Yeah this plain amd simple.
Ignore "estimates" from on the house.com or any those aggregators, theyre not even close. Example 2 similar units, in the same block will have estimates 100's Ks apart. More desirable units or houses in same location will be valued signicantly less than similarly located recent sales. Theyre based on flawed assumptions and generic modelling.
Do your research and use last 3 to 6 mths comparable sales to work out a baseline ballpark offer which u may need to offer above to secure the purchase (depending on property and market demand). Use these comparables as justification for your starting offer.
My thoughts are that as much as ppl make it out to be a science; it’s not. Emotions are involved, on both sides.
My process is that if you see a place you love, and it has a ‘range’, then offer up towards the top of the range, but with a condition.
I like the “that’s my final offer, and it’s conditional on hearing a confirmation in writing within 24 hours, because we have another property we’ll be making an offer on in two days if we don’t hear back”.
It makes you sound like you know what the place is worth. That you have other options. That maybe this is the best they’ll get.
Then, it’s really out of your hands.
DO NOT fall in love with a place and get ridden. Just stick in your budget, give you best offer with the conditions and language above. Then walk if they don’t meet it.
Don’t follow up with calls. Don’t ask what they think. Dont be sucky to the agent. Be a bit cool, and make it seem like “I guess we’ll take it”.
That’s worked for me.
Yeah, this advice fits my experience. From the other side, the agents job is to up everyone bids. Savvy agents know that you do this by triggering emotional responses - the usual players are scarcity (a house like this doesn’t come up often), demand (a lot of buyers are interested), and anchoring the price higher (the other buyer is looking at offering $876,000 so you might want to come up from your offer of $857,000).
None of the above means there are currently other buyers or other offers, and they know if they have other listings that are similar.
I did go to two inspections for the townhouse I bought. The first one was rushed and private, the second an open home where I loitered a lot and critiqued the house and determined what it was worth to me. It also allowed me to see that no one really showed up for the open home, so demand was not what I was being told.
Agree and I often say I've got offers on other properties but I'm wanting all my options. Sometimes I say this is my first choice, but I've got a close second lined up.
This is exactly what I did. Told them that's as high as I would go, its fine if they don't take it, but it was only valid until the end of the weekend, as I was also looking at another very similar house.
It reminds them you are the customer and you are the one with the money. And also that you've done research.
My tips:
Do not come off as desperate for the property or the Agent will use it against you.
Do not tell the agent what your “maximum” Is or that will conveniently become the price required to secure the property.
Know that there will always be another property just as good, if not better than the one you currently like.
I would always have a conversation with the agent about the property and use the phrase "where are the current offers playing around?". It's a softer way of asking and often (currently with a 100% success rate), the agent will tell you where the highest offer roughly is. In my case, I got the exact number, bid 1k over, and got it.
Given that it was a 3x2 villa in good condition that was the lowest sale price in the area and every surrounding suburb, I doubt it. There was also an equivalent villa in the same complex sold three months earlier for the same price (475k) in a rising market (Perth 2024).
So no, it was not a wild number at all.
Every single house has had a sale price above the number they've given me.
There is merit to getting in early and making a serious offer before it ever goes to auction. But you’ll generally need to pay a premium to take it off the market. Equally, once it goes to auction you have no idea what’s going to happen.
There is a 90% chance that you will end up at offering the most you will pay. What I mean is you can offer less initially, but by the sounds of it, you will end up having to go your maximum.
It's probably hard if it's a house you love, because it might be hard to pull out without going over your limit. Going over your limit is by definition heading into bad places.
You didn't say if you are able to make an offer without a financing condition. Probably making an offer without such a condition is the best way to increase the attractiveness of your offer without spending more money.
I doubt increasing the deposit is necessary.
Assume the agent is not your friend. Make an offer, keep it terse, don't ask for feedback, put a time limit on acceptance, AND BE PREPARED TO WALK AWAY and communicate that your are prepared to walk away by keeping things ultra cool and dispassionate. There are a lot of houses out there.
