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Agent wants signed contract as offers?

Discussion in 'The Buying & Selling Process' started by mini2, 22nd Sep, 2015.

  1. mini2

    mini2 Well-Known Member

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    Been looking (again), want to make an offer, got told I'll need to sign the contract. Am I right in thinking the agent can then parade my contract around and use as a tool to solicit higher offers from other potential buyers?

    Not really comfortable with it or am I overthinking it? Cheers :)
     
  2. Azazel

    Azazel Well-Known Member

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    Hi @mini2 , which state is this in?
    QLD generally want a signed contract to submit an offer, BNE especially, some smaller places not so much.
     
  3. D.T.

    D.T. Adelaide Property Manager Business Member

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    Depends on state, they're all different.

    In WA you sign an offer and acceptance, if the vendor signs it then it's a deal.
    In SA some agents will make you do an offer form, others will get you to fill in and sign a contract. If the vendor signs it its a deal.
     
  4. mini2

    mini2 Well-Known Member

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    It's in DT's backyard (SA).

    Sounds like I'm overthinking it. Thanks guys.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Making an offer by submitting a signed contract is fairly common place, it lays out all the relevant details to the vendor and they can accept, decline or amend it (at which point you'd counter sign the amendments). It also saves double paperwork when an agreement is reached.

    You're not entirely overthinking it. Some agents will use an offer to try get better offers from others, but they'd do this regardless of the medium used to make your offer.
     
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  6. gman65

    gman65 Well-Known Member

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    SA sounds similar to QLD - you can either have an informal offer letter/email as the first step, or a signed contract (essentially straight to step 2) that will take force if the vendor counter-signs.

    There is a 5 day cooling off period you can use if you then want to back out after both parties sign the contract - https://www.qld.gov.au/law/laws-reg...ff-period-for-residential-property-contracts/

    Under a multiple offer situation it would be illegal for the agent to either inform other buyers of the value/nature of other offers on the table. The potential buyer also has to sign an "acknowledgement of mutliple offers received" form if multiple offers have already been received.

    The agent must present all offers to the vendor, although not quite sure what the exact timeframe is (allowing some potential for them to informally scope for further offers).
     
  7. mini2

    mini2 Well-Known Member

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    So the agent called again for the 3rd time today, I said to her I'm not comfortable with it I'd much rather a letter of offer then deal with the contract. She argued it's just an offer at this stage but got pretty aggressive and tries to doggy peddle out of this when I said isn't this binding when the vendor signs it too?

    You wonder why people stops buying after x amount of properties, dealing with them agents are too bloody hard.
     
  8. Tekoz

    Tekoz Well-Known Member

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    No need to worry, I was signing a contract in NSW for a 3 bedroom units in South Hurstville that I offered few days before the auction day.

    So I signed the property after writing down my offer $675k, no deposit payment but then the vendor rejected it. On the auction day, it was stalled / passed in for $680k.

    strangely... after few weeks has passed, the property was sold for $740k.

    Only happens in Sydney market last month :eek:.
     
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  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    It's common.

    Seems like the only place where you can have an offer accepted these days without signing a contract is the ACT.

    Cheers

    Jamie
     
  10. Perthguy

    Perthguy Well-Known Member

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    A smart vendor will choose an aggressive agent to sell their property. I know I would. Agents can get buyers offside though. I know I nearly hung up on an agent who yelled at me down the phone. It's just business though. Try not to take it personally and stand your ground. Usually you can talk down an aggressive agent. Good luck! Nothing worth doing is easy :)
     
  11. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    Personally I wouldn't pull out of a deal on the basis they want the offer in contract form. It's quite common, 2 out of every 3 negotiated purchases are done this way (by my best guess).

    It is easier for the agent to take a signed contract rather than a letter to the vendor. It actually makes for a stronger offer because all the agent now needs to do is put a heap of pressure onto the vendor to counter sign. A letter doesn't hold the same sort of weight and is difficult to enforce if everything's agreed but you decide to pull out before signing an actual contract.

    On some level, offering via a contract actually plays to your strengths.
     
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  12. Kael

    Kael Well-Known Member

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    With a recent contract signing we did, we signed the contract where it asks for signatures but didn't sign/initial each individual page as was required. Owners rejected our offer, but it showed them we were serious about our offer and negotiations then began. Eventually, after some negotiating, we then initialled each page and they signed also.
     
  13. D.T.

    D.T. Adelaide Property Manager Business Member

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    That's how almost all of mine have been mate
     
  14. DanW

    DanW Well-Known Member

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    Nothing wrong with a contract offer.
    Just put a special clause of 48 hour expiry at x time and x date if not signed by the vendor. There's a thread somewhere on here with clauses like this.
    Plus of course subject to building and finance etc.
     
