Agent wants reserve price in writing before auction

I got this message from an agent about an auction i'm having soon in QLD:

With regards to further things to be done; I will send, with the report, a letter confirming your reserve price which must be signed along with the terms and conditions for the auction which also must be signed. Both these forms are standard items.

Does anyone know if he's telling porky pies or is this legit ? It sounds like suspicious REA behaviour to me .. why didn't he ask for these forms to be signed at the same time i signed the selling authority ? In Melbourne i've never had an agent request the reserve in writing and claim it's a standard form so maybe it's a QLD thing :confused: Are there any QLD agents that can link me this form on the REIQ site thanks :)

Any suggestions how to handle this situation without getting him offside would be appreciated:
1) completely ignore the email (i've had computer problems)
2) disregard this aspect of the email when i reply to him
3) tell him i don't know what the reserve is but will have a think about it 10mins prior to auction (this is true)
4) give him a vendor bid to submit if there's no genuine bidders on the day .. but give it to him when i know there's no bidding (i have eyes/ears on the ground)
 
I believe that in NSW the auctioneer needs to be given the reserve price in writing before commencing with and auction. Not sure about QLD.
 
Thanks spludgey that's interesting to know as i think it would be tough to put a reserve in writing which the agent could use to place the property on the market , this kinda takes away any control . In the past i've had agents ask me for a reserve once the auction's commenced and if bidding has stalled.
 
The dodgy agent has just emailed me the form and says if the form isn't returned then it's a reserve free auction. I think i'll enter a ridiculously high figure so they don't have any control when to put it on the market.

It is a requirement of law that we have the signed letter of reserve otherwise it will be a reserve free auction. We also must have the signed conditions of auction. Both of these will be sent to you with this report, along with the article I mentioned to you. Please ensure that these documents are signed by all parties as with the 22a appointment of agency agreement. Please return them by 4.00pm Friday.

===

We [insert names] as owners of the above property, instruct [agency name] to set the auction reserve and to sell the property at [property address] at a price not less than $______ or at a figure that we agree to accept.

Signed: _______________ [name]
 
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Perhaps you could ring the Consumer affairs/fair trading dept, whatever it is called in QLD and ask them.

Better to be sure than sorry :(
 
When is the auction? Must be tomorrow if he wants it all done by 4pm today.

It probably is a requirement for the agent to get the reserve in writing. It would prevent disputes too. But you don't really want to give away too much information too soon so I would be inclined to set up a high reserve and then reduce it on the day.

I bet as soon as you tell him the figure he will start conditioning you to bring it down. Market has dropped etc, fewer buyers etc - probably the opposite of what he told you when you signed up with him.
 
He wants the forms by 4pm Friday and the auction is this Saturday so he's given me 2 days to get both forms signed and returned to him . I suspect he left it to the last minute hoping he could run a reserve free auction ... typical dodgy RE agent behaviour. He started conditioning me 2 weeks ago :D
 
Hi Shuggy

I don't really see the problem here.
You have a property that you want to sell. You obviously have chosen an agent who has told you the current state of the market and provided you with a likely estimate of price that it should sell for (or else you wouldn't have hired him?) Consider all of the information in light of true market value and write your reserve down (the absolute bottom dollar figure that you would accept or else be happy to walk away from as a seller if the top bid doesn't reach this amount) for the agent. Remember that the market will dictate price, not what you necessarily want :) and best of luck with it all. I hope it sells above your reserve on Saturday :D
 
I suspect he left it to the last minute hoping he could run a reserve free auction ... typical dodgy RE agent behaviour. He started conditioning me 2 weeks ago :D

Reserve free auction? I haven't been to any of these unless I'm bidding on Ebay ;) It's your house and your reserve. Don't over-analyse it. Remember you hired the agent to work on your behalf- best of luck.
 
I agree with Jacque, doesn't sound dodgy to me (except for the reserve-free auction bit, you haven't really agreed until it's in writing to sell your house)
 
Shuggy, sadly the Qld Gov did bring in that requirement with the last update of the legislation. I am sorry to read that you think him dodgy, just because the rules are different in your state. A bit of google time and you would have found the fact sheets, and found out the Qld requirements.
I hope you dont mind me commenting, but when selling a property, you and your agent should be on the same page. Hey its a lot of fun, reading all the advice that people are happy to share amongs potential buyers, on how to buy as low as you can, so the flip side, is you and your agent should be on the same page, and working strategy on how to maximise you sale price. Hope you appreciate my comments are meant in a positive spirit.
 
