its my first day and first post on this forum. seems very informative.
i am lookin gfor first property to buy in my life, and found very confusing.
finaly reached close to this property, there is no advertised price, but when i asked agent, he said “in excess of 270” and after that he told me whats my max limit. i tried to hide my max.
but i asked him what if i will make offer of 270, and according to agent, i can make offer of 270, but wont be accepted by vendor.
and according to agent if competition will grow it might go upto 300. then i mentioned him that i wont go above 275. and he said better come and have a second look at the property.
so i asked him if vendor wont even look at offer of 275 then why should i waste time, btu he is insisting me to go and have a second look at the property.
i like property, in outer northern melbourne suburbs. and my understanding is that its more buyer market at the moment.
what would you advise me to stick with offer, your help would be great, thanks.
welcome to this forum, and welcome to the games associated with buying property.
The agent said “if the competition grows it may go to $300k” – with this one statement he got you to offer another $5k. Don’t offer any more based on the agent’s talk. Wait until you hear from the Vendor before making any counter-offers. I hope you learn from that mistake.
Do you want to pay $300k? I bet not. Let some other poor soul pay that much.
If you know your area and the values, then you don’t need to be intimidated by this tactic. Besides, if you lose this deal, there will be another ‘deal of the century’ tomorrow.
Put your offer of $270k in writing with a holding deposit ($1,000 will do it) and walk away and wait for the agent to come back. If he does; good and you can consider another offer or walk away. If he says it’s sold; too bad and move on to the next deal.
Better still; don’t make any offer and ask again in 4 weeks if the property is still for sale. As it is a buyer’s market there’s a good chance it still will be. If it isn’t sold and there’s been little interest, offer $265k with a deposit ($1,000).
They need/want to sell, and there are a million places for sale. Play it your way.
Cheers,
Marc.
[email protected]“we get sent lemons; it’s up to us to make lemonade”
Hi Orica,
I had asked the same question, i think its in about page 3 right now, read through that.
but you have already said the agent what you max limit is indirectly.
but them asking 270 means nothing. check other property in the suburb or region to give you an idea, even if you are not interested in them
then decide whats the property worth and then put a lower offer always to begin with. dont rush.
others can give more exp. advice.
InvestHut
thanks guys for your prompt replies.
InvestHut, i read your complete thread with full interest.
this property is 3,2,2 and lot of houses in that area is in market advertised between 250~280.
should i show agent that i m keen in that property or would that encourage him to increase my offer.
i m confused, some people said tell agent that you are very keen in property and he will try his best to sell it to you.
on other some others told me not to be so keen infront of agent otherwise he wont let you negotitate.
this whole sitution is making me confused.
Firstly, an agent must present all written offers. Remember that they are a negotiating professional, while it sounds like you aren’t that experienced in price negotiation.
As already answered, write down your offer on a contract for sale, attach a $1000 deposit check to it and instruct the agent to submit the offer. Whether you seem keen or not will be used by the agent in assessing whether or not to push the vendor to come down to your offer, or push you to up to the vendors amount.
It’s a fallacy that the agent is working for the vendor of the property. The agent is working for no 1 – themselves. $5k will make so little difference to their commission they aren’t going to bother with trying to get more for the vendor. What they are looking for is the fastest way to close the sale, get their commission and move onto the next one. With this in mind, remember the agent is going to find the weakest one out of you and the vendor and spend the most effort on conditioning that person to come to the other persons level. By putting your offer down on paper and instructing them to submit it, they are obliged to present it. The vendor will either agree or not. If not, and you feel like offering more, then do so. But not because of what the agent says.
You have two ears and one mouth when it comes to negotiating, and I suggest you use them in that order. Listen to what the agent tells you about the other party and tell them very little about yourself, what you think of the property and what your circumstances are. If you’ve already given them your life story, don’t stress but be aware of the agent using your own story as arguments for you to close the deal above a level you’re happy with. For instance, if you say ‘I need to buy something before valentines day because we are going away for two weeks’. Then during negotiations you’ll hear from the agent ‘well, if you offer another $5k, at least you’ll have it all finished before you go away on valentines day’. Thus to disagree you’d have to disagree with your own statement, which would make you a liar, so chances are you’ll agree. But better to break your own statements than pay too much and stew about it for years.
Bottom Line : Work out how much you’re willing to pay, and remember the deal of a lifetime comes around every saturday.
