Offer to purchase question

Dups! said:
Hi fellas.

Here is my situation that I need help with.

This house has been on the market since February this year. Last month (April) the price went up by about ten (10) percent.

I did a bit of research on the house itself and found out that it was listed for renting since October last year before eventually being put up for sale.

It is a lovely place. I went to view and liked what I saw. Of course, I wasn't about to reveal my enthusiasm. The painting (exterior) needs some work, other than that, it was to my liking. The house is in an estate.

I am willing to put in an offer, however, the offer I am thinking of is ten (10) percent off of the original price before the price increase.

I have requested a second viewing and also asked to bring an inspector/structural engineer.

Is my idea of the lower offer reasonable or can I bargain further?
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I put in an offer on a place less 20% of the asking price and it was accepted by the sellers.
 
Joining the thread. Place was listed for R1.4m, offer of R1,25m accepted. Applied for R900k bond via OOBA and directly at Nedbank. Currently awaiting response from banks!

5/5/2021- Nedbank offered prime rate. Waiting on OOBA now.
 
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Meister-Man said:
Guys, we are looking to sell in a difficult area.
One option we are considering, to make a potential sale more attractive is offering to pay the transfer fees of the buyer.
Any tips on doing something like this?
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Nothing wrong with that, but if you are willing to forgo around 6-8%, why not make the asking price more attractive by deducting the transfer fees from it, upfront?

For example, a property that is worth 1,250,000 would be R1,164,500. To me, that's a far more marketable property and will increase interest and competition amongst potential buyers. You can also make it clear that your price is firm, no haggling.

In your suggested scenario, your only chance to seal the deal with your sweetner is once you already have a serious buyer. IMHO it won't make too much difference to a serious buyer, he has already made his mind up.
 
It really depends on property and the area. I put in an offer of less 5%. and the house sold at plus 20% of asking price. Nice thing of Eazi (Real estate agency) you can see the sold prices and other offers.

Also same area I put in an offer of 10% less and was accepted. So it all depends on the demand of the area and the property.
 
RonSwanson said:
Nothing wrong with that, but if you are willing to forgo around 6-8%, why not make the asking price more attractive by deducting the transfer fees from it, upfront?

For example, a property that is worth 1,250,000 would be R1,164,500. To me, that's a far more marketable property and will increase interest and competition amongst potential buyers. You can also make it clear that your price is firm, no haggling.

In your suggested scenario, your only chance to seal the deal with your sweetner is once you already have a serious buyer. IMHO it won't make too much difference to a serious buyer, he has already made his mind up.
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Thanks for taking the time to respond.
The reason we looking at that as an option, is that we have newer developments around us that offer this (no transfer fees) to buyers.
We were hoping advertising this way would grab attention from some of these buyers, who were strictly looking at new developments and thereby, increasing our potential base of buyers.
Like someone who's been renting for a few years and now wants to buy, but hasn't saved up R60k (random number) and therefore their options are continue renting (and save) or buy a place where they don't need to pay transfer duties.
My thinking is that the guy on the street, is not as savvy as most myBB users and typically has no or very small savings.

I personally do agree with you and I was pushing from that angle, the SO is considering the option I mentioned.

I welcome further insight into this.
 
Tman543 said:
It really depends on property and the area. I put in an offer of less 5%. and the house sold at plus 20% of asking price. Nice thing of Eazi (Real estate agency) you can see the sold prices and other offers.

Also same area I put in an offer of 10% less and was accepted. So it all depends on the demand of the area and the property.
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Agreed, the area and price of houses you are interested in makes a difference. I offered full asking price on 2 houses but was not accepted as the seller just chose the other offers whom also offered full asking. Whereas I offered 6% less on the current property I'm buying and the offer was accepted.

One thing I've learned, is that the offer one puts in should be realistic as there could lots of prospective buyers in the market within the price range so you also don't want to shoot yourself in the foot by not being realistic and the seller just accepting another offer.
Dups! said:
This house has been on the market since February this year. Last month (April) the price went up by about ten (10) percent.
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I think the fact that the listing price increased by 10% is because most people offered less 10% but the price the seller wanted, was the previous listing price. So 10% sounds reasonable, especially since the house has been on the market since February
 
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Meister-Man said:
Thanks for taking the time to respond.
The reason we looking at that as an option, is that we have newer developments around us that offer this (no transfer fees) to buyers.
We were hoping advertising this way would grab attention from some of these buyers, who were strictly looking at new developments and thereby, increasing our potential base of buyers.
Like someone who's been renting for a few years and now wants to buy, but hasn't saved up R60k (random number) and therefore their options are continue renting (and save) or buy a place where they don't need to pay transfer duties.
My thinking is that the guy on the street, is not as savvy as most myBB users and typically has no or very small savings.

I personally do agree with you and I was pushing from that angle, the SO is considering the option I mentioned.

I welcome further insight into this.
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It's a good reason then, especially if your target market is a first time buyer. You would need to protect yourself from possibly losing it though, the sale could go sour for a number of reasons, and the estate agent and conveyancers may dip into the funds to recover costs. You could achieve this by inserting a clause to delay payment of the transfer duties until the latest reasonably possible time, and definitely after guarantees have been delivered by the finance house.
 
