First offer - advice?

[trinity]

Oh oh oh!!!! I don't think so

-

"Best practice for the agent would be.."

Sorry I should have made it clear that this is what i would do rather than state what would be best for others...humble apologies



My response was to Steevg's Q and an example of how i would present an offer when the vendor had informed me, 'i won't accept anything below...' AND still provide duty of care to the intending purchaser. Imagine ringing the vendor with 'got an offer, i'm on my way', they're getting their hopes up that this is it we're cookin with gas, and I arrive with an offer they'd consider insulting.....if i'm gonna get an earful from my vendor i'd prefer it to be over the phone

it would then put the vendor on the spot to make an instant decision - not always a good idea

Fair enough. If they hummed and haa'd, then yes i'd suggest put it in writing, have a think about it, you always have the choice to accept or not

thanks for your thoughts, always nice to know how others would approach these things

donna

[mjmarketing]

As a rough rule of thumb don't offer below 20% less than the asking.
I am wondering why you are so keen on a section? - it would tie up your money for a long time without any return - and also you can only get 50% on a mortgage.
Would you not be better to put your money into something that will make you a quick return with a short turnover so you can build up your bank balance.

[mjmarketing]

hi Donna - are you a REA?

If you are you will know the old saying - 'buyers are liars and so are vendors!' - I would never take any notice of a vendor who said.....'don't bring me any offers below.......' - I have been proven to be right more than once!
If I had a low offer I would maybe say something like - ' don't get your hopes up we may need to do some work here' - this gives them the idea not to get excited.

But as you say we all do things differently - I was a REA for 15yrs and sold 400-500 houses so feel I can make some useful comment.

[freezinhot]

Problem is, what is considered a low offer by one person, may be a way out to another who's in a difficult financial situation. Most certainly I don't want to get a reputation for putting in ridiculous offers, but (especially in the current housing/economic climate) where do I draw the line between finding out if the current offer may be an opportunity, and making a fool of myself?

This is where I believe a good relationship with a trusted agent comes into its own, Ive learnt that solving problems for troubled vendors would be the best way to get a good deal for both, and having an agent who is prepared to find out what the problems are is simply well worth a few lunches on your behalf.

Build relationships!!

FH

[trinity]

hi Donna - are you a REA?

If you are you will know the old saying - 'buyers are liars and so are vendors!' - I would never take any notice of a vendor who said.....'don't bring me any offers below.......' - I have been proven to be right more than once!
If I had a low offer I would maybe say something like - ' don't get your hopes up we may need to do some work here' - this gives them the idea not to get excited.

But as you say we all do things differently - I was a REA for 15yrs and sold 400-500 houses so feel I can make some useful comment.

No not an REA and at the risk of hijacking the thread, have taken your points on board, cheers donna

[xris]

This is where I believe a good relationship with a trusted agent comes into its own, Ive learnt that solving problems for troubled vendors would be the best way to get a good deal for both, and having an agent who is prepared to find out what the problems are is simply well worth a few lunches on your behalf.

Build relationships!!

FH

Hello Patrick,

Here we go again with this RM type indoctrination.

"Find yourself a good agent and work together to solve the problems of the poor vendor in trouble."

No agent who is even a fraction above totally useless is going to tell you his client is in trouble and then sit down with you and disclose the finer detail. You may be told that but it is nothing but a negotiating technique often used on the young and gullible. There are agents out there who will do it but they are bad agents who are not working for their clients and should be hung drawn and quartered. Do you know any like this?

xris

[revdev]

If you are you will know the old saying - 'buyers are liars and so are vendors!'

Isn't trust a wonderful thing! Why would anyone ever contemplate selling privately? Feel the love.

G

[steevg]

mjmarketing

I am wondering why you are so keen on a section? - it would tie up your money for a long time without any return - and also you can only get 50% on a mortgage.
Would you not be better to put your money into something that will make you a quick return with a short turnover so you can build up your bank balance.

Well I was thinking of building a couple of smaller units on it, but after browsing the forum, looks like this isn't a favourable thing to do for a newbie.

I've been around the building trade for many years, so feel confident in running a project, but I'm getting the feeling that there may be better ways to leverage my money.

I agree with the other issue about REA's though, there's no way they would advise you of their vendors problems, they have their own commissions to think about - why would you turn money away if you can talk the price up?
Had several situation like this myself, and never, never have I heard anything but positive reasons for selling - job, family etc, but never "oh they're having money problems"!

Thanks for everyone's comments so far!

Steve

[rueben]

If you are in the building trade then maybe bare land isn't the answer. How about buying a house that you can renovate which has a big section you can subdivide.

You could at least then have some rental income from the original house while you build (or relocate) the new one.

This is still a pretty big undertaking for a newbie so maybe stick to buying a do-up at a good price and increase your equity that way.

I have found the one thing that gets me over the fear of taking action is to go to every single open home in my area and educate myself on what things are selling for. NOT what things are listed for. www.helpsellmyproperty.co.nz is good for this - or get on a good agent's mailing list. I get a monthly printout of all sales in my area from one of the agents I use.

And I don't see a problem with going in with a lower offer if you think that is all that the property is worth to you. You might be surprised and the vendor may accept your offer. NEVER tell the agent your top price and be prepared to walk away. Houses should not be bought on emotion (easier said than done - especially your first purchase).

Look for the houses that noone else wants because they are shying away from a bit of hard work. There are plenty of sound, ugly houses out there that can be transformed with a bit of elbow grease and "paint and paper" - especially if you have the building skills....

Having read the other post of yours re your reluctant wife wanting a brand new home I would say; lower your/her expectations and start nearer the bottom where you can add value- We don't/shouldn't get our dream home first off but we all have to start somewhere. The "must have a new expensive house for our first house" mentality belongs to the "I want it NOW" mentality, which unfortunately has become more common in our credit addicted society.

Sorry - A bit off track of this thread but I thought it was relevant.

[steevg]

Rueben,
thanks, not off track at all, and I do tend to agree with the "add value" aspect - can you come tell my wife that (lol)?

I found another thread which suggested that the usual offer was no lower than 20% below asking price . . . is that your experience too?

Some good advice regarding the open homes & getting a monthly printout from an agent, I may be able to arrange that myself! Open homes, man, I've been to hundreds, just love to see houses and how they're laid out inside. Structures, interior design, I just love it all - people have a fascinating way of applying bits of their own character in their homes.

Having read the other post of yours re your reluctant wife wanting a brand new home I would say; lower your/her expectations and start nearer the bottom where you can add value- We don't/shouldn't get our dream home first off but we all have to start somewhere. The "must have a new expensive house for our first house" mentality belongs to the "I want it NOW" mentality, which unfortunately has become more common in our credit addicted society.

Hmmm, I may not have got the message across very well, she know's the "Dream Home" is a long way off yet, but really all she's looking for is our "own" home after living in a rental for the past four years. Not too unreasonable I'm sure you'd agree! It's certainly not our first time either, sorry if I've misled you on that.

My main problem is getting her to support me while I build my PI portfolio.

Thanks for your comments.

Cheers,
Steve

[rueben]

Sorry I got the wrong end of the stick there... I bet she would be happy to put her mark on a solid, dated house by updating the decor. Show her examples of how you can make a bit of money in six months to a year by buying well.

There is nothing wrong with buying your own home, adding value, then starting your IP journey. Happy wife, happy you....

[steevg]

Thanks for all the input guys . . . . I believe I got all the answers I set out to find.

Have a happy Christmas, and may we all have a very healthy and prosperous 2008 . . . . bring it on!

Cheers,
Steve