Hi there.
Question about whether real estate agents make up bogus ‘other offers’ to force someone to offer more…???
I have my suspicions and here’s why….In the past few months I have put offers in on three properties.
One of the latest ones has been for sale for at least 2 months, (when I first spotted it) if not more – because I recently discovered it listed on another web-site listed for almost double what it’s now listed at which makes me think that it’s been on the market for ages. Anyway, the minute I put an offer in, after several conversations where the agent told me ‘we’ve had a little interest but no offers’, suddenly, there’s an offer that’s for more than my offer….and ‘if I go up a bit’, but she couldn’t divulge the amount of the supposed other offer of course, ‘I might be in’.Then today I put an offer in on another place. An area where the houses are selling under GV. Well under. The agent told me the seller would accept a whopping 25 percent less than the listed price, so I put my offer in with ‘Bill’ on that basis. Within 30 minutes I had an email from ‘Peter’ telling me that they had had another offer on the property I was interested in and to get in contact.
I smell a rat. Is this what they do, make up bogus offers to get more out of me? is it legal for them to do that? how can I discover if they are telling the truth?
It also happened to me with the very first house I offered on.
I didn’t buy that one in the end because the building report said ‘lemon’, but the ‘other offer’ materialised within hours that time too.Interested to hear what people think.
BTW these are all NZ properties.cheers-
Barbara Griffincheers-
BarbMichael & Kaye,
Thats a great strategy. I just want to ask you. I have been trying to buy a property for the past 4-5 months but I always get outbidded.
Just a question regarding putting in offers. How do I get a print of multiple offers?
And in order to get the contract of sale, a section 32, dont you need to make a formal offer 1st? In order for me to get the COS, I always had to make a formal offer through the agent which required me to pay a small fee. Or is this agent dependant?
Regards
Vinh
Michael & Kaye,
So you write up your letter of offer and give it to them? I never knew you can do that?
I always had to sign an offer ‘form’ provided by the agent to make a VALID offer.
I think I’m still too green [
]Thanks again
Vinh
[
]
Michael & Kaye,
You guys are sensational!
What an art, such technique. You cut straight through the hoo-ha.
Even Jenman would be impressed.
which reminds me…
We had a Jenman agent knock on our door recently trying to drum up onterest in a local place they were trying to sell.
During the course of the conversation he told me about a property he sold recently where the buyer paid $280K, $30K more than the seller was asking, even though there were no other interested parties. The technique used by the Jenman guy was to mention that there might be another buyer interested, so give it your best shot, your walk-away price, which apparently the buyers did. According to the agent the buyers were wrapped, no pun intended.
Anyway, Michael and Kaye, I’ll certainly be employing your strategies when I come to offer on my first IP.
Thanks for sharing.
Andrew ScottMinimogul
yes it gets frustrating but don’t give up have a listen to this one,
client of mine finds house and tells me where it is so i can inspect and make an offer but guess what there’s another offer been put in today so you need to put your offer in today or you’ll miss out (oh really!)
well unfortunately i can’t get out there today so we’ll have to miss out
i call the agent the next day to arrange an inspection he still try’s to stick to his guns and go along with the story that there’s another offer on the table (fine by me)
call the agent at the end of the day still claiming there’s another offer on the table, young gun real estate agent doesn’t realise you can’t bull***t a bull***tter I don’t belive him and tell him
8pm that night i drive 35mins out to the property and knock on the front door and ask the vendor if the house is still for sale GUESS WHAT!!!! yeah house still for sale no offers in
well vendor didn’t want to deal with me (I found out later Real Estate agent was vendors in-law)
received a phone call from agent whilst driving home well the abuse was hilarious I’m sure REIV would be proudwhile this is all going on my client is wondering and wants to know whats happening
but there not all like that some agents are very helpful and i’m trying to work closely with them
Regards
Gary
__________________________________________________
My mission is to enthusiastically inspire other people to become greater and more powerful today than they were yesterday
__________________________________________________Real estates and used car salesmen have the same parents.
I am goingto simply cut the RE out of teh entire equation, they are blood sucking parasites that screw you for as much as they can to boosttheir already undeserved over inflated commision.
Go see the seller find out when the contract to sell expires then offer private sale.
Real estates, yeah right UNreal estates they should be.
Forgot when you go to auction tell no one your max bid it is a big conspiricy. I know of a RE agent that has his children attend auctions and instructs them to bid to 2K under the reserve.
One was on auction squad he was the high bidder but under the reserve when it was passed in he took off. He didn’t want the place he was just there to push it to the sale price so the agent would get his commission. Of course you can’t proove this but it does happen, ALOT.
[^] To Darryn with a ‘y’
Then on the other hand you have real estate agents like where I go shopping in my own backyard. They have seriously worked overtime to help me out especially on my latest purchase, they are really really busy but still find the time to help. Don’t get me wrong, I have come across a few bad eggs in my time but you know what I do if I still want to make a purchase through that office, either ask for another agent or ask for the head honcho themself – this one works!!! Hope this can help and happy hunting.
Sue’s.Hello all,
It comes down to finding somebody with integrity. Avoiding the agents that tell you they have integrity is a good start.
If the agent smells… don’t deal with them. Find somebody else
Marco
Minimogul
Just a quick question – Is this your first Investment Property?
Many of the strategies mentioned are if you happen to have a few IPs already and the pressure is off to get the runs on the board.
I sometimes encounter pressure tactics by agents such as putting an offer in immediately but I always state that I have to do my due diligence and it will take a while. If my offer price is tried to be increased I just state that my offer stands. I either get the property or I don’t – I know that there is always another deal.
