Real estate agents ethics

[Baywatcher]

Am i over reacting or is this normal practice

A multi offer was presented to the vendor 10 days ago, mine was best so the vender would Negotiate with me, the other offer droping out. We have both counter signed twice, I fax back within hours (through the listing agent) and the vendor taking 3-6 days with their counter offer. As the contact is about to be faxed back to me signed by the vendor, i am informed by the listing agent that a third party has presented an offer and i have a hour to accept the contract or they will present the third party offer to the vendor.

Can I now go on holiday for they weekend and sit on the contract before accepting or counter signing (the price is still too high and I need to get it lower) or can the agent now bring a third party in over the top of me.

Mike

[Green Fish]

Although the agent is everyone's best buddy, the agent is, actually, the agent of the vendor. As it stands at present, there is no contract - just various offers. The agent can definitely bring someone in over the top of you.

Anyhoo, don't worry about it. In a falling market, who cares?

[newkidontheblock]

Take your time

Me and my wife got into similar situations like yours, twice, to be exact. We're new to property investment and perhaps are not yet exposed to all the negotiation tricks that agent uses.

We put in an offer on a house, agent gave plenty of excuses about vendor being busy and all..... heard nothing back for 3 days. And the 4th day, got a call from the agent saying that the vendor are now willing to take XXXX. (no signed counter offer was presented). Agent also threatened that he's expecting another offer and we should be quick in our decision. We just told them to get stuffed. And it turned out there was no other offer coming in. We later withdrew our offer because there were other worrying issues that we found about the house.

It all depends on how much you like the property. I personally do not like to be threatened and lied to, especially by real estate agents. So, if i am in your position, I will take this 'buyers market' opportunity to tell the agents to get stuffed - and wish him/her all the best in the property slump phase.

Nevertheless, to answer your question, the agent can bring in a new offer if there are.

[Davo36]

I'm an ex agent and handling multiple offers can be really difficult. At least one party goes away feeling ripped off no matter how you do it.

And if (as it sounds in this case) you have a vendor who is a bit greedy and very slow at getting back to purchasers with an answer in writing, things can get very ugly very quickly. And as the agent in the middle, just trying to get a deal together and not miss out to another salesperson or agency, you tend to get all sorts of blame for all sorts of things which are totally out of your control.

Baywatcher, the position you find yourself in is often called a Dutch Auction. This is where the vendor takes offers from multiple purchasers and then uses them to get each one higher and higher. They do this by saying "This guy over here is offering $x, if you offer just above that, I'll deal with you." And then they take your offer and do the same thing with the other hapless sod(s). And they do this as many times as they can before the purchasers walk.

So the idea is not to get into this position. If it were me, I would put in what I felt comfortable paying for the property, state it's my final offer and and answer is required by a certain time (don't give them like 2 hours as some people do, give them overnight say to think about it). After that time withdraw the offer. You can withdraw your offer at any time prior to it being signed - and this has to be shown to you.

So if it's accepted, fine, if not, withdraw and move on. Plenty of fish in the sea.

David
PS: More and more people are demanding prices now. I'd suggest you only consider properties with prices attached, then you know where you stand right from the start. Good luck.

[spurner]

The "other offer" invariably never actually exists. Just a weapon agents use to put gullible purchasers under pressure.

My little story:

I once put an offer in on a property that had languished on the market for 18 months. The same day the offer was signed the agent was so bold as to say there was now a backup offer made on the property! I laughed and told him he didn't need to play these kinds of games with me, but he steadfastly maintained there was now another buyer. I didn't go ahead with the purchase at that time. Guess what, the property sat on the market for another 2 years! I did eventually buy the property 2 years later, and for 20% less than the initial agreement.

I read a good quote somewhere which was something like "If you want to get a good deal/price, then you have to be prepared to walk away from the deal".

Good luck!

[Baywatcher]

I did walk away last night after returning home and finding a rude message on my answer ph from the agent. What amuses me which I explained to the newbe agent, I have purchased and sold 9 properties through this company in the last 4 years and have never been involved in a Dutch auction like this. I wonder if she will be still driving around in the shinny BMW by winters end. Dont we have to look after those who put the bread and butter on the table.

Mike

[newkidontheblock]

Good on you

Mike, for walking away. But a rude message? wow - an eye opener.

[xris]

Am i over reacting or is this normal practice

A multi offer was presented to the vendor 10 days ago, mine was best so the vender would Negotiate with me, the other offer droping out. We have both counter signed twice, I fax back within hours (through the listing agent) and the vendor taking 3-6 days with their counter offer. As the contact is about to be faxed back to me signed by the vendor, i am informed by the listing agent that a third party has presented an offer and i have a hour to accept the contract or they will present the third party offer to the vendor.

