Join Australia's most dynamic and respected property investment community

Mexican standoff in negotiations: Creative minds needed!

Discussion in 'General Property Chat' started by Health4wealth, 3rd Feb, 2016.

  1. Health4wealth

    Health4wealth Member

    Joined:
    1st Jul, 2015
    Posts:
    17
    Location:
    Country NSW
    Hi guys,

    I am in need of some help with my current situation.
    I have come across a residential property on the central coast of nsw.

    It needs significant renovations and so once I went through the property it was obvious that the 300k selling price would need to be lowered.

    I came to 270k as an offer and vendor cam to 290k. I then got a P&B and was ready to go unconditional with an offer of 285k but the P&B had structural elements which needed to be taken into account, so I had to come back and offered 265k and then went to 275k and that it my absolute limit.

    Not many people are interested as its a lot of work and both cosmetic, structural and landscaping needs attention.

    I need a create way to put another offer to the vendor.
    I’m interested as to what other peoples minds can think off cause I’m fresh out of how to get this deal across the line before someone else beats me by 5k or something.

    Looking forward to the help.

    Kind Regards,
     
  2. Bran

    Bran Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    3,229
    Location:
    At work
    If you are worried about someone beating you by 5k, then why not pay the 5k? Set your limit... then walk away.
     
    Rugrat, Ted Varrick and wylie like this.
  3. Jess Peletier

    Jess Peletier Mortgage Broker - Australia Wide Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,784
    Location:
    Perth WA
    Put a time limit on the offer. If they say no, end of deal and you get to move on.
     
  4. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,509
    Location:
    Sydney
    What did vendor say about your 275k offer?
     
  5. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,842
    Location:
    Sydney
    1. Outline why your offer is what it is (using BnP). Communicate it in a confident, matter of fact way. Let them know anyone else buying it will uncover the same issues. You are ready to accept now if they agree. Get a check or something tangible to them with a deposit.
    2. Put a time limit.
    3. Pull the plug when they go over. Move on. Find more deals. Stay unemotional.
    4. If they come back to you weeks later and you’re still looking to buy, the new price is 270k.

    That’s what I would do.
     
    Rugrat, Perthguy and Jess Peletier like this.
  6. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
    Offer them 276k and tell them that you will waive the cooling off period. Chat to the agent and let them know that this is what you will be offering as a last and final offer. I am sure the agent will try and assist to get the deal done.
     
  7. Health4wealth

    Health4wealth Member

    Joined:
    1st Jul, 2015
    Posts:
    17
    Location:
    Country NSW
    275k is my limit... not 5k more
    I was ready at 285k until structural issues arose and now I'm holding firm at 275k

    I am ready to go unconditional at 275k (no cooling off)
    Vendor is sticking to 285k/
    and I'm at 275k

    I need to bridge the gap with creative terms guys, not 276k or more,
    agent is on my side and has communicated as best possible that 275k is a fair price,
    I need to convince vendor with other terms.

    Any other ideas?
     
  8. bob shovel

    bob shovel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,396
    Location:
    Somewhere in the land of Oz
    Do what @Leo2413 said and say your revised offer is now 10k less after your detailed review, plus talks with tradies! :p
     
  9. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,842
    Location:
    Sydney
    1. Longer settlement
    2. shorter settlement
    3. Rent back
    4. Deposit amount
    5. Offer your first born

    Once they sense weakness/desperation, its all over.
     
    Last edited: 3rd Feb, 2016
    Perthguy likes this.
  10. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,509
    Location:
    Sydney
    You seem very keen to get it. Is there an upside to this? If you fix it would it increase value? If so by how much? What's the expected yield? What's the expected capital growth? $5K can be small in the scheme of things. Only you know (without telling us) whether it is worth the buy after research.
     
    Leo2413 likes this.
  11. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,842
    Location:
    Sydney
    Agree. Price and value are often not the same. If asking price is 290k but you see value of low 300s, then offering 285k is fine, as opposed to less (finance permitting).
     
  12. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,521
    Location:
    Sydney
    If the agent is on your side, he/she needs to get the job done.
    A good agent would find a way, if there is a way.
     
    Leo2413 likes this.
  13. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,842
    Location:
    Sydney
    @Ace in the Hole make it worth the agents time and they will give it their best shot. They always look after self first, then client.
     
    larrylarry likes this.
  14. Inov8ive

    Inov8ive Well-Known Member

    Joined:
    17th Jul, 2015
    Posts:
    484
    Location:
    Sydney
    If you wouldn't pay 1k more than my guess is it's probably not an amazing deal and you should just let it go. I was in a very similar position with a Brisbane purchase and we couldn't reach a deal after me demanding a 15k discount after B&P. I ended up giving the vendor 1K back and going unconditional immediately and they accepted feeling that they had got something. Even though it was only a measly thousand dollars.
     
  15. Tim & Chrissy

    Tim & Chrissy Well-Known Member

    Joined:
    5th Dec, 2015
    Posts:
    813
    Location:
    NSW
    Are you confident you are across the cost of the structural work? Has a reliable builder been through? (Building inspectors aren't always builders in NSW).
     
  16. VB King

    VB King Well-Known Member

    Joined:
    8th Jul, 2015
    Posts:
    127
    Location:
    Ho Chi Minh City
    Staple a cheque to the offer, no cooling off. Show you're serious.

    You've done your DD & confident of what's good value for you - so waiving cooling off doesn't cost you anything but has a value to the seller.

    The selling agent is on your side at the moment - as others have said, motivate the agent to work for you.

    A hand full of possible outcomes;
    - they will (begrudgingly) accept (they know the issues with their property after all)
    - they don't accept - and you lose it to someone else (don't worry ... It may be you on a different property that scoops a fair deal after another unsuccessful buyer), and the other buyer has probably paid too much then...
    - it doesn't sell & they come back to you / or you come back to them after watching the property go stale (same offer or less) - with the upper hand.
    - they don't sell - in which case you know they were asking too much (onto the next deal for you) ... You were never going to buy it at a rational price anyway, there is such a thing as an irrational seller

    In all likelihood, it will be the second last scenario if the property has the issues you've described (unless someone silly comes along, most buyers won't want to buy a problem - and you should never compete with someone silly anyway) ... In which case good luck to them and back to scenario 2. ("Plenty more fish in the sea" ... And not the buyers market it has been).
     
    Last edited: 4th Feb, 2016
  17. BarneyRubble

    BarneyRubble Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    83
    Location:
    Brisbane
    There are excellent suggestions in this thread. Point that I want to make thought is the agent is not on your side. They may agree with your view of the price, however all they want to do is conclude the sale.

    See below:

     
  18. Ace in the Hole

    Ace in the Hole Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,521
    Location:
    Sydney
    Isn't the agent on the side of the strongest, most influential party?
    Either the seller or buyer has to give in to make a deal happen in this case.
    If the agent can see it's not going to be the buyer, then the seller needs to be sold to by the agent.
     
  19. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,842
    Location:
    Sydney
    Well that's precicely my point. I have seen agents 'work' anyside in order to make the transaction successful for themselves and not necessarily always in the best interest of their clients.
     
    Azazel likes this.
  20. HUGH72

    HUGH72 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,124
    Location:
    FNQ
    If its a good deal at 275k then it should still be a good deal at 276k? If its not then why pay 275k? A thousand dollars obviously is better in your pocket but I struggle to see how its make or brake.
    Move on and if it doesn't sell and agent may come back to you at a later date.
     
    Inov8ive, Perp and wylie like this.