In Part 6 of our Brisbane Buyers Agent Case Study with Luke we are looking at a target property for our client, Luke. We discuss the specifics of this deal and the offer process on the property.
If you haven’t read the first previous installments of the case study you can check them out here:
Brisbane Buyers Agent Case Study — Luke Part 1 — Introducing Luke
Brisbane Buyers Agent Case Study — Luke Part 2 — The Buying Criteria
Brisbane Buyers Agent Case Study — Luke Part 3 — Location Funneling
Brisbane Buyers Agent Case Study — Luke Part 4 — Target Location Analysis
Brisbane Buyers Agent Case Study — Luke Part 5 — Property Analysis and Inspections
First up, let’s take a look at the property we decided upon a little more closely. Here are the key points about the property:
- 4 Bedroom, 2 bathroom, double garage
- Built in 2004
- Brick veneer with rendered finish
- 429m2 block
- currently tenanted at $400 per week on a periodic lease
- listed at offers over $389,000
The property had been on the market for approximately 90 days when we first looked over the property and the vendor had recently dropped the price down from ‘Offers over $399,000’ to offers over $389,000. We really like the location in a more established part of North Lakes and in a quiet cul-de-sac and we found that properties in this particular location were selling mostly up in the $400k’s.
Having inspected many properties in North Lakes, we felt that this property did present good value if we could get it at the right price. There are many properties available in North Lakes and we wanted a property that could set itself apart from the others in some way. The location and the quality finishes and features of this ex-display home did just that.
The property was tenanted and, all credit to the tenant, it presented beautifully and was being well looked after. Having an existing tenant, who wanted to stay on, who was caring for the property well, was also a factor in making the property more appealing to us as buyers.
Initially, when we had started the process with Luke, his budget was set at $350k, however, he had a little flexibility with the budget and had determined that $370-$380 was his maximum budget for the purchase. Although we had identified a number of properties at the $350k mark, we had agreed that the properties up in that next pricing bracket were a better buy in this location. For this property, given that it was already outside of our maximum amount, we decided to go in with a ‘best offer’ first and we communicated that with the real estate agent.
The ‘best and final offer’ is one strategy for going in with an offer where you put forward your best offer first up rather than starting low and negotiating up, which is what often occurs. If a property is up near your cut off then it can be a good way to work out if you are going to be able to get a deal here or whether to simply move on. Be careful with this strategy – if it really isn’t your best and final and you would have paid more and don’t want to miss out then you can shoot yourself in the foot with this one!
We put forward an offer of $370k on the property, subject to satisfactory building and pest inspection within 14 days and subject to finance approval within 21 days. The vendors came back with a counter offer of $385k. This was still quite a way from where we wanted to be. After discussing the offer with Luke, we decided to sit on it for a while and wait. After a few days we put forward $374k and then after some discussions with the real estate agent to determine if we were going to secure the property around this level we settled on a purchase price of $375k and contracts were signed. Lucky — as we would have walked away at anything beyond this!
In our next instalment we cover off the hard work that goes on between the contract being signed and the settlement period. This is always a hectic time!