Making an offer on a house. I need your haggling advice/experience PLEASE!

[lissy]

Ok DF & I are buying our first home. We've made an offer on a house & here's the skinny:

Really old besser block house, but decent sized rooms etc, on a bit or acreage, average priced for the area. Needs a new kitchen, floor coverings, house yard fence & could do with some major tidying up, but overall it has potential.

Asking Price: $450,000
Our First Offer: $385,000 - knocked back

A week later the real estate called us wanting to know if we had thought about another offer, we got busy & 2nd week later.....
Our Second Offer: $395,000 - knocked back & real estate says their bottom price is $430,000 firm.

Where do we go from here?????
We aren't really prepared to pay more than $410-420,000 for it due to the renovations needed.

So in your experience is this likely to be their bottom price? Im thinking not?
My instinct is to go back to the real estate and say that our highest is $410,000 & we walk away if they aren't interested. Am I on the right track? and if so how long do we wait before getting back to the real estate this time?

Ive had no experience haggling in my life & DF isn't much better. A few other times we've walked away from deals & then kicked ourselves further down the track for not tacking them.

[kimmi]

You can give it a go..... I guess it comes down to how long it has been on the market for and what the owners circumstances are? Do they need to make a certain amount to be able to buy something else? Also if it's only just been put on the market, they may feel like a better offer is coming along.

I would try 410k and see what they think. After that, if you still really want the house, don't jump to 420k, jump to say 412k. Smaller increments show that you are reaching your limit and if they are keen to sell, they wont want to miss out!

[lissy]

It's been on the market for 3yrs as far as we're aware. Friends of ours swear they looked at it 2 yrs ago.
In that time the property value in that area dropped $80,000 at one time when a mine extension was postponed, but is picking up again a little due to amount of people displaced since floods.
It's currently rented out but I wouldn't think they'd be making much out of it.

[kimmi]

Well, I'd say go for it!

Don't keep making offers though, they will think there is a never ending supply of money.

When you plan to make your last offer, explain to the real estate agent that you had to borrow the extra from a parent just to make this offer and it's really at your limit.

We recently did this, I know it was a little bit of a porky pie fib, but I believe the sellers panicked when they realised there was no more money after that offer.

[toomanyshoes]

Don't pay more than you're willing to.

If you have done your research for the area and your offer is fair, stick to it. If you are happy to pay 410 put in an offer but be prepared to walk away if they aren't interested.

As hard as it is you have to take the emotion out of it, I look at similar houses and what it would cost to renovate to the average finish (not super flash/top of the line) and take that off their price. You don't want to over capitalise but you can't expect them to knock money off for a $$$ kitchen reno, etc.

[kimmi]

I meant to say maybe two more offers at the most. **

[Pandora]

put in what you are prepared to offer, not more.
Im surprised the RE took your firstoffer forward at all if they know the vendor didnt want to go lower than a certain amount.

The bottom limit he has given you is probably 5-10K higher than the actual bottom limit - from my experience as a vendor anyway.

[Astrid]

I agree with toomany, put in your best off and be prepared to walk. Also put an expiry on it. Here is our offer $xxxxxxx and it only lasts till next Friday. If you want to get tough, just say that any offers after that will be lower. Really with houses you need to be prepared to walk away, especially if you can wait or there are others in the area.

There will always be regrets with property, the "if only's". As much as we are happy where we are, there are still a couple of properties we wish had pursued that little bit harder, that is just life though.

[Astrid]

put in what you are prepared to offer, not more.
Im surprised the RE took your firstoffer forward at all if they know the vendor didnt want to go lower than a certain amount..

I believe in Vic they had to take all proper offers to the vendor, even if way below the asking price. It is possible they have the same requirement in QLD.

[Pandora]

Yes, theyre supposed to. But I know ours didnt.

[Phteven]

I agree that you need to be prepared to walk. There is always going to be another house that will be what you're looking for.
If it has been on the market for 2 years then it might be that the vendors aren't serious about selling. We have encountered one of them when we were shopping for a flat once and they are annoying time wasters - basically the proprty is only on the market of you are prepared to pay more than a fair price.
Have you looked at lots of properties? If you tell the real-estate agent that you need a reply fairly quickly because you are thinking of making an offer on the house around the corner (even if you're not) it can sometimes bring the vendor to the table a bit faster.

[kimmi]

good advice happening here...... I made the mistake of picturing our house as a family home with children running around, so we did end up going over our limit :-( So on that note, take no advice from me, I'm an emotional buyer!

[OceanPrincess]

Decide with DH what you are absolutely willing to pay, then offer 10k lower than that. Then you can go to the higher amount, but make sure you say that's your absolute final offer.

You might be surprised - they may just take the lower offer!

[YoYo]

Just put 410k on the contract followed by the words 'final offer' they will know you are not desperate that way.... Which gives you the upper hand. Good luck!!


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[lissy]

Thanks for the great advice ladies. It will come in very handy for us.

Lol kimmi - Im a bit the same i.e. picturing us in the house & all our stuff. I start thinking of where everything will fit etc. & where I'm going to put my horses which is something I have to consider but it does lead to getting attached.

Ah well may be a moot point, we heard a few rumours on the weekend from someone who looked at the property a few years ago & apparently found out that there was fairly major water damage in the roof, which at the time meant tiles to be replaced & some internal repairs. Don't know if thats still the case but we are backing off a little right now and looking at other options.

We are going to look at another house in the same area for $100,00 more but it won't need any reno's, has a pool and is situated on 1.5 acres more than the first house. Very tidy beautifully renovated old federation style house with massive verandahs.

And the owners will sell privately if we want to, so it means we don't have to deal with the crummy agents in town here, wheelers & dealers big time up here, but I suppose that's normal. I just don't like it though.