Hi All, I have only joined and this is my first post, so apologies in advance if this topic has already been discussed.
My partner and I have been keeping an eye on a property that started at $535K in FEB, was reduced to $510K in May and apparently sold at $495 but the contract crashed. Its now August we have been to check it out and pretty much think it ticks all our boxes, but for the right price. We are in no hurry to buy, but have been looking for around 6 months and really like this place. The owners have gone all out in the 'extras' included in the house, and it is a beautiful house, but the price they ark asking is obviously too high. To us, it seems like they have over capitalised. Great house and nice features, but still in suburbia on a small block of land and the most we have seen a house with pretty much same description sell for in this particular suburb is $470 and that was for a newer house on a block of land 200 mtrs squared bigger. The agent let it slip that the vendors have put and offer on a house and need the house to sell for a certain price for them to be able to buy. The agent also let it slip that they have extended the contract on the house twice now the last time being last week for another month. The agent has pretty much chased us for the last month as she knows I fell in love with the house. We finally put an offer on paper for $450. That was Sunday, she came back with a counter offer that afternoon of $497, she asked if we could up the offer a little 'because the house is really perfect for you' but we didnt up our offer, she took it back to the vendor (who I forgot to mention is her daughter and she is selling it for them commission free) and on Monday afternoon we got the call that
the offer was rejected. Which we expected. Its now Saturday, we notice they didnt advertise an open home again, but when we drove past at 3.30pm this arvo they had the boards up advertising the open home. I keep telling my partner we should call them and up the offer 10K, but he says no, we should at least wait until Monday. I kind of feel that maybe they have written us off as serious buyers. In actual fact we do have a much bigger budget but dont believe that the price is realistic. Have we come in too low? Should we wait for them to contact us again, even though its nearly a week since they rejected our 1st offer and we haven't heard from them yet?? We were both so sure that given the length of time the house has been on the market, and the situation that the owners are in, that they would drop the price. Is this arrogant on our behalf???
Any advice on where to go from here would be appreciated. Do we still play hard ball and wait a week or so more, or do we call with an increase of 10K on our original offer and then leave it at that???
People make money out of other people because every one works on the principle they have to find a bigger mug than them to sell successfully.
Reality check. If your assumptions are correct re pricing then $450k may be too high if one expects value for money. The whole successful investor mantra is based around buying BELOW market value not above or at MV. From what you're saying about comparative properties $450k is probably at MV for now. Personally I'd look at the market in that area and prices over the last 18 months to see if you're in a falling, stationary or rising market
Get past liking places for their sex appeal. If it doesn't pass the financial test and stack up as an investment then it doesn't get past go.
It's a buyers market and all the pressure is on them.
Thanks for that. In general the market in that particular area has pretty much stationary with a slight increase in the last 6 months. Nothing major, but alot more newer houses have come on the market in the last 6 months and they are selling at slightly higher Price.
I think we will hold out and just see what happens.
In reality a property is worth what someone will pay for it. If the asking price is overpriced, the market will let them know soon enough.
As Freckle said, don't let emotion get you into a bad deal.
Miam wrote:I think we will hold out and just see what happens.Don't wait – get control of your own destiny.
Write a letter to the agent advising them that your offer will be withdrawn on (insert your own date here).
Put the pressure back on the vendor.
I'd send a letter advising of the expiry on the offer as suggested by Derek. If they didn't take it up, I'd wait a week or so and then submit an even lower offer…. or better still two simultaneous lower offers, each with different settlement periods.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
If you do end up submitting another offer, back it up with some market research. List a number of recently sold properties and what they have sold for. Compare them to this property. It will then show them why you are offering a certain value. If they reject the offer then it is probably not worth your time.
I agree with Santh's advice. In black and white, submit your offer with solid market research that clearly shows them that what you are offering is more than reasonable and to their advantage. If they don't cave, you may want to rethink if that house/property is really worth spending those extra dollars.
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