Hi all,
I am looking to make my first IP purchase in the next few months and was wondering what different opinions people have with regard to making an offer on an investment property.
I understand that Steve has often highlighted the fact that if a property is what you want/meets your calculations etc sometimes it is worth paying the asking price (he says it sooo much better – but I am sure you may be able to decipher what I am trying to say??!!).
When making an offer and trying to get the best price for a property does anyone have a general rule they go with for making an offer? For example if the asking price for the property is $195000 and the average house sales price for the area is $180000 (let’s say it meets this ‘average’ mould), do you offer $175000-180000 to keep in line with the average or is there a particular % that you instantly take off to make and offer and work up to your walk away price.
I heard not long ago that the reno kings instantly offer 60% of the asking price which seemed very game! What is realistic, what is smart, cunning, laughable, realistic etc????
Thanks,
Peach[blush2]Hi Peachy,
Although my total property purchases are minimal (less than a hand full), I have made successful offers at the asking price & up to 15 – 20k less. It really needs to be done on a case by case basis. I would also be interested if other have a general ‘rule of thumb’ so to speak.
Good luck either wayDavid
Hi Peachy,
We have bought a few in recent times and aim for 20% under the median for the area.
Expect to get many of them knocked back, but remember that if it was easy everyone would be doing it [biggrin]Investment Property Management
http://www.adprop.com.auHey Guys,
Thanks for the replies!
What you have both said seems fair…I am happy to get some knock backs, I just don’t want to offer anything that is ridiculous, where they will laugh in my face…I know I need to grow some thick skin for this business but having some general ideas to go by so that I come across as serious instead of silly would definitely help!
Thanks,
PeachyI would love to here from anyone else…other [biggrin]seasoned investors??
Hi Peachy ,
Imho its not so straight forward as a set rule of thumb , for instance ,
Your normal 15-20 % or more under asking price offer depending on how thick skined you are ,or you could have already arranged your loan so you can offer a cash offer which is your best chance of offering well below asking price, or you could offer a long settlement if that suited you in which you are more likely to offer the full asking price , or maybe even a short settlement for a lower offer if you had your finances in place. Basically there is plenty of ways to make offers and its up to you to find the one that best suits you and the seller so its a win win situation. If its a buyers market you have most of the cards but if its a sellers market you stand a good chance of loosing out on the deal if you haggle to much over to little.Hope this gives you some options to throw around.
Cheers
Shaunhttp://www.goneshoppingsites.com
Free Internet Marketing Courses
http://www.freeinternetmarketingcourses.com/go.php?offer=vendking&pid=1Hey Peachy,
I think your offer can depend on how motivated the vendor is. If he is urgent to sell (ie, moving interstate, deceased estate) then hit him relatively low. You may be surprised to find that he accepts your offer.
Generally speaking I find if you are accepted on an offer which is 10% less than the asking price then it is fair.
You may also get a Val done on a property and if it doesn’t come up near the asking price, then use this in your favour as well.
Crystal
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