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

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#1992241 9-Apr-2018 18:52

eracode:
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.

I am not sure what’s so hard to understand here...

Our agent that we found and engaged with who has been showing us properties since last week coincidentally has now turned out to be part of same franchise as the listing agent for the property. I had to explain how and why I will add the expiry on the duration of the offer few posts ago as well that seemed hard to gasp how can that be done?

I know what the agents want for the benefit of the vendor. I am doing everything I can for settlement/pre auction conditions to favour me whether they want to accept them or not is up to them. My agent said minimum of $1,050000 for pre offer. I am going $40k less than that. If they refuse, great. I will go to auction and bid there hopefully winning for less.

Do whatever you want to do man.

tdgeek

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#1992242 9-Apr-2018 18:54

mattwnz:

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.

Yep. Every house sale is a bit different. Say mine is setup to go to auction. The market isn't busy. Its a flash house so limited buyers. I might well accept an offer before auction. That offer is nothing to do with the auction, I dont see why the auction gets brought forward or put back actually. Why? So, I accept this offer as this offer is NOW, its unconditional, the house has sold, yippee. If the market was buoyant, my agent who does the open homes says lots of interest, and the offer was merely just not bad, I'll decline the offer as I reckon auction will do better. As always, that offeror may give me another offer, cool. More the merrier.

The other issue is that when we actioned twice in recent times, its booked in. Its setup on there video presentation and in the auction book. Its on BloeBook and everywhere else as xx/xx/2018. You cant just change it.

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#1992244 9-Apr-2018 19:01

billgates:
eracode:
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.

I am not sure what’s so hard to understand here...

Our agent that we found and engaged with who has been showing us properties since last week coincidentally has now turned out to be part of same franchise as the listing agent for the property. I had to explain how and why I will add the expiry on the duration of the offer few posts ago as well that seemed hard to gasp how can that be done?

I know what the agents want for the benefit of the vendor. I am doing everything I can for settlement/pre auction conditions to favour me whether they want to accept them or not is up to them. My agent said minimum of $1,050000 for pre offer. I am going $40k less than that. If they refuse, great. I will go to auction and bid there hopefully winning for less.

I am very surprised that you know what the selling agents wants, price wise. They keep that secret squirrel. Even in the same franchise. Im quite sure on that. otherwise they are not working for the vendor. Why tell you that the seller is around the 1,050,000 when in fact, you may be prepared to go to 1,200,000? How many franchises were done for price fixing last year. All the big ones. Total fines were in the region of $12 million IIRC

tdgeek

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#1992245 9-Apr-2018 19:06

Possibly on topic, and possibly related, as you mentioned the two agents are same franchise. When we sold last Dec, our agent did the marketing, appraisals, photo sign, open homes. When it sold, she gets her share, the franchise got their share. But the buyer was one that was shown our house by another agent from the same franchise. The two agents shared their part of the commission, and the buyers agent got a bit more than half, That shocked me actually. I think it was close to 2/3. Why the F I said to my wife (we know the selling agent, a friend) did she do all the work, and get less commission than the other agent who just took the buyer to our house to have look??? OK, the buyer came 6 times, but even so, easy money. Do hard the work, get less of the commission.

billgates

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#1992246 9-Apr-2018 19:07

My agent who has advised of the $1,050000 pre offer and listing agent are from same franchise. They know each other very well. I am taking a stab in the dark, but the listing agent might also be calling the shots here with our agent in terms of what offer should I put in. The more the house sells for, the more commission they will get to split. I have figured that I have nothing to loose with a pre-auction offer that is unconditional even if it's refused.

homes.co.nz has property valued at max end $995k. My offer is for $1,010,000. The CV is $740k. A premium of $270k. This to me is a very good pre-offer but lets see.

https://homes.co.nz/app/address/hamilton/flagstaff/10-nicola-jean-place/20EQe

Do whatever you want to do man.

bagheera

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#1992247 9-Apr-2018 19:15

billgates:

My agent who has advised of the $1,050000 pre offer and listing agent are from same franchise. They know each other very well. I am taking a stab in the dark, but the listing agent might also be calling the shots here with our agent in terms of what offer should I put in. The more the house sells for, the more commission they will get to split. I have figured that I have nothing to loose with a pre-auction offer that is unconditional even if it's refused.

homes.co.nz has property valued at max end $995k. My offer is for $1,010,000.

https://homes.co.nz/app/address/hamilton/flagstaff/10-nicola-jean-place/20EQe

In that case, talk to your bank now (or you have 1,010,000 in the bank or can cover max the bank will give you on the place in loan and rest as your money) as the bank might not loan you the money if they think it over price. Bank can get funny without a valuation when price breaks the mil.

tdgeek

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#1992248 9-Apr-2018 19:18

billgates:

My agent who has advised of the $1,050000 pre offer and listing agent are from same franchise. They know each other very well. I am taking a stab in the dark, but the listing agent might also be calling the shots here with our agent in terms of what offer should I put in. The more the house sells for, the more commission they will get to split. I have figured that I have nothing to loose with a pre-auction offer that is unconditional even if it's refused.

homes.co.nz has property valued at max end $995k. My offer is for $1,010,000.

https://homes.co.nz/app/address/hamilton/flagstaff/10-nicola-jean-place/20EQe

Wow, can I be your son? You can afford a $1,010,000 Million dollar house? That probably more than the US and China debt!! :-)

I will take a stab, that you meant 1.01 million!

