Join Australia's most dynamic and respected property investment community

How to stop an RE agent using my offer against me?

Discussion in 'The Buying & Selling Process' started by Big Daddy, 14th Jan, 2016.

  1. Big Daddy

    Big Daddy Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    473
    Location:
    Perth
    I usually have a few problems when making an offer that i need some advice on.

    1)The agent collects my offer eg 510,001 and then strings me along whilst finding other offers
    2)Now the offer is made the agent will call all other parties who had any interest and notify them that they have had written or verbal offers


    I think for the first problem i can state my offer is valid for 24hrs and then make it clear im walking. Is this the best way to handle the situation and sound professional AND also legit (motorvated buyer). I dont want to make enemies since i may need the RE agent for other deals.

    The second problem is the agent now has my written offer which he will use to entice other buyers to put in their offer. eg RE Agent could say to all other interested parties
    'We already have a written offer near the asking price' -> which may not be true as the definition of 'near' is not clear.
    Or 'We have an offer in the 510,000's ' . -> This is a 10k range and the buyer may then put in an offer > 520,000.

    Why is this a problem? Because some houses usually sit on the market with no activity and all of a sudden i've created a panic by creating an interest/demand for the property. Is there a way to avoid this so i can just wait a few months for the price to drop so the vendor will get more desperate and later accept the same offer again. ? ie. How do i start negioating a price without putting in a written/verbal offer so the agent cannot legally tell other interested parties that an offer has been made?
     
  2. Big Will

    Big Will Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,546
    Location:
    Melbourne, Australia
    So you don't like the agent doing their job?

    An REA is highly unlikely to take your verbal offer as they cannot secure the deal for their client (and themselves) if you decide no.

    All you can do is put a time limit on the offer and hope yours is the best offer.

    Something to think of is reverse the roles, what if someone else had put an offer in before you and you were interested but it sold for $10,000 less than your starting price? What if it was sold for $50,000 less than your price? I would be pissed off that I could of easily beaten the other offer by $10,000 and walked away happy knowing I was going to pay $40,000 more.
     
    kierank and Esh like this.
  3. CU@THETOP

    CU@THETOP Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    227
    Location:
    Brisbane
    Maybe put the offer in twice- with slight variations- with different agents at the same agency.
     
  4. Big Daddy

    Big Daddy Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    473
    Location:
    Perth
    Thanks @Big Will. I wanted to know if everyone was in the same boat or if someone has developed a method/angle to get more than one 'bite'.


    I dont think you could do that. Any calls about the property to another agent must be passed onto the selling agent. The other agent may get a cut of the commision if it leads to a sale but ultimately i would be dealing with the original agent.
     
  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

    Joined:
    18th Jun, 2015
    Posts:
    2,095
    Location:
    Melbourne, Nationwide
    Two things you can do to help yourself.

    1. Put an expiry date on your offer. 2 business days is probably reasonable. It won't stop them from seekin other offers, but it will prevent them from unnecessarily delaying acceptance of an offer to shop around.

    2. Be aware up front of what you're willing to pay for this property and where the limit is. If your first offer is $500k, you know it's worth $550k and the agent pushes you for $510k, it's still a good deal. Also be aware that at some point if the agent is pushing for too much, you need to walk away from it. Being aware of your own value for the property puts the power in your hands.
     
    Leo2413 likes this.
  6. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    What @Peter_Tersteeg said.

    You also need to develop some rapport with the agent and make your offer easy to present to the owner. I.e. all cash, settlement terms that suit them etc.
     
    MTR and Propertunity like this.
  7. Marg4000

    Marg4000 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    906
    Location:
    Qld
    You must remember the agent is employed by the seller. It is his/her job to get the highest price possible.
    Marg
     
    See Change and Propertunity like this.
  8. MRO

    MRO Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    163
    Location:
    Perth
    I put a 12 or 24 hour clause on all my offers. We all have mobiles and email now so absolutely no reason you cant get a reply in that time.
     
    legallyblonde likes this.
  9. Propertunity

    Propertunity Exclusive Real Estate Buyers Agent Business Member

    Joined:
    19th Jun, 2015
    Posts:
    1,225
    Location:
    NSW
    I generally only make offers that I know the vendor will accept. I don't commit in writing to anything to an agent unless I have first set the whole thing up (sometimes this takes a few days) and had verbal agreement. The the offer will be on a signed contract sent around to the vendor for countersigning. Creating rapport with the selling agent (as mentioned by @Chilliblue) is critical most of the time.
     
