I have found an investment property that I am keen to buy. Other than finding this property on the Agents web site, and them having a key to let me in for an inspection, the Agent has been frustratingly difficult to say the least. And I am phrasing this VERY politely….
Given that this property is for investment, I have been asking what I perceive as simple “numbers” questions – body corp fees, rental yield, tennant history, rates, costs, etc. The agent has answered most of my questions with “I don’t know”, or the classic “we are real estate agents, not solicitors”.
When I suggested that he could ask the vendor on my behalf, he actually got angry and made it very clear that he would not be doing this, and that my questions were not only unusual but also unneccessary.
I have since found out the answers I needed via other means (at one stage I rang the Vendors solicitor who was only too happy to ask the vendor for me !!), and have decided to put in an official offer.
My offer was in writing, and while the my offered purchase price was 16% below the asking price, I made it clear both in writing and verbally to the agent that this was purely to start negotiations, and was not my final offer.
Once again, the agent got angry, and told me point blank that he would not be passing on this offer to his vendor. When I expressed my surprise at this, he asked me if I was therefore offering more money. I said “no, not if the vendor is not aware that I have made this initial offer.” Again, more angry words from the agent, who finally told me not to bother calling back unless I was prepared to offer MORE than full asking price.
I do not wish to negotiate with the agent, without the vendors knowledge.
I have since written directly to the vendor, explaining the situation and that I am actually still (surprisingly so, given how difficult this has become) keen to negotiate a successful sale with the vendor.
I expect the vendor to get this letter today, and I am expecting an angry call from the agent tomorrow.
If it turns out the vendor does want full price and is not willing to negotiate, I will simply walk away, albeit a little disappointed.
Even at full asking price the deal in itself is not “bad” as such. I am aware however that because the agent has hindered rather than helped this sale (not to mention both of us really iritating each other !!), my stubborness has kicked in, and now I refuse to pay full price, purely because of my most unsavourary opinion of the agent..
I am unsure in what I should do next. Is it worth pursuing ? Should I grit my teeth, smile at the agent (as I have done so far) and play his little power game ? Or should I just tell him he is a total f#*kwit, and simply find something else to buy…… beer perhaps ?
What would you do ?
BDMWylieMember@wylieJoin Date: 2004Post Count: 346
I would think that the vendor should get fairly annoyed that their agent is sabotaging their sale. I am not a lawyer, but I thought all offers on paper had to be presented. If I was the vendor, I’d sack the agent and get another. Unfortunately, because you were introduced to the property by the agent, even buying it through another agent would mean he is entitled to some commission (in Qld anyway).
If the vendor does change agencies and you buy through a new agency (or indeed privately from the vendor) then as I see it, it is up to the two agencies and the vendor to work out the split of who gets what regarding commission.
We recently bought a house which had been listed with an agent for six months. We looked at it with this first agency, who never called me back, even though I requested some information. When we finally looked at it again (after the price came down $200K) it was with another agency. I know that because I looked at it with the original agency, that agency got (I think) 20% of the commission.
If there is an issue about who is entitled to what, it is not your problem, but the problem between the agency, agencies and/or vendor.
Good luck, Wylie.Lis_2Member@lis_2Join Date: 2005Post Count: 3
I was under the same impression as wylie re all written offers have to be submitted. Is there any governing body, ie licencing board for RE agents that you could address this concern too?
Good luck, would love to hear outcome.
Lisa SheltonShwingParticipant@shwingJoin Date: 2005Post Count: 219
There is no point putting in a low ball offer unless you can substantiate the offer with verifiable facts or other data. Otherwise it’s just a punch in the guts, insult.
If you really want a property and other may be interested, don’t muck around, make your first offer count. The agent is interested in finding out how much you are prepared to pay, and getting that, not playing games.
If you pursued the property based on numbers, be prepared to walk away based on the numbers not working out, not the emotions.
Getting out of your comfort zone, can help you become comfortableshake-the-diseaseMember@shake-the-diseaseJoin Date: 2005Post Count: 97I made it clear both in writing and verbally to the agent that this was purely to start negotiations, and was not my final offer
Making that statement is a definite mistake, live and learn.
