I am in negotiations with a real estate agent at the moment for my first investment propoerty. The property is being listed for 299k, but the agent told me that the vendor will accept 295k. I have found out that the vendor purchsed this property for 310k back in the boom period of 2001. Since then interest rates have gone up, the value has come down, leaving this seller listing his property at a loss.
I am not happy to pay the asking price but would still be happy to buy this property at aroung the 280 mark. Im finding it hard to negotiate with someone who is already cutting a loss. Any suggestions or tips ??
Tarik
I think we all find it hard to negotiate with agent & vendors. Some times the agent is the hard one to negotiate with its not so much the vendor, but thats their job.
Im finding it hard to negotiate with someone who is already cutting a loss. Any suggestions or tips ??
IMO 2001 was only the start of the boom. So depending on the size, location he may have paid to much for it in the first place. Its on the market for $299,000 today so forget 2001. Your concern is that in 2010 your not putting it on the market for $289,000 same case senario.
At the end of the day IMO if you are only happy, willing to pay 280,000 make a formal written offer. Give the best terms you can 30 day unconditional, if your cashed up 20% deposit. Let the agent know that if you dont get the place you dont care at all. Not everybody is cashed up now & banks are not lending as much out. Who knows you may just get it. I find it hard to neg. with agents so all you can do is make your offer & they take it or leave it. The agent wont care if its you who buys it or joe blow a month latter. Give it you best shot.
Good Luck
T……………….firstly, ignore anything the agent says. its usually the same old B.S
why are you concerned with how much the owner paid and when?
if they are selling at a loss, its probably because they HAVE TO SELL.
either you are buying with emotion, or logic. which is it?
you CANNOT afford to be swayed by the sellers circumstances or the agents tactics.
you need to decide whether you are doing this to make friends, or to make money.
you can increase your offer, but you cant decrease it. YOU hold the position of POWER. act accordingly.
submit your offer of $280k, specify it is a first & final offer, expires 6pm. if its rejected, threaten to walk away. if they still dont budge, tell them you are done and walk away……..at least for today. you can always come back tomorrow.
if they counter with 285, offer them 282.5 and ask the agent if they would be willing to lose the deal for 2.5k. the agent will push for it to be accepted.
when I bought reno #2, the agent pulled the old "Im gonna show you 2 houses you wont want, and the 3rd one you do" trick. I submitted an offer on the first property I didnt want with the same agent, at a silly low ball price. I told the agent it was first & final. the agent came back with a counter but i told him I was done. he was shocked. then I submitted an offer on the property I did want, again with "first & final". hey presto……agent convinced them to accept without counter.
crashy
Ive got an agent with a house im intrested in. I got on it fast as soon as it went on the market. Its now 4 .5 weeks and no sect. 32 at the office. They have asked me for my offer (make an offer) I told her it would be voild because no sect. 32 is available. After 4 weeks its still the same I go in and "Sorry they have not got it yet from the solicitor" and again its give us your offer & I will ask them. As you mentioned above "firstly, ignore anything the agent says. its usually the same old B.S" I feel as soon as I give my offer with out the sect 32 (its not binding with out the sect 32) they then know what Im willing to pay and may not take it to the vendor as its not in writting and not contractual only verbal. In spite of asking serveral times over the 4.5 weeks no sect 32. I feel they may be playing me out when the sect 32 arrives (if its not there already ) with another mistery buyer with a higher offer.
Is this somethink you have heard of agent doing? Any surgestions as to my offer? How long can it take for a sect. 32 ? I know its a very simple situation nothing out of the ordinary sale.
What do you think.Thanks
Kind regards
T……………….Hi TonyB
I would contact the vendor directly. Tell them you want to make an offer but haven't been provided with the s32 yet. If the vendors have given a s32 or the REA hasn't actually tried to get a s32 then there may be grounds to cut the REA out of the process entirely without paying a commission.
Cheers
K
Tony
very sus!
totally illegal I think. but then……who can we complain to? REI is on their side.
maybe this could help:
http://australianrealestateblog.com.au/blogs/australian_real_estate_blog/default.aspx
Hi Tarik
In this circumstance I like to remember what Steve McKnight said in 0 to 260 Properties. Set three prices. Most importantly set your maximum price and do not go over it. You seem to have set your maximum price at $280 000. Is this to settle in 30 days? What do you want to do to the property? I ask this because if you want to renovate it then work out the interest repayments you may save if you have a longer settlement and add this amount or even better half of this amount(more profit for you or a bit more negotiating power)to your offer if the vendor will increase the contract period. Make sure that you have a clause that you will not pay interest until settlement and that the vendor allows you to start any renovation/development work/ have access to the property/go to council/ be willing to sign council forms etc before settlement date.
Tell the agent if it is not accepted then you are not interested in it as it doesn't stack up for you. Be willing to walk, there are plenty more houses.Lina & Crashy
Yes you know what I think you are right. I feel that there is something going on. I mean you have the place on the market, a cash buyer walks in and you make so many stories about no paper work from the vendor but want my offer. Take my offer, why , as its not binding. I dont like going with agents for any business I perfer to talk to the pot not the handle. If I was a vendor I would have the thing the next day for a cash buyer or asap. I dont like going to the vendor but hey they keep telling me its not produced and the people live local. I will piss the agent off but as my solicitor said you dont have to comply with codes of ethics made my REA. And im not bound by them as Im not making money from the vendor, the agent is. So I will find out who it belongs to and contact them direct.
Thanks for your input.
I think you could go either way. It depends on where your located, whether you are known in that area and want to do more investing in that area. If you want the real estate agents to take you seriously and pass you other deals before they get to the market, then you need to do right by him/her. A little money saved now might mean you miss out on some serious deals later. If they are not a good agent and you don't want them to work for you then this may not worry you. If you are in a smaller town or city and want to invest actively word spreads between the agents when people do this and I know that the agents do go elsewhere with a good deal. It can all be very frustrating. Do what you feel is best.
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