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

Forums › Home Workshop DIY › Offer on a house set to be auctioned. Agent compliance question.

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#1993051 11-Apr-2018 00:00

A bird in the hand.... You may find a better house before the auction, and the agent has lost you as a bidder at the auction . IMO the house is pretty standard and sounds expensive since it is only Hamilton and not that large. But the mad Auckland pricing seems to be heading down the island. You could tell the agent that you don’t want to get into a bidding war. My point is the agent shouldn’t take you for granted, or your offer. As others have suggested, you are best to talk to you own independent professional to help you with tactics, as it is all very tactical buying a house.

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#1993065 11-Apr-2018 06:47

You have 2 options.

Wait till auction and see what happens. Don't bid against vendor bids. (IMO one of the most unethical things, on par with phantom bidders)

Ask the vendor to respond with a counter offer on paper, on the S&P that you handed to them. If they say no, State you are happy to receive the counter offer up to ( give a verbal time, e.g. 1 week or 2 weeks before auction date).

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#1993070 11-Apr-2018 07:23

billgates: He meant it from the point of view that in the first week, they have had no real interest hence they cannot call the auction forward as I will be the only one there bidding. I am sure the listing agent has promised for more interest later and there might be more money if more interest. I told my agent before handing the offer that if it goes to auction and I am the only one there don’t expect the same amount as our offer. I will offer even less. I hope this is the case and the vendor can then have a conversation with listing agent afterwards whether they sell us the house or not..

I am surprised that it’s the listing agent that gets to present our offer and not the agent we are dealing with.

First week of the campaign should be a good week. The second tapers a bit usually as its last weeks new house on the market. Third week is usually slow

If there has been no interest yet, wait till the auction. Don't keep this on the boil. You are the only interested party, and you stop badgering the agents, this means you either are still interested. or less so, or moved on, but they dont know. That keeps the vendor worried, as you may end up being the only one. Your backing off means they will accept less. If you keep this boiling they will hold out for more, so put the cards on the table, upside down, and let them sweat.

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#1993074 11-Apr-2018 07:45

I agree that walking away is the best option to get the other party worried. But it's a bit hard on yourselves, but looking at the scenario, it may be the best thing to do at this stage.

Someone said what if REA is on geekzone. LOL, possible but unlikely. Unless they have a friend who's on GZ. But the internet is a common place nowadays, so I won't worry too much about it.

At the end of the day, the goal for vendor is - sell the house. GZ will not change the number of buyers (not just interested parties, but parties that have the cash). It IS possible that the goal of the vendor is not to sell house asap. Some vendors are able to wait for months to years. It is best to find out what their situation is.

Dratsab

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#1993084 11-Apr-2018 08:22

billgates: Seems odd that my agent cannot present the offer. Whats stopping the listing agent doing his absolute best to tell vendor to sway against the offer presented so they bring their own buyer and not split commission. My agent had advised to not put another pre auction offer (not that I am going to as price offered is very good) and just wait for auction day which is still 16 days away. Our offer is valid until tomorrow till 6pm so they might sleep on it and change their mind tomorrow.

Just bear in mind that people get auction fever in the heat of the moment and will bid to ridiculous amounts. I've seen it in action and always shake my head in disbelief at how stupid some people can be. Walking away should always be high on your list. [/suck eggs]

Batman: Wait till auction and see what happens. Don't bid against vendor bids. (IMO one of the most unethical things, on par with phantom bidders)

Definitely unethical if the rules aren't followed. @billgates - do you know what the reserve is or where it's currently being ballparked?

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#1993085 11-Apr-2018 08:28

Dratsab:

billgates: Seems odd that my agent cannot present the offer. Whats stopping the listing agent doing his absolute best to tell vendor to sway against the offer presented so they bring their own buyer and not split commission. My agent had advised to not put another pre auction offer (not that I am going to as price offered is very good) and just wait for auction day which is still 16 days away. Our offer is valid until tomorrow till 6pm so they might sleep on it and change their mind tomorrow.

Just bear in mind that people get auction fever in the heat of the moment and will bid to ridiculous amounts. I've seen it in action and always shake my head in disbelief at how stupid some people can be. Walking away should always be high on your list. [/suck eggs]

Batman: Wait till auction and see what happens. Don't bid against vendor bids. (IMO one of the most unethical things, on par with phantom bidders)

Definitely unethical if the rules aren't followed. @billgates - do you know what the reserve is or where it's currently being ballparked?

The reserve is secret, only the vendor and listing company know that

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#1993088 11-Apr-2018 08:38

Not losing company, listing agent. And auctioneer.

