A mistake I made (multioffer situation)

Thanks for sharing @monty the whole negotiation process is difficult at the best of times let alone in a multiple offers situation. Chalk that one up to experience. It was a valuable lesson. It's hard when an agent rings you and catches you off guard. I program the agents number into my phone and call them back. Sort of a mental version of your own turf! Silly, but it gives me a feeling of having more control of the conversation and being mentally prepared.

 

Thanks for sharing. I agree the whole process is always a bit wonky. At least there is a bit more transparency with an auction. Unless you are "in" with the agent you can't expect to get too far, Most BAs on the forum try to get in early before the agent puts the property on the open market so that there is no substantive competition. Good for the buyer but no good if you are the seller.
So what can you do?
Promise the agent a listing if you get this one;
Promise the agent a future listing (perhaps after you've done renos);
Build a personal relationship with the agent;
Promise the agent an "in" on a third party listing- mum, friends or neighbour;
Slip them a ****alou payment ( greek for an envelope payment= a facilitation fee).

Want to stir the pot? have another agent ring the seller asking "how much did you let that go for?" followed by " I have a client who would have paid/offered more than that! What's going on?"

edit: sounds like fookalau payment- greek for "envelope"

 

Put in an offer of what you think it's worth to you, move on to the next. Simple

 

Dont worry you're also allowed to lie and you don't have to show them jack

 

This has happened to me multiple times recently (last 6 weeks) for properties in LCC and MCC. Each time the REA has seemed legit when requesting for a signed multiple offer sheet. When I come across this situation now its pretty much the same deal: one offer. Put your best foot forward. Most info I've gotten out of them is how many other offers are on the table but haven't gotten close to a $$ amount. Not even a range.

 

We had a similar situation QLD. We made a fair written offer on a Wednesday that the owners apparently were happy with. The kept delaying the counter sign. It got to Friday morning, an open was still scheduled for Saturday. There was not one single reason why going into an open with our offer on the table and no countersign was beneficial to us, only to the seller as leverage at an open. So, we gave it a sunset, said if it wasn't counter signed by 2pm that Friday afternoon that it was withdrawn and we'd be happy to negotiate again after the weekends open but it would not be at the current offer. It worked, they signed.

 

Yes this is how they do it

 

Like anyone they're free to do what they want, but their actions have consequences.

 

As other have pointed out best offer is not the highest dollar value on the offer.

1. Settlement Date can impact an offer significantly, what if the vendors have already bought? One offer is $5,000 less but will settle in 30 days and the other offer ($5,000 more) will settle in 120 days. On a mortgage of $500,000 at 5% the difference of 3 months would be $6,250 so in theory the $5,000 less offer is better on 30 days than 120 days for $5,000 more as you actually lose $1,250.

2. STF - Two offers at same price and same settlement but one has STF on it, what price do you take a STF above a non STF offer? 5k, 10k, 20k? It was also depend on how the economy is doing.

3. STB&P what if your house has been eaten to death by terminates and there is a difference of $10,000 on two offers but the $10,000 less is not STB&P and you know it is going to cost $50,000 to fix..

4. What if the vendor was raised there and raised their family in the same house both people are offering the same price or a developer is going to pay more. The developer wants to knock it down and build apartments and the other is going to a young family who wants to raise their family.

If an agent is telling you the price it is more likely they are lying but end of the day there is only one way to find out and that is not believe them and see it sold to the other person.

When I worked in RE I was sitting with vendors and two offers were very close, the lower offer (just $5,000 less). Both people were told that another offer was submitted and were given the right to increase their offer before meeting with the vendors. The vendors were not over the moon with the result (it was a fair result but had been told $150k more from another agent who held it for over 1 year), I said look I don't think there is anything more but if you are happy to proceed with the better offer ($5k more, as everything else was much the same) I will call the buyers and see if we can get any more.

Called the underbidder told him I was sitting with the vendors and he said he isn't going to increase his offer, I even told him he was not in a winning position (I accidently let that slip but was trying really hard for the vendors). He still told me know.

Then went to the actual winning offer and gave them the same spiel (but without the not in winning position part) they also didn't want to increase their offer (surprise I had their best offers). The vendors then signed for $5,000 more and it gave me great pleasure to tell the under bidder he didn't win... Of course he asked me why not and I told him I even told him he wasn't in a winning position, he was very disappointed with me as he wanted the property but here is a classic example of telling the truth and people believe you are lying and you miss out.

Remember the person who holds all the cards is the REA they are the ones communicating with the vendor directly and buyers directly. If you choose not to believe them you have to be prepared to miss out and if they were lying then you will never know.

 

I've also missed out in a similar way - property had been unofficially on the market for 3 months. After many many delays I finally got to see the property & submitted an offer immediately. Later that week I got told there was a second offer - I was also highly skeptical given that they hadn't had an open & they've been advertising it for 3 months over christmas. Long story short, lost it by 5k. Allwell, life goes on

 

I had similar experience - a young couple really wanted to buy my house, but their final offer was $5k short of what I wanted. They had started with a lowball offer and had increased it about 4-5 times. They knew what I wanted and came within $5k of it.

Another party offered what I wanted the next day. I'm sure the first party thought it was a bluff, but they missed out. Contracts exchanged today.

 

Even the playing field a little. Learn as many tricks, strategies, approaches, detective work etc etc to give you the best chance at any negotiation.


Secrets of Power Negotiating - inside secrets from master negotiator, by Roger Dawson

Negotiating Secrets, by David Brown

A property investor's guide to negotiating, by John Potter

The negotiation book, By Stave Gates

Trump Style negotiation, by George Ross

 

I read Trump Style Negotiation a year or two ago. It's a good book and worth a read. I've put Secrets of Power Negotiating on my to-read list.

 

The unfortunate part is if you are the winning bidder you will think there wasn't another offer (even if the agent told you that there was). It is the underbidders that will always know that there was another offer and the difference in price.

When I worked in RE telling someone they paid 50,000 more than the next closest offer would get them frustrated so you just use the line of you only just beat them by a couple of '000s. Where in all honesty I would rather a REA tell me I paid $50,000 more because if I was going to list the same property and they could get another $50,000 from me how much will they get more from another sucker... but people don't think this way.

 

Agreed, in this situation I would never tell another party what the other offers are.
1 - It is unethical as you restrict the original purchasers from doing the same.
2 - You are limiting (possibly) the offer the other party are will to make. If they know they only have to beat $500,000 they may offer $502K etc. when they may have been willing to pay far more. It really defeats the purpose of the silent auction/tender model.

Mick.

 

Maybe happens, doesn't happen, shouldn't happen.......

It's all part of the game. It will never change much.

This is my own approach which works for me:

1. Learn the game and understand it will never change, at least not in the immediate future.
2. Learn the tricks/strateges etc agents use and buyers can use, which is perfectly legal.
3. Try to gain an edge no matter how small in any negotiation.
4. When your bottom line is breached, move on to the next deal.


Just my opinion.

 

Only if they get caught, and that is very rare. And when they do its usually the more serious offences, not little white lies here and there.

 

And if an agent happens to let something slip, so be it.
It works both ways, I no complain.