"Non-Negotiable" Asking Price on Apartment

Currently apartment hunting in Melbourne and have found one that ticks all our boxes. It's an apartment that the developer has apparently been holding on to for his daughter who no longer needs it and the agent has offered it to us after we turned down a couple of other apartments in the same building. As he is in "no rush to sell it", there is a fixed price they are asking for and will only put together a contract if I express my interest.

  1. Despite it being a seemingly "non-negotiable" price, should I still put in a lower offer?
  2. Is it unwise to make an offer before they have even put together a contract? Is there some condition I can tell them to protect myself?

Comments

  • +60 votes

    It's an apartment that the developer has apparently been holding on to for his daughter who no longer needs it

    I've heard this story for houses and apartments. In fact, I hear this story more often than I don't.

    • +47 votes

      Lot’s of people are daughters out there. Just over 50% of the population!
      The surprise is all the generous fathers.
      Because an agent would never lie.

    • +5 votes

      Reminds me of the car salesmen’s “It was the managing directors wife’s car, she just traded it on the same car just newer model.” Ive heard that a few times.

    • +1 vote

      I heard this story for daughter family etc and it is one of the best even it is the one of the worst.

      I heard this everytime for new or near new apartment.

      Offer what you think is comfortable for you.
      If it is yours then you will get it.

  • +5 votes

    I wouldn't offer anything without a contract

  • +2 votes

    its an apartment (ie has many negatives not present in a house), its negotiable

  • +27 votes

    They're just playing hardball with you.

    Make an offer.

    If they ask for the offer in writing then they've just revealed their hand. It means they don't have instructions to reject offers under the asking price.

  • +3 votes

    Make your offer to the vendor subject to the usual finance and building inspection clauses.

  • +25 votes

    If you don't sign a contract you don't have any legal requirement to purchase the property… Submit an offer, if they put a contract in front of you and decide you don't want to proceed then don't sign the contract! Simple

    •  

      Precisely.

    •  

      This.

      But there is another game these agents play i.e. send me best offer via text/SMS. They just need that to be shown to another buyer which is already negotiating hard with them.

      Scapegoating.

      If they are serious about selling the property, first thing they do is to prepare a contract with vendor statement in it plus all other special conditions they want.

      •  

        Why would a prospective buyer believe an agent's SMS is anything but a lie?

        Even if the agent has no friend or colleague to send a fraudulent message, there are dozens of online services that will send an SMS with whatever you type in: "Dear world's greatest person, I hereby legally-bindingly offer you eight trillion dollars for apartment 729 / 105 shit street"

  •  

    Two - Sale of Land Act requires all transactions involving property to be in writing. In other words nothing is binding until the contract is drawn and signed

  • +3 votes

    i guess they just want the appartment to go to the right person. it was meant for their beloved daughter so it probably has upgrades that you dont know exist!

    /s

    •  

      make a writen offer for what you want to pay. they will either accept or refuse.

  •  

    The daughter probably doesn’t want the apartment after reading articles like this.

    I’m surprised they are not willing to budge. Maybe as someone else mentioned there have been lots of extra additions because it was meant for his daughter.

    Anyway I wouldn’t buy an apartment as per the above article.

  • +8 votes

    Apartments are falling apart. Economy is heading into recession. Real estate prices are down in Melbourne.

    The agent is lying (what a surprise). Offer what you think it is worth if you simply must buy an apartment in a downward trending market.

    •  

      When house prices stop growing, people withdraw from the market and supply shrinks.

      This stops prices of houses dropping by any significant amount.

      Developers don't have the luxury of waiting for a better time to sell. They owe people money. Keep in mind also that developers borrow money at a much higher rate than you can.

      And since the most common property sold by developers is apartments, they are the most at risk for price drops.

      • +1 vote

        I can't tell if you are agreeing or disagreeing with me. House prices, in Sydney and Melbourne at least, will start to drop when the economy slows right down and people are laid off. Then all the people that can barely make their ridiculous mortgage payments as it is, will be underwater.

