Help! Whats the deal here?

[mandimoo]

Hi guys,

I am making an offer on a sale by mortgagee property as the owner died owing some money on it. I can not for the life of me figure out this RE. He so far doesnt seem very salesy, he talked the place down and was more interested telling me the horrible history of the place than selling it.
Regardless of what he says or doesnt say, my husband and I know that we want it and have plans for it. We REALLY need to get this property, however its asking price is 15,000 higher than our budget, so we want to offer $15,000 less.

I have all the paperwork, I asked the agent if there were any other people interested he told me yes someone else has put in an offer, and he told me the amount. I know that they arent supposed to do that. Now I am confused as to whether he is lying or if its real (it seems like it might be real from the story he gave) but has also told me that the seller wont be looking at the offers until Monday November 5th. He is showing through two more lots of people tomorrow.

I am getting annoyed because this property is the only 1 out of 4 properties that I could use for my plan. The other 3 are not for sale. We need it (he doesnt know this). The RE asked me the price of MY offer when he sent me the paperwork, I said 10,000 more than the existing offer. I am wondering now, since he told us about another offer, will he be telling other people about our offer, and should I alter my offer and make it higher, like an "offer-bomb" and send it in on Friday or maybe even monday?

Apologies if this is confusing the crap out of anyone. I'm not the best writer when Im exhausted!

What do you reckon we should do? Offering asking price is not an option, my husband is still annoyed with me for getting emotional and overpaying on our last property

 

[HotRod]

Sounds like there might be something weird going on if he's talking it down. Maybe he's made an offer?????

I guess you could make your first and final offer and write it on the contract (FIRST AND FINAL) with a sunset clause.

Tell the agent you are looking at other properties and you need a response by close of business on the 5th.

You need to be prepared to walk away if this does not work.

 

[thatbum]

I had a similar situation with an agent on another mortgagee sale. I don't really take much note of any agent antics so I just proceeded to offer what I wanted.

Agent got back to me and said did I want to offer more as there were other offers on the table over $20,000 more. (this was a below $300k property mind you).

I just increased it by $5k, made it unconditional and moved forward the settlement date since I was confident of finance by that stage.

Phone call 2 days later from the agent saying they couldn't believe it, but the bank went with mine even though there were offers about $20k more than mine.

I wasn't surprised at all as I knew the banks would prefer a sure thing and a quicker settlement.

 

[mandimoo]

Those tactics do sound good I was wondering what I can do to make ours more attractive without raising the price too high. We would love to do early settlement as we would have a lot of work to do before marketing the property. Unconditional sounds good, we already own one dwelling in the same complex so we already pretty much know everything about the place and its shortcomings (there are quite a few!) so I will definitely tell my hubby about that one

 

[mandimoo]

My husband's theory is that the agent is going senile hehe...

 

[mandimoo]

The strata fees in the building are phenomenal I am hoping this will either put people off or make them offer lower also. If we secure this property also we will be paying over $10,000 per anum in body corp. It's not a good bet for an IP if you are going to do a regular lease, I think it is more of a lifestyle property, which might make it harder for us to compete with people who actually want it for a PPOR as they might chase harder rather than trying to get the bargain. I just wish it were as simple as submitting an offer and having the answer that day like we normally do

 

[thepeoplesagent]

Hi Mandimoo,

I do heaps of mortgagee sales. I take it that this property is not going to auction?

The agent probably shouldn’t be disclosing offers. Sometimes, under the right circumstances it is justifiable. After all, he works for the vendor and has made you pay $10,000 more than the previous buyer. Although I myself wouldn’t have disclosed other offers.

Keep in mind, if he has told you what other buyers are offering, you can guarantee he will disclose your offer to other buyers too (not a good way to gain trust or achieve repeat business which is why I would not do it).

As for his other actions, he might know someone who wants to buy it, or he might want to buy it himself. Maybe his just an idiot, who knows? If so, he will need to disclose this to the vendor (not the part about being an idiot).

If the actual vendor is the mortgagee, don’t worry about your offer being a little below the asking price. The mortgagee looks to achieve a fair market value, not a particular figure. They have no emotional attachment to the property.

Realistically, the only thing stoping your offer from being accepted will be another buyer, not the mortgagee.

In my experience, the mortgagee will set their price anywhere between 3%-5% above what the property was valued for. If they cannot get a buyer for this amount, the property will be re-valued.

 

[mandimoo]

Yep the property initially went on the market at 395,000 then was valued last Friday, the RE told me the valuation came back at 400k and then the asking price was changed to 410,000

Its competition that I am most concerned about especially people who intend to occupy !

