Offer on a house set to be auctioned. Agent compliance question.

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#1991425 8-Apr-2018 15:09

eracode:

Why would anyone put in an early offer? Because if you’re a prospective purchaser and have your ducks sorted in a row, you can bring the whole thing forward to your advantage before the others are sorted.

True, but if others are really interested, they will quickly also get things sorted as well, if they have registered an interest. 2-3 days is probably enough time, especially as agents these days insist on sellers getting building reports done by the vendor. The main advantage as a buyer to do it IMO, is to do it when it initially hits the market, to reduce the number of people that see it advertised, and thus reduce the number of people who may bid on it so it reduces the competition of buyers. But I doubt that many sellers would agree to do that, unless they are already 100% happy with the price that is being offered.

eracode

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#1991426 8-Apr-2018 15:15

sir1963:
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eracode: @sir1963

So what happened? Did you sell the house privately for more than you would have received if you had paid a $10k commission?

Good point. Curious to know too.

People are stupid. They think you have to use a realestate agent to buy a house.

Your lawyer can give (sell) you a copy of the Auckland Law Society Real Estate Sales and Purchase agreement, this is the same thing most state agents use. You have no more protection if you buy from an agent, in fact given the number of dodgy deals you hear about I would suggest you are less protected.

A realestate agent only requires 47 Credits at NCEA level 4

A licences builder requires more than that, as well as something like 6,000 hours of apprenticeship

A Lawyer requires a law degree, etc.

Realestate agents need to become employees and get paid by the hour. There was a NZ program about realestate some years back and it said the average number of hours to sell a property was 30. At $100/hr thats $3000. I pay my plumber and builder less than that and both are more qualified than the estate agent.

Yes - obviously some people are stupid. Correct - you do not have to use a RE Agent to buy or sell a house - but if it’s being sold by an agent, you have to deal with her/him. Houses can be bought and sold by a direct transaction between the purchaser and vendor - an arrangement known as a ‘Private Treaty’. Will still need a lawyer though.

Registered RE Agents are certainly not paid by the hour.

I can’t be bothered responding to the other spurious comments here - parts of this thread are getting ridiculous. WTF?

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mattwnz

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#1991437 8-Apr-2018 15:48

eracode:

‘Registering an interest’ doesn’t give you any rights here - and if I can make an acceptable unconditional early offer while other prospective purchasers are still waiting for financing approval from their bank, or trying to organise a property inspection, then I’m in the box seat.

True, but then again you don't know other peoples circumstances, and banks these days are very willing to lend huge amounts, at least on an average type of house. I have tried to predict how other buyers may react in the past, and it is a gamble.

From my experience, banks will make a decision pretty quick if forced to by a change in auction date. Agents will also want to make sure that they get as many people bidding as possible, so they can make as much as possible off it. The worst auctions are those with only one bidder in that situation, although it is still win win for the agent. So they may make the decision of the final auction date, based on how the other potential buyers, to make sure they have got their ducks in a row, and as many bidders as they can get. Agents I have found will always try to make the process as competitive as possible. eg When I put in an offer on a house for sale by negotiation, the agent then said that there was another party wanting to put in an offer, but were out of the country, so they were then forced to put in their best offer. So it basically became a tender, which isn't good for the buyer, because then there is no negotiation. But you don't want this to occur as a buyer, as then they are playing one against the other. At least they said there was another offer, but as a buyer you don't really know. As a buyer, I now avoid tenders, even though they are great for sellers, and I would sell by tender.

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#1991438 8-Apr-2018 15:50

mattwnz:

From my observations, many aren't real estate agents anyway, they can just be sales agents. Usually if you have an issue, you have to deal with the real estate agent that overlooks them.I noticed that some agencies only have a single real estate agent and lots of sales agents.

Really? Could you please post a link to a RE company’s website that demonstrates what you are saying?

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billgates

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#1991441 8-Apr-2018 16:05

Me and my wife just returned from first open home visit for this 3rd house. Previous visit was privately arranged by our agent during mid evening. Today we saw it during mid afternoon and all the rooms receive more than plenty of natural light. The listing agent was there and was made aware over phone by our agent that we will be visiting. There were 4 couples in total including us and 1 neighbour that lives not far away just having a nosey. The auction is not until 24th April but I have decided to put an unconditional offer through our agent tomorrow and add the specific clause below. The offer I feel is on the high end. I was told by listing agent that vendor is selling because their next house build will include a swimming pool and they can settle in 3 weeks and move to a rental home. Below is link to said house. Please feel free to offer any advice and what do you think will be a good offer. The house was completed in 2016 and built by a very reputable builder that I know, The 8 years remaining on master builders warranty will also be transferred to us. There is some retaining wall on start of south side towards front of house and there is free land for around 4 sections to the front left of our house. Currently the view from front driveway is good. The land has been empty for few years and no one knows when will it be sold etc. The views from back are good and it’s elevated which is good.

The clause I will be adding with the offer will be..

“By signing and accepting this offer, the Vendors agree to withdraw the property immediately from the market and sell it to (Purchasers name) without calling an Auction or a multi-offer deadline.”

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1591380017.htm?rsqid=157c1f8cb718449bb7cbbc46177f5aa8

This is the photo of empty land in front of the driveway. Driveway is nice and long and it will not be shared with property if ever built on the empty land shown on left hand side.

