House buying in Aus - making an offer
 

Hopefully this question will make sense. I'm after a bit of advice with regards house buying in Australia (specifically Brisbane area, if it makes a difference).

If a house is on the market for say €550k - is it expected practice that you make an offer somewhere below this price, and then negotiate with the buyer? What sort of % below the asking price would be an acceptable offer. 10%? 20%? Or do people generally just pay the asking price?

I live in Scotland where the house buying system is either offers over, or fixed price (where you pay the asking price).

Re: House buying in Aus - making an offer
 

Offer to pay what you think it's worth. We did a lot of negotiating when we bought ours (NSW). What's the worse they can say??

Re: House buying in Aus - making an offer
 

Don't tell the estate agent that you think it is only worth xxxx amount. Tell him that it is all you can afford as you don't want to undermine his 'proffessional valuation'. If you are buying in a suburb where there are plenty of homes up for sale and lots of competition then be cheeky with your offer, 10 % - 20% below asking price seems reasonable to me.

Re: House buying in Aus - making an offer
 

Thanks. Good to know (when we actually get our visa, and move over) that it's acceptable to make a cheeky offer.

Re: House buying in Aus - making an offer
 

Yes, NEVER offer what they're asking for, it doesn't work that way. Always offer less and negotiate, between about 5-10%. Personally I'd say 20% is way too low, I really don't think a home-owner with his home on the market for $1million would take an offer of $800,000 seriously, and an agent most probably wouldn't submit an offer that low in the first place. The agent will also tell you if other lower offers have been made and rejected and what the amount was.

You should do your homework though, check other similar homes in the neighbourhood and see what they're selling for. And ask your agent what similar homes he has sold recently and the price they sold for. You could start researching now before you come over, have a look at www.domain.com.au and www.realestate.com.au. You will get a feel for the different suburban real estate values and what you get for your money.:)

Re: House buying in Aus - making an offer
 

Thanks Ginger for all that. realestate.com.au is my current favourite website. We were lucky that when we visited Brisbane last year, we got a fairly good idea of what we're looking for and in what area.

Re: House buying in Aus - making an offer
 

Hi cookiestar, that's even better then...you can follow the real estate where you want to buy. Good luck with everything.

Re: House buying in Aus - making an offer
 

i disagree
offer them 20% below and negoiate up, the markets flat at best and its a buyers market at the moment personally i`d go even lower whats the worst they can do ?? say no
o and on the other point the realestate people are legally obliged to forward all offers to the seller regardless of how far off the asking price ;)

you may hit lucky and get a good deal ;)


ps just for the record two years ago when the market was very bouyant and property was selling quickly we bought our current house for over 20% less than the asking price at the time

Re: House buying in Aus - making an offer
 

Also note that to make an offer you have to do it via a signed contract. One problem with going too low is that if you are actually willing to pay near the asking price you will have a lot of increased offers to submit. The seller may not take your near asking price offer seriously and think you'll keep on coming up to meet them like you have before.

Re: House buying in Aus - making an offer
 

another thing to look out for is how long have the sellers been there ?
if its more than 5 yrs they will have lots and lots of equity in the place and be more liable to accept a lower offer in todays market where as someone who bought the place say last year will quite possibly be losing money to start off with ;)

Re: House buying in Aus - making an offer
 

Certainly in QLD you don't often get the real price until you offer, and they counter offer. Then you know whether to walk away or to start negogiating.

Offers are bindings, so if they accept, thats what you are paying, and once an offer in on the table the agents will not let you alone until a deal is done. Ours carried on until 11pm with the guy going back and forth.

Make sure you know exactly what you are getting, and put all and any conditions in the offer. You can't pull out saying that I didn't know about the chicken farm next door etc.

Re: House buying in Aus - making an offer
 

"Five-day cooling-off period (except for auction sales)"

You are entitled to a cooling-off period of five business days when you sign a residential property sales contract (unless if buying at auction).

Often real estate agents or property developers arrange immediate finance for buyers who they invite to attend their property information sessions. Contracts you, the buyer, sign are therefore not subject to finance and you must go ahead with the purchase. The cooling-off period is designed to give you time to consult your own expert financial and legal advice and reflect on the wisdom of your purchase.

If you don't want to take advantage of the cooling-off period or you want to shorten it, you need to see a solicitor who will explain the consequences of giving up your rights and provide you with a solicitor's certificate.

If you don't want to go ahead with the contract during the cooling-off period, you need to write a letter telling the developer or agents that you want to end the contract and give it to them before the cooling-off period ends. You will be refunded your deposit less an amount equal to 0.25% of the purchase price of the property.

You should note that there is no cooling-off period for auction sales.

Re: House buying in Aus - making an offer
 

You can check the actual average discounts that have occurred in each suburb.
My area in QLD shows:
6% - 6 mths to May 08 : Average days on market 52
9% - 6 mths to Nov 08 : Average days on market 93

I also have a house in a Sydney suburb, and the discounting there averages:
7% - 6 mths to May 08 : Average days on market 97
7% - 6 mths to Nov 08 : Average days on market 97

I just looked at East Brisbane and found they are:
9% - 6 mths to May 08 : Average days on market 89
6% - 6 mths to Nov 08 : Average days on market 23

However, some people put their property on the market at a highly inflated price for a short time, in the hope of catching a mug, but then drop to a realistic price if they can't catch anyone quickly ;)

Most agents will not pass on any offers if they deem them unrealistic, but will tell you this at the time. Some sellers instruct agents not to entertain any offers below a certain figure.

Each State has different rules when buying houses, so make sure you rely only on QLD information, if you buying in QLD.

Re: House buying in Aus - making an offer
 

I beg to differ on the basis of you need to watch and see how long its been on the market and evaluate as best you can the sellers circumstances.

Other point is all agents are legally obliged to submit any offer in writing (in Victoria not sure about other states). Even if the offer is for $1.

Also do not accept what agents tell you about other offers - its 99% of the time lies.

Lastly when placing an offer be firm and reduce space for seller ie I use a time restriction ie 24 hours before offer becomes void.

Bewary of agents saying the price has already dropped x% - this usually means dropped x% from when placed on market - where they already new the price would be optimistic.

2003 prices are where most people are saying is a realistic market value at the moment so check through land registry sites and good luck with house hunting.

Re: House buying in Aus - making an offer
 

They wouldn't do that in QLD, as they would need to prepare contracts of sale with that $1 price, before passing it to the seller. ;)