- If I was a REA, I would be “dilly dallying” with every bum on the street if I thought that I could get a better price for the property- that is part of acting in an ethical and professional manner.
Yeah right Munjy…right up until the point that the principal or the senior agent you were working for immediately told you to “Pull your finger out and close the deal or you can find yourself another job.” Bosses don’t pay their workers to ‘dilly-dally’…and ethics and mannerisms go right out the window when cash is on the table. This is the reality of being a REA.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Actually Dazz, it is right. I am currently in the health care industry and not everything I do makes money. Sometimes I make a loss, because it is in the best interests of my patients. That is not to say my intention is to lose money, but somethings are out of my control and if necessary, I will put in extra effort to reach the appropriate standard.
That is the reality of having high ethical standards.
Not asking a buyer who has previously made an offer if he can up his offer is NOT acting in your clients best interests, unless there are other circumstances (like vendor needs to sell quickly, etc).
Regards,
Mun
With a tough, no nonsense, “show me the money” type of principal, that type of attitude wouldn’t last 5 minutes in the cut throat REA game.
If you thought it was OK to lose money, then you’d definitely be run off and be looking for another job. They (successful REA’a) simply won’t put up with that.
Ethics don’t even get a look in. Just look at the REI’s farcical charter, which isn’t legally enforceable. Ethics may cut it in your particular industry, but in the REA world, cash is king, ethics are for unemployed philosophers.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Maybe I am being naive.
However, getting a better price for your vendor, even if it means a delay of a phone call to a competeing bidder, means more commission for your agency and also for you. Even if on a per hr basis it may not mean that you are at maximum efficency. Also, in terms of reputation, word of mouth referrals are important in all businesses.
But I will openly admit that I do not know the REA game very thoroughly. I know only a couple well. My neighbour and a close friend. I’m sure they would not tell me if/when they act unethically, even though they admit how tough their business is.
In response Dazz, I don’t think it’s OK to lose money. But if such a situation presents, I consider it a business expense, that hopefully will yield goodwill in the future. Almost like advertising as it were.
Munjy
I am always losing money by not considering each client as a sale to be closed at all costs – I imagine that this is a perk of being self employed. I doubt any boss would tolerate hearing me tell clients to stay with their current lender!
This is a luxury I can allow myself but it probably does engender goodwill and referrals.
I would be a terrible Real Estate Agent – I did the training course two years ago and ended up discussing the institutionalised cheating with the head of TAFE afterwards. He denied it all but they were kind enough to refund my course fees as a “goodwill” gesture. The other students were just pleased that it was attendance only!
This is a great thread here. Some of us are a little blinkered about the real world of Real Estate. The friendly agent doing his best for you is merely follwing a scripted sales routine that has a number of strategies to “overcome objections” and “close sales” etc. We all need to realise that as a buyer or a seller we are merely following their sheet of music. A sheet designed for the best outcome for the Office!
Cheers,
Simon Macks
Residential and Commercial Finance 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.
I understand that we all want to buy something for less then market value its human nature. However let me tell you why i dont stuff around
1. Property 1 5 unit site i bought at full ask 80k i could have sold it for 125k the day after i bought it however i decided to develop it myself and have already sold 1 unit off the plan. we will end up with a 300k profit
2. Property 2 12 unit site plus childcare i looked at today we will pay the full ask and perhaps 15k above to get a few extra months settlement. all going well we will make 1 mill off this site why would we risk stuffing around and give someone else the opportunity to buy it.
3. Property 3 I sold a client a property where he can cut it up into 5 blocks plus keep the home
the deal works like this
purchase $542500 (100k more then the local agents said it was worth)
development costs 100K
total $642500
He will sell 5 blocks @ $140K = $700K
Home will fetch 270K
total 970k less gst less agents fees etc
He paid full ask and got a 12 month settlement and the blocks will be sold before settlement
Maybe we are not seasoned investors or very smart purchasers. we just look at it from a different perspective
Note properties 1&2 are bought from other agents not through my office.
each to their own i guess
What that agent did is absolutely disgusting. I would speak to the owner of the real estate agency and try to get him fired. The vendor who you spoke to sounds like a complete idiot. I would have gone crazy if an agent did that to me. Absolutely crazy. He would not be getting a single cent and I would be suing him for negligence. In my opinion, if you have the time, you should take the matter further and get him fired. Also give his name to Neil Jenman and write an email to him. It is actually obtaining a financial advantage by deception, misleading and deceptive conduct and it is totally unconscionable and unconscientious behaviour. The agent deserves to be shot. As for your offer, it was totally reasonable in the circumstances and for someone to expect you to make your absolute final offer from the beginning is being unrealistic with regard to how the human mind and human nature works with regard to large purchases. If you give me the agents details I will definitely speak to his boss myself. It is a terrible story and I am very sorry that this happened to you. Good luck with future investing.