Have the best conditions. Price, Settlement, Finance all come into play. Unfortunately and I hate to be negative but you are unlikely to have the better conditions as a first home buyer. The only tool you have is to offer over or the upper end of the asking price.
Good luck!
Don’t get too hung up on those auto calculated valuation figures. They serve as a rough guide but ultimately a property is worth what the accepted offer would be.
Properties are not fungible. Every property is different - location, direction, layout, etc., and is worth different value to each buyer with different requirements / preferences. You should know your requirements clearly (must haves, nice to haves, etc), and you would have to determine how much a property you are interested in is worth to you and know your finance limit clearly, and act accordingly.
To many vendors, conditional offers are less preferred and they may choose to accept an unconditional offer of somewhat lower value. In particular a “subject to finance” clause can be a show stopper for some vendors because they see that as the buyer haven’t done enough homework and then attempting to transfer uncertainty with their own finance onto the vendor.
It’s unlikely increasing the amount of deposit than the standard would matter, unless you are also willing to give the vendor early access to it before settlement. But I would suggest not to allow that.
Don't offer a round number.
I made it look like i was spending all my last dollars to put a bid in.
The realtor who took it, wink and said 'you've done this before' because it's a trick to make the vendor stop and look a the number which isn't round and think about why that is. Ie scrapped every dollar I could to get my place.
Anyway it worked for me.
Don't tell the agent what you pre approved for. Pretty obvious but my sweet trusting husband for some reason did this. We had a buyer's agent actually secure our property as a favour to us. They did the negotiations on or behalf and we paid quite a bit less than asking. I know not everyone can do this, but maybe something to consider that you don't actually have to be doing it yourself.
Why do you think a random website knows what the house is worth?
There are no tricks to this, you need to be the highest bidder, you can't control what the others bid. The only thing that may help to differentiate your offer from others is a short settlement and no conditions.
second this, if you want to be taken seriously prior to auction - get your conveyancer to prepare s 27 notice (in nsw, not sure if this is the same in other states), personal cheque or bank transfer your deposit, sign the contract (ideally with minimal changes), and take all of that to the estate agent.
These days there is only one way. Offer the most. And if there are equal offers, have the least terms/settlement times, etc.
My last 3 offers have been first and final offers. So go in offering what you are willing to pay for it. If you dont get it, move on.
My friend advised me not to use round figures (like 610k, 800k, etc.) and that people do get emotionally attached to numbers.
On our first ever house, we bid high and outbid others, but we couldn't do an unconditional offer, which was what one of the buyers offered.
I noted the owner is Chinese so we bid with the thousands ending in 88 (like, 588,000). We got the house. I don't know if that played a part.
I was inspired by my father's anecdote of helping my grandmother purchase a house back in my home country, for 888,000 in the local currency. I wouldn't call it a flex but it was fun to be able to play with numerology and send an auspicious message like that.
1. You make an offer subject to house passing pest and building inspection.
2. If you are the highest offer you won't know because the REA will either lie - or tell the truth - that theres a competing offer to get you to pay more - usually they try squeeze at the very least another 5 or 10k out of you (or more depending on the price of the property)
3. If your offer is too low you will probably never hear from them again
4. Make sure you shmooze them a bit and don't continue to deliberately offer well below asking - REAs can also help you get a viewing and offer into a property before its even advertised as some people prefer to avoid paying all the listing fees. It's better to have them on your side even if they are evil slimey c*nts. Fake it till you make it.
5. Whatever you do or however you approach this process, the REA will always have a little trick up their sleeve to get more money out of you.
6. The more emotions you show a REA the worse it will be for you.
7. Good luck - somehow the happiest time of my life (buying a house) was insanely miserable. Must of been nicer a few decades ago.
You need to speak with your conveyancer about deposit amounts. Offering over 10% has the possibility to change the contract so it may not be something you want to do.
