"Agent Rage"

[Letterman]

Just wondering if anyone has ever experienced what I may have recently experienced as "Agent Rage"?

Auckland City fringe property 3 bedroom "do up" listed at $400,000 10-12 weeks ago.

First offer was a verbal $270,000 in 1st week of listing = rejected by Vendor.

Second offer was a written conditional $350,000 in 10th week of listing = accepted by vendor, but offer fell over on a builders report, and when the purchaser realised how much it was going to cost him to renovate the property to the standard he wanted. His offer hadn't taken the extra expense into account.

Third offer was a written cash unconditional offer of $265,000 in 12th week = offer angrily rejected by the AGENT!

I thought that agents were supposed to present all offers to vendors?

Comments and experiences welcome.

[eri]

not sure what you expect when making offers lower than previously rejected offers

imagine it was a car

"i see you have $4,000 on that old holden, would you take $2,700 for it?"

"no"

"ok, how about $2,650"

"pi$$ off"

[Stevegoodey]

Na I think letterman has done the right thing.

He's found out new information about the property and adjusted the offer to suit.

The only reason the agent has chucked his toys is either he's having a bad day anyway or you have handled it badly by not conditioning the agent to the lower offer.

Did you drop the offer and run or explain your position to the agent and your thoughts behind coming up with the figure?

[Letterman]

Yes, I believe that my offer had a sound rationale behind it, and that this rationale was carefully explained to the agent. Having a full page article about falling property prices on page B1 of the NZ Herald the same day of the offer may have contributed to the agents bad day?

However, regardless of the evidence I was able to provide as a rationale for my offer, the agent chose to to sing the "market is about to bottom out, and then rise again" mantra. This, despite a near 20% drop in agency employee figures nationwide, and a rapid ongoing amalgamation and consolidation of real estate agency offices, owing to an approximate 54% drop in sales volume nationwide.

I also suspect that the agent was emotionally involved in the process, to a level that I would deem somewhat inappropriate. In defence of her decision to not take my offer back the vendor, she said that the vendor "was in tears" when she read my offer.

I would regard this response by the vendor as an unwelcome yet neccessary experience with the reality of the current market. The vendor also stated that she couldn't believe that she had one offer of $350,000 and then another one of $265,000 a week later, implying that her house had dropped in value by $85,000 in 7 days.

My response was that the $350,000 offer was essentially meaningless, as the vendor had pulled the deal on the basis of a builders report, and had not conducted proper due process about the cost of multiple renovations and repairs when he put his offer on paper. In 12 weeks, mine was the only unconditional cash offer (with cheque attached to the RE agreement, I might add) that the vendor had received in 3 months of the property being on the market.

My offer considered both possibilities, and was thus reflected in the offer amount made.

I am open to hearing more about conditioning the agent - what did I miss?

[McDuck]

It's an ego thing.
The kick you get as a sales person is from getting a good price for the deal.
Somehow the comission seems worthless if you didn't get that satisfaction of winning the price war.
People.
Go figure.

[McDuck]

After more thought, perhaps it is that the sales person is soft hearted.
Perhaps she hates to see the house owner loose value.
Bad news is not easy to deliver.
consider this.
You have just won 1000 dollars.
sounds good?
yup.
what about this.
You have just won 3000 dollars...oh no wait thats 1000 dollars..sorry my mistake.
Why does the second one seem a downer?

That's what you have done to the Seller and Agent.

[spurner]

Interesting situations like this.

If the property is properly marketed for a reasonable period of time, and the highest price anyone is prepared to pay is $270K, then it's very hard to argue that it's really worth $350K or $400K. It's only worth as much as someone is prepared to pay.

The offer of $350K muddied the water a little. But if the offer was $400K and it fell over, that wouldn't mean it was worth $400K either.

I've had situations like this before. I normally explain to the agent that I've calculated the value of the property to me, and explain how I have arrived at my figure. I say I'm not deliberately offering a stupid low amount, but that it's just the value it is worth to me. And if it's worth more to someone else who is prepared to pay more for it then no worries they can have it. Haven't had any problems so far.

[ladyagent]

Somewhere in this reasonably common place saga, the communication chain has become very rusty....

[McDuck]

Somewhere in this reasonably common place saga, the communication chain has become very rusty....

I agree, something is up.

If it was one of those old silverback male agents, then I could understand it.

But because it's a lady agent...it's more curious.

Maybe the weekly meetings that are now held, might mean that more group work goes into milking the now declining sales for money.

[pjimmyinahouse]

I was under the impression that legally the Agent must present all offers. Is this correct?

Secondly it seems a little odd to justify your reasoning to the RE agent. Sure it may stroke the ego- but isn't their job to broker the deal between parties?

[McDuck]

Depends on the person.

If the agent is already well off, then they are in it for the sport.

The sport in this case is getting the deal as far as possible your own way.

What else gets them out of bed each morning?

If you let the agent join your team so you both win...then he will be only too happy to fight for you.

This team joining procedure will involve golf or boats or beer.

[pjimmyinahouse]

beer sounds good
-Yes it sounds like getting the agent on your side is a good for everyone.

But I wanted to remind that their job is to broker the deal and justification is unnecessary (although polite)

[Stevegoodey]

Sometimes in a negotiation I will use a "Ploy" like "$179,000 is as high as I can go to without taking it to my board of directors"
(Don't laugh it works)

I wonder sometimes if the agent saying "I can't present that it's too low" is a ploy by the agent?

[Heg]

I thought that agents were supposed to present all offers to vendors?

Comments and experiences welcome.

They are obliged to under the REA act. I have had this similar scenario several times in the past few months. One agent (From Prestige Realty in Milford) asked how I had arrived at the figure. I explained (major do up, falling values, cash offer, How did he know what my top price would be etc etc) and gently reminded him that he was obliged to present. He replied that he had told the vendor that they "Had received an offer but it was laughable". I argued that it was a cash offer ($410k on a property listed at $549K that had already had a 10k price reduction) and that his words were hardly likely to make my offer look favourable with the vendor. I told him if he dind't want to make any money that was up to him. I withdrew my offer and wished him luck with the sale. Needless to say it has still not sold....
Some agents on the other hand will happily present anything that I put on paper. They are the ones making the sales.

[donna]

The best scenario (I think) would be that all offers are made directly to the vendor without the RE Agent's involvement - that way the Vendor can 'choose' to share the info with the RE Agent. If offers were made directly without emotion then the Vendor can decide on what is a good or bad offer without the RE Agent's verbal baggage to sway opinion.

RE Agents are fundamentally marketers and fixed rates for marketing property would also resolve the issue of unwanted emotion - as the Agents would get the same $$ for any offer accepted. The rates could scale of course for properties at the higher end of the market should more $$ be spent to market the property etc.

Just a thought.

Cheers,

Donna