    Esh and MTR like this.
  10. TMNT

    TMNT Well-Known Member

    Joined:
    23rd Jul, 2015
    Posts:
    1,387
    Location:
    Melbourne
    the reality is you'll never know if the agent is telling the truth about an offer whether it exists or not or even changed,

    the agent can even bend the truth and say "oh we had an offer of $X last week" ......even though its expired (which they will leave out)

    you can scream and complain and catch out the lie, however it wont get you far, you have to assess each situation on its merits nad work out 1. if there is another offer and 2. if its worth matching/beating that offer
     
  11. Big Daddy

    Big Daddy Well-Known Member

    Joined:
    25th Jun, 2015
    Posts:
    473
    Location:
    Perth
    Thanks for all the advice.
    We did have rapport. Maybe i was a little too nice and flexible which he saw as a weakness and exploited. This offer was made a while ago in a declining Perth market and was less than 3.5% from the for sale price with only one condition (subject to finance) in which i already had a pre appoval letter. Since it was a deceased sale and the kids wanted the money and an offer previously fell over before then it sat on the market for a while so I offered 825k, It sold for 5k more at 830k a few days later
     
  12. The Y-man

    The Y-man Moderator Staff Member

    Joined:
    18th Jun, 2015
    Posts:
    898
    Location:
    Melbourne
    @Big Daddy

    Pretty much normal for us in Victoria.
    A couple of things that can help here in this state:

    1. The REIV standard offer contract form has a standard 3 clear business day expiry on the offer unless otherwise changed.
    https://www.reiv.com.au/library/legal/contract-of-sale.aspx

    2. Have an in depth knowledge of your borrowing capacity AND a Finance Plan B, AND do your pre-purchase inspection before making an UNCONDITIONAL OFFER. Very few people competitors will have time to match you to organise finance and pest inspection in 3 days. A vendor is more likely to go for the lower unconditional than higher conditional (been in the vendor's shoes!!)

    If someone's nuts enough to come in with a unconditional higher than you are willing to go, let it go (as we have on numerous occasions).
    Note: It can be a agent bluff - they will call you back saying the other offer has evaporated magically.

    The Y-man
     
    WattleIdo likes this.
  13. CU@THETOP

    CU@THETOP Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    227
    Location:
    Brisbane
    My reply: I bet they are kicking themselves for not accepting that.
     
    The Y-man likes this.
  14. See Change

    See Change Timing Lord Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    2,141
    Location:
    Sydney
    Variation on a theme .

    Gee , that's a good offer , why didn't they accept that ?
    Must be hard working with unrealistic vendors ....

    Cliff
     
    neK likes this.
  15. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    13th Jun, 2015
    Posts:
    2,952
    Location:
    Perth
    Ugh I often do my head in with the who/what/if of making offers. I sympathise.

    At the end of the day I have to say 'another deal will come along, stick to your guns'

    If you think there is a touch of wiggle with the ethics you could try "I'm prepared to pay $5k more than any offer you have, providing you show it to me". It needs to have a time limit though.
     
  16. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

    Joined:
    14th Jun, 2015
    Posts:
    1,167
    Location:
    Adelaide, SA
    Always put expiries on your offers.

    Recently purchased a new PPOR - put in a lowball offer with a 24 hour offer expiry on the 1st day opened. Over the weekend there was circa 30 couples which went through the property.

    At the final hour we had a last ditch call from the agent, followed up by an acceptance of offer. A colleague of mine recently started working for the same agency - so I found out through the grape vine later than there was indeed 4 other parties offering on the property which they did not have sufficient time to offer or shop my offer to.

    If it doesn't work, walk. There's millions of properties in Australia. :)