Thanks Jacque, yes we know the agent is supposed to work on our behalf but the informed know that they work for themselves . No sale = no commission so they condition both partys in order to make a sale . Agents don't care if it sells for $800k or $1m they just want it sold so they can pick up their $30k commission.

Reserve free auction? Yea i'm also amazed they have the authority to run it reserve free if the forms aren't submitted within 2 days .. my guess is they want the opportunity to sell it under value to a mate.

It is a requirement of law that we have the signed letter of reserve otherwise it will be a reserve free auction.
 
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We were asked to for our auctions in NSW, but we didnt. I dont think its a legal requirement.
I cant remember why we didnt give it, but my brother felt uncomfortable sending through the information for some reason. (he doesnt trust agents)
I wouldnt give your lowest price, as a reserve, given the current market. I would give somewhat higher, and then see how things are progressing on the day. you can always lower your reserve on the day if you need to.

You will not be at the auction? Can you be there by phone, so you can get a feel for how its going (even if you have eyes and ears there... its better to be there yourself).

I think the more strategic question is what you are going to do with your vendor bid (if required).... whether your vendor bid will go straight to reserve (or even over it), or just take a "step" up to the price. We had a few properties go to auction. If there is not alot of bidding, or the bidding is very low, then I would suggest using the vendor bid to go over your reserve, so when people ask about the auction results, the agent can say 'it was passed in at ***' (and most people dont realise the amount is actually a vendor bid)

Do you know if there are registered bidders? Its a hard time to be having an auction.
 
Shuggy, sadly the Qld Gov did bring in that requirement with the last update of the legislation. I am sorry to read that you think him dodgy, just because the rules are different in your state. A bit of google time and you would have found the fact sheets, and found out the Qld requirements.
I hope you dont mind me commenting, but when selling a property, you and your agent should be on the same page. Hey its a lot of fun, reading all the advice that people are happy to share amongs potential buyers, on how to buy as low as you can, so the flip side, is you and your agent should be on the same page, and working strategy on how to maximise you sale price. Hope you appreciate my comments are meant in a positive spirit.

Thanks Peter , appreciate your post and thanks for clarifying the new legislation which i couldn't locate . I agree the vendor and agent should be on the same page but in reality we both know there's a lot of games they play when they condition . I'll bite my tongue now until after the auction.
 
We were asked to for our auctions in NSW, but we didnt. I dont think its a legal requirement.
I cant remember why we didnt give it, but my brother felt uncomfortable sending through the information for some reason. (he doesnt trust agents)
I wouldnt give your lowest price, as a reserve, given the current market. I would give somewhat higher, and then see how things are progressing on the day. you can always lower your reserve on the day if you need to.

You will not be at the auction? Can you be there by phone, so you can get a feel for how its going (even if you have eyes and ears there... its better to be there yourself).

I think the more strategic question is what you are going to do with your vendor bid (if required).... whether your vendor bid will go straight to reserve (or even over it), or just take a "step" up to the price. We had a few properties go to auction. If there is not alot of bidding, or the bidding is very low, then I would suggest using the vendor bid to go over your reserve, so when people ask about the auction results, the agent can say 'it was passed in at ***' (and most people dont realise the amount is actually a vendor bid)

Do you know if there are registered bidders? Its a hard time to be having an auction.

Thanks Penny , i think your brother has a wise head on his shoulders if he doesn't trust agents . I'll do as you and Terry have suggested and put in a higher reserve which i can lower on the day . Agree with your thoughts on a vendor bid which i've decided if there's little/no bids . Agent tells me there are possibly 4 genuine bidders . I'm o'seas so won't be able to attend the auction but have a good friend who'll be there and will call her number so she can give me a feel for things via the webcam on her smartphone.
 
Shuggy, it seems we are both on at the same time. As we both know, all sellers want the best they can get, and the buyers want the pay the least they can. And they can be well appart. So yes, the agent does have to let a seller know where they sit in the market, and also in a reverse sense present higher comparables to the buyer. In my mind, the sale is done when the seller is happy. Hope all goes well with the sale.
 
Shuggy, it seems we are both on at the same time. As we both know, all sellers want the best they can get, and the buyers want the pay the least they can. And they can be well appart. So yes, the agent does have to let a seller know where they sit in the market, and also in a reverse sense present higher comparables to the buyer. In my mind, the sale is done when the seller is happy. Hope all goes well with the sale.

Thanks i'll let you know how it goes and if i resort to plan B :)
 
I'm o'seas so won't be able to attend the auction but have a good friend who'll be there and will call her number so she can give me a feel for things via the webcam on her smartphone.

The selling agent should also be able to do this for you. They are acting for you and you're paying them. I've seen it done at a few auctions for absentee vendors.
 
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