_____________________________
We all need somewhere to live – but do we all need a CBD apartment?Offer $270K in writing first, this shows that you are serious. Verbal offers mean very little to real estate agents. If the offer is in writing and rejected you will usually get a counter offer from the vendor. If you don’t get one, ask the agent to re-contact the vendors and get one. Good luck.
G’day!
welcome to the site!
It sure is exciting isnt it? buying a property!!I like to look at realestate agents as ” creatures” all they think about is comissions! and the seller.
Legally from my understanding , the “creature” must hand in all resonable offers, of course they will cough and choke about our offers, but…
STAY IN COINTROL at all times. and be firm, with your decisions,I also, with out being stupid about it, if I can afford an extra 5-10k, sure go for it. because in a year, or 2, you will laugh at that extra 10 you paid.
Do this only if you feel comfortable, and if you are going to Buy and hold, cause if you want to flip or something, you are spending your profits, and useually you make the most money when you buy the place.
I have gone a bit off track, but I hope i have boosted your spirits and your confidence!
Check, out a book, BY Craig Turnbull,
Best of Luck
Jason
JASE
yesterday after reading all your replies, went and made written offer of 270, though agent wanted me to keep margin of negotition, and said be prepared to go up to 10k, but i told him it final offer (subject to finance), take it or leave it.
now i think he will have to tell me vendor’s answer by end of today.
i gave $500 as deposit with my offer. but he asked me to pay 10% on acceptance.
Hi Orica,
I have recently purchased a property in Bendigo (my home town).It was advertised for between $215000-$230000.After visiting the property and numerous others.I decided that the location,condition of the property met my criteria for an investment property.Now it was negotiating time.I’m not sure what its like in Melbourne at the moment but Bendigo seems to be a buyers market.I offered $200000 subject to pest and building inspection,no need for a finance clause as I already had approval with the bank.I informed the agent that it would be a 30 day settlement with a 5% deposit.The agent presented the offer to the owners and they counter offerred $215000.This property had been on the market for over 6 weeks the owners lived in Western Australia and were keen on selling.I spoke with the agent and counter offerred $205000 with the same above conditions.I informed him that I had made an offer on another house and first in will get the sale.I spoke about the yeild from the property (renting for $220 per week) and that for $205000 that is a comparable return to other properties that I had seen.I informed him that the purchase wasnt emotive it was pure yield and condition and location of the property driven.The offer was for 24 hrs it wouldnt be increased so it was no use counter offering I told the agent.Sure enough the agent responded within the hour and the terms were agreed with.
My advice to you Orica is that you are in the driving seat dont let an agent control you.Know the area in which you want to buy in.Know the yeilds for that area.Know what the value of the property is as compared to others.Know the motives of why they are selling the property.Know how long the property has been on the market.Have finance approved so the selllers and the agent know you are serious.Know what terms the sellers want ie 30,60,90 day settlement what deposit they want.Dont be emotive as others have mentioned there will be other deals around the corner,the agent knows this as does the seller.The last thing an agent wants is you to purchase through another agency.I also like to say that I have another property in mind if the conditions and price I have offered isnt accepted,it adds a little incentive to the agent and selller.
Good luck with the property,I hope you get it for what you want and not what the purchaser wants,the agent just wants a sale as $5000 increase is neither here nor there for an agents commission.
Regards Martin[biggrin]There are 3 types of people:1. People who make things happen.
2. People who watch what happens.
3. People who wondered what happened.Hey Marty good advice man!
You need to be upfront and honest Orica but in control.Unfortunately everthing that goes on in this game is not all up front.On a side note,
Sounds like yr doin well Marty plenty of deals still goin on well done man!“Don’t let yr character be impacted by yr surroundings, instead make yr character impact yr surroundings”
– Rachel Scott(17 yr old killed in columbine shooting 1999)http://rachelschallenge.com/Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
Good one you,
he will probably come back at you for the extra 10, ( more comission food for the creature)
that call is up to you, but is sounds like you did a good job submitting the offer!
I am not sure about deposit amounts, I think tahst varies from state to state.maybe if you dont want to give any more for the property, try asking athe agent, how soon the people want to leave?
if they need more time, offer them an extended settlement, in exchange for a lower purchase price.
aim for YOu win, and They Win.just stay in control. of the creature!
JASE
how did you go orica?
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