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How much off the asking price can I get for you?

Discussion in 'Real Estate' started by Jacque, 11th Dec, 2008.

  1. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    It's a question I get asked a lot- How much can you get off the asking price for me if I hire you to find me a property?

    Rather than repeat myself, I've modified a response I had to a similar query over at another forum, and I hope it helps some members on here who've asked me this question themselves :)

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    Know your market first so that you can spot a good buy rather than just accept that a certain % off the asking price is a "bargain" (and which asking price? The price it was first listed at 3/6/8 weeks previously? The price it's been dropped to for quick offloading? The inflated price the ambitious vendors have asked the agent to list it for?) - because, as the saying goes, "it ain't necessarily so!"

    I'll give you an example. I know a vendor who put their house on the market at $1.2m recently. Beautiful house, but overpriced and being ambitious for this market, they wanted to recoup what they paid in 2003 ($1m) and a little more. The house was exactly the same as when they purchased (only 5 yrs older, obviously). If you had gone in and offered 20% under, you would have been tickled pink to buy it for the "bargain" price of $960K. And yet, had you done your due diligence properly in the first place you would have discovered it was actually worth $900-920K in today's market.
    The property eventually was remarketed with another agency some weeks later (different pics, ad copy) when the vendors circumstances changed and they needed to sell quickly. It sold for a tiny $3K under the "new" asking price of $845K for $842K- a great buy for the astute buyer who picked it up. However, he only got it a .99% discount off the asking. Do you think he's pleased? My oath he is!!

    By now I'm sure you get my point
    When purchasing, it's not about how much you can get off the asking price. It's about knowing the market intimately enough to recognise a well priced property, an overpriced property, a TGB property (They've Got Buckleys!) or a real bargain, no matter what the asking price. You need to conduct your research and get out there and work to ensure that you're not overpaying and are being realistic about prices in general. It takes work, sure, but if you want to get ahead of the pack and snare yourself a good buy, it certainly isn't going to happen by routinely offering 15-20% off.

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  2. Billv

    Billv Getting there

    Joined:
    15th Jul, 2007
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    1,796
    Location:
    Sydney, NSW
    Jacque

    Good point but the final price will always be the one the vendor is willing to accept.

    If the Vendor in your example was NOT desperate to sell he wouldn't even have accepted an offer of 20% below asking price.

    In the end he would have 2 options:
    List and sell at a significantly lower price
    Take the property off the market.

    cheers
     
  3. Jacque

    Jacque Team InvestEd

    Joined:
    16th Jun, 2005
    Posts:
    1,885
    Location:
    Sydney
    Exactly, Bill, which is why he chose option 1 and relisted at a "sell fast" price.
    The motivation and willingness of the vendor plays an enormous part in determining final price.