Buying house
 

Hi Guys,

After getting our PR we decided to look for a house (first time buyer). We found one house that we like and made an offer. Price of the house is 550K, we made an offer to start at 530K. The real estate agent said "are you joking on your offer?". :(

In your opinion/experiences, do you think our offer is too low that's why he said we are joking? Any tips on making an offer?

Regards,

Re: Buying house
 

I think he`s just worried about about his commission getting smaller - he has to put all offers to his client - it`s his job to get the best price he can - don`t let him intimidate you and stick to your guns.:)

Re: Buying house
 

They have to put your offer forward to the seller so stick to it.

In my opinion, vary rarely do houses go for the full asking price, especially in this market, I would have gone lower than that to get the ball rolling.

Re: Buying house
 

No, it's not too low. We've just sold a house and at no stage did we expect someone to offer the full price. See what they come back with. The first offer is just a way of getting the ball rolling. Stick to your guns and pay what YOU think it's worth not what the owner thinks it's worth. If this one passes you by there will be another one along soon.

Remember, the agent works for the seller, not you, so it's probably just a tactic to get you second guessing (which seems to have worked). Don't let him/her intimidate you.

Re: Buying house
 

Wherabouts are you? When we came to Sydney in 2007 we were a bit surprised that the expectation was that the asking price was the STARTING point for negotiations. Most things are advertised as "offers over X". Having said that things seem to be a bit different now and obviously not every house goes for it's asking price.

I would have thought that your offer was a sensible starting point. Remember, if the agent knows you are newly arrived he is likely to shamelessly play on that. A lot of Aussies still think that everyone who arrives here from the UK has just sold a house in London for big money and we're all cashed up. Disabuse him of that notion fast!

Re: Buying house
 

Your offer is over 7 times the average wage for a male in Australia. Consider the possibility of a property bubble and a serious loss of capital value.

Re: Buying house
 

Probably thought you were joking because going in 20k under is crazy. Go in hard and give yourself room to negotiate a good deal.

Re: Buying house
 

You should have said that's funny I thought the same thing about your valuation.

Re: Buying house
 

You should have said 'if I was joking I'd say you fit well into that suit'.

Re: Buying house
 

The rule in certain overseas markets at the moment is 'If you're not embarrassed to make your offer then it's too high'.

Re: Buying house
 

that's a really rubbish rule !

Re: Buying house
 

If it is only just come on the market the owners maybe looking for a bit more.

What state are you in as the way you make an offer can vary from state to state (i.e. in NSW you get a cooling off period where the buyer can pull out for no reason in other states your have to specify in the contract very detailed like subject to finance from xxx bank)?

If you have done your research and are happy you have put in a fair offer (allowing for negotiation room as vendors rarely want to take the first offer) then go back to the agent and ask how to formally place your offer.

Re: Buying house
 

I would give them a run for their money.

I just bought recently and am very pleased with my purchase, but when I was looking around I must have viewed about 50 properties. There were a few that sort of stood out and I can remember the dialogue went like this.

(BTW I am not the type to mince my words or hold back on the criticism.)

Example 1

3 BR Town House in a great location but not in good nick (was investment property) way over priced for condition ie old kitchen 70's wallpaper and carpet.

Me: Whats the asking price?
Agent : $450,000
Me: What 450,000 Real Dollars?
Agent: What you mean?
Me: I mean whats the price in Australian Dollars?
Agent: $450,000
Me: Are you F**king serious?
Agent: Yes, what were you thinking
Me: Take a red neck mate, I definitely wasn't thinking 450 that for sure.

Example 2

3 BR Townhouse similar area another investment property. By the looks of the beds/clothes lying around was rented out to 3 single guys all seemed to be smokers (and by the smell just not the legal stuff) empty beer bottles sitting around.

Agent caught me on the way out to get my details, went down like this.

Agent: What did you think?
Me: I am thinking why did you make me take my shoes off?
Agent: Why?
Me: Because it’s the sort of place you wipe your feet on the way out
Agent: The Vendor is thinking of replacing all the carpets, or allowing for it in the asking price.
Me: The Vendor owes me a new pair of socks!!
Agent: are you not interested ?
Me: What do you think?

Example 3

3 BR House not in the best location but had a nice big garden. Advertised as ‘Bring your Tool Belt’ (agent speak means its crap) But was a reasonable price but needed a lot of work. I am thinking of a deceased property.



Me: Its advertised as $490,000 is that a definite asking price.
Agent: Yes that’s what the Vendor is looking.
Me: It needs a lot of work!!
Agent: Well a lick of paint would do wonders
Me: I was thinking of 2lbs of Semtex myself
Agent: Well it has a great Garden
Me: I did notice that.
Agent: What’s your best price.
Me: The way it is $400,000 but if you knock the house down I might consider $430,000.
Agent: The Vendor wouldn’t consider that price.
Me: That’s ok, I will give some other idiot the chance to buy it.

Gee I wasted so many Saturdays, all good now though.

Re: Buying house
 

Where are you buying? Makes a HUGE difference. Plenty of suburbs in Perth for example have 150+ houses up for sale and yet on 10 under offer or sold. You can lowball as much as you want.

Agents are ****ing arseholes here in Aus, just 6 weeks of training and they are 'qualified'. If the agent knows you are a newbie then they'll play on your ignorance. On my rare occassions that I go to home opens the agent always gives me the spiel thinking that I've just got off the boat and say I've got to hurry up and buy before the 'boom'. I then tell them I have several investment properties that I'd like to sell NOW but as you reckon they are on the up, I'll hold off!

A 530K offer on a 550K property is very fair (depending on valuation of course), tell the agent you're looking a 5 similar properties and your offer if for 48 hours only.

JUST REMEMBER, A REAL ESTAtE AGENT NEEDS NO TERTIARY QUALIFIACATIONS, SAME AS A SECOND HAND CAR DEALER, BUT WORSE!!

Re: Buying house
 

After reading some of the responses here and given that the Australian property bubble looks ready to pop I would make a much lower initial offer. In fact I'm not sure that I would risk entering the property market at this stage.