Making Low balll Offers on Rural land

I'm going to buy a small plot of rural land under $100k.

Anyway, I won't go into all the details but I'm only looking at spending around 70k on the land at most.

What I would like to know is how low could I offer? My plan is to make really low offers and hope to find a desperate seller. If someone is selling for 120k would it be unacceptable to offer 70k or would that just be a slap in the face and considered rude? What benchmark can I refer to?

There is no rush for me but obviously the sooner I can find something the better. Can I also make multiple offers, for instance, make offers on say 10 properties or would this cause problems if 3 came back to me and said let's talk?

Do the rules change when the property has been on the market for a long time?

Also, what about properties listed as "Under Offer or Contract", do you recommend to make offers on these ones in case the deal falls through, again can you make multiple offers on several?

 

There are no rules in this area, just offer away.

 

thanks Terry for you feedback, much appreciated. I'm probably hoping to also get some feedback on people who have done similar things or have been a seller or buyer in a scenario when an offer was up to 50% below asking price. How many members make really low offers and how much success do you have?

 

for "under offer" you should chase the REA and say your interested if the deal falls over. Also suss out how motivated the seller is

As for low balls, find comparable sales and know the previous sale prices combined with likely sales price, also find out demand in the area and the shape of the economy etc etc if it's rural check rain gauges. Add all that together... then offer 60% of asking price
There's a magic formula there for the mathematicians to work out

 

u never know, as rural land is difficult to sell, so they may be happy to see a keen buyer and u can then start the negotiation.

 

Try and be flexible and attractive on other parts of the contract which will entail working out motivations - is a short settlement wanted, lease back by owner, long settlement

That will soften the blow of a low offer.

 

Or a cash offer with a shorter settlement ie no waiting on Bank's loan department so use a LOC to finance if you can draw from equity elsewhere.

 

I will pay cash so it should make it easier it seems

 

Not all cheap rural land will have a building entitlement

 

If you're making multiple offers, make sure and tell each real estate agent that you have already made other offers. Also be clear and tell them that you like each of the properties you have offered on and will purchase the first one that is accepted by a vendor.

 

I would not waste your time on multiple offers,and also those under contract ..Just target one at a time may take 20-30 times and there are no rules for this value is what you see ..

 

Yes this is very important. There is land which may have flood or fire risk which cannot be built on. The fire risk is a new thing and is not always obvious as you may see surrounding houses but new applications won't be granted anymore

 

Each situation and reason for selling is different, there is no rule and rules are made to be broken. You need to know the reason for selling. It may be part of a bitter divorce settlement and the lowest offer may be accepted, its happened before. How much do you want the land? I have bought 6 rural properties mostly in the early 90s , after banks got their fingers burnt, and were reluctant to finance rural properties at that time, I paid a higher price and getting vendor finance with 0% interest and payment by installments over 20 years, suited me and the vendor, they had income, they kept the equity or increased it in their other property as the value weren't diminished, and they were able to get a part pension and more importantly a health care card. I also paid top dollar to acquire one property and people said I paid too much, years later they still wanted it and I was getting offers of 6 x what I paid, so with the lending restrictions I sold it to access the capital, it was a mistake as it increased in value by 40% in the last 2 years since I sold it. The problem with the vendor finance was that they held a 2nd mortgage on the property and made getting finance difficult so I paid extra and paid out the loan after 9 years, when I realized I had significant CG and wanted to access it. It was another win, win for each party.

 

PJ, look, it depends on the market ie is it a buyers or sellers market? Who holds the upper hand?

It is very difficult to get a bargain in a sellers' market but it does happen.

I, personally, have made many low ball offers in the Sydney residential market. Since the boom started in 2013 I have rocked up to heaps of open houses and hit them with low balls.

Many agents know me. I know because I see them roll their eyes as I enter their properties. "Ha, me again!" I yell out.

Haven't scored one yet but I'll keep trying. It will happen. Persevere.

 

Are you sure your name isnt Moshe?

 

I have noticed many with no building entitlement. If the area is safe from flooding fire etc is it hard to get this changed with the council?

From what I understand I can build a 50 metre garage etc and could live in it if I use the property for farming or gardening etc which is what I plan to do but the problem is that I think its very limited to how many days I could live there. There would still need to be a toilet system etc.

Also, what about those properties by beaches like near Nelson Bay, is there any chance they will change to allow a house in the future or could I be waiting decades?

So when i search they are often listed as rural, lifestyle, residential. I assume lifestyle blocks are out of the question and rural ones will need to allow buildings.

 

I do notice many as "offer under contract" for land as well. I will probably do a reverse search when I'm ready to buy and start with the ones that have been listed for the longest time. I will also keep on top of new ones. I have already started book marking potential properties.it also depends on how much cash I get after I sell my current property soon.

 

It is very hard to change councils mind on the no building entitlement ones - they are classified that for your own safety and that of the SES/RFS who will attempt to save your beehind in an event.

Lifestyle blocks in my area often can be built on so do check them out.

 

what's the deal with using a caravan or van etc to stay in on land where building is allowed? Also, some properties might have a large garage that one could live in while they build the home. Is there a limit on how long you can stay in temporary accommodation with the authorities?

 

Council may have rules about how long you can live in a caravan or shed. They may be OK while you are building or for a month or two a year but may rule it out for longer.

Be sure to check before buying. Also, they may have rules, but not enforce them strongly ( of course this can change).