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#1993091 11-Apr-2018 08:52

Batman: Not losing company, listing agent. And auctioneer.

Correct, I was just being generic

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#1994120 11-Apr-2018 09:48

itxtme:

I get the feeling your annoyed that the agent is trying to get the most for the vendor, which is their legal obligation. You have to play the game like everyone else is. Your attempts to knock out the competition is fair game, but the rejection of that offer is equally fair.

This.

If you were the Vendor instead of the buyer, how would you be approaching this? Would you take this offer? (you need to be *brutally* honest with yourself here) I'd suggest your agent would be advising against it and for good reason. I also think you would listen to said agent.

I would suggest the listing agent has a brief on how keen you are and none of the tactics you are trying to employ will be new to them. They will have a sense you want the house, a lot, and they will know they can likely squeeze more from you. The only win in a situation like this, and it's actually pretty rare, is if you genuinely dont care if you win or lose it.

50K more for the agent isn't likely SIGNIFICANT money, but it's still money, but 50K for the vendor is likely a pretty penny.

If it's any consolation, MANY people have been in this situation before you. You aren't doing anything wrong per se, but I believe your expectations may need to be reset.

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#1994139 11-Apr-2018 10:08

In terms of the reserve price, except for vendor and listing agent no one else can find out for sure. One of my friends did however came up with a theory which may be true to find out the reserve price via trademe.

If you do a filter search on trademe and set a price range, you will see houses listed which fall under that price bracket. The houses ofcourse have no prices listed.

It's the 1st house in search link. Reserve price as per the looks like set at $1 million.

https://www.trademe.co.nz/browse/categoryattributesearchresults.aspx?134=14&135=16&136=974&153=&132=PROPERTY&122=0&122=0&49=1000000&49=1000000&29=House&123=0&123=0&search=1&sidebar=1&cid=5748&rptpath=350-5748-

https://www.trademe.co.nz/property/residential-property-for-sale/auction-1591380017.htm?rsqid=5bf8c0b9134c4676b7f0aa3c2adb7c97

Do whatever you want to do man.

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#1994142 11-Apr-2018 10:10

It is very rare for the reserve to be known before auction day. A smart agent won't ask until a few days before because then they can't answer the question from purchasers. There may talk of what the vendor wants but the reserve is only set with the auctioneer.

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#1994143 11-Apr-2018 10:11

What binds people to that? People change their minds all the time.

When we went to market, we set a reserve we wouldn't sell below, then when we saw how much interest, we upped it. We didn't go to auction though, perhaps the rules are slightly different? Is the reserve written down and are they legally obliged to sell if it's above that?

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#1994157 11-Apr-2018 10:22

Anything can happen. I have had an agent force me to sign an agreement to sell above a certain price. I was pissed off. If an agent makes me sign anything i will walk away. There are so many other agents out there, and the buyers will be exactly the same regardless of which agent you use, unless you are trying to sell to overseas buyers or out of town buyers. Don't forget the out of town buyers.

Legally speaking, if the auctioneers announces reserve is met then the house will sell. But it has nothing to do with whether the reserve is signed in concrete. They may sign they may not have signed. It won't matter to the auctioneer, his job it to hold the auction.

Also you cannot accept a bid, say reserve has not been met, and then say it has been met later on. It will have to be the next bid. They usually announce the reserve price which may or may not have changed when the auction comes to a stall very close to it.

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#1994172 11-Apr-2018 10:46

I set both our reserves at what I was happy with, not the lower, what I will put up with. So I knew that it probably wont reach reserve. Then I let the guy go to a wee room with the bidder and he went back and forth, and 44k later I accepted it. Thats what they are good at, getting the last cent. To the agency, that negotiation is worth all their commission. Its all or nothing. Same thing happened the last one we sold

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#1994316 11-Apr-2018 16:06

Batman:

I agree that walking away is the best option to get the other party worried. But it's a bit hard on yourselves, but looking at the scenario, it may be the best thing to do at this stage.

At the end of the day, the goal for vendor is - sell the house. GZ will not change the number of buyers (not just interested parties, but parties that have the cash). It IS possible that the goal of the vendor is not to sell house asap. Some vendors are able to wait for months to years. It is best to find out what their situation is.

I know a developer / builder who has literally had their house on the market for years, becuase the amount they want is higher than the market will pay. This is also in an easy to sell area., although the house they are selling isn't very nice. The thing is that they have also raised their price as the market has risen too.

I think the thing is not to ever get to emotionally attached to any house. There is always another house. Agents want people to get emotionally attached, but that is't in the buyers best interest.

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