In fact IMHO giving any commentary on whether this is a first/middle/final offer is a mistake.
Simply state your offer clearly with any offer conditions and always have an expiry (~24 to 36 hours). If you can substantiate all the better although I never have.
While we are on the topic, as a general bit of advice never ever increase your offer in the same phone call that your previous offer is rejected, never even say that you will put in another offer even if you fully intend to. Just cover the topic of why specifically the offer was rejected (conditions, deposit, price) then thank the agent and get off the phone. Then do not put in another offer for at least a day or two, longer if you can stand the wait and the market isn’t hot.Fast LaneMember@fast-laneJoin Date: 2004Post Count: 527holdencommodoreMember@holdencommodoreJoin Date: 2003Post Count: 88
I Love those agents, makes it better for the rest of us – ythey’re not getting your business in the future I take it?
Having said that, as the theme has been with the above replies, I wouldn’t waste someones time by offering something like that. They’re on the market to sell – it’s not as though they’re asking for an opening bid at an auction. They want to sell. If you want to buy, then put a deposit for 10% with your offer (even if it is low). You’ll see more results that way.
Just out of interest, what suburb in VIC are you looking in?
(“,) $$$ HoLdEnCoMmOdOrE $$$ (“,)arnie_paulParticipant@arnie_paulJoin Date: 2006Post Count: 4
I was reading your letter below and understand your frustration. I was under the impression that it was illegal for a real estate agent to withhold an offer for a property. My father sells real estate in New Zealand and all offers made have to be presented to the vendor no matter how low they are (and yes i do konw that I am now in Australia).
I don’t know if the same rules apply here, but i know that in New Zealand you can complain to the real estate institute and indeed some agents have been fined in the past for not presenting deals to people.
Does anyone know if the same rules apply in Australia. If you contacted the real estate institue in your state they should be able to tell you. Also the head office where the real estate person works should be able to help you. The questions you are asking sound fair and needing to know how much the body corp fees are etc would make an impact on your offer. Try to persue it if it is going to be able to help your porfolio grow
Best of luck
ArnieColin GowanParticipant@colin-gowanJoin Date: 2005Post Count: 86
As I see it negotiations are much easier when everyone gets along.
So first thing to do is patch things up.
Second thing to do is not rush.
Reply to communications no faster than 24hrs.
Tricky for a phone conversation but do your best not to look like you are stalling.
Thirdly all offers are to be in writing and you should expect the same with their reply, include that in your offer instructions.
Fourth always give the other parties room to move
Put yourself in their shoes, how would you react if backed into a corner?
I know I would come out fighting.
Fifth ask lots of questions, sometimes with more knowledge of a situation a better offer can be constructed.
Sixth always keep a few aces up your sleeve.
Your offer is never the final offer but donâ€™t tell them this.
Never let them know that you want to start negotiations, any time an offer is made negotiations have already started.
Consider why the agent is behaving this way, a friend was selling his house a few years ago and he asked his agent to stall for a few weeks so that I could try and raise the money.
I failed to raise the money but knowing what I know now I would have raised as much as possible and negotiated with my friend for vendor finance for the remainder.
Now the situation you are presently faced with sounds like a waste of time to me.
Make a new offer about 2% increase with a 120-day settlement (let them start thinking that you are approaching your limit).
In about a weeks time go back to the real-estate office and put in another offer lower this time but for a different but simular property.
If the other party thinks that you have walked away they may come back to you with an offer.
Either way always be in a mental state that you can walk away never let the heart dictate financial matters that is for a clear head.
Email [email protected].
Fax new number coming
For all your CLEANING and GARDENING work.
Thanks for the fantastic replies and suggestions.
In regards to negotiating price – I am trying to take the “cheeky offer” approach as per Michael Yardneys newsletters, all the while being conscious of the Jan Somers concept of “pay a reasonable market price and you can’t go wrong” as well as the “you make your money when you buy” mantra of Steve McKnight and many others on this forum.
I do agree that there is a fine line between “cheeky offer” and “low ball offer”. My theory is that at best a cheeky offer may be accepted, and at worst you pay reasonable market price. Either way, longer term, you win.
