Goodevening,
Could anyone please tell me what the law is regarding Agents presenting offers to vendors.
I made an offer on a property today and the real estate agent refused to take it. My offer was rather low ($197) compared to the asking price ($287) but I believe after extensive research that my price was very close to fair and I made it clear to the agent that the vendors could place a counter offer as I would be willing to negotiate on price and suitable terms for the vendor. The property has been on the market now for 4 months and I am sure that this is because it is way overpriced compared to comparitive properties in the same area. I happen to know people who know the vendors and know that the vendors are anxious to sell and are looking for any offer. They have purchased elsewhere and the house has been sitting vacant for a couple of months costing them money.
Does the real estate agent, who by the way told me today that the property was overpriced by at least $40,000 hence getting closer to my initial asking price, have to present all offers??
I was under the impression that they did have to present all offers and that it was up to the vendor to say yes or no.Thanks
Felicity [?]I believe that the agent is obligated to present all offers. Not sure if it’s the same in all states. A quick call to the REI in your state would clear that up.
If the answer is yes, then call the agency and speak to the principal and inform them that one of their agents has refused to present an offer to their vendor. Unless they are that agent, it usually gets them going.
Cheers
MelThanks Mel,
That is what I thought as well. The agent told me today that he had asked the principle and that the answer was no. I plan to ring the REIV (I am in Victoria) in the morning as they shut at 4.00 and I missed them this afternoon. Just thought I would ask some advice in the meantime.
Thanks again
FelicityHi Felicity,
I think the Agent is bound by Law to submit all offers to the vendor,I would be inclined to put an offer in writing and present this to the Agent, If the Agent declines to forward your offer to the vendor then contact the vendor direct with your offer, Good luck,
Regards
Steven
Mortgage Broker[email protected]
http://www.mobilemortgagemarket.com.au
Ph:1800 820 500
VictoriaPLEASE note comments made should NOT be taken as specific taxation, financial, legal or investment advice. Please seek professional, specific advice.
Steven said what I was about to add. When/if you contact the vendor, let them know that the agent refused to present the offer. They might begin to wonder how many other offers have not been presented.
Cheers
MelIt`s understandable he is a little annoyed and looking out for the sellers best interest.
I would guess you have been misinformed regarding the vendors being overly anxious to accept offers.
If the house is overpriced by that kind of margin and they needed to sell, surely they would drop the listed price in order to attract more buyers.
Most if not all sellers would be extremely angry about such a low offer imo.[
]What I don’t understand is how it is possible for there to be such a discrepancy between what you Felicity consider the correct market value to be and what is the asking price.
I suggest that it may be a good idea to ask the agent whether he can show you some recent comparable sales to confirm the proper value of this property.
Is the agent aware that you have bought several properties already in the recent past ?
Pisces
Hi Pisces
I think I know why the property is priced as it is.
The current listing agent is not the original agent. The original listing agent sold the vendors the house they have moved into promising they would get an inflated price back on their old home. This obviously did not happen as the house is still on the market. 4 months later the vendors are now with their 3rd agent (I have watched the ads)and still having no luck but still under the belief that their property is worth more than it actually is because the original agent assured them that this was the case.
I have done extensive research on the sales in surrounding streets in fact I missed out on a great property in similar condition 2 streets over that was listed at $220 and sold last October for only $170.Yes I did inform the agent that my business partner and I owned several properties within the immediate area. Unfortunatly it did not convince him to present my offer.
Regards
Felicity>>Unfortunatly it did not convince him to present my offer.<<
In that case he is in neglect by breaching his duty of care.
Perhaps the owners have instructed him to not come back with any offer less than xyz dollars ?
That would make some sense out of the story.Did he actually show you through the property Felicity ?
Pisces
I dont believe agents are under any obligation to present offers.
From a sellers perspective I would be pissed if the agents kept coming to me with low ball offers. Do your job better I would say.
From an agents perspective (and Jenman alludes to this) agents like to tell the sellers what all offers are. Even low ball ones. This is one way agents can condition sellers into selling for a lower price.
At the end of the day – the market price as evidenced by recent sales in the area and the economic conditions of the seller (eg. I need to sell now as I bought another property) determine the sale price.
Felicity
If you get a copy of the new regulations for real estate agents from consumer affairs in Victoria it quite clearly specifies that agents MUST present any and all offers that are made to the vendors. I posted the contact details in the Heads Up forum about 2 weeks ago. Its a free document, pretty easy to read and unbiased.
An agent will often say when one makes an offer “Only two days ago someone made an offer considerably higher than yours and the owner didn’t accept it”.
Often that isn’t true and he is only saying this to coax a higher offer out of you.
On the other hand the agent may quite possibly be telling the truth and if you don’t believe him (as I am inclined to do as a matter of course) one may well be missing out on that particular property (as has happened to me on a few occasions).
Personally I would be reluctant to make an offer in writing as an unscrupulous (?) agent may show my written offer to another buyer in order to get a higher offer from that person.