  • +2 votes

    Provided the contract is subject to finance I would just offer what you are happy to pay.

    Even if they accept, the lender has to value the property based on your loan offer so if it comes back under valued it won't get approved anyway.

  • +5 votes

    Lol even the daughter does not want it.

    OP you say it checks the boxes, so there is probably another lot of property that will also check those boxes sooner or later. I would stay away from newly built apartments unless you are rolling in cash and don't mind paying such a premium to the developer.

    Of course, you can offer any $ amount you like. Just go and see the average days on market vs average vendor discount for the area. If the average is -10% the asking price then offer -12% and keep doing it until they bite and you give a little back after the vendor counter offers into the -10% or -8% range.

    insert trump_artofthedeal_meme.jpg

  • +5 votes

    Everything has an opportunity cost.

    Builder holding on to this apartment comes with the opportunity cost of tying up funds.

    Offer what you believe it's worth and move on if not accepted

  • +2 votes

    Apartments are the worst property buy going.
    Their capital appreciation is about zero at best, and declines in most cases as new one are built in close proximity.
    If your finaces can stretch a bit then go for a unit - at least you are buying something tangible - land.

  • +3 votes

    Every property is negotiable. Even more so in the current down market. Apartments are also in over supply and face added selling competition.

    Don't believe any realtor stories and just look at the facts. Remember the realtor work for the seller to get the most out of the buyer.

    In the end if you're happy to live in the property for the next 7 to 10 years then you'll have less to worry about the value and bite the bullet. Factor in body corporate fee for the timeframe.

    • +2 votes

      Don't believe any realtor stories and just look at the facts. Remember the realtor work for the seller to get the most out of the buyer.

      If you believe this you’re deluded. The estate agents work for themselves. You think an agent is going to play hard ball over a few extra thousands for the vendor? No way, once an agent is signed on to sell a property, their number one aim is simply selling it and getting the vendor to accept offers. Yes, they will work somewhat at getting buyers to submit high offers.

      Let’s assume a commission of 2%. On a 1mill sale that’s $20,000. You think an agent is going to work for the seller to get $1,010,000? That an extra $200 commission against potentially not making a sale (and $20,000 commission) by playing hardball.

      My advice to the OP would be to make an offer. Once you make a genuine offer the agent will be working hard on the vendor to try and get them to accept. Obviously this assumes that the agent is engaged under a traditional % commission model. Might be different with a developer, they can be a little more shrewd when using estate agents.

  • +1 vote

    As the developer, he is trying to keep the value of the sale as high as possible so the other agents can lever sales off that price. Try offering to pay the asking price but add in a $x,000 rebate after the sale + any other extras you can think of eg extra car space

  • +4 votes

    Apartment?

    "Run Forest, Run"

  •  

    A friend had a house their asking price was 570k they got offers around the 520K. Probably the real estate agent saw you as a very interested in the property that's why he/she trying to push to the asking price, you always can put an offer. put the offer that you think you can pay and you think that the apartment is worth. real estate agents get a percentage commission the higher that he sells it for the more commission they get. With the current market, buyers have more properties/options to buy.
    BTW even if you get your offer accepted by the vendor you have 3 days cooling-off period (ask the agent about this).

    • +1 vote

      Cooling off period comes with usually a 1% fee or something weird. Pls be careful with special conditions.

    •  

      Depends on terms of the offer/sale and what you signed. Some do not have that feature if you've bought it under a 66W which some agents will demand. I know everything is negotiable especially in the current climate but rewind back to during the peaks and I found agents wouldn't take an offer without a 66W.

  • +2 votes

    The Agent is getting desperate for a sale by the sounds of it, the daughter story is so commonly used it's laughable. Keep your emotions in check and don't let anyone pressure you into buying, do your due diligence.

