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

In Qld, the problem I have with auctions is that REAs can’t give a pricing guide. In fact, they can even mention pricing at all.

At least with tenders they can.

With tenders, a buyer can include conditions such as B&P, subject to finance, subject to the settlement of another property, etc. With auctions, they can’t.

 

Actually, where are these rules you say??? Are these rules you say legal? From my understanding, it isn't illegal, so there aren't really any official rules, more an understanding

 

I was told when I bought my property that 'legally' the RE cannot disclose to me what the other offer is, can't even say if my offer is better or worse, had to sign a multiple offer acknowledgement form. Obviously it could easily be abused by agents trying to squeeze more money out of buyers, hell I even considered raising my offer but ended up sticking to my guns and got the property with my original offer anyway, it is what it is. If you think your offer is solid then stick with it.
So to answer your question, I reckon it's because it works in the agent/vendors favor when trying to get you to offer more when in reality the other offer is less than your original anyway.
*This was in QLD only, no idea about the laws in other states*
Multiple Offers

 

Google them .

Rules are statements telling people what they should do in order to achieve success.

 

I was told today that it's actually not illegal to disclose what other buyers are offering.

 

I was told today that it's actually not illegal to disclose what other buyers are offering.

 

My last bidding experience was with an agent who was extremely open with prices. So much so it was off-putting. I ended up in a bidding war against a buyer's agent where it felt like an auction. I ended up just leaving my final offer 2k below theirs, they had 60day settlement and I had 30day, so I thought that would be appealing. Final sale price ended up 4k more then my offer, so the agent managed to squeeze another 2k out of the other party. Frankly it was a really annoying process, and the agent lost our good will/patience which would have resulted in a higher price

 

But is it mandatory?

 

Legal, mandatory, optional, desirable - you can argue till the cows come home!

But the bottom line is that the vendor employs the RE agent to sell the property. The agent will advise, but the vendor issues the instructions.
Marg

 

Even if not illegal, there is no requirement that they MUST tell you what someone else has offered, as I mentioned before, if you're putting your best offer forward what does it matter?
The seller might not just choose the highest offer, they'll look at the whole offer and any clauses included. They may take a lower $ offer because it has a shorter settlement time or other factors.

 

I don't think it's a smart move to simply "walk away" from a potentially good investment just because you don't like the sales method of the agent. This is a rookie move that eliminates the pool of properties for no good reason other than a lack of willingness to engage with the agent because of their tactics and lack of negotiating skill.

A property is worth what a property is worth and it really doesn't matter what method the sales agent uses. If someone makes an emotional buy and pays more than the vendor was willing to accept on blind bidding then things will always equalize.

What you should always do is run your own race. Don't be suckered in by agent sales tactics or methods. Just do your research and do it well. If you do this, you will come up with a fair market value with your own upper limit that you are willing to pay. Only ever negotiate with the vendor, not other buyers! If the agent starts talking about multiple offers and multiple buyers just pretend it's just you and vendor and don't pay more than your research and comfort zone is telling you.

Sure, you might miss out on some but you will win others. Most importantly, you'll never overpay for a property and you won't miss out on a potentially good investment by trying to take a stand based on the agent's sales method.

- Andrew

 

^spot on advice imo

i bought a 2br apartment in a historic building in melbourne cbd that was going to auction. went to a couple of inspections and the response was overwhelming. it got to the point where the agent was struggling to take down everyone's details. lots of old folks.

i said f--- it, it's a nice place, type that rarely comes on the market, but i'm not going to compete with cashed up downsizers. discussed with family, agent mentioned that pre-auction offers were on the table. so i made a really strong one, vendor must have said ok, then agent notified all other interested parties that they have a day to respond. after all downsizers are not known for being exceptionally quick on the trigger. ended in a 4 party run-off decided by best and highest offer. not the most transparent, but whatever. i didn't get the bargain i wanted but i paid a fair price and the vendor was probably happy too.

key learning points for me are have your own valuation, use the bank valuation carefully, set your limit and don't go over unless you are sure that you will outbid the nearest competitor by a smidgen. don't walk away if you like the place. chances are that desirable properties will have competition. eventually you will have to go for it.