All Topics / Help Needed! / Negotiation Q: vendor didn’t come back with a counter offer?

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  • Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
    Join Date: 2013
    Post Count: 25

    I just made a legitimate offer on a property, and the vendor (via the agent) has responded with 'not willing to proceed unless the offer is in or closer to the advertised range'.

    No counter offer was given, is there an appropriate etiquette for cajoling a counter offer from the vendor/ agent?

    Further to that, is there any merit in speaking with the agent to justify our original offer? (we have several solid reasons, research and  a valuation)

    (btw, we are 99% sure we are the only interested party in this property, which has been on the market for 18+ months)

    Profile photo of Tony FlemingTony Fleming
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    @the-dark-knight
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    Sounds like it might just be a difficult vendor. If it's been on the market for that long I'm sure it's probably advertised at a unrealistic price and the vendor wants to get that price and has his heart on getting that price or close to it. Did you try maybe offering a shorter/longer settlement if that suits the vendor better? I personally wouldn't put another offer in on it, you said you've done your research and got a valuation so your offer is probably accurate on what it is worth. Just tell the agent that if the vendor changes his mind, you have my number but you are going to have to pass.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
    Email Me

    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jamie MooreJamie Moore
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    Hi Jay

    Agree with Dark Knight – sounds like a difficult vendor and probably aren't overly motivated to sell.

    Ask the agent how much it will sell for. They normally give you an idea.

    If it's outside what you're willing to pay for it – move onto the next. Another deal will pop up – they always do.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    Thanks for the quick responses – really appreciated. :) I agree – I think we will walk, and say 'get in touch' if the vendor changes mind.

    re. Vendors motivation, I know the vendor is divorced, and has previously had the property on the market at a higher price again. 

    In any case, the upper limit of our valuers recommendation is well short of the vendors asking price. Is there any merit in simply saying to the agent: 'look, we simply cannot afford to buy a property that will be impossible to sell?'

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    Thanks for the quick responses – really appreciated. :) I agree – I think we will walk, and say 'get in touch' if the vendor changes mind.

    re. Vendors motivation, I know the vendor is divorced, and has previously had the property on the market at a higher price again. 

    In any case, the upper limit of our valuers recommendation is well short of the vendors asking price. Is there any merit in simply saying to the agent: 'look, we simply cannot afford to buy a property that will be impossible to sell?'

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    I mean, surely the agent realises the vendor is being wildy unrealistic, right? 

    Profile photo of Jamie MooreJamie Moore
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    I'd just make a final offer. If you're really interested in the property – give them your final price and tell them to not bother coming back to you if it's not accepted.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of mbuildingmbuilding
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    Hi Jay,

    You did write

    "has responded with 'not willing to proceed unless the offer is in or closer to the advertised range"

    i think that is what seller's counter offer is…..

    just do your numbers, look at other comparable properties in a market and present your best offer.

    if they don't accept it, move on to other comparable property. I am sure that is not the last property on the market.

    Also, how did you find out about vendor's divorce?

    Just out of curiosity, can you give more details about property??

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    As for how I found out about the divorce, the agent let it slip while my valuer was doing his inspection.

    The agent seems to think that the valuer was from the bank, when in fact he was an independent valuer. Not sure if that misperception has any significance? Either way, the agent has asked me for what the figure the valuer gave us on several occasions – which I have not done.

    in any case, our maximum range – as informed by our own research, and our valuers assessment are not anywhere close to what I would call 'near' the vendors asking price.

    this is a pity, because finding a another truly comparable property in the area  could take a long while.

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
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    There are a few reasons why the owner isn't budging (some as stated aboved):

    1. Vendor not motivated
    2. Vendor or Ex are being difficult 
    3. Price has not been adjusted in line with market correction
    4. Agent has overquoted and being held to account
    5. Bank is owed more than your offer and owners are not able to accept less

    Stick to your guns – if necessary tell the agent what the low-medium range of the valuation was (and use this as the max that the bank will approve), you have got the evidence – use it (you have paid for it so you have nothing to lose if they still want something above your walk away price).

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    Scott No Mates wrote:
     (and use this as the max that the bank will approve)

    I'm  sorry, I don't quite follow exactly what you are getting at – can you please clarify?

    Great points everybody. Might just have to lay my cards on the table, hope that the vendor sees logic, and be prepared to walk away if he doesn't.