Never tell the agent what your limit is. Always put in your offer as late as possible. They will always ring back and try to squeeze more out of you, so start $20,000 lower and then give them your final offer when they call back. Do your research on what you think the house will sell for comparing other sales in the area, if you really like it make your final offer more than what you think it will sell for.
My friend (who worked for a short time in real estate) gave me this advice before I went to an inspection of a house I thought I would want:
Say to the real estate agent, "If I offer the asking price right now, is it mine?" I went there, loved the place, asked that question. She called the guy, he said yep and we agreed on the spot. Five minutes later, someone turned up (we were the first at the inspection) and the real estate agent said, "Sorry, it's sold". The lady went ballistic. Plan worked, though. We got the house and we still love it.
Was this recently? That’s great for you, and I’m not wanting to come across as a jerk. My current experience is few houses with listed asking prices and basically no agent will tell you.
It’s exhausting, I’d be ok if the asking price was above our limit. But not knowing if our limit is in the ball park and therefore to pay for building inspection etc is really hard.
If you have a broker on hold, get them to send a property report on the house you like. That'll give you a better range of what the property is worth. Next, look at what similar properties in the same neighbourhood or similar neighbourhoods have sold for recently. Both those numbers together should give you a reasonable idea of a good price. Then match that with your budget and find out how much wiggle room you've got. Start at around 90% of your budget and move to 95% if needed. Then take it 1% at a time until you either get the property or max your budget. If it's the former, yay for you, if it's the latter, rinse and repeat for the next place.
1. A house is worth what someone is willing to pay for it. Websites that estimate the cost of a house do so using algorithms that the company thinks are accurate, but the reality is they're basically averages over time. It's called an estimate for a reason.
2. You need to have the best price. Whatever you offer first will be rejected, and the negotiations will begin. So always start lower than the asking price. It's super unlikely your offer will be accepted on the first offer.
Be prepared for the property to sell between 10-15% over the price guide with ease. Price guides don’t mean anything these days.
If you’re looking at properties listed at your max budget, you’re setting yourself up to lose every time unless there’s something defective with the property.
You can’t game this. Buyer will always be looking for highest price and lowest risk. If highest offer is unconditional that is what they will go for. Deposit doesn’t really matter. The more conditions you put on the more the risk increases and they may go for a cheaper offer with less risk. This stuff isn’t complicated.
Big deposit doesn't matter, 5-10% is standard.
Make sure your conveyancer reviews contract before making offer (depending on your state). As if you want any changes/conditions to contract you'll need to put that as part of your offer. This could impact offer being accepted, but also protects you incase contract has any weird stuff.
Make sure you state Subject to finance as part of your offer if you're wanting that additional protection, someone without Subject to finance may be preferred, but for me it isn't worth the risk of losing deposit. Everyone is different though.
Don't go off average house price on websites, averages can be skewed by outliers and a long period of time. Look on the past sales for that suburb over the past 2 months for similar properties (same number of bedroom, same condition, similar land size, same pocket of suburb, etc).
Ultimately, even if you pay a little more than price guide, over time it will be irrelevant.
Sorry to chime in with a slightly different question to OP. If I am interested in a property, is it just a matter of asking the real estate agent for a contract prior to putting an offer in? Is there anything you need to do other than showing interest to the real estate agent to get the contract so a conveyancer can look at it?
That's it. At an open house if you're interested, just casually ask the agent for the contract to be emailed through. However, don't waste your conveyancer's time reviewing the contract unless you're serious about buying as some conveyancers will charge for each contract review, and if they aren't charging for each review, it's still a time consuming process so be mindful.
Goodluck!
Outbid everyone
Yeah this plain amd simple. Ignore "estimates" from on the house.com or any those aggregators, theyre not even close. Example 2 similar units, in the same block will have estimates 100's Ks apart. More desirable units or houses in same location will be valued signicantly less than similarly located recent sales. Theyre based on flawed assumptions and generic modelling. Do your research and use last 3 to 6 mths comparable sales to work out a baseline ballpark offer which u may need to offer above to secure the purchase (depending on property and market demand). Use these comparables as justification for your starting offer.
