I’ve been looking at a few properties and dicided to make a few offers which would roughly give me a netural return and then with tax deductions I was hoping for +cf. I made a written offer on several properties through two real estate agents. Both rang me and told me that the offers were to low to ring there sellers with. I was under the undstanding the if a offer was put into writing the estate agent must legally show the sellar. Can anyone confirm or dismiss this?
If they are within there rights it will be very difficult to find a desperate buyer or a property anywhere near +cf in the current market in the area I am looking (which is northern Vic in a country town of 10,000). Rental returns are currently around 5%.
Mick T[cowboy2]
Hi Mick,
I think you are correct in saying that all offers must be presented to the vendor, regardless of how “low” the agent thinks they are. The only problem is, even if they say they have presented the offer, is there any way of checking whether they really have? If there is, maybe someone can provide details as I sure would like to know.
Regards,
OziIf the vendor has told the agent that they do not want to see any offers below a certain amount then they do not have to submit offers to vendor below that amount – that is my understanding.
If the market in general is buying properties that are at a 5-6% return on average then really there is no reason why the vendor would consider an offer that placed the property at a 10% return.
As for finding desperate sellers look for properties that have been on the books for a long time, agents from out of town listing the property (ie vendors have moved ) there are little clues – but it will be very difficult to go and find a property that is +cash flow without you doing something clever to the property.
You cannot force an agent to put forward your offer. If you firmly believe that an agent is withholding an offer you thing the vendor should see then the only thing you can do really is knock on the door yourself (assuming they live there).
Otherwise, if the agents says the offer is too low to put to the vendor then just move on. It probably is too low.
Finding +cash flow now is very difficult. Have you thought about easy ways to improve the property to increase the rental and make it +cash flow? Maybe start looking at opportunity type properties like that.
Have you looked at the web site renos.com.au by the Reno Kings? If you are intersted in this avenue this is a good place to start.
Good luck.[thumbsup2]
Thanks for the replies.
Several properties did require a little work eg new flooring, unfinished bathroom, old wallpaper in every room. But they were still very high priced. Other properties had owners that had moved out of the area or were going to. So I thought i had found properties with potential, but obviously the agents weren’t interested. I did ask one agent if he had any investment properties and the answer was no, which now dosen’t surprise me.
I am now not sure wheather to go for something negativly geared or just to keep looking for +cf in other markets, or to wait till the market becomes more favourable.
I was also interested if anyone has used a buyers agent? And if so to what success.
Originally posted by Sandstone:You cannot force an agent to put forward your offer. If you firmly believe that an agent is withholding an offer you thing the vendor should see then the only thing you can do really is knock on the door yourself (assuming they live there).
Good luck.[thumbsup2]You could alsways speak with the principal of agency. Walk in with your offer and demand to speak with the principal of the business with a complaint of a most concerning matter … explain that you ahve put an offer on a prof=perty and the agent will not put it forward…. see what happens…..
… or
FInd out how long it has been on the market and also find out why they are selling… if you detect there is no motivation at all on the vendors part to sell (this will mean they have no need to adjust the price or the listing is too new)….Time fixes everything!!!…
1. in time the vendor will either run out of time for what they were trying to acheive … or try to correcth eprice and follow the maket all the way down instead of getting ahead of a prices if the market is falling….
2. in time Vendor will just keep relisting until the price is acheived (may take years …. however if they are in no hurry then they will wait).
3. In time the vendor will become conditioned by hte agent that is working for him… to accept the real market value based on the offers they are getting….If you are not dealing with a motivated seller then you will pay retail and low ball offers will not work….. as a last ditch effort… give them an unconditional “CASH” offer of $xxxx attach a checque to it and send the agent off with it…. (try to make it toward the end of the month as the commission will be on the agents mind by this time in the month).
If that does not work … put in an offer on another 10 houses and get on with it….. keep it in the system though as in time the deal may still swing your way ….
Cheers
KiwiWhy Rent? Rent 2 own!
http://www.rent2ownaus.comAll offers must be communicated to the vendor unless he has instructed otherwise. ie “Don’t give me any offers under $X”.
Of course there is no point having your offer presented unless the agent is trying to sell it to the vendor.
“we have just got an offer for $150K. I reckon this guy is just making low offers and it is an insult. I hope to get you something much higher shoprtly”
vs
“we have just got an offer for $150K. I know you are keen to get $180K but the market appears to be softening further and we are just not getting much interest in this style of property. Given your situation I really think that we should seriously consider this offer. The buyer appears genuine and is willing to go unconditional ASAP.”
Which agent would you rather have present your offer?
This is a game of selling by all parties. You need to get the agent onside and not piss him off by questioning whether he is passing on your lowball offer. Convince him that it is reasonable and probably the best he will get.
I think written vs oral offers is a small issue and not one to waste time over. By all means submit it as you like – but just sell it to the agent and vendor!
All the best
Cheers,
Simon Macks
Residential and Commercial Finance Broker
***NODOC @ 7.15% to 70% LVR***
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
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