In about an hour I'm bidding by phone for a little coastal property that's just come up for sale. Luckily I have my brother in the area, who's volunteered to go and be my eyes and ears and bid on my behalf whilst I consider how much I want to spend I don't really expect to win (other interested parties) but you just never know your luck at auctions..... Anyway, it's always a bit of fun!!
Well, out of the 8 auctions mine was the last of the night (most interest always is) and with one other bidder, the property got PI to me at a lovely $162,000 We will now have to negotiate with the REA tomorrow and see what we can do about the $212,000 reserve
Hey Jacque, Wow that seems like a pretty cheap coastal property. What type of property is it? freestanding house, unit? Whats the condition like?
It's a 2 bd unit in original condition (built early 80's) in a small coastal town called Sawtell, just 6km south of Coffs Harbour. Beautiful beaches
Nice one Jacque. Did you find out about the area because your brother lives close by? or because you did some of your own research and found it to be a good area for your next investment.
It's always been a favourite place of mine, Leandro. You could say my interest is slightly emotional- as my family has been going there for annual holidays for decades. It's a quiet little place, but with Coffs so close (which also has an airport) I consider it a great place to invest- if you can buy at the right price
An update to this purchase for those interested: With a further week to think things through, the vendor has put the property back on the open market with an asking of $212K but will take $200K. I'm now up to $170K and am biding my time Sometimes patience is the key to not overspending, providing the conditions are in your favour. I've also offered a contract with a 66W attached and a 10% deposit by end of week so we will wait and see the response.....
Hey Jacque, Excuse my ignorance but what is a "66W"? Also, how many raised offers from your part do you think it takes before the vendor or selling agent thinks that you can just keep going further if they wait longer. i.e. say you offered 160K first, then went back with 165K, and then 170K. Do you think they would get the impressesion that you can keep going? My personal thoughts are that, as long as the increases in the offer keep getting smaller then they will think that you are getting to the end of your line.
A section 66W form is basically a form, signed by yourself as purchaser under the guidance of your conveyancer/solicitor, that waives your standard cooling off rights with a contract of sale. This means that once both purchaser and vendor have signed the contract, it is legally binding and the sale is then referred to as unconditional. Your line of thinking here is spot on and something that as a negotiator, I practise myself. The smaller the increment, the closer to the bottom line you appear to be getting. However, depending on the particular situation around the property (hot market, lots of buyers, slow market, realistically priced property, stale property, highly motivated vendor etc) negotiating calls for different techniques and strategies. It's about formulating the correct strategy for the property at the point in time that suits. The other practice to avoid, in my opinion, is the ultimatum that you don't mean. If you are prepared to make one offer, for example, and let the agent know that this is your "walk away" price, then bluffing and offering more later on will not do you any favours. Would love to discuss this further in another thread as it's a topic that has the capacity to promote a lot of interesting discussion from all of us as investors, but my lunch break is over Will keep you posted as to the outcome anyway!
Thanks for your response Jacque, now i know what a section 66W form is I think a thread on negotiating or offer tactics would be interesting to read, however like you said every deal requires a different approach, so the thread won't produce any clear answers for anyone wanting to learn how to "Negotiate" but might offer some general pointers.
Follow up to this property- sat on the market until about a month ago with a Coffs Harbour agency and is now sitting vacant with no agent. They wouldn't take less than their $200K and so I lost interest. Moving on- now I have my eye on doing a JV as well as scouring for a PPOR. Now if only the financing was as much fun as the sourcing!!