Originally posted by munjy:Maybe I am being naive.
However, getting a better price for your vendor, even if it means a delay of a phone call to a competeing bidder, means more commission for your agency and also for you.
I would agree …you are being naive….if an agent gets an extra $5000 on a sale that is at best an extra $100 in commision for the agency and probably $40 for them BUT they risk losing the sale altogther…the risk return is skewed against them.
If I was the agency principal and I saw sales being lost because one of my agents was “trying to look after the coustomer’s best interets” in this manner I would come in swinging a baseball bat.
You do have to look at the situation from all angles before making an informed decision, either way why are we so bothered with that property alone where there is so much on offer out there, not short of properties for sale..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.au“…why are we so bothered with that property alone where there is so much on offer out there, not short of properties for sale..”
True, Roy, that there are plenty of properties for sale.
But the point of Nats12 I think is, that s/he offered a reasonable price for this property and then was not given a smurfin’ chance to negotiate; so the agent created a lose/lose situation for both Nats12 and the vendor. S/he wanted to hear others’ opinions about this.
Celivia
I understand, that’s why we learn from our mistakes, if I was Nat, I’d confront that agentjustto get it off my chest and perhaps hear his side of the story.
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auOriginally posted by Celivia:“…why are we so bothered with that property alone where there is so much on offer out there, not short of properties for sale..”
True, Roy, that there are plenty of properties for sale.
But the point of Nats12 I think is, that s/he offered a reasonable price for this property and then was not given a smurfin’ chance to negotiate; so the agent created a lose/lose situation for both Nats12 and the vendor. S/he wanted to hear others’ opinions about this.
Celivia
gees wish that was the situation out West… buyers are fighting over them
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
Honestly, I think it’s great that so many people have different views. I can *almost* feel my mind broadening!
For the people who feel that NAT12 should have offered a higher price, or, that it’s understandable/forgivable that a REA shuns other buyers for a quick sale, how would they feel if they were the vendor who NAT12 approached with a higher offer?
Would you still be so understanding of the REA? Would you still feel that the buyer in front of you deserved to miss out on the property, and you on the extra $10k?
Couldn’t describe how I’d feel without swearing.
Great thread!
Munjy
Originally posted by munjy:Honestly, I think it’s great that so many people have different views. I can *almost* feel my mind broadening!
For the people who feel that NAT12 should have offered a higher price, or, that it’s understandable/forgivable that a REA shuns other buyers for a quick sale, how would they feel if they were the vendor who NAT12 approached with a higher offer?
Would you still be so understanding of the REA? Would you still feel that the buyer in front of you deserved to miss out on the property, and you on the extra $10k?
Couldn’t describe how I’d feel without swearing.
Great thread!
Munjy
Hi Munjy,
Ok I will put myself in the seat of the vendor as you suggest.
1. Every day I don’t sell this house is extra house payments that I’m making for nothing.[angry2]
2. Every day I don’t sell this house is another day that I can’t buy the other house I have my eye on.[hmm]
3. Every day I don’t sell this house is one more day of stress waiting for a buyer to make a decent offer.[evil5]
4. Every day I don’t sell this house is one more day I’m paying advertising costs to Real Estate Agent.[grrr]
5. Every day I don’t sell this house is one more day I have to have my house open for more inspections.[jealous]
To tell you the truth If I was in the seat of the vendor I would get quite annoyed and insulted at low ball offers for my house and wish that people would stop wasting my time.
If, later I was rung by the person who offered me the low ball price and they told me that they would have paid me more if the real estate agent had of given me the chance, I would tell them that hindsight is great but how was I to know what your final price would be.
I would then tell them that I was happy with the price I received, other wise I would not have accepted the offer.
I would then tell them that it was they who missed out on a great house for a great price and that the loss was theirs not mine.
And if I was real cheeky I might tell them that I would have accepted $5000 less than what I got….[biggrin]
You will always miss 100% of the shots you don’t take!
LOL thanks Ron,
But I’m really referring to the original posts by NAT12.
1.It was her initial bid.
2.At 5k less than someone else’s it was not a low ball.
3.She was not given a 5 second phone call to give another offer. The vendor is NOT waiting for days for another buyer/offer.
