I am looking to purchase my first home however I am not sure about offer process so I am looking for Ozabargain community advice who have purchased house in the past.
If I am looking for either 350,000 or 450,000 worth of property, how much offer should I make which will not be rejected?
How much offer is reasonable?
Thank you!
There's no right answer to this question..
What you need to ask yourself is:
1) How much are the vendors willing to accept?
2) How much interest is there from other buyers?
3) How much is it worth to you?
And most importantly,
4) How much can you afford?
If you're making compromises, try to value those compromises with a dollar figure.
Case in point, if the Kitchen is old and you want a new one.. take off the price that it will cost you to install a new one.
This is a good way of looking at it.
I think the key is to remove as much emotion from the decision as possible. Sometimes this is very difficult, as real estate is strongly marketed on emotional appeal (thanks for our new home Mr Hooker).
If you can look more objectively, you will be better able to drive a negotiation, and scubacoles method of trying to place a financial value of different elements is useful.
I should add that I'm "taking the price off a new kitchen" off what I think the property would be worth if it were "perfect", not off their asking price.
Can you live with paying $20K too much for a property you like?? or would it be better to lose your dream house with an offer that is too low?….remember you'll have 20 years to mull this question over after the sale culmination!.
It all depends on whether the property has been on the market for a while, but the best advice would be to offer low and negotiate……340K….offer 315K or 320K.
If you buy at auction, before you begin, ALWAYS SET A TOP PRICE AND NEVER GO BEYOND!!!!….there will be another auction next week, just try again until you get "your bargain"
And never forget the (friendly) real estate guy's interests lie with selling to you at the highest price possible.
Heh.. that's what the real estate guy want you to think. Their interest actually lies in getting a sale with the least amount of effort on their part, not necessarily at the highest price possible. An additional 10k to the sale price means that they will only get roughly extra $100 if they are lucky. That is not worth their time driving back and forth negotiating. It is better for them to get as many sales as possible rather than try to maximise the price for an existing sale.
My advice would be for you to get your finance sorted as you will look like a better prospect than someone who hasn't got their finance sorted but offering a higher price. Real estate agents really hate risking the contract falling over on finance.
"My advice would be for you to get your finance sorted as you will look like a better prospect"
This +1. There are a lot of tyre kickers and dreamers out there making offers for things they have no hope in hell of buying. The last property I purchased the sellers had been stuffed around by 3 buyers who could not get finance.
Their interest actually lies in getting a sale with the least amount of effort on their part, not necessarily at the highest price possible
Yeah, you're right, of course…I was trying to convey that when they come back with a counter offer, they are just trying to go through the motions of supporting the vendor and getting a few extra bucks for themselves…..no need to fold on your original offer immediately!
Thanks Everyone - I have some idea now :)
If you want to make sure it isn't rejected, offer the asking price, subject to inspections etc. conditional on them taking the property off the market. I did this once in a hot market, and ended up paying 5% less after some issues with inspections.
Assuming though, that the property is fairly priced, you can accept losing out if someone beats you, and you want to make a good deal for your self, I would suggest offering $320 for the cheaper and $410 for the higher.
The agent is obliged to pass on legit offers, and it will likely start up some dialog. If the seller responds by knocking $10k off their asking price, you are likely to be able to negotiate a successful outcome.
At the least, you will then be able to push for a counter offer.