I’ve got my eye on a property being sold privately and need suggestions on what questions I should ask the vendor to find out what conditions I can add to my offer to sweaten the deal.
Once I have this information i’ll need to know how to use it: what options I have with contract conditions.to be able to afford the property I have to lease it for about 6 months until my fiance starts work as a high school maths teacher next year.
Within the 6 month period we will get married and use the house as our PPOR.The situation is as follows:
The property is owned by a couple in their 80s and they are selling so they can move out of their 1/4 acre property to live near their son (downsizing) because they cant take care of their yard.
They want all dealings to go through thier middle-aged son.The property is on a a quiet street, they only have a small sign out the front of thier property, and i’m the only person who has shown an interest after 3months on the market.
I feel the reason for this could be:
1. They are on a quite street and not many people travel past the house. They havent advertised in the paper or other media.
2. The sign at the front of their place is only a “for sale” sign with a mobile number below it (no indication of price).They would like to sell the property for $675k and I dont have that much money to play with.
I inspected the house with my mother a couple of weeks ago. The elderly couple showed us through the house. They are both very honest people and the house, although original (47 years old), is in very good condition.
I told them we were interested but that I dont have enough money. I promised them i’d get in contact with.2 weeks passed and I got my uncle (a builder) to have a quick uninvited look at the exterior of the house after work.
A house is be built next door to the property so he snuck in there and reported back to me that it looks to be in good condition.I made an offer (over the phone) through the couple’s son for $631,500. I told him that for me to afford that offer I would need to rent the place out for at least $400 a week.
In the same phone call he said what they are going to do is wait for another 2 weeks for Octoberfest or Eurofest (dont know which one) which is the only day the road fills up with cars because the European clubs are at the end of the street.
Basicaly they are hoping for some interest.
He didnt reject my offer at all. I’m not sure if he means that if he doesnt get any interest in 2 weeks he’ll accept my offer or if he wants to counter offer.My offer is very close to how much I can afford… my absolute highest offer would be $650k and would be touch and go if my lenders would support me.
I know the elderly owners are house proud. I dont sense they desperately need money.
I feel that the vendor would prefer an owner occupier purchaser instead of an investor even if the investor offered more $.
They are very proud of their gardens.Plan:
My feeling is to make it clear to both vendor and son that we need to lease the house for 6months ONLY because my fiance doesnt start working until next year and we need to get married before we move in together.
To reitterate that we are to make this our home, I could ask the vendors if the back yard is child safe because my fiance and I plan to start a family once married.
Because the vendor is house proud and especially proud of their gardens, I could ask them if there would be an ideal place in the yard to start a vegetable garden. My fiance wants a vegie garden and this would pleasure the vendor.I can also offer them $7k more ($638,500) because I can get the first home loan grant from the government.
Any other ideas?
Hello MRK25T,
Phew, what a moniker you have got!?!
I think you are on the right track, and just need to sit tight and hang on for the ride.A lot of sentiment will be attached to that old home. they will want to sell to a struggling young couple who will love the house as they did.
Perhaps you could arrange for your wife and yourself to pop around and scout out the vegie patch location etc. Make it at about afternoon tea time.
You may become friends and get a further inkling on how you could make a satisfactory offer.
I doubt that a heap of eurofest people will line up at the gate in October.Giddo
http://www.standrewsplace.com.auKNOWLEDGE IS POWER
Don’t do anything. You have just made an offer. The ball is now back in their court. If you reapproach them you will just seem desperate and I have met some very shrewd old couples in my life!
Either they will get interest in their home during the Octoberfest or they won’t. It seems to me that unless you are prepared to offer asking price then there is nothing more you can do.
If you still haven’t heard from them after Octoberfest then call them again and reiterate your original offer, this time talking about all the things you mentioned in your post.
I expect that if they get any further offers, they will call you and see if you can better it.
Good luck
K
Giddo, my moniker is the number plate i had on my old car. MRK = Mark and 25T = 2.5L Turbo (I had a nissan Skyline).
I’ve tried to read every post on negotiations on this forum (but now the forum’s search facility doesnt work for me).
From the stories the general idea looks to be to put the offer forward and wait for them to get back to you. This is because if you hear back from an agent you can be sure you’ve knocked off a few $ from the asking price.
I’ve made 3 offers on seperate places (a unit and 2 houses) through an agent and this has worked well for me. I think the reason it worked was because there was minimal interest in the properties.I also doubt that there will be a line of people queing to buy the property during eurofest. Its just that I got guzumped 2 weeks ago on a house and its not a nice feeling spending money on pest, building inspections etc. and not end up buying the place.
I will merge both Giddo’s and Linars plans together which i’l dub “a cunning plan”.
Post Eurofest my fiance and I will visit them during afternoon tea and take along a tea cake.
We will focus conversation on the garden by asking how to care for it, what plants they have, have they attempted a vegie patch and what vegies would thrive, etc.
I will make sure there isnt talk of pulling the house down or knocking walls down etc. because this house has sentimental value.Linar, do you think that they will contact me if a higher offer is put forward by a third party?
I’ve already told them i’m at my limit. Would I be taking a risk?News in on Friday arvo: I was approved to borrow $520k for a $650k maximum purchase. I now have more money to play with.
Thanks for your help,
MarkOh. You told them you were at your limit. That may not have been such a good thing to do.
I used to do a lot of negotiating in my job – I was a lawyer – but I still don’t really understand how RE negotiating works. I know of people who put forward their first offer and tell the agent that it is their first offer. I don’t see the point in this because if the agent is acting in the vendor’s best interest (and they don’t always) they are of course going to tell the vendor that the purchaser has more money to play with.
When I negotiate I tell the agent that I have a limit. I don’t say what the limit is and I always back up my first offers with reasons for it, eg, independent valuation (but I never disclose the independent valuation). But I do know that when you say that you are at your limit, the agent usually believes you and doesn’t call you back.
In this case you are dealing with the owners direct. They will probably call you back if they get a higher offer and see if you can throw a bit more money into the purchase. It all depends on whether they believed you were at your limit when you said you were.
As to negotiating in general, I would never disclose my limit unless I was actually at my limit. I would just intimate that I do have a limit. Justify your offers. A really good way of doing this is to do your research. Know what other properties in the area sell for. You will be surprised at how little research vendors (and even RE agents) do. I have in the past managed to convince a RE agent that my research was more valid than theirs and purchased a property at MY price which was way below the asking price.
Of course, this is all just how I would go about it. I would be interested to hear how others go about negotiating. It may even be worth starting up a new post on the subject.
But if no-one offers more money in the meantime, then you do indeed have a very cunning plan. I like it a lot.
K
You must be logged in to reply to this topic. If you don't have an account, you can register here.
