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

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#1991311 7-Apr-2018 23:27

I was in the process of building but gave up 2 years ago after builder decided to up the final contract price by $225k which was story on its own. I updated my build thread with that post. I still have that land and as another user mentioned in this thread, the agents don’t know this yet but I will be selling the land through with them after purchasing the house. The buyer also becomes the seller aka good service and you get more business as it will help fund the purchase of the house for us. We would rather buy a house than go through the trouble of even thinking about building after last experience.

My offers have been unconditional and will be for the 3rd house pick as well with the agent that is helping us who so far has been very helpful and great to deal with. I don’t want to pour water over 3rd agents hard work and effort and pass on the 3rd house which has both me and my wife very happy to think about living in.

I will however be lodging a complaint with the previous auctioned house we bidded on with the branch manager of franchise company and if fobbed off, go straight to REAA complaints. The same agent has not replied with a courtesy email about the 2nd offer I made on the house either and this was 3 days ago.

Do whatever you want to do man.

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Dial111

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#1991319 8-Apr-2018 00:50

Sorry to hear you had a bad experience building... currently in the process of building now and we definitely did our due diligence and made sure our contract is water tight with the builder.

sir1963

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#1991383 8-Apr-2018 11:14

Dial111: When we bought our first house we tried auction once... never again. I'm pretty sure they have to present the offer and if accepted that's where reserve is set and auction comes forward, maybe wrong.

Being on both sides buyer and vendor, I can't say many nice things about agents.

Since selling and back on the market again we presented an offer (deadline private treaty) to an agent who told us he will present the offer but it was way under what he thought the house would go for, we offered 10k over what the vendor was asking for. He tried to push us to our max budget which was another 50k, so 60k over asking with his logic being we should put our best offer forward... that was my best offer for what I thought the house was worth.

Wife could see I was getting angry so she called it at what we offered and no more. He tried again so I got up and ripped the S&P up and told him we're not that desperate so shove it, and walked out.

House sold for 30k under asking the next day.

We were selling our house privately.

Had an estate agent come and ask if he could show some people through.

I figured, sure , why not.

The insisted I had to sign a contract so I would be covered by their insurance. They were NOT happy when I wrote on it "For viewing only" and put a line through the commission section.

The came back and said their client would like to make an offer, so we negotiated. It got to a price I was willing to accept.

I the said I would only pay them $2000 commission , ie over $1000/hr. They said they would not accept anything less than $10,000.

I laughed at them, said no way, my offer was MORE than generous. Ended up showing them to the door.

PhantomNVD

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#1991387 8-Apr-2018 11:22

networkn:
Weren't you building a new home recently? Perhaps I was mistaken. Irrelevant, but was just curious.

@networkn yes, the deal I was talking about was the purchase of the land I then built on. Interestingly it was Ray White as mentioned above too🤔

eracode

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#1991388 8-Apr-2018 11:23

@sir1963

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

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

Batman

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#1991395 8-Apr-2018 12:42

sir1963:
Dial111: When we bought our first house we tried auction once... never again. I'm pretty sure they have to present the offer and if accepted that's where reserve is set and auction comes forward, maybe wrong.

Being on both sides buyer and vendor, I can't say many nice things about agents.

Since selling and back on the market again we presented an offer (deadline private treaty) to an agent who told us he will present the offer but it was way under what he thought the house would go for, we offered 10k over what the vendor was asking for. He tried to push us to our max budget which was another 50k, so 60k over asking with his logic being we should put our best offer forward... that was my best offer for what I thought the house was worth.

Wife could see I was getting angry so she called it at what we offered and no more. He tried again so I got up and ripped the S&P up and told him we're not that desperate so shove it, and walked out.

House sold for 30k under asking the next day.

We were selling our house privately.

Had an estate agent come and ask if he could show some people through.

I figured, sure , why not.

The insisted I had to sign a contract so I would be covered by their insurance. They were NOT happy when I wrote on it "For viewing only" and put a line through the commission section.

The came back and said their client would like to make an offer, so we negotiated. It got to a price I was willing to accept.

I the said I would only pay them $2000 commission , ie over $1000/hr. They said they would not accept anything less than $10,000.

I laughed at them, said no way, my offer was MORE than generous. Ended up showing them to the door.

So they wanted $10,000 per hour. Wow. I went to university for the wrong job.

Batman

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#1991396 8-Apr-2018 12:42

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.

plod

272 posts

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#1991400 8-Apr-2018 13:07

itxtme:
I think you should consider the fact that your offer is too low. The auction example you gave would have likely had the vendor in the room, so they would have seen you bid against the offer. If you truly were the only one bidding why did you bid at all? Better off negotiating after the auction.

