Hi all,
When you see ads online saying for example “Offers over $400,000” or “$400,000+”, would you say to only offer over $400,000 or put it an offer lower than that?
Not sure what the “etiquette” is here…
Thoughts?
I'd consider circumstances re the sale, like how long has the place been on the market (are the owners likely to becoming impatient), is it worth $400,000/+400,000 (compared to other nearby similar properties), why is it for sale (is it urgent?)?
I've always offered well below an advertised price, and the most I've ever paid is $12,000 less than the advertised price. I've never been knocked back yet, although had to negotiate a couple of times.Wow that’s great, hopefully that is not because you are a cuteyoungchic
. I am actually looking for an answer for this question as well. If it is not for an IP, and you like the property, you are lil bit afraid that your offer will not even be considered. Many properties are advertised this way. Offers over $500,000, does that mean anything under will not be considered at all ?Choose an independent agent, who's then working in your favour, and not the sellers, and ask "if this was you, what would you offer?"
He/she may skirt around the answer you want, but watch the body language very closely to determine his/her truth. You'll probably get the answer you were looking for anyhow.
Hmmm, if the property you're pursuing is for your place of residence, that's a slightly different kettle of fish. In that case, what you pay, is what you feel the property is worth to you, & you'll no doubt have your little heart attached to the house (or the shed?) Still consider the length of time it's been on the market, before deciding what to offer. I know if I was selling my own house, & it had been on the market for more than about 3 months, I'd be getting peeved at having to keep it in pristine presentation "just in case." It would also be difficult to know my next move, if I was relying on the sale of this house to be able to move on. So I suspect after about 3 months I'd be willing to consider a lower offer.
I can't help but think that if a person is demanding a set price or higher, that perhaps they're not really ready to part with it yet. What do you think?Consider: Greed, Fear & Panic – put an offer on the table (they will want more), take it off the table (they will come begging). Fear – if the property is sitting there and you have retracted a fair offer.
I want to make an initial lower offer but the agent already said they received an offer below asking price and it got knocked back.
Don’t know if they’re telling the truth or not…maybe trying to make me offer asking price/test where my bottom line is?
cuteyoungchic wrote:I'd consider circumstances re the sale, like how long has the place been on the market (are the owners likely to becoming impatient), is it worth $400,000/+400,000 (compared to other nearby similar properties), why is it for sale (is it urgent?)?
I've always offered well below an advertised price, and the most I've ever paid is $12,000 less than the advertised price. I've never been knocked back yet, although had to negotiate a couple of times.I agree- Depends on the property and owners circumstances.
The most recent property I purchased was advertised originally at "Offers over $650,000" 4 months later I secured the deal at $595,000 even though the last advertised price was "Offers over $630,000"
The Agent has a duty to present all written offers, I would put your offer in writing and ask that they counter sign.
If you read enough books on selling you will find one of the biggest motivators to get people to take notice or buy is what is called the 'take away technique or close'. Put an offer in at a level YOU think is fair (and to hell with etiquette) and place a codicil on the written offer to the Vendor that the offer will only stand for 'x' number of days and then it's off the table. This kind of tactic as a purchaser through a private treaty sale can often be very powerful. Our company acting as Buyer's Agents use it all the time with great success for our clientele.
I hope this has been of help to you?Another trick that worked on the last three property purchases made by my ex partner, was to tell the agent at the time of handing over his signed offer, that it would be his only offer.
It worked perfectly the first 2 times, he got the properties at his offered price. The third time, the seller negotiated, but only by $1000.00, which was agreed to by my ex. He still felt he'd won!
And like you said ALF1, to hell with etiquette!
When our agent first met my ex partner & I, he actually said "I can't hand over an offer like THAT!" when we made our first very low offer on a house. But he got used to us! Especially when he realised our very low offers worked! Our habit was to buy a house in a pleasant street that the general public didn't want because the carpets were worn, or the curtains were out-dated. We just knew we'd get them cheap – & of course we threw out the carpets & curtains, paying for new ones from the mortgage, which increased the rent by $15 a week, but only cost about $2.00 a week in extra mortgage repayments.Another nice technique CYC!
Do you notice another common denominator with the responses to your question SC541 – to hell with etiquette. If you want to invest into property to make money, you can still be an honest & honorable person but you don't have to be nice in relation to the amount you offer. If a Vendor needs to sell (or even must sell) then your low offer may actually be helpful to them. I know of investors who'll go and make offers at least 20% under the minimum asking price and do that on 10, 20, 30 + properties in one weekend. If just one Vendor says yes then ………… you can work it out!sc541, how long's the $400,000 house been on the market?
