Here's the deal:
We found a place we really liked as a PPOR that was listed on Friday. We had it inspected today (Saturday) and put in an offer. The property was listed as offers over 295k so we put in 300k seeing as we really liked it and wanted to secure it. The agent rang back at 5pm saying the offer was not accepted and the vendor was after something closer to 320k…nearly 10% higher than the listed price! I find it a bit odd that he has listed it 10% lower than what the vendor is asking for. I can see that he wants to get a few more offers in before deciding but I still find it dodgey…plus I don't even think it would be worth that much!
If we did offer 320k and the valuation came in at say 310k, surely I have some sort right to pay the lesser of the two?
Any ideas on how to approach this without getting losing the property to someone else? I've asked about what sort of terms are they interested and he politely told me they are more interested in price. I can push for longer settlement but we are getting desperate to find a place with baby on the way!
Cheers
Maybe it depends how long it has been on the market. I imagine they have gong with offers over 295K to sneak it under the $300K on the Real Estate.com search engine etc.
It does say offers over which doesn’t mean that have to take the first offer that comes in over that price.
The valuation would only mean something to the bank, pending how much cash you have. If a valuation comes in under the sale price that does not mean you pay less. It will mean if you want the property you will just have to fork out more of a deposit. Should you wish to continue buying a property that is selling more than what it is worth
You shouldn't be surprised that an agent would come back to you with "NO DEAL". You offered $5k over the $295k. May as well try though. What is positive is the agent has told you what the vendor wants @ $320k
What is the house worth? Do you have an independent valuation? If so and it is under the $320k mark then present it to the agent with an offer for the valuation price. That's if you really want this house I guess.
If the vendor is priced oriented then Im guessing the property hasnt been on the market that long OR they are holding out for an unrealistic price in today's market. You will have to work out which it is.
Have there been any offers? How long on the market? What are the comparable sales?
PS: A long settlement doesn't usually help a PPOR purchase and I'm assuming you are renting at the moment, but you could trade off the extra you pay for the house, with the longest settlement time you can manage. That settlement has to include early access to allow you to live there rent or loan free for that time. Based on 6.5% interest on a $256k loan,(80% of $320k) you would be saving $1386 per mth. A 6 mth settlement would get you back $8,000. If you continue to save these funds during that (free) time and repay the amount into your loan at settlement, a $320k purchase becomes a $312k total price. In this way you are converting the 'dead rent money' you pay now, into the exta payment on your PPOR. Again a long shot, but the agent said they were price oriented. This will test them out to your advantage.
Ian
http://theblockblog.com
Free Property Investment Info, Tools & Resources For Investors with a Sense of HumourHi Grantos
It can be frustrating when the price is listed with a plus sign after it. Some agents use it as a lure to generate more interest.
At the end of the day, it's up to the vendor to decide which offer they are willing to accept.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I can understand the <300k listing to get people that are close to that mark on budget to see it in their searches. That is around my budget and I always include up to 350k when I do searches.
In our offer we've said that it is subject to bank valuation being to our satisfaction, is this enough to allow us to re-neg price if the valuation price is less than the agreed purchase price?
The other issue is we want to get exchanged on something before the end of the year to save on the stamp duty!
grantos_champos wrote:I can understand the <300k listing to get people that are close to that mark on budget to see it in their searches. That is around my budget and I always include up to 350k when I do searches.In our offer we've said that it is subject to bank valuation being to our satisfaction, is this enough to allow us to re-neg price if the valuation price is less than the agreed purchase price?
You should be able to negotiate on anything up until the contracts have exchanged.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
It ‘s the 1st week of the campaign, too early to tell what they will accept. If you up your offer to $310k they may come down a bit more. Don’t be over anxious & pay too much but don’t offer too little & lose it.
thanks for the comments. Any clauses to add to stop us being gazumped.?
Maybe a sunset clause or similar. You could probably put in a subject to valuation clause. You can pretty much put in a clause for anything, it just needs to be agreed on by both parties.
Hi Grantos,
I used to work in real estate and here are some tips that may help you out – Well i hope any way!!!
The key to a successfully transaction is to make sure both parties are happy with the terms not just the price.
1) If the agent told you that the vendor wanted 320k over the phone tell the agent to provide you with a counter offer.
At the end of the day the agent has only said what the vendor wants but since the counter offer is not in writing how do you actually know that the vendor wants this much.2) You have to be a bit patient. The house is not even on the market for 1 week and you have put an offer on it. The vendors must be thinking that there could be a better offer out there.
3) Putting clauses subject to valuation can really play against you.
let me give you an example:If you where the vendor and you seen these two offers which one would you take?
1 – Your offer 320K – subject to bank valuation
2 – another buyer offer of 310k subject to finance onlyWhich offer would you take if you where the vendor?
Jpcashflow | JP Financial Group
http://www.jpfinancialgroup.com.au
Email Me | Phone MeYour first port of call in finance :)
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