Agent want to turn over sales because it equals dollars for them. 20k sales difference means little to the agent, so them saying they wont present it I think speaks more about the amount you offered, than anything else.

while this maybe correct, this whole process is like throwing a dart with your opposite hand. Unless vendors are going to give some written guides or set price they should expect offers outside there expectations. It’s not good enough for the agent to say between prices. BEO is acceptable to me

mattwnz

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#1991404 8-Apr-2018 13:43

As the vast majority of agents in NZ are sellers agents, it is very much geared for sellers, and getting high prices. IMO if we had more buyers agents, the price of houses may not have accelerated as much as they have, due to stronger negotiation from the buyers side. You do have to remember when dealing with agents, that they are pros at what they do. Essentially they are working for themselves to sell a house as quickly as possible, so they can move onto the next one, but have a responsibility to the seller to get the best price they can. Unless you commission an agents as a buyer, agents will not be there to help a buyer try and get a house for the best price. If you watch location, the hosts on that show are essentially buyer agents, and will help someone buy, and IMO many people need that.

mattwnz

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#1991406 8-Apr-2018 13:47

eracode: Because the vendor has signed an agency agreement with the agent, the vendor cannot deal directly with you - nor can you deal directly with the vendor. Everything needs to go through the agent. Sorry but putting an informal offer on a piece of paper into their letterbox isn’t actually going to work or achieve anything. It may be seen as being more provocative than doing it the correct way - through the agent (unfortunately).

If the vendor does like your informal offer, all that will happen is that the agent will need to formalise the offer in an Agreement for Sale and Purchase and then you’re back at Step 1.

As a buyer has zero contract with any agents, what can stop a buyer putting an envelope with a price in the sellersletter box? At the end of the day, the agent just wants their commission, so if the seller has employed an agent, they would pay the agent the commission they would have lost. Although it can get tricky for the seller, especially if they claim that the agent didn’t introduce the buyer. IMO that is one reason agents have open homes, and make everyone visiting sign a book, so they have proof that they had interaction with all interested parties, beucase if you are an interested party, would would likely go to an open home.

mattwnz

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#1991407 8-Apr-2018 13:52

eracode: It’s simple - in an auction situation, if a prospective purchaser wants to make an unconditional offer prior to the auction date, the agent is required to (i.e. must) present it to the vendor - even if it’s a low-ball or unrealistic offer. The agent can’t refuse to present the offer - which is made in writing by way of an Agreement for Sale and Purchase signed by the prospective purchaser.

If the vendor rejects the offer, that’s the end of it. If the vendor wants to accept it, the auction is brought forward (to give other prospective purchasers who have seen the property a chance to bid) and will usually be held within 2-3 days. The offer that’s on the table will be the reserve price and the opening bid at the early auction.

If that is the case, why would anyone put in an early offer?. That only helps the buyer get a better price IMO, as it creates the perception to other buyers that it could go for a high price. Also if they have to pull the auction forward, then the statement ‘unless sold prior’ isn’t correct, as it is still having to be sold at auction.

sir1963

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#1991408 8-Apr-2018 14:15

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?

Ended up using a cheaper agent (cost us $5,000), but we got a better price.

Out of the Lawyers , building inspectors, and realestate agents, the estate agent is the least qualified, least at risk, and makes the most money.

sir1963

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#1991411 8-Apr-2018 14:32

Batman:
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.

mattwnz

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#1991419 8-Apr-2018 14:53

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.

eracode

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#1991421 8-Apr-2018 14:57

mattwnz:
eracode: It’s simple - in an auction situation, if a prospective purchaser wants to make an unconditional offer prior to the auction date, the agent is required to (i.e. must) present it to the vendor - even if it’s a low-ball or unrealistic offer. The agent can’t refuse to present the offer - which is made in writing by way of an Agreement for Sale and Purchase signed by the prospective purchaser.

If the vendor rejects the offer, that’s the end of it. If the vendor wants to accept it, the auction is brought forward (to give other prospective purchasers who have seen the property a chance to bid) and will usually be held within 2-3 days. The offer that’s on the table will be the reserve price and the opening bid at the early auction.

If that is the case, why would anyone put in an early offer?. That only helps the buyer get a better price IMO, as it creates the perception to other buyers that it could go for a high price. Also if they have to pull the auction forward, then the statement ‘unless sold prior’ isn’t correct, as it is still having to be sold at auction.

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.

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

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