Putting in an offer

Discussion in 'The Buying & Selling Process' started by Mdcosta, 16th Feb, 2020.

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  1. Mdcosta

    Mdcosta Member

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    I've found a house that I would love to buy as my first home, in the west side of Melbourne. The property price range is 470k-525k and is put up for auction and the owner is ready to accept offers before auction. After much research, I found that the average price for a similar house is around the 460k mark. I told the agent that I'm ready to give 465k in writing and the agent straightaway mentioned forget this property as the owner is expecting way above 500k mark. Now my question is if the owner is expecting only above 500k, then isn't this a case of underquoting and isn't it illegal in Victoria? I'm still planning to increase my offer to 470k and offer it in writing. If that gets rejected, shouldn't the advertised price range be changed to a range beyond 470k as per law? Am I wrong here or am I getting fooled around by the agent ?
     
  2. My House QLD

    My House QLD Well-Known Member Business Member

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    Agents always tell you the owner will accept offers prior to the auction, that way they know what you will pay on auction day and can work out who the best buyers are!
     
  3. kierank

    kierank Well-Known Member

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    Who knows and TBH who cares!!!

    How many OFIs have there been?
    How many people have attended?
    How many of these are serious potential buyers?
    What price have they indicated to the REA/vendor? $500k to $550k??
    ...

    There is a lot of information you don’t know and, in reality, it doesn’t really matter. It is just noise.
    ... on a property listed at $470k to $525k. Maybe the REA is thinking they are “getting fooled around by” you?
     
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  4. Trainee

    Trainee Well-Known Member

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    This assumes your estimate of 460k is realistic.
     
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  5. wylie

    wylie Moderator Staff Member

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    As a vendor, I would not even look at an offer below the bottom of the range. That range has been agreed to (surely) by the vendor as part of the auction negotiations.

    I don't know the legalities of the range having to be altered if an offer within the range is knocked back. But ultimately, you won't buy it for lower than the buyer wishes to accept.
     
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  6. kierank

    kierank Well-Known Member

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    As a vendor, I might not even accept an offer at the top of the listing range, especially if 100’s of people are coming to the Opens, many of them are saying they are interested, lots of them are getting B&Ps done, a number of them are saying they see value at $530k to $550k, ... Let it go to auction and may the best person win.

    There is a lot of stuff we don’t know about. As I posted above, this is all noise.

    As a buyer, one should play their own game and not be lead by the RE/vendor, other buyers, etc
     
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  7. Mdcosta

    Mdcosta Member

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    True. As per my last chat with the REA, there are only 3 others interested (after 3 opens) and all have verbally offered around the 465k-475k and none have given in writting. He mentioned that my price has absolutely zero chances and this is kind of giving me a mental block from giving the offer in writing. I'm pretty sure that any amount above 480k is a loss for the buyer. I'm not lowballing too much from my research though.Do you think I should still trust my research and put it in writing?
     
  8. Trainee

    Trainee Well-Known Member

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    Put it in writing if you want. Let them reject. If it goes above that in the auction, fine. If it gets passed in, talk to them again.
    Maybe the market really is 475k and the seller is unrealistic. But you cant do anything about that. They might just pull the property.
     
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  9. Mdcosta

    Mdcosta Member

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    "
    If the agent's estimated selling price changes, or the seller rejects a higher written offer, the agent must remove or update:
    • online advertising within one business day, and
    • all other advertising as soon as practicable."
    From Understanding underquoting

    This is what is confusing me from that estimated price aspect.
     
  10. wylie

    wylie Moderator Staff Member

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    But until he rejects an offer, the range stands?

    Maybe put in your offer, have it rejected and then see what the agent does to the advertising. If it fails to sell at auction, you may get it for less than the vendor is wanting, if the need to sell.
     
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  11. kierank

    kierank Well-Known Member

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    Do this:
    ... then this:
    @Mdcosta, you have to determine your strategy in this “game”, then execute your plan to win.

