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How to make an offer on an overpriced property

Discussion in 'General Property Chat' started by MissSwiss, 18th Apr, 2016.

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  1. MissSwiss

    MissSwiss Member

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    Hi all,

    I'm currently wanting to make an offer on a property. After a lot of research I have concluded that this property has been well over-priced compared to all statistics and other similar houses in the same suburb. Basically it is a 2 bed/1 bath/2 garage, very old, band aid jobs on all of the repairs, needs all external staircases & hand rails replaced, gutters all need replacing, sections of the roof need replacing, some of the timber stumps need replacing, paint jobs are unfinished, makeshift "3rd bedroom" put together with bits and pieces of building material basically, kitchen and bathroom filthy and old junk basically.

    I'm confused because this property is listed at $50k more than the sold prices of other 2 bed/1 bath/2 garage houses that have clearly had recent full renovations. And there hasn't been any real growth in the area over that time, and the supply/demand in the area is 50/50 basically.

    So, am I wasting my time offering $50k under the asking price? Is there something I could be missing here?

    TIA
     
  2. larrylarry

    larrylarry Well-Known Member

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    why this property? what's the plan to make money out of this? is this for investment or just residence? knowing the suburb will help.
     
  3. MissSwiss

    MissSwiss Member

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    Husband is a carpenter so we plan to renovate and flip :)
     
  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    If you've decided what it's worth, tell the agent what your offer is and that's what you believe the value to be.

    They'll reject the offer.

    That's fine, tell them it's still on the table if they decide to be more realistic about their expectations.

    Is the agent eventually comes back and accepts the offer, you were right all along. If they sell it to someone else for more, you were wrong.
     
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  5. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    +1
     
  6. MissSwiss

    MissSwiss Member

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    You are right Peter. They will reject it, I'm sure. And I suppose if they sell ti to someone else for more, then I don't want it for that price anyway.
     
  7. Nick Valsamis

    Nick Valsamis Well-Known Member

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    Also, if they come back to you at a later stage you may have some leverage to counter with a lower offer.
     
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  8. larrylarry

    larrylarry Well-Known Member

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    Good. Put your offer now. If rejected, then you can move on to the next one.
     
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  9. MissSwiss

    MissSwiss Member

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    Ah thanks for the reassurance:) I don't know why I worry about having offers rejected! I shouldn't!
     
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  10. larrylarry

    larrylarry Well-Known Member

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    I recently made an offer on a property and it was rejected. I then withdrew my offer. Agent came back to my original offer because even when its lower, i had better terms..asked me to put my original offer back. I didn't respond further and found something else better. Thanks to the advice given by an experienced investor.
     
  11. HUGH72

    HUGH72 Well-Known Member

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    You won't know unless you try, if it's listed that much over market value it might scare other buyers away.
    The agent might come back to you and if he/she doesn't then nothing other than an over priced house is lost.
     
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  12. Agent99

    Agent99 Well-Known Member

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    are you sure you will turn a profit for the flip if there is so much thats needs doing ?
    It doesnt matter that there is a tradie in the family, it is still time and effort and should be priced into your reno feaso, have you included stamp duty and selling costs ?
     
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  13. dabbler

    dabbler Well-Known Member

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    Some owners get talked into selling places, and agents have them thinking all these lofty prices, they rely on people to turn up but do nothing, then they work on owner to bring them down.

    Offer what you feel is what it is worth.
     
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  14. MissSwiss

    MissSwiss Member

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    Sorry, I wasn't very clear on out intentions. We plan to basically do enough work to make it SAFE and liveable, then rent it for an indeterminate period of time. Should we see some growth, we would then restore the property to it's original glory :p This could be 5 years, could be 15 years.
     
  15. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    If you're not having offers rejected you're not making enough, or offering way too much ;)
     
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  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I used to be worried about asking pretty girls out on dates. :(

    Then I realised that the worst thing that could happen was they'd say no. :oops:

    That terrified me. :confused:




    So glad to be married... :D
     
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  17. Barny

    Barny Well-Known Member

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    After a while you get used to the rejections. It's a numbers game.
     
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  18. MissSwiss

    MissSwiss Member

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    Yes, you are right. I need to remember it's just business, it's not personal.
     
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  19. Barny

    Barny Well-Known Member

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    I was referring to chicks.
     
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  20. MissSwiss

    MissSwiss Member

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    Then I'm glad I'm married and not interested in chicks :p