We are about to purchase our 900sqm property with the intention to demolish existing 40yr old house and sub-divide to build 2-3 units. We have crunched the numbers and we can make a healthy ROI.
The property was to be on Auction Dec 17th. But because of troubles with current tenant, the benefitiouries(can’t spell) wants the property to be sold by THU (tomorrow) 4PM. The section 32 will come today, WED 1PM. Everyone must submit a blind bid in an envelop (with 10% deposit cheque) and the highest bidder will be notified. It is highly un-usual procedure. Also considering that real estate agents have had trouble getting people to view the property. There has only been 1 day of open inspection and it’s been on market for 2 weeks. The listed price is $330k+, real estate expects $370-400k. There are 4 potential bidders. But having only less than 2.5 days to consider and draw a 10% deposit, i’m not sure how many will bid.
What are you thoughts? What sort of figure should we bid for? I’m thinking $350k. Location is a gem.
Hi
I’ve had this situation before, and quite a bit recently.
My (somewhat cyncical) take is that the agents are trying to create a bit of a frenzy.
There may or may not be other bidders.
In my experience, I have refused to play their game and instead will wait until the offers don’t materialise. I figure it puts me in a better negotiating position.
Of course you may miss out, but that’s real estate!
If you want to buy it under there conditions, I suggest you gice them a fair price and have conditions in the offer.
Also, it is a private sale. There is no mention of needing to pay a 10% deposit.
Hope this helps
– David Bradley
Bradley McKnight GroupWhen in doubt, don’t is my motto. There sounds to be something strange going on Why bring it forward only 10 days. You know your suburb and how hot it is but considering its only been on the market 2 wks and one inspection I cant believe there are 4 waiting to buy in this economic climate. Would they be developers, only hardliners left now, Mums & Dads are out (my opinion only) Is the house a good renovator for young couples to buy? On the other hand $350 sounds like a good offer to me, particularly if they are in an extreme hurry to sell. I guess the old ‘don’t be greedy’ applies and if you can still make money on $350 purchase and the land is big and the position good, perhaps not to hold out thinking you can ‘steal’ it for less. Sorry can’t be more help
Fern
Hi,
I found this happens a lot with Mortagee sales.I know this is a little sneaky, but I cant see how its wrong. At 10 min prior to cutoff, ask how many offers have been submitted. If 0, then put in a low offer, else put in what you feel is fair.
Also inform the Agent the cheque should not be cashed. On success you will draw another cheque or EFT. Its usually symbolic and they wont try to cash it if you were not selected.
Good luck.
Mat
PS I have only been involved with 3 of these and been outbidded everytime as there has always been at least one other offer! My results should be considered with my comment!I saw a property advertised for $680+, offered $650. The agent then changed his advertisement to $650+ on the net. Later, I bought it for $640. Don’t be missled by the advertised price. Put your offer based on what you think its worth then you can’t be too wrong.
Good luck.interesting feedback. definitely very helpful info, tactics (matt!) and insights. thanks!
i guess its not much use to hold out and make a steal when we have based our numbers on $350k buy.
im more concerned about the agent playing funny games. it is possible that the owner is fed up and wants to sell, and the agent is creating a frenzy with this arrangement to maximise offers. the agent is a real salesman persona, old dog in the business.
will keep you guys updated with the progress… cheerrs
What’s the problem with the current tenant? You don’t want to be lumped with that.
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http://www.depreciator.com.auits a deceased estate. Grand-daughter is living in there at the moment and she’s abit of a drug user. Hence the problem. I suspect the parents are the benefitories and wants the place sold ASAP. There were actually 2 open inspections but on the first day, the agent couldn’t get into the property with the wrong key given to the agent.
our intentions is to demolish the current house. it’s 40+ years old and in need of major renovations. the land is also covered with shrubs, trees, etc.
we’re thinking of putting a bid in and subject to plan, loan approval, and removal of native trees (if any).
How do you expect your offer will stand out and be attractive to the Vendors with all of those “subject to” clauses.
They aren’t interested in your future “subject to” anything. This isn’t some author or friendly seminar host your dealing with…they are real people who’ve hired professional help to get the most cash out of the deal as possible. They want your unconditional cash on the table.
You’ve mentioned 350 as the basis for your numbers for the supposed future development. This has absolutely no bearing whatsoever on what the property is actually worth, or indeed what the Vendor will accept.
If you want it, put the Vendors hat on for a minute and start thinking what they want. If it’s too high for your taste, walk away and find soemthing cheaper. If it’s not, pay the price and secure the land.
Asking agents (especially wily ol’ dogs) how many bids have been received will not help one bit. Do you really think he’ll let you know anything at all, let alone the full and honest truth ?? He’s the chap trying to extract as much cash out of you as possible ??
Work out what the land is truly worth and put a bid in for that figure. Simple.
hi kingdavid
like it dazzling,your right if th enumbers stack up and you can make money, there is no point in beating around the bushes i would take the 34 k in cash and tell the old dog iton the table but you don’t want to get involved in some dutch auction take it or leave it your not giving any signed envelopes you have cash and you are willing to buy (cash always gets the agents blood moving) also dead line your offer ie you have 12 hours or your out of the race if the price is right you’ll get it.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Hello,
Good advice here again all, King you seem to know abit about the owners, have you approached them directly with an offer? Maybe they are interested in doing a deal without “lucky-dip-man”, being involved.
Hmm the savings of commission has to appeal to anyone, especially if you have a cheque in your top pocket
Good luck
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