RonSwanson said:
It's a good reason then, especially if your target market is a first time buyer. You would need to protect yourself from possibly losing it though, the sale could go sour for a number of reasons, and the estate agent and conveyancers may dip into the funds to recover costs. You could achieve this by inserting a clause to delay payment of the transfer duties until the latest reasonably possible time, and definitely after guarantees have been delivered by the finance house.
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Yeah, that's my fear, that all is hunky dory and at the 11th hour the buyer walks away.
Will chat to the estate agent again and get her to liaise with the lawyers.
Thanks for your insight
 
ToxicBunny said:
One of the things I will be doing going forward if I sign any Offers to Purchase in future, is adding a small addition to that clause of something along the lines "At an acceptable interest rate to the buyer" ... just leaves the door open to bail out at the last minute...
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The wife and I are currently in the market to buy (have been since November). I'm having a hard time with this clause, as we'd like something to this effect to protect ourselves in the event of being forced to accept an unsatisfactory/unacceptable interest rate given by the banks. I've had three different agents just flat out refuse anything to this effect, one going as far as to state, in as many words "we have burned our fingers in the past due to buyers pulling out at the last minute"

Maybe the wording we are trying to use is just not quite right, so if anyone can help with an actual clause from an OTP (preferrably one that was accepted), I'd really appreciate it.
 
SykomantiS said:
The wife and I are currently in the market to buy (have been since November). I'm having a hard time with this clause, as we'd like something to this effect to protect ourselves in the event of being forced to accept an unsatisfactory/unacceptable interest rate given by the banks. I've had three different agents just flat out refuse anything to this effect, one going as far as to state, in as many words "we have burned our fingers in the past due to buyers pulling out at the last minute"

Maybe the wording we are trying to use is just not quite right, so if anyone can help with an actual clause from an OTP (preferrably one that was accepted), I'd really appreciate it.
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Then define a definitive range in the clause that is acceptable to you rather than leaving it open ended/

Something like "at an interest rate of prime -.05% or lower over a period of at least 20 years with 0% deposit required"
 
SykomantiS said:
The wife and I are currently in the market to buy (have been since November). I'm having a hard time with this clause, as we'd like something to this effect to protect ourselves in the event of being forced to accept an unsatisfactory/unacceptable interest rate given by the banks. I've had three different agents just flat out refuse anything to this effect, one going as far as to state, in as many words "we have burned our fingers in the past due to buyers pulling out at the last minute"

Maybe the wording we are trying to use is just not quite right, so if anyone can help with an actual clause from an OTP (preferrably one that was accepted), I'd really appreciate it.
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I have found that adding the word "reasonable" or "reasonably" to be quite useful with legal types. So, using the previous example: "...a loan, at a reasonable interest rate... ". Problem is that the seller may also then want to insert a clause that states that the buyer has, to his knowledge, an excellent credit record and history of payment.

It's all a bit fuzzy though, and it's perhaps just easiest to approach your bank or SAHL and get a certificate for a loan approved in principle. That way, a seller may be more inclined to accept a reasonable offer, because he knows that the chances of you getting a bond approved is good, and that you already know the rate. Unless, of course, he has completely overpriced the property.
 
ToxicBunny said:
Then define a definitive range in the clause that is acceptable to you rather than leaving it open ended/

Something like "at an interest rate of prime -.05% or lower over a period of at least 20 years with 0% deposit required"
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That would solve it between buyer and seller, but the problem with that approach is that you then have already given the bank the rate at which you are prepared to settle, so its bad for negotiations.
 
RonSwanson said:
That would solve it between buyer and seller, but the problem with that approach is that you then have already given the bank the rate at which you are prepared to settle, so its bad for negotiations.
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Bank doesn't have the OTP as far as I'm aware...

Hmmm... I see that they do, tricky then.
 
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SykomantiS said:
The wife and I are currently in the market to buy (have been since November). I'm having a hard time with this clause, as we'd like something to this effect to protect ourselves in the event of being forced to accept an unsatisfactory/unacceptable interest rate given by the banks. I've had three different agents just flat out refuse anything to this effect, one going as far as to state, in as many words "we have burned our fingers in the past due to buyers pulling out at the last minute"

Maybe the wording we are trying to use is just not quite right, so if anyone can help with an actual clause from an OTP (preferrably one that was accepted), I'd really appreciate it.
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What I added was "at an interest rate of no higher than the Prime lending rate minus one percent".

If the agent refuses to take that to the buyer then tell them to stop being a c**t and do their f**king job. The agreement is between you and the seller and they are just there to facilitate it. They don't get a say on what you put in to the offer to purchase.
 
SykomantiS said:
The wife and I are currently in the market to buy (have been since November). I'm having a hard time with this clause, as we'd like something to this effect to protect ourselves in the event of being forced to accept an unsatisfactory/unacceptable interest rate given by the banks. I've had three different agents just flat out refuse anything to this effect, one going as far as to state, in as many words "we have burned our fingers in the past due to buyers pulling out at the last minute"

Maybe the wording we are trying to use is just not quite right, so if anyone can help with an actual clause from an OTP (preferrably one that was accepted), I'd really appreciate it.
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I mean I get it but not sure why they'd refuse; the property will still be on the market and surely it would be for the sellers to decide if they accept those terms or not. I think we simply changed "loan granted in principle" to "loan accepted".
 
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