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  1. #1

    Question Purchase scenario: how would you approach this?

    Hi all,

    Have an unusual situation and not too sure on what the best scenario for approach is.

    I had been told a property was going on the market locally in Wellington, I knew the owner directly. I reached out to the owner, though that owner informed me they had already engaged the agent and she could not discuss sale with me, and I should engage the agent.

    So, I engaged the agent (whom I have not dealt with before) who promptly gave me a price (BEO, of course), for which I said OK, send me through the S&P and we will get it done today and I will meet the price. He then challenged me and said "NO! Buyer enquiry OVER, and it must go on the market first". My response was that if he was serious to sell, all he had to do was send through the S&P, and the property would be sold without preparation or marketing at his asking price. He refused to budge, so I told him that when he was ready to sell the property to give me a call and I would see if I had the capital on hand. I let the owner know what had happened, she told me she would be painting it and putting it on the market when it was done.

    A month has passed, I see the property has now been listed on the open market. The price is fair, not cheap but not high. I have not been contacted by the owner or the agent, which I found a little strange. The price is listed as BEO, but at the end of the listing talks about a tender period closing, with owner reserving the right to sell before tender close.

    I am unsure how to go about this, unsure that I will get the "best price" from an agent who has already shown reluctance at selling fast. I know another agent in the sales company, and have bought several properties through that agent in the past though have not had contact for a few years.

    How would you all go about a purchase in this scenario?

  2. #2

    Default

    You haven’t offered the vendor any (or enough of) a reason to not take it to market.


    I had almost the same situation a month ago. A pre market offer to a neighbor after signing with an agent but before marketing had commenced. We ended up buying the property at below our target price but in a range that I’d say was fair.

    The vendor kept going back to what if I took it to market and could get a higher price. I knew the vendor was moving overseas so I kept talking certainty price and ease of the transaction - one less thing to worry about. With a little bit of doubt - if you don’t sell after the 4 wks of the campaign you’re a month closer to your leave date and up against selling the property. I mentioned at that point I’d still buy it but my price would be far lower.

    You on need to understand the motivation of sale and work out what would encourage them to sell to you fast. Otherwise they have nothing to lose marketing the property to determine interest before committing to your offer.

  3. #3

    Default

    Thank you for your advice Don't Believe the Hype, very insightful and something I had no considered.

    Unfortunately for me, I suspect the owner has tried to pick the market peak, selling for capital gain.

    She did mention it was to be closer to her elderly parent, though I suspect this motivation may be as important as the attempt to time the market.

    The owner has purchased a new property in a different area, moving from an apartment to a traditional house closer to an elderly parent.

    I will send you a Pm with a link to the property.

  4. #4

    Default

    Hmm similar problem here. Vender listed the property being 3 sections subject to title. The earth works for the driveway to the back sections is ready to start. Ready underlined. So I made an offer in the first two weeks of this general listing and the vendor refuses to countersign saying they aren't selling until they've seen what the market is like for these three sections. Wouldn't it be false advertising to list a property not actually for sale? Wouldn't a REA be more careful about getting caught working for nothing. (70km to the section from their office.) Wouldn't the REA expect a vendor to price the land if a S&P agreement is offered.? Can't fathom this why the REA bothers with it. No point me increasing the offer if the vendor won't countersign, how could I get the show on the road again. Hurry up and wait.

  5. #5

    Default

    Nope, it's quite common. Vendors don't have to accept an offer and you don't have to leave it on the table. Keep an eye on it however because if it is an area where the market is flattening then the vendor may find that they aren't actually sitting on a gold mine and your later offer can be reflective on that.
    Last edited by Nick G; 03-11-2018 at 05:04 PM. Reason: spelling
    Free online Property Investment Course from iFindProperty, a residential investment property agency.

  6. #6

    Default

    Thanks Nick G. Fancy that, vendor lists the Pty then won't put a price on the s&p offer. It's like false advertising if the vendor won't put a price on it. Just checking the market apparently.


 

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