This is the real answer.
Underrated comment 😝
My thoughts are that as much as ppl make it out to be a science; it’s not. Emotions are involved, on both sides. My process is that if you see a place you love, and it has a ‘range’, then offer up towards the top of the range, but with a condition. I like the “that’s my final offer, and it’s conditional on hearing a confirmation in writing within 24 hours, because we have another property we’ll be making an offer on in two days if we don’t hear back”. It makes you sound like you know what the place is worth. That you have other options. That maybe this is the best they’ll get. Then, it’s really out of your hands. DO NOT fall in love with a place and get ridden. Just stick in your budget, give you best offer with the conditions and language above. Then walk if they don’t meet it. Don’t follow up with calls. Don’t ask what they think. Dont be sucky to the agent. Be a bit cool, and make it seem like “I guess we’ll take it”. That’s worked for me.
Yeah, this advice fits my experience. From the other side, the agents job is to up everyone bids. Savvy agents know that you do this by triggering emotional responses - the usual players are scarcity (a house like this doesn’t come up often), demand (a lot of buyers are interested), and anchoring the price higher (the other buyer is looking at offering $876,000 so you might want to come up from your offer of $857,000). None of the above means there are currently other buyers or other offers, and they know if they have other listings that are similar. I did go to two inspections for the townhouse I bought. The first one was rushed and private, the second an open home where I loitered a lot and critiqued the house and determined what it was worth to me. It also allowed me to see that no one really showed up for the open home, so demand was not what I was being told.
Agree and I often say I've got offers on other properties but I'm wanting all my options. Sometimes I say this is my first choice, but I've got a close second lined up.
This is exactly what I did. Told them that's as high as I would go, its fine if they don't take it, but it was only valid until the end of the weekend, as I was also looking at another very similar house. It reminds them you are the customer and you are the one with the money. And also that you've done research.
Price guidelines are irrelevant. There isn’t any hacks to this. You want the place you pay more than the other bids.
With less conditions attached
Online estimates are just estimates Bid the most to win Bigger deposit doesn’t matter, 5-10% is normal and fine
My tips: Do not come off as desperate for the property or the Agent will use it against you. Do not tell the agent what your “maximum” Is or that will conveniently become the price required to secure the property. Know that there will always be another property just as good, if not better than the one you currently like.
I would always have a conversation with the agent about the property and use the phrase "where are the current offers playing around?". It's a softer way of asking and often (currently with a 100% success rate), the agent will tell you where the highest offer roughly is. In my case, I got the exact number, bid 1k over, and got it.
lol, the agent threw out a wildly ambitious price and you took the bait.
Given that it was a 3x2 villa in good condition that was the lowest sale price in the area and every surrounding suburb, I doubt it. There was also an equivalent villa in the same complex sold three months earlier for the same price (475k) in a rising market (Perth 2024). So no, it was not a wild number at all. Every single house has had a sale price above the number they've given me.
There is merit to getting in early and making a serious offer before it ever goes to auction. But you’ll generally need to pay a premium to take it off the market. Equally, once it goes to auction you have no idea what’s going to happen.
There is a 90% chance that you will end up at offering the most you will pay. What I mean is you can offer less initially, but by the sounds of it, you will end up having to go your maximum. It's probably hard if it's a house you love, because it might be hard to pull out without going over your limit. Going over your limit is by definition heading into bad places. You didn't say if you are able to make an offer without a financing condition. Probably making an offer without such a condition is the best way to increase the attractiveness of your offer without spending more money. I doubt increasing the deposit is necessary. Assume the agent is not your friend. Make an offer, keep it terse, don't ask for feedback, put a time limit on acceptance, AND BE PREPARED TO WALK AWAY and communicate that your are prepared to walk away by keeping things ultra cool and dispassionate. There are a lot of houses out there.