Can I now go on holiday for they weekend and sit on the contract before accepting or counter signing (the price is still too high and I need to get it lower) or can the agent now bring a third party in over the top of me.

Mike

Hello Mike,

Basically tough on you. When you present an offer to the other party (here the vendor) the vendor can do what he wants with it and when he wants to. His risk in sitting on it for too long is that you can withdraw it at any time.

It sounds like the agent is earning his commission.

xris

[xris]

Baywatcher, the position you find yourself in is often called a Dutch Auction. This is where the vendor takes offers from multiple purchasers and then uses them to get each one higher and higher.

Hello Dave,

Really?

That is not what happened when I last attende one in 's Hertogenbosch.

xris

[Green Fish]

It's a bit like the use of the phrase "begs the question" instead of the phrase "raises the question". Completely wrong, but it seems to have caught on. Same with the use of "Dutch auction" for "informal auction".

(In a Dutch auction, the price goes down.)

[Heg]

Hello Dave,

Really?

That is not what happened when I last attende one in 's Hertogenbosch.

xris

Sometimes xris, you make me laugh out loud. That was a beauty

[Aston]

Agent also threatened that he's expecting another offer and we should be quick in our decision. We just told them to get stuffed.

Excellent!!!

I'm currently negotiating on a property and the Agent told there was another offer so I would need to be quick.

I told him to forget it and walked away. The Agent was back Within 24 hours, acknowledging that there was, in fact, no other interest in the property.

[Green Fish]

Another annoying thing about agents:

The ridiculous "presentation" of offer and counter-offer. I have put up with it on occasions, but given the current state of the market, I do not think any cash buyer should have a bar of it. If the agent rings up to advise that they have "an offer to present", tell them to present it then and there, over the phone, and that you won't be signing anything until the price has been agreed verbally (which, of course, isn't binding).

[xris]

The ridiculous "presentation" of offer and counter-offer. I have put up with it on occasions, but given the current state of the market, I do not think any cash buyer should have a bar of it. If the agent rings up to advise that they have "an offer to present", tell them to present it then and there, over the phone, and that you won't be signing anything until the price has been agreed verbally (which, of course, isn't binding).

Hello Greenfish, this is your friendly agent. I will be writing up an offer for you at 3.00pm. Can I come straightover to you at 4.00pm to show you? Don't really know what it will be yet but I'll do my best of course.

xris

[Davo36]

In regards to multiple offers, consider these 3 scenarios from an agent's perspective:

1) Lease on a childcare centre: Been working with one lady for ages, she's really dragging the chain. The owner says if she doesn't take it by tomorrow a relative of mine will take the lease. I convey this to the prospective lessee who tells me to bugger off. Relative does indeed take lease straight away having quickly seen it was a good deal. Prospective lessee rings me up in tears and tells me she's sold property to start up the business and it's all my fault and what can she do now? At least a month spent on that deal.

2) Lease on small factory unit: Show a guy through. He's in a transition point in his life, is wanting to change where he lives and what he does. Really likes the place but has no money for the first month's rent as deposit. While he's trying to scrape it together, another agent in the office leases the property. I ring him to let him know it's no longer available. He yells at me down the phone, swears at me and hangs up. He felt I should have let him have it somehow or at least told him someone else was going to lease it (imagine me saying "there's antoher offer...") and so it was my fault he didn't get it.

3) Industrial land sale: Prospective buyers been looking at it for ages, have it under contract for sale but awaiting resource consent. Neighbour (whom vendor knows personally and who said the neighbour wouldn't present a problem), decides to veto resource consent. Vendor then tells me he has another offer from a competing agency. He is under pressure to sell from the bank. I ask to see it, he says he can't show it to me because that would be a breach of privacy. I convey this to my purchasers who don't believe the offer exists, don't go unconditional on the agreement and it lapses. So my deal falls through and yes, the other offer 'failed to materialise'. The vendor was telling me porkies in an effort to get the purchasers to go unconditional. I spent around 4 months on that deal and got $0 for the effort.

In each case, I the agent did absolutely nothing wrong but had people very upset with me. I can still vividly remember the criticisms. This is part of the reason I am no longer in that job and would never do it again.

Of course there were other examples too.

To you people posting on this thread, you don't know anything until you have been a real esate salesperson as a job. You quickly see just how dishonest and capricious the average member of the public is. To be successful in real estate you have to be able to put up with the sort of scenarios above and just move on to the next deal without letting it get to you and slow you down. Otherwise you sit there going over and over what you could have done differently and you fail to make any further successful deals. I would wager this is why many salespeople leave the job.

David