I was just reading Kay’s post “Buying at fair value” and it got me thinking about another issue that has been on my mind for a while…
Let’s say you can only afford to buy one property worth $200,000, but you put in an offer on 5 houses each worth approximately $200,000 and put a ‘subject to finance’ clause in each contract knowing full-well that you will only get finance for one of them.
What are the implications of this?
Does the buyer have to know that you have put offers on four other properties but can only purchase one?
Does this effectly waste months of vendors’ time or is there some way they can have other contracts in the works at the same time?
If it does guarantee a waste of vendors’ time, would any of you have a problem with that ethically?
I would love to read some discussion about this!
Ian,
I would have no problem with this.
How do you know that any of your offers will be accepted?
If you are offering $200K then ideally you are buying something that is actually worth $230-250K – if you follow this strategy a number of the vendors will actually turn you down, but one might not – then you havent wasted anyone’s time.
The properties are for sale and you have made an offer subject to an external parties approval.
Cheers
Todd
http://www.providence.net.auTodd O’Neill
http://www.meteorpartners.com
‘Move to the next level’I don’t see anything wrong with your strategy. And the vendors are always free to refuse a conditional sale. I have just sold a property unconditional. I refused to sell it subject to finance. It’s the vendor’s perogative, isn’t it. Of course, if you really want to property, and the vendor has got your offer STF and another offer unconditional, they’re probably going to negotiate with the unconditional offer. That’s what I would do – go back the the UNC guy and ask him if he can improve on the STF offer.
Well as a general rule i wouldnt do it as i wouldnt like it done to myself. However i had a contract on a house and a couple days later they were offered alot more money from someone else and they took it. So i guess it can work both ways.
Regards Bear
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