Negotiating a deal?

[Indadhanu]

I've always wondered... the sellers offer a price. What is a reasonable percentage to try to negotiate down to? Obviously that depends on the house, if it needs work etc, but on average? Do most sellers expect some negotiation, or do people put houses on with that price and hat price only in mind? Some are quite specific! is there an average? How do you work out how much to negotiate by? Do you ask to get a valuation and building inspector before you put an offer on, or do you put in an offer and then once it's been accepted then do the inspections and either offer less or withdraw based on that?

Theres so much more to real estate that I never considered before LOL!

[Little Chicken]

I think you make an offer with the sale conditional on an acceptable building and pest report. So they accept the offer first iykwim.

[Indadhanu]

Oh cool, yep thats makes sense lol I'm such a newbie at real estate!

[Arimeh]

There isn't any hard or fast rules as to what to you take off on your first offer. I usually do about 10-15,000 of the sale price off? When we had ours on the market in queensland, it was on for $333,000. We got offered $305,000. We laughed our butts off - as IF.

We finally settled on $319,000.

As for the inspections, I wouldn't get a valuation done separately because if you are getting finance, your finance company will already have to get that to make sure the property isn't worth less than what they are giving you.

Just make the contract subject to finance approval and satisfactory pest and building inspections.

[Winter]

You put in your offer conditional on you getting finance approval, approved building report & pest inspection & any other 'conditions' that you deem fit such as 'all additions to the house being council approved'. The last one is important because if their are out-buildings or patios or extensions that are not council approved, they are not legal and you may be required to remove them.

With regards to the price, sellers expect negotiation. However, they may have a very firm 'price' in mind. What generally happens is you offer & they counter-offer. Say you see a house and its advertised for 320K. You may put in a bid for 290K and the seller comes back with 310K. You can always counter-offer again, say 305K and if they accept that, then that is the price. Don't forget stamp duty on top of the price. There should be a web site for your state that you can look up & see what the stamp duty is going to be. For example, lets say stamp duty is 15K, then you're looking at 320K plus whatever your loan establishment costs, house insurance and building / pest inspection reports costs.

It is all very confusing for first time home buyers, but keep asking questions Leash, there are many of us who have btdt.

I also wanted to add, that I find it very comforting to have my own home. It feels like an extra level of security & I like that my money is going back to me (and the bank!) So I hope you find what you're looking for.

[Winter]

And don't worry about the home owners laughing at your offer, it is worth a go to offer low and see where you end up.

[Arimeh]

There should be a web site for your state that you can look up & see what the stamp duty is going to be. For example, lets say stamp duty is 15K, then you're looking at 320K plus whatever your loan establishment costs, house insurance and building / pest inspection reports costs.

If you need help with this Leash, I can help out - considering what I did as a job in Queensland

[Indadhanu]

Thanks everyone

So is there still a first home buyers grant? Where does that come into it?

And apparently stamp duty would only be abuot $500 dollars, does this sound right?
What are the other fee's and things? Would we need a solicter? How much are all the inspections and things, on average?

[Winter]

Ahhh...$500 stamp duty doesn't sound right at all.

You wont need a solicitor, you'll need a settlement agent. They handle the transfer of money from the bank to the seller and the transfer of title into your name.

You'll need a couple of grand for settlement & inspection costs. And insurance for the house as well. We needed that before settlement would take place.

[Arimeh]

Leash - I can offer a 18 month old view on things - I haven't done any conveyancing in qld for that long.

First home owners grant - yes it still exists. Most banks use it to cover some of the mortgage insurance costs and so forth, plus fees and charges for them establishing the loan, registering the mortgage on title, settlement fees etc - I think most of our FHOG went on that kind of stuff. Our mortgage insurance was over 3 grand as it was.

Stamp duty would probably be around that - tis not much for First home owners. I think we paid $600 on our place in nambour back in 2006 and the cut off for stamp duty has risen, so i'd say thats about right - but can double check and tell you exactly how much if you want me to.

Solicitors fees - yes, get one, particularly for buying. I would do my own selling in queensland but not buying. For a standard house, its about $800 for fees for the solicitor and about $350 for searches, depending on which council you are buying in. Brisbane city council was one of the MOST expensive councils to get searches through, we're talking $300 just for their searches, let alone all the others.

Pest and building - I got ours done for $220. Probably be similar to that.

[Pretty Butterfly]

I have never used a solicitor, just a conveyancer, who handeled everything for me once a price was agreed on.

And I mean everything... she called me when it was time to read and sign stuff or with questions. If you get a good one, it makes things VERY easy!!

I think there is a waiver/reduced thing for First Home Owners still for stamp duty, on top of the first owners grant? There was when I bought my first house....

[Arimeh]

Ahhh...$500 stamp duty doesn't sound right at all.

You wont need a solicitor, you'll need a settlement agent. They handle the transfer of money from the bank to the seller and the transfer of title into your name.

You'll need a couple of grand for settlement & inspection costs. And insurance for the house as well. We needed that before settlement would take place.

I'm not sure what state you are in, but in Queensland, the stamp duty is cheaper than most of the other states. Plus its better to have a solicitor than just a settlement agent, as the settlement agents AREN'T solicitors, and if you run into trouble, its more expensive to get someone to help you out - I'd rather the protection of a solicitor than going in blindly - ESPECIALLY - if you've never purchased a house before.

ETA - PB - Queensland is one of the only states I think where you must use a solicitor for a conveyance. Conveyancers can work themselves in other states, but all are directed in Queensland by a solicitor. Conveyancers cannot practise in Queensland on their own without a solicitor (believe me, I studied to be a conveyancer in Victoria, then went to queensland and it wasn't recognised cos there isn't a course up there - everyone is a solicitor who then practices in property law - ie conveyancing)

[Indadhanu]

Apparently, according to the OSR, there are a whole bunch of concessions? $1.00 for each $100 or part of $100 for purchase prices up to $350,000, plus $8,750 for first home buyers (under $500,000).

Thanks Mel Your brain will be very useful in weeks to come.

[Arimeh]

Leash - how much is the property? I can have a look for you if you like.

[Winter]

Wow, I should buy in Qld! We paid over $15,000 in stamp duty alone! Bloody WA!!

[Pretty Butterfly]

Then I recommend a solicitor!!!

Ours was great, have used her for buying and selling everytime.

[Indadhanu]

We haven't got a specific one in mind, don't want to get attached until we get an official go ahead from the bank! I'd link one I have my eye on to you, but I don't want to get my hopes up LOL!

[Arimeh]

Wow, I should buy in Qld! We paid over $15,000 in stamp duty alone! Bloody WA!!

WA is probably up there with tassie - we paid nearly 9 grand for this place and it was only $265,000 to buy!! IN queensland we would have paid $2650.