Urgent Advice needed regarding high Offers

Hi guys,

Long time lurker first time poster. Have learnt a lot from SS and continuing to learn here.
Its time I need some help and ask questions.

I have finally made my first informal offer of $425K on a PPOR that was advertised for $390K+

Reason for that amount is probably the high interest i saw at the inspection which was around 40-50 people.

Anyways long story short, the agent has called today and is saying that they have received 13 offers out of which few are above $440K and three for 450K. But he says he can't accept those high offers because of the market or something (Didn't quite get that as I was at work). So he thinks this property could be mine and said above 10% deposit is required and has given me time to decide and get back to him if I really want the property.

My Question! Is there a rule of some sort that he cannot accept those high offers? OR is he just playing me and trying to push be for more money?

I have to get back to him today. Any sort of input would be appreciated.

Regards
MKH

 

Hey @MKH , good on you for putting your research into practice.
What state is it in?

 

Hi Azazel,

It is in Victoria South East!

 

That is a big area to compare!

With 13 offers means (even if there is 5 offers) means there is a lot of interest. Find out what settlement the vendors want and put your best offer forward.

If you believe the place is worth 450 you will need to put 450, same as if you believe the place is worth 500 you should put 500 if that is your limit.

As you don't want to lose out on the property for 5,000.

Sorry but the numbers are stacked in the vendors favour and if you cannot beat the other 12 offers you will not win.

 

Ah Ok. I have no idea about Victoria, but I'm sure someone will reply as to the legalities of it all.

 

@Big Will Thanks for your input. The property is not worth more than 410K itself in my view. Given the current market in SE melb, I would say $430K tops. Also this does not mean that 430K is my limit or $420K is, but it is my view that there is no point of touching limits when the property is not worth that money. I understand that I should only pay what I think the property is worth to me.
But then again I wanted to know what other people think of this situation where an REA says he cannot accept a $450K offer because that is too much according to the current market value of the house.

For all I know my offer could be the only highest one he got and he probably is pushing me for more?

 

A place is only worth what someone is prepared to pay on a given day. You may have struck the only honest agent in Melbourne who doesn't want the deal to fall over due to a finance clause.

What are the issues around deposit? Sounds more like price is acceptable but they may want more upfront and agreement to release deposit? What are the vendor's circumstances eg nursing home bond??

 

He could be but chances are

you really need to know why the 450k were not accepted or were they going to be accepted but are asking others for a higher price.

A vendor would be crazy to accept your 410k with 450k on the table which is STF.

 

It sounds like they do not like the terms / conditions that the higher offers come with.

Depending on where you are at there is an opportunity to put in a low offer with the terms that the vendors wants.

We have found that unconditional offers get a lot of attention - even at a lower price point.

It shows you are a real buyer.

On our last purchase we put in a low unconditional offer and then finished up increasing it a little bit to get 7 days for finance, B&P etc.

 

He did ask me that if I could pay more than 10% deposit to which I said, shouldn't be a problem.
Vendor has already bought a house from this same agent hence selling this one.

 

Hi Wylie,
My offer had the generic two conditions: subject to finance and building & pest. But the agent does know that I have a deposit of 100K.

 

@Tonibell

That could be true that it has to do something with the terms/conditions with the higher offers as the agent was asking me to make it an unconditional offer to make my offer look more lucrative.

 

Sames. In Qld that would then become an instalment contract. Not sure if you are being played by the agent.
I personally walk away if the environment gets too competitive.

 

You answered your own question.

Never heard of that before.

Normally; the more they can get the better.

 

The Seller can fill out a Section 27 Form, which requests an early release of the deposit from the Purchaser (and from the R/E's Trust account.

The R/E gets paid their commission from this, and the rest goes to the Seller.

It is usually a 30 day period until release, but can be earlier. We just had that occur with our PPoR sale.

 

@Bayview
Thanks for your input. As you know it is my first property I have no idea about this section 27. Is this something that is between REA and vendor? How does it affect me if I choose to pay more than 10% deposit on signing the contract with Finance still subject to approval?

Cheers
MKH

 

You don't release the deposit until finance is approved and the contract is unconditional

 

So why don't you're just stick to your $425k, offer him say a 30k deposit and a nice short settlement - or offer flexibility in settlement if the vendors have bought a new property they might appreciate being able to set the settlement period to coincide with the date they settle their new house. As long as it's reasonable and you're not in a hurry to move in could be a win-win.