richmondParticipant@richmondJoin Date: 2003Post Count: 831
I was wondering whether many of you have a standard thing with making a first offer, of going 10% or 15% below the asking price, which if a house is up for $60000 would be an offer of low 50s… I know Steve says not to go too low, but how low is too low? How low do you go not to waste everyone’s time?
Is it just a case by case thing? I know when I had some real estate agents through my Mornington Peninsula place they reckoned they would ask for $385 and hope to get $370 (thousand of course)
The place I live in was on the market for $280,000, first offer was $220,000, then we gradually agreed to meet at $250,000…
Thanks in advance of replies
R westanMember@westanJoin Date: 2002Post Count: 1,950
six years ago i found you could make offers 30% below asking price and occasionally they would be accepted. but today the market is so hot i often hear of properties selling for above asking price. i would still try offering low, i was lucky this year to get something for 63k (asking price 79K) but another time had to pay 74k (asking price 79K). i ask what has been the best offer so far and how long has the property been on the market, if its been on for say 2 months and no offers i would start low say 20% below.
regards westanricnrosaMember@ricnrosaJoin Date: 2002Post Count: 5
I purchased a property last Saturday and the best feel I got for what price would be accepted came from the agent. Listen to the agent understanding they have a high level of ethics to maintain, and you should get a good feel for the price. Asking questions is the key.
By the way, the house I purchased came in 20k below market price and 4k below asking price.ricnrosaMember@ricnrosaJoin Date: 2002Post Count: 5
Its the other half of Ric n Rosa. Quite a few years ago I was a real estate agent and have had to submit countless offers. By law I had to submit every serious offer that was put forward to me despite me thinking it was disgustingly low. This will often put you offside with the agent as well, and, as they can be one of your best sources of information/networking it is not wise to get on their wrong side.
This doesn’t mean that you dont go in low. My best lesson learnt was that you initially do go in low however it would be relative to the asking price. Prior to this I would find out why the vendor is selling. What are their needs, how long has it been on the market etc, This seemingly casual banter between you and the agent will often give you clues to the type of vendor that you have. Vendors come in different catergories as well and your offer should reflect the style of the vendor.
Dont be afraid of submitting your first offer low – you are only testing the water. Its all experience. SooshieMember@sooshieJoin Date: 2002Post Count: 974
Michael, sounds like a good idea, that way you are in control not the RE. After all, it’s your money!
Another twist on this, (especially as there seems to be bidding wars going on with regards to the price of properties in certain areas) is not to worry too much on what % below market value you put your offer in at, but what terms you can negotiate on the deal.
Just a thought…
“Giving is a Blessing, receiving is the bonus”jasontang888Member@jasontang888Join Date: 2002Post Count: 6
I was thinking about submitting an offer on a house in Prospect, Adelaide. But don’t where to start with the letter of offer and how to include conditions such as subject to building inspection, finance, etc.
Can anyone help???
JasonBettyBlockbusterParticipant@bettyblockbusterJoin Date: 2003Post Count: 46
It been a while since I’ve purchased a property but from memory the initial contract at time of deposit has a facility to include the clause re subject to finance and pest inspection etc.
The letter of offer can just have the details of the propoerty ie address, how much you are offering and the expiry date of the offer.
Betty BlockbusterAndrewSParticipant@andrewsJoin Date: 2002Post Count: 6
Some agents we have found have been reluctant to allow us to add clauses like “subject to acceptable finance” and “subject to acceptable building inspection” as they realise that this can be a huge cop out for us (who gets to define accepatble). Another way around this, provided provisional finance is approved, is to sign the contract (dont pay a deposit until after cooling off) and arrange valuation and building inspections within the cooling off period (3 days). If the valuation or inspection dont come up ok then just cool off or if they don’t happen in time then cool off and re-sign the contracts again. We have done this a few times and it was n R/E agent that put us on to it initially. Getting the valuation done quickly enough can be a bit touchy but work with your Finance Broker on this one.
In SA there is a section on the REISA contract allowing for time to find finance but if the bank approves the loan but the bank valuation does not come up ok this does not technically mean that the loan has not been approved. As such it can get messy getting out of the contract as the agent may want written confirmation that finance has been declined and you have paid a deposit etc. etc.
Good luck in Prospect we have a couple there and have done well.
AndrewMiniMogulParticipant@minimogulJoin Date: 2002Post Count: 1,414
I once said ‘I know what the list price is but what is the real price?” to an agent.
(Nowadays I always say that!)
Anyway, the first time, RE agent said ‘I know the vendor wants at least
X amount (naming a figure which was 35 percent below the list price).
AHA! i thought!! Amazing the discount you can get just by asking.
The next day I phoned in my offer, except to a different real estate agent (this time the senior one. i.e. a REAL estate agent, haha geddit) Told him my offer was very close to what i was told the vendor wanted by the junior RE agent. Senior RE agent was aghast that junior RE agent had told me that.
I’m sure Junior was telling the truth, but I suddenly twigged at why Senior was so bummed – it was because junior had not added RE commission on. Senior’s silence told me I had hit the nail on the head.
Added on commission and – after some to-ing/ fro-ing/me walking away for a few days, Senior called me back and said ‘congratulations’!!
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