Hi all,
Thanks for your helpful tips. Appreciate it.
The place has been on the market for about 6 weeks. Went to auction last weekend and there were no bids.
The agent said this week they got an offer at 390,000 but vendor rejected (I think the agent might have made this up, what do think?)There are a few negatives to the property so I’m only willing to pay around the 360,000 mark and to offer this in writing with ALF1’s take away technique
Do you think if I say “this is my only offer” it would close the door to any further negotiation?
Hi again sc541.
Is the Agent lying? It's only lip service and could be a lie – remember this: a Real Estate Agent is selling for the Vendor to get the maximum price for their Vendor because he/she looks good but, more importantly to the Agent, he/she gets paid more. My experience is, if you haven't heard it or had in writing from the Vendor(s), consider the Agent to be telling 'porky pies'.
If you say 'this is my one and only offer' it closes no doors. You are now playing the subtle role of negotiation. However, it can make you lose credibility if you come back too fast with a higher offer. You need to make your offer and give it to the Agent with the "if your Vendor doesn't accept this offer I really don't care as there are no shortage of other properties I can purchase for around the same money and features. In other words, give the Real Estate Agent the impression if he/she burns you as a Buyer, he/she won't get you back.Remember also, we are still very much in a Buyers Market which means YOU have the upper hand. Properties are NOT selling like they were pre-GFC so Vendors and their Real Estate Agents can't afford to 'burn' potential buyers.
Hi SC541,
Our first property was 'offers over' and we secured it for 4% ($20K) less than the asking price a week after it went on the market. This property is in an area where the median days on the market is 21.
Our second property was secured for 9% under the asking price three weeks after it was placed on the market. This area is regional and the turnover is nowhere near as quick.
It is easy to be scared of what they might say when you are starting out and we still have a lot to learn but we found the 'offer valid for 24 hours' worked in our favour with the 2nd IP. Third time around we will be more aggressive and not worry so much what the agent thinks. Like everyone has said, they are looking out for the seller and will tell you anything to make a sale. Offer what you are willing to pay and think it is worth and stand your ground. We had the agent come back five days later saying that the price the owners early would NEVER consider he could "if we were really lucky, convince the owners to accept". Of course they did!
Peachy
Hi SC541,
Never fear to ask. Ask and you shall receive. What are you worried about? What's the worst thing that can happen? They'd say "no" right? And if they say "no", what's the worse thing that can happen? You didn't get the property that didn't belong to you anyway.
And there is no rule that says, you can't give another offer?
Secondly, negotiation takes many form. I had once been able to reduced an accepted offer by a further $15,000 by going back to the agent and saying, if they reduce it to xxx, I can settle in three weeks, "would that help them?" Sure enough it would, so I got another $15,000 discount.
Hope this info helps.
Thank you.
Angel
Personally, whilst I agree with the general gist in this thread and ultimately put my offer in writing with a time limit, I always put my offers in verbally first followed by silence.
This is a VERY powerful negotiation tool, and although it can be quite uncomfortable waiting for the agent to break the silence if your new to this methodology, eventually they always will, and through what they say and how they say it, you will get an honest gauge on the situation and the viability of your offer. If they immediately say no chance, then you’re probably pushing the limits a bit too far, however if theres even a moment of hesitation then thats where the games really begin and you know there is at least a possibility of getting your offer or something close to it accepted. Don’t see a “No” as a bad thing, personally unless I get at least one “No”, I know I havn’t negotiated hard enough.
More importantly its crucial to be 100% commercial in your approach so leave emotion behind and just keep your cards close to your chest. What you dont say is often more important than what you do say. Fear of loss is a very powerful motivator, and you can bet the agents will use this with you so play them at their own game. Remember they only get paid if they make the sale and in this current market thats a big IF.
Anyway this is just my thoughts on the matter, having worked professionally on both sides of the fence I know this is what works for me.
Good luck
P.s. Stay positive and believe you will achieve your desired result, new age mumbo jumbo or not I think its more important than any process.
. I am actually looking for an answer for this question as well. If it is not for an IP, and you like the property, you are lil bit afraid that your offer will not even be considered. Many properties are advertised this way. Offers over $500,000, does that mean anything under will not be considered at all ?
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