    Buying property is like a dancing competition. There are other couples on the dance floor, you need to be aware of them but you have to work out your moves/what you are prepared to do in order for you to have the best chance to win the trophy/property (based on what you are comfortable doing).

    If you don’t win, there is always another “dancing” competition.

    Don’t make it any more complicated that that.
     
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  12. Tofubiscuit

    Tofubiscuit Well-Known Member

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    @kierank sounds like you have participated in dance competitions...

    I worked hard to develop my own unique move to win dance competitions. It was suited to my body shape, personal flair and technical level.

    Its called the ultra sonic hip thrust. The property equivalent would be multiple offers within 24 hours.

    TB
     
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  13. Trainee

    Trainee Well-Known Member

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    then stick to it. But someone else might pay more.

    In a downmarket, you could lowball 50% and if the seller was desperate enough they would accept.

    from the other posts, have you noticed that all of the things you think are important arent actually important to others? May want to think on that.
     
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  14. The Y-man

    The Y-man Moderator Staff Member

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    As I understand it, it is possible underquoting if they refuse to sell at $525k (unconditional), but even then, they could refuse prior offers because they could get more than that on auction day.

    The Y-man
     
  15. wylie

    wylie Moderator Staff Member

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    And I guess if an offer of 525k unconditional efore auction is declined, the agent could not leave the range advertised as 470-525k.
     
  16. Stoffo

    Stoffo Well-Known Member

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    Last year a property two doors down came on the market (in need of reno), for auction but open to offers prior, 500-550 range

    The neighbor (growing famly needing more room) between us was first in offering 480, this was rejected with the rea saying they expected it could make 600.

    On auction day 3 people showed, all neighbors (the one who had made the only offer went to his job that day as he didn't see it being worth much over $500k)

    We started at $400k, countered by a very high vendor bid, it passed in and was sold to the only bidder shortly after auction for low 400's :D

    The rea really couldn't care as his paycheck was probably only a few hundred less
    The vendor must have been dazed
    The neighbor who made the only prior offer came back to us on the Sunday with an offer over what they offered the rea :)
    The buyer's are :)

    Play your own game :cool:
    But if you are serious don't talk to the rea, hand them an offer in writting valid for 24hours with a cheque for 5%
    If it is rejected then it has cost you a few dollars for the cheque, but at least you will know for sure o_O
     
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  17. The Y-man

    The Y-man Moderator Staff Member

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    Let's say as a vendor you have the reserve at $520k (legally within the range). You get an unconditional offer of 530k prior to auction but you feel that if you take it to auction you might get $600k at the least (this would be confirmed by the strong pre-auction offers).

    You should not be held hostage to the pre-auction offer(s) in achieving the highest price for your property by going to auction.

    Where I imagine you (actually your agent) will get into trouble is if the auction bids get to $526k and you pass it in (because you did have a pre-auc offer of $530k). I suspect this is why there is a lot of confusion and difficulty with this new reg ~ because it could disadvantage the seller.

    There have been plenty of times I have taken my properties to auction to "test the waters", pass it in and put it up for "normal" sale (for what we call a "private sale" here in Vic).

    The Y-man
     
  18. wylie

    wylie Moderator Staff Member

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    Was this a property you owned being sold?
     
  19. Stoffo

    Stoffo Well-Known Member

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    A family group purchase, as a land bank
    We discussed buying it, but it wasn't looking cheap...
    In the first week of campaign the neighbor told us he had made an offer
    When there was no interest on auction day we started very low, the had to sell
    Barely paid land value (or under, best overnight profit buy ever)
    It is two doors down from one already owned
    Just waiting for the one inbetween to come up for sale, or reno/knock down rebuild both if we have to wait too long......
     
    Last edited: 17th Feb, 2020
  20. wylie

    wylie Moderator Staff Member

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    Did you know the neighbour had offered higher than you ended up accepting? Or did the REA keep this from you?

    Unless I'm reading it wrongly, had you known your neighbour was interested and/or would pay more, you would not have sold to the other buyer?

    Or... re-reading your post again, were you the buyer for low 400s?

    Either way, you'd not ever list with that agent, would you?