How to approach neighbor to buy their property

Hi

I am interested in buying my neighbors property in sydney but unsure of how to approach them so that it leads to favourable outcome.

Both mine as well as neighbors are rental properties.

Purpose is to combine both lands for development in future and land bank for now.

I can find out neighbour address from council and send them a letter or I can involve a realestate agent.

Approaching directly would save seller realestate agent’s commission (provided they are willing to sell and accept my price).

Should I mention the price in letter or leave it open for further discussion?

If I mention a price that’s 5% higher than market value plus a no-commission deal (because dealing with buyer directly) would that make it look appealing?

Any suggestions?

 

Dropping things in a letterbox wont get far. The tenant will bin it. Speak to the tenant and see if they can identify owner on the lease. Tell them you have interest in keeping it as a rental too so they wont be concerned

Council wont tell you. You can do a land title search for a token fee BUT it only shows the names then need to find where they live and if that name is listed anywhere (eg unmarried name etc) and hope they arent overseas.
Real estate agents will charge you as a buyers agent
The PM may still charge vendor a commission if their contact allows it.

 

Thanks @Paul@PFI . You are right. As per new privacy law council are not giving out neighbors address anymore. However, I can have council forward my contact to neighbor by filling out a form. Upon receipt it’s upto neighbor to contact me.

I am going to try below (in that order):

1. Forward my contract to neighbor via council. (there is no guarantee council has upto date contact of owner). Then wait few weeks.
2. Find name via title search and look them up on internet.
3. Approach tenant and wait few weeks for owner to call me.
4. Try their PM and see if they can have me connected with owner.
5. Involve a re agent and let them take over the process.

 

1. The owner gets your letter but ignores it.
3. Tenant contacts owner, again ignored.
4. PM contacts owner, again no response.
5. Agent contacts owner.

After four separate approaches, what do you think your chances are of buying for a reasonable price? The owner will naturally assume you desperately want the property, and will jack up the price accordingly.
Marg

 

How much over market price are you willing to pay?

 

5-7% above market.

 

You are right. That's my concern.

May be as a first step I can involve a realestate agent who can try to bring this property to market for an open auction.

If that fails then I can reveal myself to neighbor and try with a above-market offer.

Finding a re agent who I can trust will be a challenge. It's possible that they change sides and reveal owner of my intentions leaving me worse off.

Also, re-agent works in owner's interests (in theory) so I can't expect them to be discrete about my presence.

 

Would you sell to your neighbour for 5-7% above market? Factoring in cgt, costs of buying another property, etc 15% above would be breakeven.

 

Not in theory. In law.

 

You are getting way ahead of yourself.

There is every chance your neighbour does not wish to sell at this time. End of story.

If you want to give it a go, I would suggest you contact a buyers agent, negotiate a fixed fee to present a signed contract to the owner, with an expiry date.
Marg

 

There's a fair way assuming your blocks are identical. You put a price out there neighbour chooses to either buy you out or get bought out at that set price.

Any other way you are taking advantage of them (That;s how you make money I guess)

 

This has been contrary to my experience.

 

Approach the neighbour in a pair of budgie smugglers. "If you don't sell me ya property ya gonna get plenty more of this lol"

 

We have purchased property many times without an agent. We have done this by door knocking.

Start by being honest and come from a space of wanting to create a win/win without wasting money on agents.

PAUL

 

Depends on the owner. I wouldn't sell any of my properties at 5% above market price.

 

Only if you arrive with 5 or 6 similarly dressed mates.

 

Local school/church is buying up neighbouring properties to expand. They have paid about $200K (15-20%) over peak prices for each of six blocks so far. If you are serious, I think you need to have a think about how much premium you are willing to pay.

 

That's sick.