To me this sounds a bit dodgy. It sounds as if the two agents, the buying one (yours) and the selling one are managing this too much. It sounds like an auction, you and two auctioneers. I would, based on what they have suggested, and what you may think its worth, put an unconditional offer in. Its fair to expect an acceptance or decline in 24 hours. If declined, just go to the auction and take a seat like every other attendee.

What is a pre offer? Its an offer today, thats all it is as far as I can see. Pre auction offer sounds more like, "I wont be at the auction, here is my offer, please bid this at the auction" (which is not uncommon)

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billgates

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#1992250 9-Apr-2018 19:19

I already have a pre-approval for a much higher amount than the pre-offer I have now just put in. I stated clearly that the offer is only valid until 11th April Wednesday 6PM. If they want to have an auction prior to that or can arrange for one this quick, be my guest.

Oh and another update, I have contacted the real estate company of the agent that said no to passing our offer to the vendor after vendor bid won the auction for the 2nd house we liked.

Do whatever you want to do man.

eracode

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#1992251 9-Apr-2018 19:20

I think you’re misleading yourself here by referring to ‘our agent’. You might be dealing with him (even from before you saw this particular house) but he’s not your agent - he’s ‘an agent’ who works in the team which is selling this house for the vendor. There’s no distinction between the agent you’re dealing with and any other agent in that franchise. The agent you’re dealing with will not, and cannot, be looking after your best interests because they’re all working for the vendor. The agent you’re dealing with should not be mistaken for an ally.

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

bagheera

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#1992289 9-Apr-2018 19:25

billgates:

I already have a pre-approval for a much higher amount than the pre-offer I have now just put in. I stated clearly that the offer is only valid until 11th April Wednesday 6PM. If they want to have an auction prior to that or can arrange for one this quick, be my guest.

yes for a place that they think is worth 1.01 mil, but they will not give you 1.01 mil for a place they think is worth 950k - you got to prove to them it is worth 1.01 mil, currently if I was your bank, I would want a valuation of that place to check that you are not over paying market value for that place.

billgates

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#1992293 9-Apr-2018 19:35

It comes down to your finances in the end. We provided our bank manager like every time with what he requires and if all is well, he pre approve us which he has. I would not be putting in an unconditional cash offer without this. No one would.

Do whatever you want to do man.

eracode

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#1992295 9-Apr-2018 19:37

bagheera:
billgates:

I already have a pre-approval for a much higher amount than the pre-offer I have now just put in. I stated clearly that the offer is only valid until 11th April Wednesday 6PM. If they want to have an auction prior to that or can arrange for one this quick, be my guest.

yes for a place that they think is worth 1.01 mil, but they will not give you 1.01 mil for a place they think is worth 950k - you got to prove to them it is worth 1.01 mil, currently if I was your bank, I would want a valuation of that place to check that you are not over payimg over market value for that place.

For houses in this price range, banks do not require a Registered Valuer’s report - they take the price agreed between a willing seller and a willing buyer as being the true value of the property.

A valuation is only required if there is no Real Estate Agent involved in the transaction - i.e. sale by Private Treaty - or if the price is a lot higher than this case.

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

bagheera

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#1992299 9-Apr-2018 19:42

billgates: It comes down to your finances in the end. We provided our bank manager like every time with what he requires and if all is well, he pre approve us which he has. I would not be putting in an unconditional cash offer without this. No one would.

I have seen people with general pre-approval from a bank to not get the loan because the bank thought the price was too much for the place, and the person was out of the deposit due to no loan, and sale could not go ahead. Pre-approval from a bank is only for a place that is not over market price, it pay to check before putting in an offer that they are still happy to pre-approve on the place first.

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#1992334 9-Apr-2018 20:08

billgates:

My agent who has advised of the $1,050000 pre offer and listing agent are from same franchise. They know each other very well. I am taking a stab in the dark, but the listing agent might also be calling the shots here with our agent in terms of what offer should I put in. The more the house sells for, the more commission they will get to split. I have figured that I have nothing to loose with a pre-auction offer that is unconditional even if it's refused.

homes.co.nz has property valued at max end $995k. My offer is for $1,010,000. The CV is $740k. A premium of $270k. This to me is a very good pre-offer but lets see.

https://homes.co.nz/app/address/hamilton/flagstaff/10-nicola-jean-place/20EQe

Never trust anything a RE agent says. Especially the ones that make you feel like you can trust them 100%. But that is so that you will believe everything they tell you. For their own benefit, whatever it is they are trying to achieve.

The more you feel like you can trust the agent, whoa jedi mind trick alert!

sonyxperiageek

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#1992338 9-Apr-2018 20:10

eracode: I think you’re misleading yourself here by referring to ‘our agent’. You might be dealing with him (even from before you saw this particular house) but he’s not your agent - he’s ‘an agent’ who works in the team which is selling this house for the vendor. There’s no distinction between the agent you’re dealing with and any other agent in that franchise. The agent you’re dealing with will not, and cannot, be looking after your best interests because they’re all working for the vendor. The agent you’re dealing with should not be mistaken for an ally.

I think he's said before that he's engaged this agent to help them look for properties and coincidentally he also works for the same franchise that the vendor's selling agent is in.

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