Multiple Offer situation - Why are Offers disclosed at an auction but usually not in a private sale?

Discussion in 'The Buying & Selling Process' started by Beachy, 10th Jun, 2019.

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  1. Beachy

    Beachy Active Member

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    Regarding a multiple offer situation, why is it that most agents won't disclose what the other buyer is offering (instead ask you to sign a form saying there are more than 1 offer and want you to present your highest and best offer), YET at an auction, every buyer knows what the other buyer is offering out in the open, and the auctioneer keeps going back to each bidder/buyer and asking them to increase their bid/offer by another $5,000 or $1,000???

    This way of buying by auction is not frowned on by buyers, sellers or agents and accepted as legal and ethical, but when making an offer in a private sale, most agents claim that by disclosing another buyer's offer, it is unethical and wrong, but at an auction it's OK...seems like double standards!!! As a buyer I want to know what the other buyer is offering so I can (if I want) offer more and keep increasing if I choose.

    Where is the transparency?? This is based in Queensland. Thoughts?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    they could release offer amounts with the permission of the vendor, but most times they might be thinking that by not knowing a prospective buyer may give them a higher figure than they are really after.
     
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  3. Cate Bell

    Cate Bell Well-Known Member

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    Personally, I feel the same as you do. This might not sound very helpful, but when I hear multiple offers, I walk. I just let the RE know that I don't get involved in multiple offers but I am still interested so let me know if the property doesn't go under contract. Sometimes the agent will come back to you and state that the vendor didn't accept any of the offers, and then you can start the negotiation. There is always another opportunity is what I think.
     
  4. thatbum

    thatbum Well-Known Member

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    Isn't the answer obvious? Because it usually advantages the seller to not reveal the details of the other offers.

    Sometimes they do disclose them, and its when they think it suits the seller.
     
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  5. Trainee

    Trainee Well-Known Member

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    And the seller wants your best offer.

    It isnt transparent. So?
     
  6. Beachy

    Beachy Active Member

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    I'm talking about disclosure amongst the buyers not the seller
     
  7. Beachy

    Beachy Active Member

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    You're missing the point, at an auction, you know what the other buyers are offering, but in a private sale, usually you don't because the agent usually doesn't disclose what the other buyer or buyers are offering, instead wanting you to sign a form and put forward a usually once only highest and best offer - no transparency there.
     
  8. QldKoolies

    QldKoolies Well-Known Member

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    At an auction everyone is buying under the same conditions. This isn’t the case with private conversations and varied contract conditions. If it was as you say would you be confident that you were treated fairly and there was no favouring of other buyers?
     
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  9. Beachy

    Beachy Active Member

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    For this question, I'm only focused on the lack of transparency when it comes to the non-disclosure of a price whereas at an auction there is full disclosure when it comes to price in offers
     
  10. QldKoolies

    QldKoolies Well-Known Member

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    I think you’re confusing the REA for someone who works in the buyers interest. From a consumer protection perspective though I think the multiple offer process would get less complaints then secretive auctions. The REA is usually below hookers and used car salesmen when it comes to trust so I doubt a buyer would trust the process.
     
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  11. The Y-man

    The Y-man Moderator Staff Member

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    As a seller, I have had offers from
    Buyer A: $300k
    Buyer B: $320k

    I sold to buyer A, because A was unconditional, B was subject to B/P and finance.

    What @QldKoolies is saying above is that just knowing the price won't help you.

    The Y-man
     
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  12. Trainee

    Trainee Well-Known Member

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    Think of it this way. Transparency is better for buyers. So why would sellers go to auction and allow transparency? Better (no) conditions, make it more urgent for buyers.
     
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  13. Cate Bell

    Cate Bell Well-Known Member

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    But you don't know what buyer C would have offered if they walked (if there was a Buyer C waiting in the wings)- and many buyers walk in a multiple offer situation.
     
  14. The Y-man

    The Y-man Moderator Staff Member

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    Correct - that is why a good agent does not let the potential buyer know there are any other offers, until a written offer is submitted.

    Then I get them to go back and use whatever tactic to get the price up....

    The Y-man
     
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  15. Cate Bell

    Cate Bell Well-Known Member

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    And that is why buyers should be very cautious of multiple offers, and walk.
     
  16. Beachy

    Beachy Active Member

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    Yes, the auction process is more transparent, just wondering why the private sale method doesn't have the same "rules" if you will on transparency of disclosure of what offers are
     
  17. Beachy

    Beachy Active Member

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    The point of this original post question is simply to compare why at auctions there is disclosure of offers amongst buyers whereas in a private sale situation, most of the time, there isn't
     
  18. thatbum

    thatbum Well-Known Member

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    I'm not sure what you mean?
     
  19. kierank

    kierank Well-Known Member

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    I really don’t understand the original post.

    It is a bit like asking:- why in Rugby Union must one release the footy when tackled whereas in Rugby League one can keep it (for up to five tackles).

    Them the rules :D.

    If you don’t like releasing the ball, don’t play RU :eek:.
     
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  20. wylie

    wylie Moderator Staff Member

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    I would walk away from a house without a price or that isn't going to auction. Except once when our dream house was put to tender. I absolutely hate tenders, but it was our dream house.

    We didn't get it. None of the three offers that went in (best and highest) were high enough for the vendor.

    Vendor would have been better to put a price on it. It was empty anyway. It sat for months before it eventually was sold. Without the tender process it would have been sold at least six months sooner.

    But you have to accept the sales method chosen by the vendor. If you don't like it, walk away.
     
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