Don’t get discouraged. It took us 7-8 months of looking to do our first IP deal and then 2 weeks later we did our second.
Thanks so much to everyone that replied. Actually, one of the offers I had thought was bogus ‘that had come in at the last minute on the property you were interested in’ was my own. I’d been emailing ‘Peter’, but put an offer in with ‘Bill’…little did I know (I know now) they work as individuals even at the same office…my offer was rejected on that one….
but the other one turned out good..offer accepted and am now waiting on satisfactory builder’s report….as for the other offer on that house, which may or may not have been bogus, the price had just been reduced so perhaps that was legit. I’m sure RE agents do try and give you the impression that there are other people interested though, even if there aren’t.
Interesting what you say about the numbers, and the way you have many offers prepared.
I do the numbers too of course based on the return vs purchase price. If that works then I figure I can only improve on the deal by negotiating. But I also find out what the actual price sold versus GV ratio is for the area, because a lot of times what you should be paying is way less than what it’s listed for.
cheers-
MiniDarryn with a y
have you heard of the saying ” What goes around , comes around ” ? With an attitude like that, your sure to find out
l notice your quite happy to let the Agent find the listings for you. lve got another one,”sounds like the pot calling the kettle black “
MITCH
just a late follow up to this post.
been chatting offline with a fellow investor who had the exact story about a (possibly bogus) offer coming in at the last minute with the exact same real estate agent, code name *rosie*
so if you ever deal with a real-estate agent called (code-name) *rosie* and she hits you with some supposed counter-offer, call the bluff, we reckon she’s bluffing.I will post the crack to this code in a secret email.
secret email to secret investors:
the code: reverse the order of the letters, and then reverse the order of the letters
*end of secret transmission*
g’day – it is my experience that real estate agents will try any ‘technique’ to get a better price for their principals ie the vendor. being economical with the truth is a standard negotitaition skill.
to be a good negotiator you need a healthy dose of paranoia and cynisism. its always important to ask yourself, who is making money from this deal and what type of techniques could they use to push up the price.
a few tips
– make offers for a short as time as is reasonably possible. gives you a get out if you get cold feet. alternatively if the vendor comes back quickly within time – you know you have a ‘live’ one!!!!
the agent will push for a long reply time so that you can have time to get ’emotionally attached’ to the property.– always make offers with ‘subjects’ ie subject to building inspection, finance etc. always clse the subject ‘to buyers approval’. free insurance!
– if your making offers on multiple places in the same area, make the agent accountable. tell him you have another property via another agent and youre giving him the first shot.
– most important rule to negotiation is to understand that if you miss out on the property there will always be another one. this will stop you from exceding your limit and give the agent and the vendor the vibe that you wont be traded beyond your expectations.
– another important one is that if you spot a great deal – dont stuff around and be cute. buy it quickly cause the chances are someone else will come in and spot the same thing.
cheers
Hi Minimogul,
great topic. very funny secret post.
And to Michael, what a great system you have worked out thank you very much for sharing it.
We were recently looking at a house and had spoken a few times with the agent and after a couple of weeks the agent called us and said they have had an offer of 450K but if you offer 450K and let them rent it from you they will sell to you. Well in my opinion its not worth 450K and the place is a tip when they own it so not going to be a tennant of ours. and three weeks later -still ‘for sale’! On a lighter note. I do agree we need to find good agents and work with them. It must be hard when there are so many bad generalisations about their profession.
LynneAll very good advice guys.
I guess the thing to remember is that WE have the power! [8D]
Hi guys,
I’m pleased to say that I’ve benn lucky enough to find several honest agents in the area that I’m buying in. I’ve just returned from 3 days there and I’m happy to say that the only real tactic used, was applying a little pressure to get an offer on the table(the agent suggested the amount which was substansially lower than I was going to offer).
I also got invited around to one agents house and spent hours discussing the market in the region over the last 20 years or so, over numerous cups of tea (it was very informative[]), and strengthened relationships with a few others.All in all it was a great few days, that taught me alot about how agents minds work, and helped to gain me a few more loyal members of my team. When things are as crazy as they are up there at the moment it helps to have an agent who wants to sell to you, in preference to others![
]There are good agents out there, and they will work hard for you if they think your fair dinkum and not just pulling thier chain! Tell them what you want and why, if they tell you your expectations are too high, be able to explain why they’re not! I will get you a long way!
Cheers,
Scott S“Aim for the stars and you’ll shoot the top of the telegraph pole. Aim for the top of the telegraph pole and you’ll shoot yourself in the foot!”
-anonHi Team,
Had similar experience on Sunshine Coast. We have learnt from experience now that we should have put a time limit on the offer. Put an offer in in the morning only to have Agent come back that evening telling us there was another offer amd we would have to go through this multi offer rigmarole. Didn’t hear anything next morning so secured another unit with another agent we felt more comfortable with (cost us more $s though). We contacted the first agent to be told he was still waiting for a response from the owner and then finally called to say we had missed out – funny though, it appears the same unit is still being advertised on the internet, four weeks later. Also had another bad experience when we found a house we liked. We looked at it on Monday at $430,000, then called the following morning to be told it had dropped in price by $30,000 so we asked for another inspection. Time for inspection was arranged but while talking to the Agent, she indicated she had some interest in buying the property herself but her bank manager had told her she didn’t have enough cash. Ten minutes before our inspection was due she called back to say the property had been sold and the contract was in the process of being signed. We asked if we could also have an opportunity to put in an offer but she carried on about the privacy act and how she could be fined $20k if she gave out any information.
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