Buying property, social retard cant make an offer

[WhoCares]

So.....

I found the right property, love it, perfect, ticks all boxes, already remodelled the bathroom in my own mind etc...
Got the loan approval
Initial checks all clear

Cant make the offer....why?

Because I hate negotiating. I know what the property is reasonably worth given extensive market research of the local area, comparable properties and time on the market. Vendors are keen to sell, they want out and have been waiting a year already. But, the property is not worth the asking price, not even on its best day without the dated 80's interior and the kitchen that needs a rework because its got a stupid split style stove shoved in a corner and no bench space.

I just hate confrontation and fear the agents reaction when I make an offer for reasonable market value. Its gotten to the point now where I want to walk away and forget about buying. I have no-one to help me with this. Any suggestions?

 

[cafe]

What's the worst that could happen if the agents don't like your offer?

(Sometimes asking myself that question helps me do stuff I'm uncomfortable with, because really, what's the worst that could happen in most situations? Usually nothing life-threatening.)

 

[spirilis]

I had a buyer's agent helping me with this process so she took care of it all. I take it you're doing this on your own?

 

[JAVO]

I just hate confrontation and fear the agents reaction when I make an offer for reasonable market value. Its gotten to the point now where I want to walk away and forget about buying. I have no-one to help me with this. Any suggestions?

Actually, you fear your reaction to the agent's reaction. What the agent says doesn't affect you in any way. It's your perception of it which affects you.

The agent probably just wants to sell it and get the commission. As long as the sellers are willing to sell it for the price, the agent probably doesn't care that they're going to make a few hundred less on the commission.

If they won't budge on price, push for other concessions, possibly including cash at closing to update the place. Definitely make the offer contingent on home inspection too.

 

[93JC]

What's the worst that could happen if the agents don't like your offer?

It's not the 'right' property if you can't get it for the right price. Give 'em an offer. If they balk so be it, let 'em sit on their overvalued property.

 

[Tigerlily]

An offer, is an offer, is an offer... An agent doesn't have to like or dislike your offer, they simply have to present it.

I had a buyer's agent helping me with this process so she took care of it all. I take it you're doing this on your own?

Yes! You need a buyer's agent, so you won't have to negotiate anything. Just make sure the agency agreement is in writing. Best of luck!

 

[swordpath]

At least negotiate, as opposed to just walking away. Like others have mentioned, what's the worst that can happen? You end up without the property (which would be the case anyways if you walk away)?

 

[netzealot]

Negotiation isn't an ESTP's game, despite the stereotype. It's easy--you must make a hardline value determination of what the property is worth to you at most. Negotiation is merely the process of teeter-tottering the heavy load that is the final deal into place.

For example, paying $300,000 feels "worth it" to you, $320,000 less so, $340,000 feels irresponsible, and $360,000 is just too much period. That means your realistic limit is about $330,000.

1) Start the negotiation by trying to find out what they're looking to get for it. Don't tell them you already have a set amount in your mind, or that you have a loan approved. You need a ball-park figure from them "to find out if you can even afford it". It will probably be a pretty high amount.

2A) Let's say they are asking $450,000. You will not pay more than $330,000. How you walk the negotiation down to that number is up to you... you should start with a semi-lowball offer to see how much they'll budge in your direction... say, $250,000. If they aren't going to budge anywhere close to your $330 then you can walk. Let's say they counter offer with $400,000. You say $280k, they say $375k, you say $300k, they say $350... then you whip it out and give a semi-hard number of $300k, no more... they'll give you their minimum number in the $315-345k range, and you agree to it.

2B) If the number is close to your initial value, you should mentally subtract $50-100k and negotiate the process as if the most you'd pay is $230-280k to get the best price.

Mathematically speaking, negotioation is merely determining your max final value, then determining whether the amount that the other party will increment down towards that value is the correct ratio vs. your own increments up towards it. If they want your value+$200k, and you start $100k below it, they need to be willing to increment down at 2x the rate you increment up. Negotiation is about finding out whether their minimum sell value overlaps with your maximum buy value in such a way that leaves the final resting number in your end of the overlaping spread.

Make sense?

 

[WhoCares]

I'd love a buyers agent but thats a concept we dont have here in Oz. We dont have many concepts when it comes to purchasing propperty, just the old fashioned mortgage via a bank. But thanks to LZH and others for giving me the shove to move forward regardless.

So asking price is $350k, market value approx $270k, I'm willing to pay market value only given its location, a small rural town where properties take at least 9 months to sell, even in good times. Past few years have seen property values fall in this area, very little capital growth in the past decade. The home is atypical for the area so its not got wide market appeal for local demographic.

Offer $250k?

 

[JAVO]

$250k sounds like a good offer.

 

[netzealot]

I'd love a buyers agent but thats a concept we dont have here in Oz. We dont have many concepts when it comes to purchasing propperty, just the old fashioned mortgage via a bank. But thanks to LZH and others for giving me the shove to move forward regardless.

So asking price is $350k, market value approx $270k, I'm willing to pay market value only given its location, a small rural town where properties take at least 9 months to sell, even in good times. Past few years have seen property values fall in this area, very little capital growth in the past decade. The home is atypical for the area so its not got wide market appeal for local demographic.

Offer $250k?

Again, it depends on how much they'll budge. 250k can be a good offer but you're only giving yourself 20k to work with. They will need to come down 80k while you can only go up 20k. However, you do have the market value available which is your hard cap, so you can stop there and say that is the market value and the most you can offer. If what you say about the local housing market is true and they know it, seems like they would (or at least should) take 270k.

On the other hand, if you were to leverage the poor market for the house and offer only $230k, it might "help" them jump to the 270k market value themselves. Technically, the middle of that spread is 290k though so keep that in mind. Instead of you trying to convince them that you should only pay market value, I'd lowball them a little more and get them to try and convince you to at least offer market value. That's when you say "I can't do any more than 270k" and they accept thinking they got the most they could out of you as well as fair market value... which they did, but in this case it also happens to be 80k lower than what they were asking.