4.There is no need for further house inspections – she is already placing an offer.If you were willing to accept $5k less than what you got, you would have been happy with NAT12’s original offer!!!!
Munjy
Originally posted by munjy:LOL thanks Ron,
But I’m really referring to the original posts by NAT12.
1.It was her initial bid.
2.At 5k less than someone else’s it was not a low ball.
3.She was not given a 5 second phone call to give another offer. The vendor is NOT waiting for days for another buyer/offer.
4.There is no need for further house inspections – she is already placing an offer.If you were willing to accept $5k less than what you got, you would have been happy with NAT12’s original offer!!!!
Munjy
Sorry to disagree with you Munjy,
I was refering to NAT’s original post aswell.
In fact, compared to what Nat said they were willing to pay, $265K I believe, then $246K is low ball. Nat did not know what the final price was so her inital offer was very low ball. The fact that it was 5K less then the other bid is irrelevent. The vender obviously reached their asking price and was motivated enough to accept.
As I said in previous post, Nat should have made her best offer.
The asking price was 240K+. In my opinion most people want about $10,000 more than what they are starting at. Offering $4K more than the starting price is fairly low especially if you are willing to pay $265K for the property.
We don’t know how long the vendor has been receiving offers. And for all we know people may have still been asking for inspections.
When, as the seller do you say enough is enough?
You will always miss 100% of the shots you don’t take!
Funny, Ronulas and Munjy!
Why do people think tat Nats12’s initial offer was low balling? Low balling is when you significantly offer below the fair market value. I don’t think that Nats12 has done that.
Honestly, how many people here are really usually making just ONE offer on a property- their best offer?
If it had happened to me, I think I would have, as Roy suggested, had a civilised [axe]talk [argue]to the agent to hear his side, clear the air, and then move on asap- [party]
Hakuna Matata.Celivia
Originally posted by Celivia:Funny, Ronulas and Munjy!
Why do people think tat Nats12’s initial offer was low balling? Low balling is when you significantly offer below the fair market value. I don’t think that Nats12 has done that.
Honestly, how many people here are really usually making just ONE offer on a property- their best offer?
If it had happened to me, I think I would have, as Roy suggested, had a civilised [axe]talk [argue]to the agent to hear his side, clear the air, and then move on asap- [party]
Hakuna Matata.Celivia
This will be my last post on the subject…. I only feel that it was lowball compared to what Nat thought the property was worth. Nat was prepared to pay $265K and only offerd $246K. Nats idea of fair market price was obviously what they were prepared to pay, not what the place actually sold for.
You will always miss 100% of the shots you don’t take!
Just to clear a few things up:
$246k was not a low ball offer for the area. The asking price was $240k+. A lowball offer would be in the $230’s.
The offer I put in was on the day that the section 32 was released. The vendor would not have been receiving offers before this.
The price the house sold for was $251k. This does make my original offer of $246k a reasonable initial one. As an investor I would be costing myself money to not start around this mark. I have not known anyone who’s first offer is also their last other than in set by sales.
The point of my post was part whinging on the experience I had, but also demonstrating the way in which real estate agents act.
My biggest issue with this whole scenario is the fact that the agent has chosen to act in their own interest above anyone elses. If I was the vendor I would be extremely unhappy with the agents actions, especially since he now knows he could’ve got more.
I played the cards the way I chose, I tried to rectify it by contacting the vendor in an attempt to seal the deal, but hey I didn’t win this one.
There will be another around the corner.
The way I read this is the exact opposite to the reaction at auction…you know the ones where the camera swings around to the smiling, smarmy couple who comment that they were extremely happy with their purchase and picked it up for 20K less than they were prepared to go to.
From reading the above posts, it appears this was the same tactic employed but on this occassion backfired.
I also believe that it is not so simple to just move on to the next one. With the amount of DD I do before sitting down to a serious negotiation session (the Manila folder is chocka blok)…if it all pans out good then if you fail to buy it there is definitely a daunting prospect of throwing all that time and research down the toilet and starting from scratch again.
Just so you know someone who has, I’ve purchased 3 IP’s at full asking price. The DD research told me I was onto a winner and why stuff around. Over time the difference in haggling with the vendor and losing out on the prop is something like 13.48% vs 13.41%. My time and DD research is far more valuable than 0.07%….especially if the next best thing on the market at that particular time is say 11%.
If you get the opportunity to buy next door, and triple the value of your block of dirt, and that opportunity opens up once in 60 years, are you really going to haggle ???
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
You must be logged in to reply to this topic. If you don't have an account, you can register here.
