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

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#1991751 9-Apr-2018 00:31

Batman:

THe whole idea of marketing an auction is to sell the house, not to have an auction for the sake of having an auction.

Except agents will also probably want to get their auction fees on top of the commission. So if it doesn't go to auction, they miss out on those fees, unless it is written into the contract that they still have to pay them.

Batman

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#1991790 9-Apr-2018 07:54

mattwnz:

Batman:

THe whole idea of marketing an auction is to sell the house, not to have an auction for the sake of having an auction.

Except agents will also probably want to get their auction fees on top of the commission. So if it doesn't go to auction, they miss out on those fees, unless it is written into the contract that they still have to pay them.

I've never sold a house at an auction but I imagine it's something like booking a hotel. You can cancel a room anytime before a deadline, as you haven't used that service. Everything in life is negotiable, and if it's marketed as "auction - unless sold prior" and you have to pay auctioneer fee regardless, I will be thanking the agent kindly and showing him the exit. I didn't think agents get a commission for something going to auction, only auctioneer fees (like, marketing fees, for example).

Agents only get commission for selling a house. Which is what we're trying to achieve here. Remember, nobody wants to have an auction for the *sake of having an auction. The end point/goal is sale of a house.

* PS yes, if you have 10 people really wanting 1 house because it's amazing for whatever reason - build quality, views, school zone, something else, or there are not enough houses for cashed up buyers, etc, then the point of the auction is to get the highest price for the seller, but the end point is still the sale of a house.

tdgeek

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#1991800 9-Apr-2018 08:35

We have sold two by auction, I don't recall an auctioneers fee. Like any agent sale, you pay a commission, whether thats by an agent or an auction. The auction is just a method of finding a buyer. The commission you pay, part goes to the franchise, i.e. Harcourts, and the other to the agent who managed the sale. Open homes, marketing etc. If the bidder was from another agent or agency, they will share that with the selling agent.

MurrayM

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#1991808 9-Apr-2018 08:53

Batman:

I've never sold a house at an auction but I imagine it's something like booking a hotel. You can cancel a room anytime before a deadline, as you haven't used that service.

In most hotels / motels you can cancel your booking before your check-in time, but there's usually a penalty (eg one nights stay if you cancel within 48 hours of check-in).

eracode

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#1991903 9-Apr-2018 10:57

IME auctioneers always charge a fee - except Barfoots who do not charge IIRC.

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

tdgeek

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#1991919 9-Apr-2018 11:37

eracode: IME auctioneers always charge a fee - except Barfoots who do not charge IIRC.

Ah, understood. Typically they are $300 to $500 for the auctioneer, I assume this is for the guy/gal that does the auction. We went through Harcourts, the probably had that, I wasn't bothered by small fees, it was the commission that mattered more. yes Barfoot is still free

evnafets

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#1991948 9-Apr-2018 12:39

http://unconditional.co.nz/griff/2015/07/08/5-things-you-should-know-about-pre-auction-offers/ has some good info on it.

Particularly relevant is I think point 4

by submitting a pre-auction offer, you’re asking the sellers to cut short the property’s exposure to the marketplace. Thus you’re going to have to make it worthwhile for the sellers to shorten the timeframe in which potential purchasers may hop on board the auction train.

I can see your point of view wanting to get in and buy the place ahead of others. I have also had some friends on the other side of things who were very interested in a house, NOT informed about a pre-auction offer bringing the auction date forward and as a result missed out.

Ultimately like a few others have said it is up to the seller whether they accept your offer or do the Zoolander "Screw him - hold out for more!"

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#1992076 9-Apr-2018 15:03

Our agent has advised us strongly against putting in an offer and wait for auction day as we will be showing our hand otherwise. Our agent is of same franchise as listing agent so not sure if that may have anything to do with the suggestion. They might want more interest drummed up as only 1st show home done yesterday so possibly for them not much competition.

Do whatever you want to do man.

networkn

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#1992079 9-Apr-2018 15:07

billgates: Our agent has advised us strongly putting in am offer and wait for auction day as we will be showing our hands. Our agent is of same franchise as listing agent so not sure if that may have anything to do with the suggestion. They might want more interest drummed up as only 1st show done yesterday.

Do you mean strongly against AGAINST putting in an offer?

They won't take your offer as you suggested with a withdrawal clause on acceptance?

Buying a house can be a frustrating process, requiring a lot of patience. I have known people to take well over 2 years. We had a friend who put in offers on 30 places! It was at the height of the housing boom and they found they were usually short by between 50-100k and they weren't buying slums with couch change either.

