sell. How can you convince them to sell? You will need to offer them a price significantly higher than what they paid just a short time ago. They will need to be compensated for the inconvenience of such a short stay and also enough that it's more than what they paid plus purchase costs plus the premium of selling when they didn't really intend to more so if they love their home and don't really want to move again. You might find that if you put all these together the price suddenly becomes all too much and in the end you'll be paying way over market price.
    Then again, for some strange reason (I'd say very unlikely) they might have regretted buying it and may be looking for an exit. You never know, but I'd say a long shot.
     
  6. Azazel

    Azazel Well-Known Member

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    Fortune favours the brave.
    Can't hurt to ask.
     
  7. Marg4000

    Marg4000 Well-Known Member

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    Not always. Particularly if it is a PPOR.

    Case in point - that workers cottage in West End that the elderly owners refused to sell to developers. Huge complex was built around them. House recently sold after owners either died or went into care.
    Marg
     
  8. Redwood

    Redwood Well-Known Member

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    Hi there -

    Interesting - this is a strategy for developers, they usually persist for months then settle on a $$$ across 3-4 sites in a line.

    I have a dream home in the heart of melbourne that I want - in the street (with a dirt road) there has only been one sale since 1992, that sale occurred when I got married and I missed out (gggrrrr).

    Knock on the door, tell them you are interested. Say there are no agents and your genuine, get an independent valuation of the site (mine is 2 hectares) - then negotiate a price and settlement terms. For mine - I have had no success, however I am being patient, I recently chucked in a overseas cruise.....no luck yet.

    Really comes down to price. In my area, the chinese are all over it, so knowing i'm not asian they know they can go to market.

    Next steps, couple of slabs of VB on the doorstep for chrissie.


    Cheers Ivan
     
  9. Xenia

    Xenia Adelaide Property Manager Business Member

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    It's worth a go, keep in mind that's how us real estate agents get sales - knock on the door "we want to sell this property"

    Mostly its "no" sometimes it's yes.

    Always worth a try, what's the worst thing that can happen?
     
  10. wylie

    wylie Moderator Staff Member

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    I was more meaning that "unless you ask, you don't know".

    We letterbox dropped several houses when we were looking for a PPOR. We were not successful but I know others who have been successful.

    I'm also thinking of someone who has a major renovation planned, costing more than hoped for, and they would likely consider a good offer rather than go through the pain of the big reno.

    You just never know if someone is regretting their purchase. I would definitely ask the question.

    I do also know a house near Downey Park where every other house was bought by BCC except one that held out. It was left marooned in the midst of parkland until the owner died and it was then bought and demolished. So, I realise not every house has a price, but if someone offered me considerably more than my house is worth, I'd give it some thought ;).
     
  11. legallyblonde

    legallyblonde Well-Known Member

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    There is certainly no harm in asking! I would keep some of the 'sweeteners' up your sleeve though ;)
     
  12. Adele

    Adele Well-Known Member

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    Have actually done this. Property was pulled out of the market few months prior. Had an agent re-approach the vendors. They asked for a wow price ( property was in Glen Waverley ) and long settlement. I passed on it and ended up buying something else.

    Most important question is whether or not you are going to regret buying it over the market price? Keep in mind that with so many properties always coming up on the market, and the fact that you won't be living in it as of yet, there is likely going to be another 'dream home' that you will find. And most likely at market price.

    In any case, good luck. I would be interested in how you go with this.
     
  13. Perthguy

    Perthguy Well-Known Member

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    That's not true. I have owned a property that had a tenant who moved out. I only found out later he moved out because he wanted to buy a place. He spoke to the neighbours and they advised him not to contact me about buying my place for the exact reasons you have given. I wished he had talked to me about buying my place because I would have sold it to him. Just because a place is not on the market yet doesn't mean the owners have no desire to sell.

    My parents in Adelaide would sell their PPoR today if they got a good offer. The place is not on the market yet.

    Now, I'm not saying in this case that the owners want to sell. Just that you can't assume they won't just because the place is not on the market right now.
     
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  14. wylie

    wylie Moderator Staff Member

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    We also have a tenant who wants to buy the house (that is not for sale). He cannot afford it at this time but that may change. It would be a very easy sale for both of us.
     
  15. York

    York Finance Broker Business Member

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    I never said they 'wont' sell. But realistically, they bought it 18 months ago. What are the chances they would want to sell already? Possible but improbable. In your case, only when you found out your tenant wanted to buy your place were you interested. If someone wants to buy something you have you might sell it, after you know they are interested. It triggers your curiosity and creates an opportunity. 'I wonder how much they would be willing to pay?' Like I mentioned, if they had no intention of selling you will have to pay a premium most likely.
    Same with your parents. You said it yourself they would sell it if they got a good offer. Would an average offer be good enough? No. They want top dollar. Which is the point I was making in my post. If the price is right, everything is for sale. In this case based on the details provided by the OP my opinion is that it's a long shot.
     
  16. JDP1

    JDP1 Well-Known Member

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    Worth a try..just ask them...although it will very likely be no..
    My neighbour asked me if he can buy my place even though it wasn't for sale...I declined...no harm on his part.
     
  17. Perthguy

    Perthguy Well-Known Member

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    I agree with a long shot but I don't agree they are not interesting in selling. You are wrong about my parents though. They don't want top dollar. That would be a great offer! I said "good" as in market value.

    Exactly. Even though I had not thought of selling at the time, one conversation later my place would have been for sale. I would have gladly sold to my tenant if he only asked. How do we know these people aren't exactly the same? We don't.
     
  18. Jeah_

    Jeah_ Well-Known Member

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    As with everything in life, you never know what battles other people are fighting. It may be highly likely that they have just bought the house of their dreams and they intend to live their happily married for 30 years. Or one of them could have just been made redundant and they're in mortgage stress, divorce pending, transfer to another city for work is pending, they actually don't like the house but don't think they can afford to move or any of a thousand other scenarios.

    You'll never know until you ask.
     
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  19. Big Will

    Big Will Well-Known Member

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    The worst thing they can say is no.

    However I would have to assume it would need to be an attractive offer to entice them.

    My parents wouldn't sell their house for 3M (probably worth 2.6-2.8M) however if someone walked in and offered 5M they might take it. If it was 100M I am sure they will take it or there would be a divorce being done.

    Mum is more attached to the house than dad.
     
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  20. Mr RD

    Mr RD Member

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    About 80% of the property i buy is off market and could be higher if had more of the right clients. You would be amazed at how many people are sitting around waiting for someone knock on the door. I do however target specific types of property, its not the average 3b BV, understand the proeprties value to you and its value to the vendor. If these two figures start to match you may have a deal. If they say no, you won't die wondering, if they say yes happy days. Often a short term owner is open to selling if they think they can get a quick cash premium esp on a primary place of residence, but take into account their entry and exit costs. Keep the deal simple and as much cash in your pocket as possible. Unless you are going for a DA get the property into your name as soon as possible, just keeps everything neat and tidy. Good luck