Agent's tactic

The house has been in the market more than 3 months due to vendors unrealistic price expectations. We made an offer about a month ago but vendor wants over $100k more. We pulled out.

On Saturday we received a phone call from REA and he told us that our offer was the highest one they have received, but they think it's worth more than that and can we increase our offer and meet a vendor half way? He did not give any quarantees that a vendor even would accept that.

Not sure why he would think that we would increase our offer when knowing that our offer has been the highest? Has anyone experience anything similar and what would you do? This house would be our PPOR and forever home.

 

My usual reply along the lines of

I dont want to waste your time or mine. Why don't you find out what the vendor is willing to accept to make this a done deal and we'll take it from there.

 

Seems like a classic "Selling Houses Australia" story ready to occur.

@neK has it right, except I'd put more pressure - clearly the vendors think it's worth more so asking the agent to get a "best" figure from them will only get something like the 50% discount the agent things they may be able to push through.
Instead, I'd be pressuring the agent to do much better - I'm already highest and have been for 3 months, it's been on for 3 months with no bigger offers, there's plenty of fish in the sea, you'd possibly be able to rethink but really you've already moved on and are not going to do anything without a realistic price point from the vendor.
I think the last is important - do you really want to go through it all again like last time? You really want to know it's possibly in your grasp before putting any mental energy into it.

If the agent's not very good AND you really want the place, you could spend a little time offering reasons to them - comparable sales and all. If they're good, I'm sure they've already done this with the vendor though.

 

Isn't the saying something along the lines of "A house is only worth as much as it sells for"? If they really believe that it'll sell for over $100k above your offer, why are they bothering with your offer in the first place? To me, sounds like they're trying to condition you to think it's worth more when it might not actually be.

 

I wouldn't increase it. Infact I'd be telling the agent that offer is already stretching my budget and thats about it. I'm looking at other properties so if the vendor decides to sell needs to get back to me ASAP.

This approach works for me as I never care to lose a deal. I usually look at 5-8 deals Same time. If you really want the property and are happy to pay more then that's another story. Otherwise stand your ground they are more vulnerable then you are right now.

 

The agent is merely asking you to pay more than you've already offered in the hope of getting you closer to a price that the owner might accept which is below what they wanted originally...standard haggling.

He is just doing his job to get the best price for his Vendor.

You can either agree and raise your offer if you really want the house, or simply say no thanks.

 

Stand your ground and ay only what you think the property is worth. Resubmit your offer with @Leo2413 's advise about advising the agent that you are at your limit.

 

I made an offer of what I think it's worth after using comparable sales and observations of new units coming up in 6 months time. Agent said vendor wanted mid 600s. Shortly after my ramblings agent said mid 500s might sealbyhe deal. My offer is mid to high 400s. I might even have paid 500 but offer rejected. So I went elsewhere and bought one. The property is still on market (7 weeks) and that's long in Sydney. Agent did come back to me and asked me to come up a bit more but I said the unit is not worth what vendors are asking for. End of story.

 

@Tillie everyone has a different tactic and style that suits them. If you try to copy someone elses style, it will look forced. My suggestion to you is think of different scenarios where you had to ask your partner for something and what their subsequent response was and see how you can overlay a similar situation.

For example, if you're buying a car, you don't just go out and buy it (ok some people do, but I'm not referring to them), you would ask your partner. If the price is too high, you walk away and explain the sales person that as much as you like the car, you are going to have to check with your partner as its much than expected.

I would anticipate the same situation would happen when buying a property.

 

The agent probably called you up since he’s desperate. After 3 months his contract with the vendor will run out and the vendor will flog him off and use another agent thinking he’s useless. After another 3 months the vendor will finally realise they have unrealistic expectations and will end up selling for a similar price you offered and will go back thinking ‘gee that first agent wasn’t too bad’.

 

Either renegotiate or stay firm and tell him that is your limit.

Either way be happy with the outcome.

 

Thanks for quick replies everyone!

What really makes agent's tactic interesting is that the property is for private sale, not sold in auction. We did not know that the offer we made over a month ago is the highest one, before he told us on Saturday. Now we really has no incentive to increase our offer, when knowing that there is no higher offers. Why would we? Weird tactic from agent's side

 

We already did that when we put our offer forward. The agent could not show us a proof that supports the current asking price. He is just saying that he thinks it's worth more because you can not replace the property with the money we offered. My response just was that it's not our fault that vendor overcapitalised...

 

As yourself "do you really want the property" ? If you do, keep hassling the agent that your finance ready and can settle in 3 weeks, soon he may just realise that your his one hope !

 

You should set an artificial deadline and put pressure on the vendor.
say like our offer stands and will reduce by $1000 per day. The ball is in your court now.

 

Just wow. Have you actually done this?

 

Update.

Our response to the agent was that we are not able to meet vendors' expectations and we are going to do the second inspection at the other property, however if the vendors expectations changes, he can contact us. We also gave enough details about the other property that he knows that it is real proposition for us.

The agent left us a voice mail message tonight that did not make any sense. He said that the vendor wants to clear $xxx after costs (agent's commission) and that equates the offer price between $y - $z. The variance between the cleared price and paid price was so high that it equates 5% commission. But when our offer was rejected last time (when the agent was on leave) and we dealed with the different agent, we were told the same story but the different numbers, but at this time the commission rate could be calculated to be 2%. I am not sure if I should laugh or cry...

 

I think that's a wise way to play it.

and how's that your problem..? what the vendor wants to get after comms/other expenses- that aint your concern.

 

So recap. You wont pay more and they want you to. I say sit on your hands. You are the highest bidder for a unrealistic vendor.

 

Their cost is not just agent commission, you also have advertising, photography, floorplans, solicitors fees, etc etc.

Play the game you like it appears you are the only one however it will be harder to negotiate if more buyers came into the picture.