Question re making an offer

[lupin7]

Hi, I'm looking at getting my first property and am interested to know what the deal is with places that have offers on them.

I've struck a few times now when I've looked at properties only to be told not to bother as they have an offer. (why have the open home then ?) And this weejk I've struck the second time when I've gone to make an offer only to be told there is already one on. Perticually annoying this time, as I had a non-conditional cash offer and was told they had a conditional one already (less than a day passing).

So what's the actual deal? I know there are some points where they can't accept any other offers - but other properties go multi-offer, and I'm doubtful they all make their offers at the exact same time.

thanks for letting me know the answer

(frankly I've found agents aren't interested in selling their properties, let alone answering questions such as the above)
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[Bob Kane]

I assume your offer is better than the existing offer?
Seems strange that the agent doesn't seem interested. I would expect the agent to use you to up the selling price.

[lupin7]

Well, that I can't say, I'm offering the asking price, unconditional, they may be offering the same but conditional is all I know.... Note that I've never got to the offical offer stage though - the agent wasn't interested.

And as I said, this is not the first time (in fact I think the other place (and agent) this happened with is still being advertised 5+ weeks later).

[speights boy]

I'm offering the asking price, unconditional,

I'm looking at getting my first property

Something odd here.
Are you appearing at open homes, having a quick look round and then offering full price, unconditional, verbally to the agent?

Do you not require any inspections...builders, Property file etc?

Have you ever asked the agents for a copy of the S&P agreement?

If you make your offer on this; WITH YOUR LAWYER I suggest, then the agent must present this to the vendor.

[Ghouly]

Simple explanation lupin.

When a conditional offer is accepted on a house, the agent cannot present any other offers to AVOID the contract that has already been presented, unless, the existing contract has a cash out clause put in it by the vendor which allows it to happen. This cash out clause exists when properties have conditions that are likely to last more than 10 days, such as conditional upon sale of purchasers house, and the vendor is wary that in that time a better unconditional offer could come in. At this stage, the original purchaser will be given the chance to go unconditional, or the vendor will avoid the contract and create a new one with the new purchaser.

The reason that there are open homes still is that the offer is conditional, and could still fall apart. You will find that if it falls apart, the agent will quickly ring any other interested parties to get them to try and sign an offer, and if they don't have an open home, they lose the potential clients that would come along. Its a matter of security for their job, and it gives them a chance to network with more potential buyers/sellers. They generally wont hold any more homes once an sale goes unconditional.

Multi offer situations arise when there are multiple sales and purchase agreements written up and signed, and then ALL AT ONE TIME these must be presented to the vendor. They can not take them one by one.

[speights boy]

Thanks Ghouly.

Is there any reason / advantage why the vendor would not have a cash out clause.....especially considering this hot AKL market?
Would you expect an agent or the vendor's lawyer to at least try to get the vendor to have such a clause?

[Ghouly]

When there is a long conditional stage, there is no reason they should not have a cash out clause, except that it does create a condition that can scare off a purchaser. For example, a purchaser may not want to spend all that extra money to market his house for a very quick sale if the vendor is just going to cancel it first chance he gets. At this stage, a decent agent will assess the likelyhood of the sale going from uncondtional to conditional based on his knowledge of the market and whether that house will sell for the expected price, and convey his professional opinion to the vendor as to whether the cash out clause will scare off the purchaser.

But that last bit is off topic.

A cash out clause generally has a 5-10 days notice period, as do most building reports, LIM reports, finance clauses etc. So for that reason, a cash out clause isn't plausible when the unconditional period is less than 10 days, so wont be encouraged when the conditions on an offer are just the standard things.

I do say this all from my experience, however some Agents do operate in "different" ways.

Edit:
The Lawyer MAY encourage the clause if the conditional period is a long period and from their professional opinion they see a risk. I would EXPECT an agent to always try and put this in when the conditional period is quite long.

[Ivan McIntosh]

It would be usual for a lawyer to encourage a cash out clause, unless the conditional period was very short, say 5 working days, ten at the most. In that instance you might as well just wait it out as go through the nuisance of notice.

Of course, this assumes we get to see our clients sale agreements before they sign them, which often we don't, much to their occasional distress.

I'm not sure why anyone would brush you off tho....if I were the agent I'd be taking your details and encouraging you to stick around to see what happens so you can put a further offer in straight away if needed....and I'd be straight onto you if the first offer lapsed.

[lupin7]

Thanks guys, that helps me make sense of it now. I knew there were some legal issues about presenting when there was already an offer, but that clears up the details.

As to why I'd make an unconditional offer, not that it should matter given the question, it's simple. It was a clear bargin that I had prior experience with and could easily afford.

Not sure about the brush off either... maybe I come over like I have no money

[Ivan McIntosh]

Anyone with an unconditional agreement and a cheque for the deposit should be taken pretty seriously, I would have thought

[speights boy]

Well lupin; one good thing to come out of it, you know who NOT to list your property with if you ever need to employ a REA.

[BerkeleyCapital]

The agent is not doing his job if he doesn't present a legitimate offer to the vendor. If that continues, you should speak with the real estate agents governing body.

[lupin7]

Well lupin; one good thing to come out of it, you know who NOT to list your property with if you ever need to employ a REA.

LOL, exactly. In my property hunt I've now found two agents I'll never deal with again. he other one kept having open homes for over a month on a property that she'd told me was multi-offered within a day of listing. I went to one a couple of weeks after the listing, thinking the offers had fell through, only to have her say "don't bother looking"...