First Home buyer : No Price guide and Tricky Agent

Discussion in 'The Buying & Selling Process' started by Vishh, 8th Nov, 2020.

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  1. Vishh

    Vishh Well-Known Member

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    Hi All,
    I went and saw a 3 bedroom property and we liked it. Its renovated recently.
    We asked the agent regarding price guide and they didnt provide any. Instead they gave comparable sales of nearby property at a cul-de-sac location which was sold at 860k around 2 months back.
    1. I went to nsw land value site and saw this cul-de-sac property value is 557k, whereas our property of interest is valued at 426k. ( I think since it is on main road). This is just for reference.So I think the agent's comparison was not correct.
    2. I went to propertyvalue and saw property value is shown as 750k to 800k.
    3. I found 3 recent property sold on same road in last 6 months and it is between 800-820k. Their value in propertyvalue site is shown in 800-850 range.

    In my opinion as per above points 770-780k is what in my mind, but can stretch till 800k. However I dont want to lose this as it ticks all checkboxes and hence I really need help on deciding what to put as offer.

    Thanks,
    Vish
     
  2. Trainee

    Trainee Well-Known Member

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    Land value tells you nothing. Obviously because you are not just buying land.

    Propertyvalue or whatever isnt very reliable.

    Market is surprisingly warm at the moment.

    Sounds like you cant afford the asking. But the asking isnt that far above comparables even if you discount the main road.

    Best bet might be to offer your max and put an expiry on the offer.
     
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  3. Vishh

    Vishh Well-Known Member

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    Since Agent only told properties above 850k as comparable sales, I feel like they may be expecting above what is worth and outside my range.
     
  4. Trainee

    Trainee Well-Known Member

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    The comparables are to justify the asking, but the comparables may not be fair.

    sounds like you think the comparables are around 800-820, but your max is at the lower end. So isnt your only hope is to offer your max and hope you get lucky. In a falling market (say 2018) you could have waited the seller out. Now...
     
  5. Vishh

    Vishh Well-Known Member

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    My main worry is what if bank values only at 750k. Recently happened to my friend and he had to lose the token deposit.

    Did you mean adding date for my offer? like "I would like to offer 780k and valid till 13/11/2020 5pm"
     
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  6. Trainee

    Trainee Well-Known Member

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    Check with your mortgage broker and go through your comparables with them. Then offer what you think it will value at. But be prepared to get rejected a lot if your estimate is low.

    something like that. Force the seller to decide before the next open. Bird in the hand and all that.
     
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  7. Vishh

    Vishh Well-Known Member

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    Mortgage broker's report said 785k. Thanks
     
  8. Trainee

    Trainee Well-Known Member

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    Lets play a game. Say you offer 820k and seller accepts. Bank val comes in at 785k. You have enough extra cash to make up the valuation shortfall.

    Will you crash the contract and lose 2k? Or would you go through with it?

    maybe the answer is to look for something cheaper. This is a really weird market to buy in right now.
     
  9. Vishh

    Vishh Well-Known Member

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    It will be really difficult if bank valuation comes around 20-30k less. So yes deposit will be lost.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Often for our clients they see it as an opportunity to further reduce the selling price or improve their conditions.

    A low val isnt all bad


    ta
    rolf
     
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  11. Propertunity

    Propertunity Well-Known Member

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    I agree with @Rolf Latham above. Bear in mind that when you are in 5 business day cooling off period, the seller cannot sell to someone else, decide to not sell, nor increase the price they agreed to sell to you at. However, you may try to renegotiate the price (downwards) due to a low val or anything else that you want. The seller may not accept if course, in which case you can rescind the contract before the cool off period expires. Yes, you'd lose the 0.25% deposit - but I see that as just a cost of doing business (and the cost of having complete control of the property for 5 business days).
     
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  12. Vishh

    Vishh Well-Known Member

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    Thanks everyone. I sent the offer and Agent hasn't replied yet. I expected a reply atleast.
    Fingers crossed.
     
  13. Trainee

    Trainee Well-Known Member

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    What did you offer?
     
  14. Vishh

    Vishh Well-Known Member

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    790k. Mortgage broker said 790-795k as bank valuation.
    I put 13/11 as offer expiry date.
     
    Last edited: 9th Nov, 2020
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  15. Vishh

    Vishh Well-Known Member

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    Today agent replied "Thank you for your offer". Will submit to the vendor.
    Does that mean mine is amongst highest offer?
     
  16. Trainee

    Trainee Well-Known Member

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    more curious about how you inferred that? The agent is supposed to pass on all offers to the vendor.

    Though you cant control what the agent or vendor does with the offer. The vendor might shop it to other buyers. The agent might use it to crunch the vendor, especially if the asking really is above market.

    Maybe yours is the only offer. Maybe there is another offer above yours that the agent will use your offer to condition the vendor with.

    All you can trust is your own assessment of fair value.
     
    Last edited: 10th Nov, 2020
  17. Vishh

    Vishh Well-Known Member

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    because when I called agent yesterday morning he was saying 850s is expected range, still he called me yesterday evening asking my highest offer and when I said thats the max I can offer, he said he will let vendor know.
    Today he sent text msg saying will submit to vendor.
    In the earlier instances, Agents told outright mine will not go through if they were expecting 850 and I submitted below 800s.
     
  18. Jacque

    Jacque Jacque Parker Premium Member

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    NSW agents are legally obligated to present all offers (unless they have vendor instructions in writing to the contrary) and this is a standard response. What prompts has he provided that make you think it's the highest offer?

    Also to consider some other questions....
    What's the level of interest in the property?
    How long has it been on the market?
    How many contracts have been issued?
    Any building/pest/strata reports carried out? (agents have to reveal numbers here)

    *If agent not forthcoming on price:
    what range did they put on the listing agreement?
    What is the vendor anticipating as the most ideal outcome on price?
    How did they arrive at that price?
    Out of the comps provided, which is the closest to this property?

    Have other offers been made? If so, when and what happened?
    What is the agent going to do with all the offers/what's their selling strategy/game plan?
    What other terms can you offer to tempt the vendor, besides price?
    (You need to know the vendor's situation here in order to help solve any possible problems/scenarios)
    At what price will the vendor be willing to exchange in the next xxx hours?
    etc

    Good luck :)
     
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  19. Rich2011

    Rich2011 Well-Known Member

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    What report? Auto Val?
     
  20. Rich2011

    Rich2011 Well-Known Member

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    That's a standard response.