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Dutch Auction; I can taste a bit of sick in my mouth
Topic Started: 18 Dec 2013, 11:22 AM (4,053 Views)
Frank Castle
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Business As Usual

Looking at a site that was sent to me yesterday before it was on RE.com
Apparently I was first call back but its taken me until now to do a rough due diligence due to council holdups.
Ticks all the boxes in a big way for me (shitter with tenant in place, zoned for multiple resi and units to 3 level)
No flood, no sewrage or water pipes across block, close to everything
Been waiting 5 years for this one to come up and now...NOW I am being told there are 3 other offers coming in so submit by best one.

CNTS :mad: :?: :wak: vomit
Edited by Frank Castle, 18 Dec 2013, 11:23 AM.
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herbie
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Frank Castle
18 Dec 2013, 11:22 AM
Looking at a site that was sent to me yesterday before it was on RE.com
Apparently I was first call back but its taken me until now to do a rough due diligence due to council holdups.
Ticks all the boxes in a big way for me (shitter with tenant in place, zoned for multiple resi and units to 3 level)
No flood, no sewrage or water pipes across block, close to everything
Been waiting 5 years for this one to come up and now...NOW I am being told there are 3 other offers coming in so submit by best one.

CNTS :mad: :?: :wak: vomit
Two properties I've enquired about over the last week or so have both been a bit similar to what you discuss. They were advertised publically though. Nine offers on one. Six on the other. Within maybe four days of advertising in both cases. Agent just collects them and presents to owner as a bulk lot to take their pick. Some offers being above the asking price in both cases.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Catweasel
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herbie
18 Dec 2013, 11:33 AM
Two properties I've enquired about over the last week or so have both been a bit similar to what you discuss. They were advertised publically though. Nine offers on one. Six on the other. Within maybe four days of advertising in both cases. Agent just collects them and presents to owner as a bulk lot to take their pick. Some offers being above the asking price in both cases.
Catweasel say wow.

Imagine do the property deals with a Herbie or the Frankie the Castle.

It be like a grass roots still in a soil.

And a mojito all the around,

when a deal the conclude,

and a possible the impromptu hoedown.
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Frank Castle
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Business As Usual

I am wondering.........
Could I sign the contract hopefully, with a price high enough to ensure initial victory
And then on inspection say "Nah, its a steaming pile of shit and it'll cost blah blah blah.............my new offer is $XXX,000"
Would or could that work?
Or would it be back on the table again for the other parties?

Edited by Frank Castle, 18 Dec 2013, 12:45 PM.
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zaph
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Frank Castle
18 Dec 2013, 12:44 PM
I am wondering.........
Could I sign the contract hopefully, with a price high enough to ensure initial victory
And then on inspection say "Nah, its a steaming pile of shit and it'll cost blah blah blah.............my new offer is $XXX,000"
Would or could that work?
Or would it be back on the table again for the other parties?

1. Given it's a development site I guess there's a high possibility that they won't accept inspection clauses.
2. I'd say unless it's just a small amount you want to knock off because of inspection they will just take it back to the others.
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MMM
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Frank Castle
18 Dec 2013, 12:44 PM
I am wondering.........
Could I sign the contract hopefully, with a price high enough to ensure initial victory
And then on inspection say "Nah, its a steaming pile of shit and it'll cost blah blah blah.............my new offer is $XXX,000"
Would or could that work?
Or would it be back on the table again for the other parties?

Sounds annoying Franky.
Maybe put clauses with your offer like you mentioned, but with two others going at it you probably can't be two fussy.
Offer the re agent some sort of INCENTIVE to accisdently drop the paper with offers with it on the floor in front of you. ;)
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miw
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Frank Castle
18 Dec 2013, 12:44 PM
I am wondering.........
Could I sign the contract hopefully, with a price high enough to ensure initial victory
And then on inspection say "Nah, its a steaming pile of shit and it'll cost blah blah blah.............my new offer is $XXX,000"
Would or could that work?
Or would it be back on the table again for the other parties?

I think you can only hold them to the contract on a reduced offer if you can show that there was a required disclosure you did not get and that you are materially disadvantaged. Otherwise they can crash the contract, return the deposit, and go back to market.

Unless the sale is advertised as a tender, I don't think the agent is legally allowed to hold onto offers but must pass them to the vendor as soon as reasonably practical. Consider the case where a good offer comes in but the agent passes through a "worse" offer from a mate for less and holds onto the better offer for a day or two...... Better or worse is a fairly subjective thing at times.....

The vendor can of course sit on offers without responding.

I have in the past been told that my offer was shit and that better offers were pending, stuck to my guns and still got the deal because the other offers somehow failed to materialise. But that was in much more of a buyers' market than Qld is at the moment.

Edit: The vendor cannot simply crash the contract immediately you come back with "this is a steaming pile of shit....." etc. However, they can come back with a counter-offer that says "steaming pile of shit or not, the price is still...X" and if you reject the counter-offer out of hand then the contract is crashed, assuming your objection is justified. If the objection is unreasonable then you are still on the hook at the original offer - but I am assuming you have a pest inspector who can always find termites, right?. If you fail to agree by the unconditional date, then they can crash the contract or continue negotiating while soliciting new offers.
Edited by miw, 18 Dec 2013, 04:47 PM.
The truth will set you free. But first, it will piss you off.
--Gloria Steinem
AREPS™
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newjez
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After being outbid several times, I now find asking prices for my target property have jumped 20%. Cash buyers should be shot.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Frank Castle
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Business As Usual

Its fucked
I've spent all day and half the night at it and am still just as flummoxed.

If I was starting again from scratch with a clean plate I would be all over it as this is probably the best deal I have come across since 2000
But because I already have a decent sized project on the go, albeit rather slowly, I dont want to stick the neck out too far just in case.
The bank said we're good to buy it , clean up a site and build the first house on the site on a ridiculously large chunk of land and we wouldn't need to get rid of the existing house to do it.
Their would be no council contributions either, but we already have a couple of spare blocks attached to existing sites and really, this site deserves 6 or 7 two story townhouses or a 3 story unit block across the full site and I cant see that happening for a long time yet.

The easiest option is to just buy it and do nothing with it for a few years, renting the existing shitbox out and that would cover the loan at the current 5% but shiiiit, how long do I want to keep at this game for?

Part of me says leave it - the other part says it'll haunt me forever if I do.


First world problems eh :re:
Edited by Frank Castle, 18 Dec 2013, 05:39 PM.
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miw
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Frank Castle
18 Dec 2013, 05:38 PM
First world problems eh :re:
Just tell me where it is Frank. I'll send you a case of mohitos and all will be well with the world. :-)
The truth will set you free. But first, it will piss you off.
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