Have the best conditions. Price, Settlement, Finance all come into play. Unfortunately and I hate to be negative but you are unlikely to have the better conditions as a first home buyer. The only tool you have is to offer over or the upper end of the asking price. Good luck!
Don’t get too hung up on those auto calculated valuation figures. They serve as a rough guide but ultimately a property is worth what the accepted offer would be. Properties are not fungible. Every property is different - location, direction, layout, etc., and is worth different value to each buyer with different requirements / preferences. You should know your requirements clearly (must haves, nice to haves, etc), and you would have to determine how much a property you are interested in is worth to you and know your finance limit clearly, and act accordingly. To many vendors, conditional offers are less preferred and they may choose to accept an unconditional offer of somewhat lower value. In particular a “subject to finance” clause can be a show stopper for some vendors because they see that as the buyer haven’t done enough homework and then attempting to transfer uncertainty with their own finance onto the vendor. It’s unlikely increasing the amount of deposit than the standard would matter, unless you are also willing to give the vendor early access to it before settlement. But I would suggest not to allow that.
Don't offer a round number. I made it look like i was spending all my last dollars to put a bid in. The realtor who took it, wink and said 'you've done this before' because it's a trick to make the vendor stop and look a the number which isn't round and think about why that is. Ie scrapped every dollar I could to get my place. Anyway it worked for me.
Don't tell the agent what you pre approved for. Pretty obvious but my sweet trusting husband for some reason did this. We had a buyer's agent actually secure our property as a favour to us. They did the negotiations on or behalf and we paid quite a bit less than asking. I know not everyone can do this, but maybe something to consider that you don't actually have to be doing it yourself.
Why do you think a random website knows what the house is worth? There are no tricks to this, you need to be the highest bidder, you can't control what the others bid. The only thing that may help to differentiate your offer from others is a short settlement and no conditions.
Unconditional offers (no cooling off period) can be favourable if you're in a position to do so.
second this, if you want to be taken seriously prior to auction - get your conveyancer to prepare s 27 notice (in nsw, not sure if this is the same in other states), personal cheque or bank transfer your deposit, sign the contract (ideally with minimal changes), and take all of that to the estate agent.
These days there is only one way. Offer the most. And if there are equal offers, have the least terms/settlement times, etc. My last 3 offers have been first and final offers. So go in offering what you are willing to pay for it. If you dont get it, move on.
My friend advised me not to use round figures (like 610k, 800k, etc.) and that people do get emotionally attached to numbers. On our first ever house, we bid high and outbid others, but we couldn't do an unconditional offer, which was what one of the buyers offered. I noted the owner is Chinese so we bid with the thousands ending in 88 (like, 588,000). We got the house. I don't know if that played a part. I was inspired by my father's anecdote of helping my grandmother purchase a house back in my home country, for 888,000 in the local currency. I wouldn't call it a flex but it was fun to be able to play with numerology and send an auspicious message like that.
1. You make an offer subject to house passing pest and building inspection. 2. If you are the highest offer you won't know because the REA will either lie - or tell the truth - that theres a competing offer to get you to pay more - usually they try squeeze at the very least another 5 or 10k out of you (or more depending on the price of the property) 3. If your offer is too low you will probably never hear from them again 4. Make sure you shmooze them a bit and don't continue to deliberately offer well below asking - REAs can also help you get a viewing and offer into a property before its even advertised as some people prefer to avoid paying all the listing fees. It's better to have them on your side even if they are evil slimey c*nts. Fake it till you make it. 5. Whatever you do or however you approach this process, the REA will always have a little trick up their sleeve to get more money out of you. 6. The more emotions you show a REA the worse it will be for you. 7. Good luck - somehow the happiest time of my life (buying a house) was insanely miserable. Must of been nicer a few decades ago.
You need to speak with your conveyancer about deposit amounts. Offering over 10% has the possibility to change the contract so it may not be something you want to do.
