I have been researching for 12 months and am now ready to purchase my first ip, am very aware of the need to buy at a discount and would love to hear other investors success stories of the discounts they have achieved. I just need a rough idea of how low you should go and how long I should persist. Thank you in advance
Depending on what state you are in the average discount we find successful is between 7% – 10% of the asking price.
Hiya
There's no set formula for how much a property needs to be discounted by before it represents good value.
I wouldn't even focus on trying to get a specific discount – doing so may cause you to disregard other important facets of the deal.
If you find a property that suits your criteria – your due diligence will help you ascertain whether or not the asking price represents fair market value for the property. Having said that, most vendors are going to advertise at a price that's at the upper end of what they're hoping to obtain. You just need to work out what your upper limit for purchasing the property is – and base your negotiations around that. I wouldn't offer up your final price straight away though – start low and give yourself room to increase it a couple of times.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Agree with Jamie. It's pointless discussing how much % you got as a discount.
Getting a 5% discount on a property that was overpriced by 10% is a dud.
This is where research comes in to play. You need to KNOW what a property is worth. THEN you know if it's a good deal.
I saw a property advertised on a Thursday night on RE.com. Rang the agent just after 9am and he said someone was already on the way there. They bought it. It was under priced as the agent was a friend of the family and was out of area and didn't understand the prices.
Another one I saw first day advertised. Went straight out looked, went to the office and signed the contract. Two weeks later one sold in the same block for $20K more. I knew the area and the block and knew the price was great. No discount off asking price but in reality more than 10% below market.
You should persist if you think you can realistically get your price. Look at the vendors motivation to sell. This dictates their willingness to drop their price. You need to have a buy price and anything over that is your walk away price. Tell the agent that's your walk away price. Then get it or walk away.
Yeah there is no set percentage of calculation… Research is your best asset in this aspect having said that I've had very few offers accepted the first time even with them being reasonable, so now i always have my first offer quite low and ridiculous and than you begin serious negotiations. It worked well for me once with a 16% discount of the asking price on the first offer.
Tony Fleming | Triumphant Property Group
http://www.triumphantpropertygroup.com.au
Email MeNSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury
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