Do whatever you want to do man.

eracode

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#1991451 8-Apr-2018 16:17

billgates:
Me and my wife just returned from first open home visit for this 3rd house. Previous visit was privately arranged by our agent during mid evening. Today we saw it during mid afternoon and all the rooms receive more than plenty of natural light. The listing agent was there and was made aware over phone by our agent that we will be visiting. There were 4 couples in total including us and 1 neighbour that lives not far away just having a nosey. The auction is not until 24th April but I have decided to put an unconditional offer through our agent tomorrow and add the specific clause below. The offer I feel is on the high end. I was told by listing agent that vendor is selling because their next house build will include a swimming pool and they can settle in 3 weeks and move to a rental home. Below is link to said house. Please feel free to offer any advice and what do you think will be a good offer. The house was completed in 2016 and built by a very reputable builder that I know, The 8 years remaining on master builders warranty will also be transferred to us. There is some retaining wall on start of south side towards front of house and there is free land for around 4 sections to the front left of our house. Currently the view from front driveway is good. The land has been empty for few years and no one knows when will it be sold etc. The views from back are good and it’s elevated which is good.

The clause I will be adding with the offer will be..

“By signing and accepting this offer, the Vendors agree to withdraw the property immediately from the market and sell it to (Purchasers name) without calling an Auction or a multi-offer deadline.”

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1591380017.htm?rsqid=157c1f8cb718449bb7cbbc46177f5aa8

This is the photo of empty land in front of the driveway. Driveway is nice and long and it will not be shared with property if ever built on the empty land shown on left hand side.

Sounds great - good luck with it.

Sometimes I just sit and think. Other times I just sit.

Handle9

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#1991453 8-Apr-2018 16:25

You may struggle with that clause due to it being an auction - it isn't an unconditional offer based on the auction t&cs, you have altered the terms of sale. I'd talk to an experienced property specialist solicitor, they will be able to advise you on the legalities. It'll cost you some money but it's worth it.

Good luck though.

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billgates

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#1991457 8-Apr-2018 16:34

The real estate company’s website states next to auction date Unless Sold Prior. The clause is in my favour but I will offer a good price. I will let the offer expire after 48 hours as well. I don’t want my offer to become the starting reserve price. There are very very few buyers if any for a 7 figure deal in Hamilton. The auction rooms are empty for such houses so I feel that’s going for me with the clause.

http://www.lugtons.co.nz/property.php?propertyid=15756

Do whatever you want to do man.

eracode

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#1991458 8-Apr-2018 16:38

How will you “... let the offer expire after 48 hours ... ”?

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mattwnz

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#1991460 8-Apr-2018 16:40

billgates:

Doing the old trademe ordering trick, I can see they listed the expected selling price between properties priced between $999,999 and $1,023,000. So that is above the homes dot nz upper price. So that may help you in terms of knowing what the agent expects it could sell at.

Handle9

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#1991461 8-Apr-2018 16:41

It isn't that simple, it really depends on what the auction process describes. For example Barfoot and Thompson have a published pre-auction offer process which states that if a pre-auction offer is accepted the auction must be brought forward. It will depend on the terms and conditions of the agency and their auction process. Like I said earlier you need to understand the process and if you don't know get advice.

billgates

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#1991463 8-Apr-2018 16:42

Just state the time and date the offer is valid till in front of the clause I wrote above. I don’t have a week to wait. They could sit on it till the auction day for I know which is a waste of time for me as I might not even win it in auction. I don’t have 2+ weeks to wait for auction days. I will move on to another property. The agents know very well in Hamilton how much of a market is there for this price bracket market. It may not work and the vendor might want to wait for auction. That’s there decision but at least I will not be waisting my time.

Do whatever you want to do man.

eracode

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#1991466 8-Apr-2018 16:46

@billgates

I may have missed it but please tell us you are working through a solicitor on all this. Concerned that you are flying by the seat of your pants.

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billgates

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#1991467 8-Apr-2018 16:46

Handle9:
It isn't that simple, it really depends on what the auction process describes. For example Barfoot and Thompson have a published pre-auction offer process which states that if a pre-auction offer is accepted the auction must be brought forward. It will depend on the terms and conditions of the agency and their auction process. Like I said earlier you need to understand the process and if you don't know get advice.

The agent will need to prepare a pre offer contract. The clause I mentioned above is what will be added by my agent. That’s the bit that vendor agrees and signs. I couldn’t care about what the auction process describes. My clause clearly states if the vendor agrees, any auction or multi deadline offer goes out the window. If they sign this, they agreed to the clause. This can be added to pre offer agreements. People just don’t know about it.

Do whatever you want to do man.

billgates

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#1991469 8-Apr-2018 16:50

eracode: @billgates

I may have missed it but please tell us you are working through a solicitor on all this. Concerned that you are flying by the seat of your pants.

I have not involved the solicitor yet. I will talk to him tomorrow before preparing the pre offer agreement with agent. One simply cannot just pull out of an agreement if they sign it or force someone to follow an agreement if it clearly states when will the pre auction auction offer expire. That’s why it’s called a contract which clearly state the terms and conditions that the agent will present.

Do whatever you want to do man.

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