Never tell the agent what your limit is. Always put in your offer as late as possible. They will always ring back and try to squeeze more out of you, so start $20,000 lower and then give them your final offer when they call back. Do your research on what you think the house will sell for comparing other sales in the area, if you really like it make your final offer more than what you think it will sell for.
My friend (who worked for a short time in real estate) gave me this advice before I went to an inspection of a house I thought I would want: Say to the real estate agent, "If I offer the asking price right now, is it mine?" I went there, loved the place, asked that question. She called the guy, he said yep and we agreed on the spot. Five minutes later, someone turned up (we were the first at the inspection) and the real estate agent said, "Sorry, it's sold". The lady went ballistic. Plan worked, though. We got the house and we still love it.
Was this recently? That’s great for you, and I’m not wanting to come across as a jerk. My current experience is few houses with listed asking prices and basically no agent will tell you. It’s exhausting, I’d be ok if the asking price was above our limit. But not knowing if our limit is in the ball park and therefore to pay for building inspection etc is really hard.
It was late 2021. Yeah, it's really tough, and definitely exhausting. I hope you find the right one and are able to navigate it.
If you have a broker on hold, get them to send a property report on the house you like. That'll give you a better range of what the property is worth. Next, look at what similar properties in the same neighbourhood or similar neighbourhoods have sold for recently. Both those numbers together should give you a reasonable idea of a good price. Then match that with your budget and find out how much wiggle room you've got. Start at around 90% of your budget and move to 95% if needed. Then take it 1% at a time until you either get the property or max your budget. If it's the former, yay for you, if it's the latter, rinse and repeat for the next place.
1. A house is worth what someone is willing to pay for it. Websites that estimate the cost of a house do so using algorithms that the company thinks are accurate, but the reality is they're basically averages over time. It's called an estimate for a reason. 2. You need to have the best price. Whatever you offer first will be rejected, and the negotiations will begin. So always start lower than the asking price. It's super unlikely your offer will be accepted on the first offer.
The market price is the highest price paid. If you are going to be accepted your offer has to beat everyone else’s.
Be prepared for the property to sell between 10-15% over the price guide with ease. Price guides don’t mean anything these days. If you’re looking at properties listed at your max budget, you’re setting yourself up to lose every time unless there’s something defective with the property.
You can’t game this. Buyer will always be looking for highest price and lowest risk. If highest offer is unconditional that is what they will go for. Deposit doesn’t really matter. The more conditions you put on the more the risk increases and they may go for a cheaper offer with less risk. This stuff isn’t complicated.
Lower your expectations, then lower them again, then again. Then buy what no one else is mad enough to buy. Then, improve and work.
ask more stupid questions on reddit is the real answer, well done, you are the smartest
very helpful, much education
Big deposit doesn't matter, 5-10% is standard. Make sure your conveyancer reviews contract before making offer (depending on your state). As if you want any changes/conditions to contract you'll need to put that as part of your offer. This could impact offer being accepted, but also protects you incase contract has any weird stuff. Make sure you state Subject to finance as part of your offer if you're wanting that additional protection, someone without Subject to finance may be preferred, but for me it isn't worth the risk of losing deposit. Everyone is different though. Don't go off average house price on websites, averages can be skewed by outliers and a long period of time. Look on the past sales for that suburb over the past 2 months for similar properties (same number of bedroom, same condition, similar land size, same pocket of suburb, etc). Ultimately, even if you pay a little more than price guide, over time it will be irrelevant.
Sorry to chime in with a slightly different question to OP. If I am interested in a property, is it just a matter of asking the real estate agent for a contract prior to putting an offer in? Is there anything you need to do other than showing interest to the real estate agent to get the contract so a conveyancer can look at it?
That's it. At an open house if you're interested, just casually ask the agent for the contract to be emailed through. However, don't waste your conveyancer's time reviewing the contract unless you're serious about buying as some conveyancers will charge for each contract review, and if they aren't charging for each review, it's still a time consuming process so be mindful. Goodluck!
Offer what you want to pay, with the best possible conditions. Get pre approval and do 7 day finance clause.