 

[thepeoplesagent]

Yep the property initially went on the market at 395,000 then was valued last Friday, the RE told me the valuation came back at 400k and then the asking price was changed to 410,000

Thats really strange, I've never heard of a mortgagee doing that??

 

[mandimoo]

I have no idea why it happened, I first saw the property on realestate.com.au on Tuesday night at 395k which I thought was a great price so I called the agent right away and made an appointment to see it on Thursday morning but then my mum told me it was 410,000 when she looked at it on Friday. It was strange! Id be happy to pay 395

 

[mattysavager]

A colleague of mine has just bought a mortgagee repossession in Brisbane (2-3 weeks ago).

The vendor was Westpac Bank as mortgagee. They didn't counter offer - she offered $5K more than the other offer (which the agent also disclosed). The bank accepted as long as she paid a large deposit and could show cleared funds to pay the stamp duty.

I agree with the other advice that you should beat any other offers on terms. Cash unconditional if you can, and feel free to put a deadline on it. The agent would certainly know that the 10K Strata Levies would put off a lot of buyers.

 

[Jake Milne]

. We REALLY need to get this property, however its asking price is 15,000 higher than our budget

This really concerns me... You're being too emotional.

Make sure you look around and decide that you like this one more than all of the other options you can source. Make a level headed decision based on the numbers.

I am getting annoyed because this property is the only 1 out of 4 properties that I could use for my plan.

Really? Have you called every agent in the areas you're looking at?

The deal of a lifetime comes around once a week.

 

[mandimoo]

It's a very specific plan hehe... but yes I will admit I am emotionally involved. I don't usually make my decisions purely financial, I tend to buy things because I want them, and then find ways to make them pay for themselves (entirely.... & even profitably!) This will end up being more like an exchange than a purchase as in a few years i will sell off the first and keep this new one, at this point I expect them both to be neutrally or slightly positively geared

 

[westminster]

I'm guessing that you might own a property and are seeking to buy any of your neighbours - that is the only reason I can understand the low number of properties which meet your needs.

 

[Rhinsor]

I went to a mortagee auction end of last year. The house got no bids then got passed in a 250K. 4x1 720sqmish 10 minutes from Perth.

Myself and another person put an offer in. I put in a 255K offer and got told someone else put in a offer. The agent didn't call back requesting a higher offer and I contacted them multiple times without reply.

It sold for 260K in December and is now worth $380-$400K!

 

[sanj]

I went to a mortagee auction end of last year. The house got no bids then got passed in a 250K. 4x1 720sqmish 10 minutes from Perth.

Myself and another person put an offer in. I put in a 255K offer and got told someone else put in a offer. The agent didn't call back requesting a higher offer and I contacted them multiple times without reply.

It sold for 260K in December and is now worth $380-$400K!

Ouch! What suburb?

 

[Rhinsor]

Mirrabooka, on the next street to my current IP which was built the same year and is the exact same design funny enough.

Took me quite a few months to get over this missed opportunity

 

[mandimoo]

That sounds like a negative experience I wonder why the agent didnt get back in touch with you? Opportunity missed!

Basically the reason it has to be this one is we are using them as tourism properties, there are 4 different viewpoints of the building, only 2 of them are suitable, we own one already which is on one aspect, buying this one will see us owning both aspects and also this one that I am going for is top floor which we would like to own so that we may differentiate the properties (ok.... so that we can charge more for gimmick factor). Its actually pretty much the only one suitable as we do want top floor, it gets no noise from above and has the sun deck which is a great selling point. I only started with the other property a few months ago but it's doing really well so far with $3000 - $4000 monthly average, I expect that this one will do the same if not better and for the same purchase price.

What I dont expect though is much capital growth

 

[Spades]

I went to a mortagee auction end of last year. The house got no bids then got passed in a 250K. 4x1 720sqmish 10 minutes from Perth.

Myself and another person put an offer in. I put in a 255K offer and got told someone else put in a offer. The agent didn't call back requesting a higher offer and I contacted them multiple times without reply.

It sold for 260K in December and is now worth $380-$400K!

Maybe the agent bought it???

 

[Rhinsor]

Maybe the agent bought it???

The house got renovated within a few months with new kitchen, paint and backyard cleaned up. It was on realestate.com.au after that for $370. (Mines currently rented out for $450.

I take it down as a really good lesson as the buyer did the exact same thing as i would of done (except i would of had a higher rent) and they had a really good outcome.