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Query on making an offer

Discussion in 'The Buying & Selling Process' started by psylence, 19th Jul, 2015.

  1. psylence

    psylence Member

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    I've seen before average discount on listed price % for suburbs. I'm thinking of buying in west or north Melbourne, say if a house is listed at 400-420k is making an offer for 370-380k normal?
     
  2. Chilliblue

    Chilliblue Well-Known Member

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    The price is what you think the property is worth based on your research.

    A listed property may be over priced, right on the mark or under-priced and making a general assumption is not always good idea.

    Look at what similar properties have sold for in that area and if possible note their listing price against the sale price.

    Best of luck.
     
    Last edited: 19th Jul, 2015
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  3. HUGH72

    HUGH72 Well-Known Member

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    Buy some reports on the suburbs you're interested in to get a better idea of prices of comparable houses sold. Then base your offer on what you think is reasonable value.
    The list price may be close or slightly over a properties value or the vendor may just want way too much.
    A 5% discount on a property listed 10% over market value is obviously not a good buy. On the other hand if its been listed for a while or the vendor needs it sold yesterday it may be listed at or under MV. For free info on listing history use www.oldlistings.com.au
     
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  4. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    As previously stated, you need to look at what other similar properties in the area are selling for to determine the value of the property. We give clients lots of help with Residex property reports, but this is just another component of that research that you need to do.

    At this point, offering a figure below asking price in Melbourne isn't going to work. If you go to some auctions, you may notice that properties are selling for 20% or more above the agents asking price. This is quite common in hot markets. A simple offer below asking price isn't going to be taken seriously unless there's a very, very good reason for it.
     
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  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Great point.

    Don't aim to get a certain percentage off - aim to get it for a price that you believe represents good value. I've seen properties that have been listed at way above their actual work - getting $50k off them wouldn't indicate a bargain. Likewise - I've seen properties listed for well under market value. Generally just a tactic of the selling agent to draw in a larger crowd and sell it for much more.

    Ask your banker/broker for a residex report or similar to assist with your research.

    Cheers

    Jamie
     
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  6. jpcashflow

    jpcashflow Well-Known Member Business Member

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    Hello,

    When working with offers, If you are looking at putting an offer work of number per say vs a %.

    Offers are not just about a price, but the deposit amount, loan amount, settlement and clauses might make your offer stronger or weaker.
     
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  7. sash

    sash Well-Known Member

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    Hard question....

    Couple of factors to consider:

    1. Is the suburb booming if so....offering 10% less is a waste of time and you will be pissing the agent off. I recently paid full price for a property as it was already a bargain.

    2. If the demand is less than ideal - i.e. not in a hot market...do your research both of the property value as well as the circumstances for the sale. If you can can get this right....and get an idea of what they will take...that should improve your pitch.

    Recently...I was able to establish what the buyer would take just by asking the agent....you might get lucky..if all the stars line up.

     
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  8. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Just very quickly, 1 strategy I have used many times in the past is lets say you looking for an average ip roughly 450k. What I do is I look for 5-7 of the same type of ip in the suburb, all that are acceptable, I'd be happy to buy and meets my criteria. I then offer 10-15% off (sometimes more depending on the market) each of them with the strategy that if 1 gets accepted its a great win for you. Sounds very simple and it is, and it works amazingly well. As long as its not in a boom market. Last time I used this strategy, I actually got 130k off the asking price which was almost 20% I never thought it would be accepted! Now, nothing surprises me anymore. Crazy thing is, it was probably worth just under the asking price too! The saying, it cant hurt to ask, can really save you some serious $$$.
     
    Last edited: 19th Jul, 2015
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