I wish to buy a house that is not on the market. How do I go about placing an offer? ?
I wish to buy the house my grandparents lived in when I was younger and I have always viewed as a family home. How, in Australia, do I go about placing an offer. Although finance is not a problem, what would the normal price hike up be?
Quick House Sale
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May 26th, 2010 at 6:05 pm
I’m in the US, but I imagine it works the same way in Australia. First get a real estate agent to represent you. They will be able to tell you how much the property is worth. Then they can approach the owners (usually via letter) to see if they are interested in selling. I don’t think there’s a way of calculating a normal price hike-up. It depends how much the owners love or hate the house. If they love it, you’d probably have to sweeten the offer. Your agent should be able to advise you on that. You’re at a disadvantage because the owner will most likely say they love the place and have no intention of moving… hoping you’ll offer them a lot of money to do so.
The most important thing for you to do is find a smart agent with experience who will look out for your best interest.
Good luck!
May 29th, 2010 at 12:34 pm
Hal9000 is right about the approach.
The only thing I have to add to that is to imagine you are on the receiving end of an unsolicited offer for your place. You had no intention of moving. Moving is expensive and time consuming. In the US there are closing costs to be paid that typically amount to 3-5% of the purchase price. A professional move can be quite expensive, in the thousands.
Not only is it expensive to move, then you have to look for a new place to live and search and go to open houses and appointments, etc. It takes time and I’d want some kind of compensation for that time (especially since I wasn’t planning on moving anyway).
If I was neutral on the house and didn’t mind moving, it would take at LEAST a 10% premium to value to get to me to leave. If I really, really like the house, neighborhood, etc., or I had a really heavy expensive collection of something to move it would be considerably more of a premium to get me out.
If the current owner has any kind of brain, you’d be looking at about a 20% premium to market value.
Just because you and the owner agreed to some kind of arrangement where they were getting a premium, don’t expect the bank to along with you. They are going to base their requirements on market value, meaning any premium you need to pay will have to be cash that you currently have.
good luck!