    • +2 votes

      Was helping my MIL looks for an apartment after her husband passed away. Closer to shops and train, less maintenance etc. about to put a bid on in mid June. My spouse spotted this article. We read it and then listen to this guys interview. I was struck by the enormity of the consequences for my MIL if things went pair shaped, especially at her age.

      We are no longer looking for an apartment.

  • +10 votes

    This is my first time. Says the prostitute.

  •  

    "apparently been holding on to for his daughter"

    Bullshit

  •  

    Rule #1: All prices are negotiable unless you're in a supermarket.

    Rule #2: All sales people lie to make a deal.

  • +2 votes

    Try to find out WHY the daughter doesn't want the unit.

    Cracking to the ground soon?
    Toxic underground?
    Lousy construction materials and finishes?

    She is the developer's daughter.
    She must know a story or two.
    And she wants a trouble free place.

    The sound of warning signals is deafening…

  • +1 vote

    It's a trap
    Send no reply

    Seriously don't call back, when THEY call YOU, you tell the agent you have found another property that you like that is a bit cheaper.

    See if they still play hardball

    Also, multiple apartments for sale in the same building - unless it was built very recently- is a huge red flag.
    During the boom times apartments would sell out before the building was constructed.

  •  

    Make a stupid offer first. Never know. I offered $240k on a $310k property. Ended up with a bit of back and forth and settling on $295k.

    My sister was bankrupt and took an offer on her house that was $60k lower than asking. Seen other properties lately dropping prices in the range of $20k-$80k. Seen others that haven't budged.

  • +2 votes

    I had a real estate agent last week pretend to be a neighbour so I would open my door to talk to them. They then asked me to promote a nearby property to family and friends. I have had several other unethical experiences similar to this with other agents. In my opinion, real estate agents more than earn their slimy reputation.

    • +1 vote

      Have just moved into our new house and the amount of lies we were told by the agent was crazy. It was a new build and one condition of the contract was that we were asking for warranty on all new appliances purchased for the house and he tried telling us that was unreasonable and that the seller was annoyed by the request. They reluctantly agreed and since moving in we found out the dishwasher isnt installed properly. Have since found out the seller was an ownerbuilder too which we were told they werent.

      •  

        The agent must declare if they own or have an interest in the property… you could report them to Fair Trading and I believe they would get a huge fine

  •  

    Make an offer. The worst they can say is no. If they say no then walk away and tell them to call you if they change their mind but be quick as you are a motivated purchaser.

    The contract doesn't matter until you pay the deposit/sign the contract. Make sure you get the contract checked before paying/signing. If they suddenly want you to hurry then tell them GGF

  •  

    Despite it being a seemingly "non-negotiable" price, should I still put in a lower offer?

    Absolutely. Hand in your OzB card if you don't. Remember with real-estate agents, the time is ALWAYS 'bullshit o'clock' and don't believe a word they say when it comes to encouraging you to buy.

    If it's not meant to be, it's not meant to be. They think they can get an easy sale out of you as you're actively looking and ready to buy without having to advertise it which would cost the vendor money.

    Don't be sucked in by those sort of comments. Offer what you're prepared to pay and stick to your guns as much as you want to.

    Is it unwise to make an offer before they have even put together a contract? Is there some condition I can tell them to protect myself?

    Absolutely. Make a verbal offer over the phone, or via email but state 'subject to S32 and contract review'. Then once your conveyancor reviews the contracts with you, you can decide whether to proceed or not and pay a deposit.

    the developer has apparently been holding on to for his daughter who no longer needs it

    FYI this is 100% bullshit. A lie. A sales tactic. Nothing more. Disregard it and make a lower offer than asking. If they dont accept and you dont want to pay asking, walk away.

  •  

    Making an offer is not 'negotiating' anyway (it's an offer, take it or leave it) so make whatever offer you want.

  •  

    Update please OP!

  •  

    This is a form of bait and switch

  •  

    As others have said, just make the offer you feel comfortable with, don't buy into the bullshit the agent feeds you. The worst they can do is say no. The thing is, if the developer really doesn't want to lower the price there is nothing you can do.