Update to my situation – the vendor obviously got my letter, because I got a voice mail message from him yesterday afternoon, and he left his phone number, and better yet he sounded quite pleasant. I tried to call back, but his phone was engaged, then it just rang out.
In keeping with the suggestions of trying not to seem too enthusiastic I will try phoning him again tonight.
So far, the angry agent has not contacted me……
I will update this post when further details come to hand.
Thanks again for all your suggestions and comments thus far
BDMWylieMember@wylieJoin Date: 2004Post Count: 346
Could I also add to this that some comments have been made about the low offer. Many posts on this forum involve comments like “can’t wait until the prices go lower to snap up bargains” etc etc. I don’t think putting in a lowish offer is an insult. Vendors either say no or yes, or make a counter offer.
In this post, mention was made of an offer 16% below asking price. I don’t think that is an insult, but I do think the agent has no right to treat a prospective purchaser with such hostility.
WylieDon NicolussiParticipant@donJoin Date: 2005Post Count: 1,086
This one time, at band camp- no really its a real story.
I once made an offer like that which resulted in the agent getting put out of shape and ignoring the offer. What I then did was focus all my attention I why the offer should be presented etc etc instead of focusing on the deal itself.
Basically while i was busy getting emotional about it another person submitted an offer which was also quite low and I missed out. They renovated the house, split off one block , built a new spec home on it and sold both. This was my idea as well but for the sake of the low ball offer I missed out on what should have been a good deal.
Be carefull that when you make a low ball you are not just helping your opponent over the line eg I have two offers here x wants to pay a certain price which might be low but at least it is not as insulting as the offer made by y. Agent now has a frame of reference to make the <edited> offer look good because your was even worse. Now agent has commission – you have nothing and mistery buyer has a good deal.[blush2]
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[email protected]marneyMember@marneyJoin Date: 2002Post Count: 9
It sounds to me very much like the agent is either planning to buy the place himself or orther wise has a mate lined up to buy it. His hostile attitude seems very unnatural for an agent. Mostly they are keen to help and interested in supplying information.
I’m please to hear that you’ve made contact with the owner, but if you’re told there’s someone else interested I would consider that threat quite plausible.mapleleafMember@mapleleafJoin Date: 2005Post Count: 51
There were several mentions in this thread that the agents are required to pass along offers to vendors…Unfortunately this is not the case (in QLD) and it is frustrating if you are dealing with agents lacking customer service skills!
Good luck with this one!
Achieve the Dream!mapleleafMember@mapleleafJoin Date: 2005Post Count: 51
Just to add to my previous post and to clarify…they do not have to write an offer contract but they DO have to at least verbally pass on any offer to the vendor.
Sorry for being unclear above!
Achieve the Dream!grossrealisationMember@grossrealisationJoin Date: 2005Post Count: 1,031
I have read with interest this post and the main part of this game is not the offer nor the agent,
neither is that important the main part of this game is to get the deal across the line.
first you have made some sort of contact with their solicitor and you have a value that you wish to pay and you have a unhappy real estate.
so lets move the players and you must to get any deal to work.
first the real estate.
organise your own have a chat with a real estate you can work with and tell them in they can do the deal at this value they get a commission.
next ring the solicitor and tell them that you arn’t a negotiator but your real estate agent is and to contact them.
next ring the owner and tell them the same.
next give your real estate a cheque to be put in there trust account for the deposit of the value you want.
then organise a meeting in your real estate to organise a deal and ask all concerned that you don’t keep being annoyed by the other real estate and that any of their cost are carried by the vendor or split listing.
now comes the good bit when this is all done and they all meet at either your real estate office or their solicitors office( and thats where they will say) you then take over the meeting and tell them what a waist of money you have spent to organise this and you want them to pay part of your real estate costs or a reduction to the value to cover this cost.
if you leave that meeting without the deal it was not going to happen.
so get over it.
just because some one is not within what you class as acceptable does not mean you can’t win a deal the aim of the game is to win and if you have to take out a player so be it and in your case its the real estate so take him out and work around what you have.
and from what you have posted what you have called this real estate and his opinion of you is slight compared to nab’s view of me but they still do deals.
and suncorp is worse most of my builders have told me that they haven’t had a lender that likes me but if i want a friend leave that for a saturday bbq.
