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Do REAs Have To Tell You If There are Offers Higher than Yours?

Discussion in 'The Buying & Selling Process' started by BDub, 10th Sep, 2016.

  1. BDub

    BDub New Member

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    As the title says, do REAs have to tell you if there are offers higher than yours? (non-auction)

    I am looking putting in a slightly lowball offer, but I do quite like the place. I am willing to go up from my inital offer but I dont want to lose out to a "Yeah, we got a higher offer and went with that. Bye!"

    Do the REAs have to tell me? (I heard they are legally required to but that might be an old wives tale)
    Or is it ONLY in their best interest to get upward bidding? (but not legally required).

    This is Victoria if it makes a difference.
     
  2. Xenia

    Xenia Adelaide Property Manager Business Member

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    if there is another offer on the table we usually say there is another offer but dont discuss price. We do however indicate that the other one is within the asking price if yours is not.

    The agent can also quickly give you a hint that it's not going to get accepted if it's really low and they have other offers.

    The laws are that agents can't say they have another offer if they actually dont.

    Low ball offers are great - they actually give us the right to tell other purchases that we now have an offer on the table and prove it if we are asked to by one of the authorities that regulate agents.

    The "other offer" can be higher or lower, there is no need to disclose.
     
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  3. MrFox

    MrFox Well-Known Member

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    Would you like the agent to disclosed your offer to the other party?
     
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  4. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

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    There is nothing preventing a selling agent from disclosing the fact that there is another offer or what that offer actually is. Neither is the agent under any obligation to disclose that there are other offers.

    I'm unsure about Vic but in NSW the only time an agent has to disclose that there is an offer made is to another intending purchaser that has paid an EOI deposit (commonly called a holding deposit) but RE is rarely transacted this way these days.
     
  5. thatbum

    thatbum Well-Known Member

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    No.
     
  6. BDub

    BDub New Member

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    Thank you. Pretty much what I expected.
     
  7. Azazel

    Azazel Well-Known Member

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    If your making a lowball offer there is more chance of them going with a higher offer obviously.
     
  8. Jasmine

    Jasmine Well-Known Member

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    My experience is that a REA will not even come back with a counter offer these days. Most will only let you place a single offer and they will ask you to make it your best and final. I miss the old days.
     
  9. Big Will

    Big Will Well-Known Member

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    My feedback from when I worked as a REA in Melbourne.

    They don't have to tell you what the other offer is except there is another offer and to me I would clarify that is this offer on a contract of sale (as in a vendor signs and it is done/not a verbal offer).

    Reason for doing it this way it is fair to both parties.

    For example - Vendor Advertises 500k Asking price and all buyers put unconditional offers and 30 days settlement (so price is really the only determining factor).

    Buyer A - Puts an offer for 450k with initial $1,000 deposit
    REA tells Buyer B there is an offer on the property and needs their best offer.
    Buyer B - Says I will offer 450k but the agent wants their best price or it might be sold to the other buyer... They then offer 470k again agent wants their best price or it might be sold to other party. to which they finally say 480k is their best and final offer.
    Buyer B - Puts an offer of 480k with initial $1,000 deposit

    In this situation as is the Buyer B will purchase the property without a doubt however Buyer B knew there was another offer but Buyer A doesn't so the playing field isn't fair as Buyer B has more of an advantage.

    So REA goes to Buyer A saying there is another offer on the property and they need their best offer.

    Buyer A has two choices;

    1. Think the REA agent is lying and keep their offer as 450k and lose the property.
    2. Think the REA is telling them the truth and increase their offer.

    Not that this can be 100% but if a REA is telling you there is another offer it is HIGHLY likely there is one. This is because if there isn't and you pull out your offer they have nothing and will be running back to you. However if you increase your offer there is now two offers for the vendor.

    Lets just pretend Buyer A increased it to 500k and they bought it (keeps my post smaller). Buyer B will know what price Buyer A paid however Buyer A will never know if one there was another offer and more importantly what the other offer was... The REA will always say you only just beat them by a couple of 1,000s... Why no one wants to be told they paid 20k more than someone else but they are all happy to hear they only beat someone by $1-2k... To me I would rather be told that I paid 50k more as the agent did a good job and I would want to use them to negotiate for me if I was to sell however people take these things personally.

    Now lets look at the same situation but with different prices.

    Buyer A - Offers 490k
    REA speaks to Buyer B
    Buyer B - Offers 450k
    REA speaks to Buyer A and says there is another offer.
    Buyer A - Changes offer to 500k+ (this does happen).

    This is why an agent will never reveal the price, as why would Buyer A increase their price being 40k above Buyer B?

    The REA and the vendor are the ones holding all the cards when it comes to negotiating as there is only one property but can be multiple buyers. If you find yourself as the only buyer this is when you will typically get the best price.

    As a rule of thumb if a REA tells you the price of the other offer they will most likely be lying or just stupid, why? Lets take a look using same example;

    Buyer A - 450k offer
    REA tells buyer B there is an offer and it is 450k
    Buyer B will most likely put offer of 455k as they are now winning by 5k
    REA tells Buyer A there is an offer of 455k.
    Buyer A then puts in 460k

    Now the REA either has to go back to buyer B and tell them that the first offer also increased their price and the more times this happens the more pissed off the buyers will be as they are not sure if there is another offer. Also from the vendors perspective they will only get 1-5k more than the last offer as buyers will typically not put 30k more because they know what the other offer is.

    The only time an agent might tell you the price is if they are a very close friend or family member and the REA is willing to do this but very few people will find themselves in this situation.

    There is heaps of different ways things can play out but this is why an agent prefers the best and final offer as you will typically get the best offer and not 1k more than the last offer.
     
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  10. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Good post Will :)
     
  11. Big Will

    Big Will Well-Known Member

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  12. The Y-man

    The Y-man Moderator Staff Member

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    So if the agent asks you "Is that your final offer or are you willing to go up?" what do you answer?

    The Y-man
     
  13. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    "Please present my offer to the Owner."
     
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  14. dabbler

    dabbler Well-Known Member

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    They can tell you anything or nothing, part of the process is to work out what the agent is like too, I have been lied to before about offers. And if your going to offer, your offer could be used as leverage too on someone who is thinking about making an offer.

    I missed a place recently as was not prepared to make my offer until I knew everything about the place, I also felt the agent was waiting for an offer to use as leverage, even though they know we were serious buyers, they took another offer and got the place to contract without informing us even though we were dealing with them first. I suspect the other party was gullible and not informed as there were docs missing from the contract, I will almost bet my whatever they paid more than asking.
     
  15. dabbler

    dabbler Well-Known Member

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    Seems that tactic is a time waster & will often annoy.

    I think the agent will be able to read them like a book :)