I have found a villa I am interested in buying in Perth.
It is a deceased estate so the council has taken control over the property
I believe the asking price is heavily discounted and had this confirmed with the interest in the home open last night. I was there for about 20 minutes and could see at least 6 or 7 groups of people discussing finance and offers not to mention the 10 or so other people to walk through within that 20 minutes.
Now I went to put in an offer last night but was told as it was being sold by the council you can only put in 1 offer per person and they will accept the highest/most convenient.
The problem is I have had verbal approval for a loan including deposit and 1st home buyers but formal approval will not come through for 2 – 4 weeks. This wont be very convenient for the council as they will be looking to sell off the property asap as they are paying the holding costs. The approval is for $10k above the asking price of the home
The agent hasnt got all the paper work ready yet so im hoping this will take at least another few days to give me some more time.
I really want this place as I beleive it to be great value and has plenty of room for improvement. Will need new flooring ASAP as the carpet stinks and could very well be rotting.
My question is what do you think would be a reasonable offer given there is plenty of interest and that my offer will be subject to a fairly lengthy wait for finance.
I have no idea how much to offer
I dont want to pay over the asking price as I will need the $10 000 to fit it up a bit
In this climate though is it silly to be offering the asking price even if I think it is heavily discounted
You already seem to have read between the lines. The council will want to sell for the highest price, with the biggest deposit, and minimal conditions (finance, building inspections, settlement etc)
I can't tell you how much to offer not having seen the facts, however, if the asking price is heavily discounted (below market price in its current condition?) and interest is high from what you witnessed, its likely it will sell above the asking price.
Four weeks for finance approval under the circumstances will be unattractive, other buyers are likely to be ready to settle at the time you are waiting for finance. You need to negotiate a faster approval with your lender to have any chance, if you can't do this, and are not prepared to offer over the asking price, it's quite likely you will miss out (if it is being advertised below market price in its current condition)
Thanks for the reply skip,
Well as it is a deceased estate and being sold by the council it hasnt been cleaned at all, there are dead cockroaches everywhere, mouldy carpet, clothes from presumably the deceased lying around everywhere, so im not really sure if this would bring the market price to far down.
It will put off some buyers but the problem is easily fixed with a good clean.
There is also some water damage to the ceiling in the lounge room because of a missing tile with the strata company having agreed to fix. I was also going to put subject to the ceiling being fixed by settlement. There is a builders report stating there is no other damage just that to the ceiling.
Will probably go with just under asking price
With a tender such as this does the offer period close after a certain amount of time or does the agent hand offers in to the council as they come? If there is a period of say 2 weeks then it would put me in with a much better chance as finance could be in by then or close to it
One of the street front villas in the same complex sold for $415k in original condition last november (exact same design and floor space). One of the villas behind the one im looking at sold for $385k in original condition with new bathroom 5 weeks ago. So even from that it looks well under priced
If multiple offers are received (unless it was stated there was a tender deadline) the council may likely make a decision, rather than lose a good offer(s) through delay. Realistically you have close to 2 weeks up your sleeve, probably upto a week before a decision is made, a few days before you meet to sign the formal contract, your cooling off period in WA?
Even if you are late in receiving finance approval, there will be a another week before action is probably taken/notices served etc.
No cooling off period in WA which isnt great
If the lender has said to me approval will be between 2 – 4 weeks and they wont budge what would be better to put on the offer
2 weeks and if it takes longer to try and extend
3 weeks and same as above or
There is no penalty for being late on finance approval, I'd suggest 3 weeks, but I'm sure the finance brokers on this board may disagree. Importantly your settlement date needs to be met, as penalties can be incurred if you run late.