  15. mini2

    mini2 Well-Known Member

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    Aggressive might not be the perfect word to describe her tone. Rude is probably more appropriate as she was caught off-guard. For sure, marketing the property aggressively is great but not when you're dealing with a prospective buyer?

    Yeah I get that but there's this idea of being used to leverage more cashola from other prospective buyers, why should I give them this benefit? Yeah this might be illegal but so is underquoting prices...

    Might do just that - 'accidentally' left out the initials on 12 pages, just our signatures on page 13 then play dumb and get them to present it.
     
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  16. DanW

    DanW Well-Known Member

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    Here the thread I mentioned: https://propertychat.com.au/communi...include-in-contracts-when-purchasing-ip.1840/

    Those were on QLD contracts.
    Like usual get your solicitors advise before planning a standard clause to add.

    For SA I forgot to mention, you can download a standard offer form from the Real estate institute I think, and just have a bunch pre printed. You can serve them to agents during open houses.
     
  17. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    How will a written offer via a letter make any difference? If it's a genuine offer a letter can still be used to leverage other buyers. A verbal offer can be used to do this as well.

    It's also not illegal to seek better offers after an offer has been made.

    Until the vendor accepts an offer, there is no contract and it's the agents job to get the best offer they can. Again this suggests that an offer made as a contract works in your favour because the vendor only needs to sign it. If the agent needs to duplicate your offer (that's been verbally accepted by the vendor) onto a contract, then get you to sign it, then get the vendor to sign the contract, this incurs a delay. All this extra paperwork and running around gives other agents time to get a better offer than the one you've made.

    Real estate agencies can be very competitive work environments. It's not uncommon for one agent to get an offer on a property and one of their colleagues to try find a better offer, snatching the sale (and the share of the commission) away from the first agent.

    I think you're looking at this backwards. Putting your signature on a contract:
    1. Shows your offer is serious.
    2. Makes it easier for the agent to get the vendor to accept the offer.
    3. Makes the whole process quicker which reduces the odds of a counter offer coming up.

    It's possible you're actually worried about the offer being open ended and the agent taking days to get the vendor to sign it. To counter this, you should always put a sunset clause on your offer, such as, "The vendor has until 5pm tomorrow to accept this offer".
     
    Last edited: 23rd Sep, 2015
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  18. dabbler

    dabbler Well-Known Member

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    It is not the agent who is meant to do this, that is why you employ a legal person, to "exchange" contracts.

    In NSW you give your .25%.....that is as much as you need to do, if it is not a hot market, you probably do not even need to do that.

    You can indicate that your willing to sign a contract as soon as an offer is accepted.

    If you give a contract that is signed, you better be sure you want the place and can get everything done in the 5 days too, often 5 days is simply not enough, has no one experienced banks losing papers, not get the loan formally offered in time....reports not returned when promised,.you risk losing 10% if you do not complete after the cooling off has lapsed.

    If your signing the contract, they should also be taking the .25 as well so it is off the market.

    What if you sign, agent says vendor wants more or no, you go off and sign with someone else, then the first turns around and says vendor accepted and contract has now been signed and sent to solicitor & at same time, second one advises of same.......what a mess.

    The agent can also apply pressure to vendor with a signed contract in hand, that may be good in one way, but it is still a slimy operator if you ask me.

    So, I think you are right to resist signing, but not for the reason your worried about, but because your signing a legal contract !
     
  19. mini2

    mini2 Well-Known Member

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    Point(s) taken, I shouldn't be so alarmed or put off by the agent when they demand a signed contract.

    Thanks all.
     
  20. Big Will

    Big Will Well-Known Member

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    Nothing wrong with putting your offer on the CoS, it actually makes your offer stronger and once agreed by the vendor it becomes contractural.

    Doing it on a letter on what you wish to offer it doesn't include all the conditions (the generic ones), so even if the letter is agreed it isn't worth that much weight.

    Three scenarios can happen when a letter or verbal offer is accept;

    1. The offer is accepted and both parties sign a CoS and everyone is happy.

    2. The offer is accepted the buyer completes the CoS but the vendor goes I think we can get more money or receive another offer in that 24 hours which entices them more so they do not sign your CoS so it is left as an offer.

    3. The buyer refuses to sign the CoS as they were either BSing or reassess and want to offer less money then the original offer which leaves the vendor with no sale or less money.

    As a vendor I wouldn't accept an letter of offer due to the risk and as a buyer I also wouldn't do it due to the risk.

    If you are serious about purchasing you would have no issue on signing a CoS unless you were looking at doing a dodgy?