this is business so forget the real estate and work on the owners and the solicitor.
and a very interesting little piece of information with regard real estate agents if you buy thru one agent but you have registered an interest ie you have rang up about it with another agent you can get hit with two commissions.
read the contract and the part that says the purchaser will pay the commission of the introducing agent cross it out(nsw) and ask for it to be deleted,
I do as standard
if not you can get multipul claims for commission as they can say they are the introducer even thou they did not sell it.
you should see a contract for sale after my black marker has been thru it.
here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]XeniaMember@xeniaJoin Date: 2002Post Count: 1,231
BDM, I agree with the others that the worst thing you could do is tell an agent that this is NOT your best offer, if he had accepted your offer he would have had to recomend to the vendor to reject the offer as this is only to start negotiations.
He is under fiduciary responsibility to the vendor to present all written offers, but you just told him that this one is a wast of time! So I can see why he didn’t present it!
I would increase the offer, present to the agent and tell him that this is what you are prepared to pay, make it attractive, ie larger deposit, get rid to the cooling off period etc and show that you are compensating in other ways for the lower price.
With regards to buying it from the vendor, the time for the agency agreement should have lapsed, the vendor must cancel the agreement in WRITING after the end of the agreed term (usually 90 days), then check with the agency agreement to see if the agent is to be paid anything after cancellation. They are not all the same!
Hope this helps, please keep us up to date with this one, it’s very interesting [biggrin]
Just thought people might like an update :
I still have not heard from the agent with the grumpy trousers on. And at this point I doubt that I will !! Excellent !
However, I have spoken to the Vendor – a couple of times – and the long and short of it is we have done a verbal deal together, and contracts should be signed later this week….
After a bit of negotiating over the last few days, we finally came to an agreement yesterday. In talking to the vendor I discovered that:
a. the agent was, in fact, a fool.
b. the agents boss also was a fool.
c. the vendor removed his listing from the agency in question, based on my letter to him confirming his suspicions, the day he received it.
d. the vendor is a builder, whose modus operandi is to buy a block of land, build 4 units on it and sell 3… ie keep one for himself. He has done this 7 times, and has actually sold half of these himself rather than through an agent.
e. because of d. above, he was in no way a distressed or a motivated seller. Quite the opposite, in fact. As a result, the best I could negotiate was a 4.5% discount, but with terms and a couple of extras suitable to me.
While I obviously would have liked this property to be cheaper, as I mentioned in my original post, even at full price the deal was ok. So overall I am pleased.
Also, in talking to the vendor, I discovered that a shopping centre, initially anchored by a Coles supermarket , will be built approx 15 mins walk away in about 18 months time. Also, the more I spoke to him, the more I have realised that he is very knowledgeable about all things IP. He has obviously put a heap of thought into his buildings and plans, which he has modified and improved over the last few years. He runs the body corp, so I will have an excuse to talk to him on a semi regular basis. And on top of that, he is a nice guy who is willing to answer questions asked of him.
So, while I may not have bought the bargain of the century, I have added to my investment portfolio a property that I am confident will perform well over the long term, and quite possibly I may have found a person who could well be a source of knowledge that I might be able to learn a lot from.
Thanks heaps for all your responses and suggestions !!!
BDMsafeashousesMember@safeashousesJoin Date: 2005Post Count: 41
One of the principles we were taught at the Brisbane Masterclass yesterday was to keep emotions out of it, and stick to the numbers. Maybe make ONE offer only that works for you and if the agent plays up, try and make sure the vendor finds out about the offer and that it is genuine and the highest offer you will make.
The agent’s behaviour may be annoying, but it is a side issue.
safe asgrossrealisationMember@grossrealisationJoin Date: 2005Post Count: 1,031
is this property in vic or nsw.
check the contract and in ther ewill be aclause that says have you been introduced to this property by any agent make sure you get it crossed out very important as the purchaser not the vendor payes this cost.
I do my own negotiations and yes you can neg a deal but you don’t do that until you have a who else is in the deal and b you change other thing around the amount time,vendor finance,deposit and completion not one for changing my offer.
thats part of get the deal at the start and you need to work out a true value to you and thats what you work on.
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