Purchase price 'offer' strategies

Hi Bill,


Most asking prices are negotiable. Even if the vendor says it's his "bottom price" there's no harm in making a lower offer if you want to, he can only say no. Haggling is definitely a normal part of the buying process.


The bank valuation probably isn't good leverage, if by that you mean can you negotiate the price based on the bank valuation. This is because most bank valuations are around at least 20% less than the asking price. Banks give valuations based on the size and age of the property and don't take into account its interior condition. So if someone has bought an older flat, and spent a great deal on renovation, then their asking price is likely to be a lot more than the bank valuation. The vendor may eventually accept a lower price if they want to sell the flat quickly, but if they don't need the money they may just hang on to it until they get the price they want.


If you're looking for an agent to help you find somewhere, drop me a line at linda@queensproperty.com


Best of luck!

Linda

buy in 9-12 months, not now.


and yes you should absolutely haggle and negotiate (of course unless you are trying to buy from me, in which case of course there will be 3 other interested parties ready to bid above the asking price and close quickly, so just feel lucky that I might even consider your offer... :)


A good agent can be a great help and while I don't mean to disparage them universally, as a first time buyer you should be beware that they are not really working for you or your interests; they are working for a closed transaction (when they get paid). And their advice about market conditions, seller's attitude, or negotiating strategy may not be, for lack of a better term, totally objective.

I had a centaline agent cold call me yesterday telling me prices in my are had dropped nearly 20% and now was a good time to buy. When I explained to him the fact that he was cold calling meant there weren't enough buyers for all the sellers he seemed genuinely shocked. I said thanks, but call me in 6-12 months when it will be a better time to buy!


Banks are making margin calls at the moment and some investors (stocks and property) are wanting to get out. Those selling a little below the market average at the moment may be the smart ones. They'll offload quickly and in 6 months will be smiling as their recently sold property continues to drop in price. They will take a hit at current market prices, but are betting on a win in the medium term.

Hmm if you want a bit more of a scientific method.. determine the recent selling prices of similar flats in the building.. and apportion it to your target flat by using the same price premiums (%) that the developers charged when they originally sold the units when the complex was built.. assuming all other things are equal.


If you plan on renovating anyways.. dont tell the agents.. so that when it's time to haggle.. you can deduct the cost of "repairing" the required items, thus having an inspection done can help you lower the final price, after the initial prices are agreed upon.


Determine how much the landlord is bleeding every month by having the condo empty.. mortgage payment based on 30%, and the etc fees..


Determine how long the condo's been on the market as well. Lowball them if the condo's been sitting for a while... if people aren't fighting for it.... it's overpriced.


Let realtor's know that you have cash ready to buy if you run across a great deal.. but for them not to waste your time.. tell them specifically what you want.. ie.. high floor, view, away from main roads, 1 block to mtr.. etc... otherwise they will show you every apartment they have a key to..


Goodluck with the hunt!