Is it worth offering 650k for properties listed at 700-750? (FHB)

Hi guys,

I'm in the process of buying my first home, so very new to the process.

And a few simple questions I've got after looking at the property market is:

* Is it worthwhile offering $650k-660k for properties listed at 700+?
* How would you approach a REA with such an offer? Should I explain why I'm offering way below the range?
* I've also noticed that REAs are not really answering emails. Is it really the case or I was unlucky?

Thanks for your help

 

Have you tried calling them? You have got nothing to loose. Things are easy to buy but hard to sell.

 

Know what the house is worth before making an offer, otherwise you're wasting everyone's time (including your own). You'll also discredit yourself as a serious buyer.

Do not base your offer simply on Listed price less $xxx. Real estate does not work that way.

 

Yes, you are offering too far below asking price, for that particular price bracket. IMHO.
Why you are offering 50 - 100k under asking price for properties?

Generally the seller isn't going to just drop that much. Because generally the seller is going to want to get what they are asking. Whether the property is actually worth as much as they are asking or not. In fact, the sellers that are asking that much more then what its actually worth, are usually even less likely to budge, in my opinion. Because those sellers who believe their property is worth more then it is, don't like to accept evidence to the contrary. And your extreme low ball offers are simply going to be used by the real estate agent to try and soften the seller up a bit. But unless they are desperate to sell and its been on the market for a long time, then you are still unlikely to benefit from it yourself.
The fact thatthe real estate agents aren't even responding to your offers is evidence enough that they believe your offers aren't worth even responding to.

 

I don't pay any attention to listed prices. I do my own research, outline to the agent why I have offered the price, and go low. I have found it works well when a property has been poorly marketed. Using this strategy may take many offers until you get one accepted, but I think it is absolutely worth pursuing. You have to take a lot of no's before you get a yes. I have bought many properties below land value this way. It is a buyers market in most areas, you have everything to gain.

 

+1. Couldn't agree with this any more.

I don't think its technically correct to say that there's nothing to lose. I agree you lose credibility - which could be very important in negotiations moving forward.

 

If it is because some places are cropping up that you like, you could always go to the agent and tell them what you really like about it, but say your upper limit is $650k. They may be able to direct you to some properties with features you find attractive, but with a compromise that brings the price down.

Having said that, when we bought our current home, it had been on the market a while and had already dropped in price quite a bit, so from when the first advertised it to what we paid there was more than $50k drop, but I think our first offer was about $30k less than the asking price at the time.

Cheers,
Inertia.

 

Which city?
What do comparable sales for a similar property show?

For example, the average discounting in Sydney was 6.9% in April (via CoreLogic on YouTube), so your offer range could be within reason. However if comparable properties have sold nearby for higher prices, then it's less likely a low ball will be accepted unless the vendor is looking for an urgent sale.

 

Not worthwhile IF the agent has priced it correctly UNLESS the property has gone stale or IF the vendor has had a change in circumstances and is now desperate.

By asking lots of questions first to establish one of the scenarios above.

Yes, but it can't be "because that's all the money I have".

REA's aren't good with emails. They are out on the road all day, mostly on their phones. Just call them to get their attention.
THe others have given good advice above.

 

Obtaining average discounting data and applying to a specific property is useless.
No different when agents talk up how they exceeded reserve by $xxx price.
Just means the vendor had lower expectations and the agent did a good job convincing them their house was worth less.
Vendors with low price expectations are great for Real Estate agents. Means they can get paid for doing next to nothing.

 

Thanks for your help[/QUOTE]

Depends on the timing and market conditions.
I bought a property earlier this year initially marketed for $950k plus. Then they revised the price to $900-990k for Auction. I have been watching until the day of Auction. It didn't get sold in Auction and I asked politely if they will consider $850k. They owner took 48 hours to digest however eventually agreed to it.

 

Of course it is, which is why I said to look at comparable sales. I was just pointing out that the lower offer range is within the norms of a market with poor sentiment and it was a counterpoint to the comment earlier that "Generally the seller isn't going to just drop that much".

 

Is it worthwhile offering $650k-660k for properties listed at 700+?

Yes, it is an acceptable starting point for negotiation

* How would you approach a REA with such an offer?

Written, with all other details outlined too (deposit, settlement date, conditions)

Should I explain why I'm offering way below the range?

No, it's none of their business. Let them interpret it however they want.

 

Give it a try. I prefer to make a written offer with a short expiry date with as minimal other conditions as possible. I also dont like to provide any back story or other details to the agent as i think they are usually irrelevant. All they need to know, is that you are serious about buying, have the capacity to do so, but wont buy if it is not at the right price.