    Profile photo of Tamara43Tamara43
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    @tamara43
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    Hi Jay

    You really need to dig deeper around the reasons for the sale. Be upfront with the Agent and say that the only way you can come to the party is if they can find out "What the owners are trying to achieve out of the sale of the property?"  You need to understand their motivation behind the sale.

    There are only 2 reasons why a person ever sells a house – to get their Cash bit out or get away from their Debt bit. Find out which is it????

    The fact that they've had the property on the market at a higher price and it's now come down is Real Estate conditioning – the Agent indicated to the owners there was no interest at the original price and therefore suggested the price be reduced, which they obviously agreed to. Normally this process would continue until the owners relent and just sell. The Agents don't care as it makes little difference to the percentage commission he/she makes over a few thousand dollars as long as they just get the place off their books.

    In this instance however, the fact that owner has had the property on the market for 18 months and has asked you to "come up to the advertised price in order to proceed" suggests to me that he needs a certain amount of $$$ to move forward and cannot lower the price any further. I would assume this is most probably due to his debt load, which may or may not relate to the divorce situation. You can get as many valuations as you like, but if the owner needs a certain amount of money to clear his debts…….he's not going to sell to you at your offer! 

    He's not necessarily unmotivated, nor is he trying to be difficult. If you can speak with the owner direct, ask him: "What will he do if you don't buy the house?" – this will answer your question about his motivation. If he says he's just going to ride out the market till the prices recover – yep unmotivated. If he says he just needs to get rid of the property asap- definately motivated.

    Depends on how much you want this property and what your exit strategy is for it, but if you want more assistance with buying it on "Terms"……read Rick Otton's book "How to buy a House for a $1".

    Cheers, Tamara

    Profile photo of Jamie MooreJamie Moore
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    Jay Sizzle wrote:
    Scott No Mates wrote:
     (and use this as the max that the bank will approve)

    I'm  sorry, I don't quite follow exactly what you are getting at – can you please clarify?

    Great points everybody. Might just have to lay my cards on the table, hope that the vendor sees logic, and be prepared to walk away if he doesn't.

    Scott's saying to tell the vendor that your final offer is the max the bank will lend you.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    Great advice guys, thank you – ESP. Tamara. I'll have a think, and speak with the agent at some point to try to ascertain where the vendors head is at.

    thank you.

    Profile photo of Jay SizzleJay Sizzle
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    Re. the vendor's financial (possible) constraints:

    I know that he owns at least two properties, has a senior role in a mutilnational company, owns a very nice car and may possibly own a business.

    Can I fairly assume that all claims of 'crying poor' should be ignored? – OR – due to the divorce, there may be certain financial thresholds that he cant breach?

    Profile photo of Tamara43Tamara43
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    Jay – try and have the conversation with the Vendor. Work out his Cash Bit and Debt bit. You'll have a better understanding of where he's coming from after that. Don't assume anything, otherwise it's just speculation on your part. Find out his ACTUAL situation, but request permission to ask the questions first. Cheers, Tamara

    Profile photo of Jay SizzleJay Sizzle
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    @jay-sizzle
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    The vendor himself – rather than the agent?

    Is that something that is good practice? I know my lawyer would be horrified!

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    If you know that you can contact the owner (providing you aren't cutting the agent out of the deal), go for it. 

    As an owner, I would be ticked off and directing you back to deal with the agent – I don't take unsolicited door knocks when the property is listed. However, you need to overcome their objection letting them know that your offer has been rejected and whether it has been presented by the agent.

    Profile photo of DerekDerek
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    @derek
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    Jay Sizzle wrote:
    Either way, the agent has asked me for what the figure the valuer gave us on several occasions – which I have not done.

    Don't understand why you wouldn't show the valuers figure. Think it through.

    You want the place.

    You have paid for a valuation.

    The valuation has come in below vendors price & at a price you are prepared to buy at.

    Methinks you are better off using the valuation as a last shot (after all you have already invested some money in the deal by paying for a valuation) to try and get the vendor to see reason.

    Nothing to lose – it sounds like you are prepared to move on and would have 'wasted' the cost of the valuation if you don't throw it at the agent/vendor. Having an independent party tell the vendor they are being unrealistic may just seal the deal.

    If I was the vendor/agent and you refused to show the valuation (which you are within your rights to do so) I would think that you are trying to make me lift (oops should read drop) the price.

    Profile photo of mbuildingmbuilding
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    @mbuilding
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    Jay,

    Purely based on your replies so far.. it seems that you really want this property.

    what is it?? House, Land, Acreage, Apartmentt, town house.

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