all agents (not jus re) have a fiduciary duty of full disclosure to the principal (the vendor) therefore the agents is bound by law to present all offers.
I reckon the real estate agent has a moral obligation to present only reasonable offers.
What would you do if you were the vendor? I would tell the agent to piss off.
I was selling my PPOR during an auction campaign. The agent came to me with a shitty offer, I felt like telling him where to go. He was obviously conditioning me for a lower price.
Sure go fishing with low offers, but you dont get any sympathy from me if the agent says take a hike.
If you submit a WRITTEN offer in Victoria (and usually have to pay a holding deposit too) then the agent is legally bound to present the offer to the vendor.
I now there is one agency I’ve dealt with a few times where I doubt very much that any of my verbal offers get past the sales manager. I know the agent I deal with there is getting very frustrated with the manager blocking things.
As a recent example, I put a reasonable offer on a house. The vendor counter offered a couple of thousand higher, I agreed (but at this stage the only written offer was the original one).
At this stage I started getting feedback that the stumbling block was the deposit – I’d offered $5000 as opposed to 10%. I was told that without a 10% deposit, the deal was off.
I stood my ground, and that was it.
I’ve wondered since whether it was really the vendor who had this concern, or the sales manager who wanted to see enough money in the trust account to cover the commission….
Or maybe I’m just being cynical! [
]Keep smiling
FelicityWell – What you do if you were the Agent? Would you too not want a 10% deposit to cover your Commission.
If I was an agent – I would say – If you want to make a fair dinkum offer, come up with the 10% or dont waste my time.
Yack, I reckon you as the sales agents would miss out on a lot of quick sales if you took that attitude.
I don’t think I have ever made a 10% deposit on exchange of contractsd – the highest has been 5%, but my aim now is to get contracts exchanged on a max of $1000. I’m about to complete an exchange where I have instructed that a deposit of $1000 is accepted (I initiated the amount) on a sale of a property worth over $500K. This will mean that the buyers will not tie up their money unnecessarily for the remaining term of the contract, which IMO is a good incentive – especially as this one is off the plan, and settlement is not for a few months. The agent WILL get their commission, but they just have to wait for it out of settlement funds rather than have it sitting in their trust account earning them interest.
Cheers
MelDisclaimer: Below is my interpretation of the REIA & REISA codes and guidelines only. Don’t take this as gospel, but maybe use as a starting point for research if you wish to take action due to the professional conduct of such an agent.
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As smenkhare said, the agent has a fiduciary duty to disclose the offer to the pricipal.Additionally, if they are a member of the Real Estate Institute, as most agents are, they are bound by their National Code of Conduct as well as the respective state guidelines. Below are quotes from the REISA Guidelines for Professional Practice. Other states will have similar guidelines.
In South Australia, Section 13 of the REISA Guidelines for Professional Practice states “All offers, preferably in writing, shall be submitted to the Vendor as soon as possible or within 48 hours of receipt. All persons making an offer should be informed as soon as possible after the making of an offer as to the Vendor’s decision to accept, reject or consider the offer”. By not putting your offer to the Vendor, the agent is in breach of the professional code and is liable for diciplinary action from the Real Estate Institute.
Also, Section 11 of the REISA Guidelines for Professional Practice states “Members have a responsibility to their Vendors to obtain the best possible price for their properties…”. By not submitting your offer, the agent may have missed the opportunity to obtain the best price as the price you may have eventually negotiated may have been the best. So I believe the agent is also in breach of this section and again would be subject to diciplinary action from the Real Estate Institute.
These guidelines are an interesting read for anyone buying property, so that you know what ethical codes the agent is bound to. It’s all plain English with no legal jargon so anyone can digest it easily. Always good to be armed with this sort of information when dealing with agents. It’s worth contacting your state branch of the REI to get a copy.
Cheers,
Mike.[^]The vendor may well have instructed the agent not to bother phoning him everytime he receives a ‘silly’ offer.
End of story, the agent is innocent and in the clear.
Unfortunately one cannot talk to the agent in confidence and tell him what you really think (how far you are prepared to go). Most likely everything will be repeated verbatim to the vendor.
Pisces
When I did the agents course many years ago It was law to submit all offers. Funnily enough the one thing that the TAFE Teacher belted into us was Section 52? of the Agents Act – that in short says: everything must be in writing.
I always present my offer in writing – as a signed contract.
There is no stronger way to present an offer than to sign a contract (subject to finance/building/pest/vacant possession or whatever else you wish) and I will only ever give a deposit of $500.00 Max (Sorry got it all tied up elsewhere). The vendor can strike out my offer and write in their counter, then its up to me to initial it or not..
I don’t buy at auction (that may change when for my PPOR in the future).
If my offer is accepted and the sale goes through everyone will get their piece including the agent regardless if it is in their trust account or not – No solicitor on this planet (as much as some would like to) would disperse funds and cut the agent out.
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