I'd quite like to buy a place with more room, esp a rumpus room, but we don't want an old house and new houses almost never have them.

billgates

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#1992086 9-Apr-2018 15:23

Yes. Strongly against. I swear this AI keyboard has a mind of its own on phone these days.

I have not told my agent that I will add the clause. I don't need to add the clause as I guess if I put a expiry date and time then it cannot be held liable forever. I am going to put in my offer tonight and weed out competition. We really want the house.

Do whatever you want to do man.

eracode

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#1992154 9-Apr-2018 16:36

billgates: Our agent has advised us strongly against putting in an offer and wait for auction day as we will be showing our hand otherwise. Our agent is of same franchise as listing agent so not sure if that may have anything to do with the suggestion. They might want more interest drummed up as only 1st show home done yesterday so possibly for them not much competition.

When you say “our agent”, do you mean the agent you’re dealing with - but who is actually the vendor’s agent - the agent who is trying to get the best deal for the vendor and himself/herself, and who probably doesn’t actually give a R’s A about you?

Of course they “want more interest drummed up” which is exactly why they don’t want you to to put in an early offer - and is exactly why you should.

This is getting ridiculous - I fear you have no idea what you’re doing and this is why you should get your solicitor involved ASAP (or someone else who can properly advise you) . IANAL.

Sorry to be blunt.

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mattwnz

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#1992171 9-Apr-2018 17:10

IANAL. Maybe you could also talk to another agency company, and ask about hiring a buying agent, where you pay them at an hourly rate to help you buy it under negotiation before auction. They know all the tricks for a start, and you are not also having to deal with the sellers agent. Buying a house can be very strategical. If it goes to auction, at least you know what other people would be prepared to pay for it, and you can bid up to your maximum. Personally I think auctions are good for buyers. But the price range this is listed under, I suspect they are wanting quite a bit more than the homes dot nz websites top estimate .

Is there a lot of other interest in the house? My concern with that house, is the sloped hill to the side of it. Potentially someone could build a house on top of that on piles, that overlooks you and potentially block the sun. Also whether you will get run off from it. So IMO you want some sort of certainty as to what is going to be built on it. Buying a house next to a empty section can be a risk.

tdgeek

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#1992188 9-Apr-2018 17:43

I dont get all this, I thought it would be a two page thread max. The T+C state, "unless if sold earlier" Put in an offer, the seller will get that presented to them, and they can say yay or nay. If yay, its sold to you, auction is cancelled. If they dont accept, that just means they feel your offer will be bettered on auction day. You can either go and bid more or not go to the auction.

The selling agent, which is the franchisee and agent get the commission. If another agent is helping the buyer, they want a share. That applies in actions as well, happened on our last one.

I have no idea why there is a strong recommendation not to put an offer in, or as was initially said, that the agent wont. They are supposed to be helping the property be sold. So, they arent helping very well.

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#1992197 9-Apr-2018 18:14

tdgeek:

I dont get all this, I thought it would be a two page thread max. The T+C state, "unless if sold earlier" Put in an offer, the seller will get that presented to them, and they can say yay or nay. If yay, its sold to you, auction is cancelled. If they dont accept, that just means they feel your offer will be bettered on auction day. You can either go and bid more or not go to the auction.

The selling agent, which is the franchisee and agent get the commission. If another agent is helping the buyer, they want a share. That applies in actions as well, happened on our last one.

I have no idea why there is a strong recommendation not to put an offer in, or as was initially said, that the agent wont. They are supposed to be helping the property be sold. So, they arent helping very well.

Agree. You want to buy a house, you go do what you need to do. And good luck!

mattwnz

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#1992207 9-Apr-2018 18:24

tdgeek:

I dont get all this, I thought it would be a two page thread max. The T+C state, "unless if sold earlier" Put in an offer, the seller will get that presented to them, and they can say yay or nay. If yay, its sold to you, auction is cancelled. If they dont accept, that just means they feel your offer will be bettered on auction day. You can either go and bid more or not go to the auction.

I don't totally understand where the other agent comes in either. Any agent involved with the selling, will be employed by the seller. Not unless they have employed multiple agents to sell it, which isn't very common these days?

I think it all depends on the contract between agent and seller, as unless sold prior, may just mean that the auction could be pushed forward to another date, if they get an offer, which could then count as the opening bid at the auction. So in that case it would be sold at an earlier date than the auction date listed. From my experience, it is very very rare for a seller to accept the first offer presented to them anyway, without any negotiation, unless it is the type of offer that blows their expectations out of the water, stating it is the one and only offer. So the seller may use the auction as a tool for negotiating the price, by using it to put in a vendors bid over the offer bid.

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