Offer and Negotiation Tactics (detailed timeline)

Found a property (2 years old-almost new) that was supposed to go to auction in Dec (agent range was 610k-660k) but was cancelled because no one showed up on the day. During the campaign, I attended one inspection and the rest I just watched from afar to see the level of interest and it was popular with over 10 parties attending per opening. Honestly I was surprised the auction was cancelled.

Now the property is up for sale as a private treaty with a range of (650k-660k). From my own research, comparable properties sold in the area during the last 6 months range from 600k up to 650k. But mostly are in the range of 630k to 640k.

I decided to offer 635k unconditional and that was probably mistake #1. See the details below.

Monday: I verbally offered 635k and the agent said will get back to me soon.

Tuesday: Nothing, I was playing it cool because I thought my offer is reasonable.

Wednesday: Agent calls and says they have 640k, will I increase ? I said NO.

Thursday: Agent calls again and says vendor is happy to sell with the lower price range (meaning 650k). I said NO my offer is 635k.

Friday: Agent calls and tells me the 640k offer is not serious buyer and says my offer of 635k is the best so far but I should increase because the vendor will sell immediately to anyone who offers 650k. I said NO. Agent said ok will touch base next week.

Saturday: It's open for inspection and yet again lots of people attending. I was observing from a distance.

Monday: Agent calls and says did I change my mind, I said NO so he said he will speak with vendors. And I asked do you want my offer on paper? He said will get back to me soon.

Tuesday: Nothing. So far it's just talk and nothing signed.

Wednesday: Without hearing back from the agent, I decided to make my offer on paper. I sign and send the contract 635k unconditional.

Thursday: Agent says the vendor is considering it seriously but they have a 640k now, will that change my offer? I said no.

Friday (today): I'm starting to regret offering 635k and giving them 3 days to decide (mistake #2) should've been 1 business day. Agent calls me and said the vendor received a 640k offer and actually ready to accept 645k (that's 5k lower than the advertised range 650k-660k) I said to the agent, I offered a reasonable and unconditional offer from the start and I won't budge from my 635k offer. He said he will speak to the vendors and get back to me.


If you reached thus far in reading, thank you so much. I hope I get a comment or reply from you.

I like the property and accept that 10k is not a deal breaker. I can add 10k to my offer and meet their 645k asking price. But something tells me to wait.

My offer will lapse in 3 clear business days, so that's coming Monday (5pm or 23:59 not sure).

Should I wait and stick to my 635k offer or cave in and raise it 10k to meet the asking price?

TIA

 

1) would you regret not winning this property?
2) Is there another one like this or better in the next 3 months on the market for $635k?
3) How much is your time worth to continue looking every weekend

If answers to all 3 leans towards increasing the $10K then I say go for it and say take it within 24 hours or lose me altogether.

TB

 

I'm flexible and willing to accept a shorter settlement but it's harder to negotiate because the property is tenanted and I want a vacant possession. The agent said they need to serve a 60 days notice to the tenant.

Early release of the deposit is not discussed. Isn't that risky ?

The agent is bluffing and doubt they have other offers on the table.

I want to wait but the wait is killing me.

 

1) Probably Yes. It ticks a lot of the boxes.
2) I can't tell where the market is heading but certainly prices have gone up since I started searching for a property in Sep last year.
3) This is the biggest factor that may make me increase my offer. I'm so tired of searching and inspecting. This is the first (and only) property to have submitted a signed offer because I like it.

 

I can't believe you offered pretty much two weeks ago and just left that offer open.

 

Should have made it expire on friday. Why give them hope from another open?

 

I can exercise my cooling off option Monday morning.

I agree, that was my mistake. I should've made my offer valid for 2 business days not the default 3 days.

 

My verbal offer was just verbal. But my signed offer should've been limited to 1 or 2 business days.

 

Yes but the verbal offer still counts against you. It looks weak that you're willing to hang around for so long.

I personally never offer verbally, ever. Paperwork only.

I don't think the 3 day written offer is the problem - the time before your written offer was.

 

The agent is doing his job, "working for the vendor" ( and squeezing you)
Anytime you make an offer it should be in writting with a very short period of offer.
If I was the vendor who had previously cancelled an auction due to lack of buyers and had an offer only $10K short of what I wanted "it'd be sold already" !
Stand your ground, or counter with a reduced offer (-$5K) dated & with a time, valid for 24 hours only (as you will be buying a property THIS WEEK and have another property to view "tomorrow"! )
Happy shopping

 

Any updates @GreenTea

 

Great thread @GreenTea ! really interesting

 

All my regrets regarding properties have been not buying when I could have but did not raise my offer.
The money issue are soon forgotten but the regrets in not buying last a lifetime.

 

It looks like you are not really willing to walk away because you like the property. Perhaps the vendor is sensing that. I would try and make it look like your patience has truly ran out and there is another property you are about to go for.

Perhaps give them a couple grand extra with a very short timeframe to decide? Makes them feel like “they’ve won” without paying too much.

Something like $637k, 24hrs to take it.

In the end though if they don’t want to sell it for less than $645k there is not much you can do about it.
I think you need to create the sense of urgency and the fomo as so far they have sat on your offer while fishing for others.

 

If it was me, I'd consider withdrawing the offer in writing, then make a second offer at $630k and say it's valid for 24 hours because there's another property I'm interested in.

Puts the pressure on them