It means that one has been ‘used’.
I do not see this as an unfair tactic by the way.
How do others approach that situation ?
One particular obstacle which I have sometimes run into (mostly I buy without an agent) is when the vendor tells me he or she will discuss it with their solicitor. That is more likely than not just an excuse (a blatant lie if you like to call it that).
It really means that we haven’t been succesful as the owner obviously thinks our offer is too low.
In my opinion the reason the vendor goes about it that way is because they feel uncomfortable to say ‘No’.
Any comments anyone ?
Pisces
markpatric,
“It`s understandable he is a little annoyed and looking out for the sellers best interest.”
Yes but the agent and you are both pre-judging what the seller’s best interest is without giving them the chance to consider the offer themselves. The way I see it, if the vendor doesn’t like the offer, then it’s either ‘reject’, ‘counter’ (or accept of course.)
‘Most if not all sellers would be extremely angry about such a low offer imo’
again, the only people who can really say if the vendors will be angry or not is the vendors.
i once offered 70 percent of asking price, after researching that it *was* 2K under what would have been a fair market price based on similar properties in the price range. After an outright rejection two weeks went by, and then a counter offer of 86 percent of asking price. I then came up to the real price I’d worked out the house should be (7o percent of asking price) and was accepted.
I think if you know what something is worth and what you are prepared to pay, you will either get it accepted or not. I thought I was rejected and that was fine, I’d walked away from the deal because at anything more than what I paid it wasn’t going to work out. It’s not a matter of being ‘angry’ or not, it’s just when buyers meet sellers and try and find a fair mid-point.
You will never really know if the agent submitted the offer. Often it is in the way it is worded that influences the vendor. For example the agent can mention in passing:
“Oh and I had a ridiculous offer the other day of $XXX and we both know you will get more than that. Couple more folks are looking tomorrow and I am sure it will only be another week or so before we get full asking price.”
Whereas you would prefer something like:
“Well we finally have a serious buyer looking at the property. He has offered $xxxx. I know it is less than you wanted but the market seems to have flattened out somewhat. I really think you should seriously consider this offer.”
Some food for thought.
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
That post of yours raises the question as to how we can influence the agent to use the second rather than the first of these communications to the vendor.
Pisces
I am absolutely convinced that to buy well you need to develop a strong relationship with a few agents. By all means contact more but take the time to cultivate a few that you get along well with.
This way you will know what is coming on the market. Remember that it takes a few days for a property to be listed and the address wont go to the general public until the agents agreement is signed to prevent people from negotiating directly before the comission is protected.
If an agent trusts you he will let you know what is coming on before it does. In addition he will know your style and also that whilst you make low offers you are serious. He will communicate this to the vendor and who knows maybe the need for a sale is urgent? Many low ballers have a shotgun approach and make the offer before they have even thought seriously, just to test the water so to speak.
What do you think?
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Felicity
All I can say is, to hell with the agent. Bypass them and present your offer to the vendor.
Kim
It may cause problems in that likely the agent may be entitled to commission.
That was the reason for me asking you whether you had inspected the property together with the agent.
Normally there is a clause on the contract which states that you, the buyer, hasn’t been introduced to the property by any agent other than the agent mentioned on the contract.
There could be all kind of complications with the vendor being taken to court by the agent and the vendor looking at you to reimburse them for the claimed commission.
Pisces
Pisces, in this instance I wouldn’t think that cutting the agent out was the intention. Making sure the offer has been submitted is fine, but you as the buyer need to inform the seller that you are only going direct to them as the agent refused. Implicit in this is that you were in fact introduced by the agent, and therefore the commission is still to be paid.
Most of the contracts I have seen specify that even if you were to sell it to your friend, you would still have to pay the agent’s commission in a exclusive agency agreement.
Cheers
MelCouple of random thoughts.
I think that all offers must legally be presented to the vendors.
Some vendors have unrealistic ambitions, or try to hold out, or have no reason to sell.
I would contact the vendor (get a contract, and then ring telstra), and make a polite phone call. “Good evening, Mrs Jones, Frank from franks real estate showed me through your lovely home last wednesday. I was just wondering if you could clarify if all of the lovely curtains are staying with the house, or if you will be taking them with you. Lead into a conversation about their pride and joy. Tell them about how the garden will bring you so much joy in taking care of it. Then tell them that you would love to increase your offer, but the bank will not lend you anymore.
If their answer is “247 grand, not a cent less), then there is your answer, walk away, there is always another deal around the corner.
If their answer is ” we havent had any offers”, then it is time to ask the vendor what they want for the property to have a signed contract tonight.
BTW, REA will always get paid. They will have a sole agency aggreement, or will say that you were introduced by them.
Sounds like you have a dodgy agent and/or unrealistic unmotivated vendors, and will probably have to move on.
Would be quite handy to keep driving by, and checking out the new signs, etc., but 3 agents? they are not desperate, but probably have no reason to sell NOW
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