bidding/offer process, please assist

[dynamite]

When placing an offer (prior to contract), am I obligated to buy a property if the vendor says yes, which can sometimes take days, and thats prior to a contract being drawn up.

The reason I ask is, I would like to be able to put multiple offers (different properties) in without being commited as buyers may say no, which means I may miss out on other properties, with vendors which may say yes.

 

[Aceyducey]

Dynamite,

Until you have exchanged contracts you can withdraw. Remember that this holds for the vendor as well (gazumping)

What we normally do is put in a few offers and let all the vendors know that we have several in and will be running with the first reply we get.

Cheers,

Aceyducey

 

[sbe]

As per aceyducey, unless you want to be ignored pretty quickly by your local RE's, tell them what you're doing.

Armed with that, they can go to the vendor for a faster decision.

 

[WillG]

You often put your bid in and say it is subject to building inspections and finance. The agent will often ask you for a small ($500) holding deposit if the vendor accepts the bid.

You can change yur mind up until the contracts are signed and the 10% deposit is paid up.

 

[dynamite]

Excellent, thanks people.

I have never been in the position to be a renovator for investment, I have always just bought a house as cheap as I can, and done the work I thought needed.

Now that we are looking at investing more seriously I really can't see how I can get a good market spread if I cant offer multiple offers (bad english I know).

Are there any other tricks to this process you can think of?

I certainly do want to do the right thing where I can, I don't believe in stuffing people around or being unethical, it just doesnt promote a good reputation, and if your aiming to do some quality work in one area, reputation surely has to count for something come sale time.

 

[Bill.L]

Hi all,

One thing we have used is a time limit. The REA asks if there are any conditions and I usually say that I need a reply by 5.00pm tomorrow afternoon as I am looking further, and I mean it!
We had the situation where the REA came back with the counter offer the following morning(ie 18 hours after the deadline). I told him sorry but that offer has expired. 10 minutes later he phoned back with a further $2000 off(on a ~$115,000 purchase). We still declined as we purchased elsewhere.

In hindsight we should have bought both, but that was thinking too far outside the square for us at the time.

bye

 

[dynamite]

Excellent idea Bill.

The bottom line from what I am taking people are saying is:

You are not legally obligated until you have signed a contract.

Which means to me I can put in as many offers as I like on as many properties as I like, and I am not obligated even if the vendor agrees to my verbal offer (initial).

 

[Bill.L]

Hi dynamite,

I don't like the term "legally obligated" as I am a bit oldfashioned and prefer "morally obligated".

If I put in an offer and it's accepted within my time frame, then it's a done deal even if something better comes along before I've signed the "legally obligating" piece of paper. I expect people I deal with to be trustworthy, therefore I have to be at all times.

bye

 

[XBenX]

Just wanted to point out - all information on the forums is of a general nature

IE Dont rely on it - do your own research and consult professionals

id prefer to put a condition in the offer along the lines of subject to partners approval - doesnt matter if your dog is your partner - it gives you an out

I also use time limits and submit written offers initially - although I like to then do the negotiations in person, face to face with the agent...just allows me to judge how the offer is received a little better (I try and make the agent ring the vendor whilst Im in the office)

in the negative that also allows the agent to do the same thing...

 

[dynamite]

Perhaps the time thing is the best way, and making the agent ring whilst your there.

I just get sick of agents taking up to 24 hours just to get back to me.

By then I may have missed out on 5 other possibles.

 

[Aceyducey]

In line with Bill L's post, as we find we are often dealing with the same RE Agents time and time again it's important to be honest & forthright when putting in offers.

If you reneg on a few verbal offers the Agent won't take you seriously next time.

This is where being ethical = self-interest as well

We tend to make written offers anyway - that way you can be sure that all the conditions are understood by agent AND vendor & the offer cannot be misrepresented to a vendor (intentionally or otherwise - RE Agents have faulty memories like the rest of us & with lots of offers coming in on different properties, occasional mistakes happen).

Cheers,

Aceyducey

 

[dynamite]

So now it sounds like to me some people dont put multiple offers in. Or are they just stressing the ethical issue.

To me it would seem common sense that if Im putting multiple offfers on on properties that Im gonna tell the agent I need to know by such and such a time. I thought this would have been fair enough.

If you go to far ethically you are unable to put multiple offers in, ie if you say well if you get back to me within 24 hours that would be good. You never know how many other properties you will have missed out on.

So isnt giving the agent 2-3 hours to advise the vendor of your offer plenty of time? Obviouslly there will be the occasion when the cant get through but they should be minimal (how many people dont answer their mobile when house, and if they dont have one, well enough said).

 

[mitch]

Gday dynamite,
lm struggling to find any properties that fit my investing bill let alone mutiple ones begging to be bought.l think l look hard enough although l could always spend more time looking but the market in vic is very high and the returns l need just arnt there at the moment,so l look look look and dream of finding many properties to put offers in on witha 3hour limit to reply

MITCH

 

[investor]

Hi Dynamite

Put in as many offers as you want, to as many real estate agents as you want. Chances are if you are in Sydney none will be accepted and the property goes to auction in the end anyway.

Don't worry too much about the ethics when placing multiple offers, there is nothing wrong about that as long as at the time of placing each offer you seriously believe you will purchase that property at that particular price. If they all get accepted pick the best one or two or three and forget the rest.

I can't even remember how many times a real estate agent has asked me to place an offer in, which I used to, only to increase the quoted price for that particular property when he spoke to other potential buyers. eg sorry sir I have already got an offer of $X you will have go higher.

I agree with the time frame it works sometimes. I have given many offers both written and verbal and even signed contracts and left deposit cheques.
Remember even if you have signed a contract and left a deposit cheque you can still back out (in NSW anyway) within a 5 day cooling off period. This does not apply for auctions.

Regards

Investor

 

[Bill.L]

Hi all

I have a little problem with the ethics being presented here. If I put in an offer on a house, and give the REA at least 24 hours to get back to me(ie 5.00PM tomorrow), it doesn't stop me looking further, and I TELL the other REA's that I have an offer in on another property. I would say to the second agent that I could offer $XXX on this property IF I don't purchase (y) property. Give me a phone call at 5.10PM. You can bet your sox that you will get the call back at 5.10PM. Your answer to REA2 is sorry I've already purchased, or the other deal fell through, let's talk.

A/ Your being honest

B/ It shows that you mean business(they don't have to believe you, that's their perogative)

C/ When you wish to deal with that agent again in one month, year, decade... they know that your not just yanking their chain!

bye

 

[dynamite]

Nill I agree thats the way to go, accept I think 24 hours is far to long, what does an agent need 24 hours to present a price for, surely this just gives them oppurtunity to increase the price with other offers? I think 3-4 hours is reasonable. But if there is something I am missing please advise.

Thanks.

 

[Ross Sneddon]

Hi

I accept that the moral position is more honourable than the legal position but please remember that the legal agreement is binding.

When making any offer, do so in writing. Use fax, email or hand over a piece of paper with your offer, even if you have spoken to the agent by phone. A verbal offer is of much less value.

Always put a time limit on the offer. This offer is open until close of business "date" (e.g. five days hence or whenever) however as I am looking at other property or I intend to attend an auction tomorrow afternoon I would like an answer by 5:00pm this evening.

Give both times and dates. You then retain the negotiating upper hand.

The agent knows exactly what you intend to do and will try and have the vendor consider within your timeframe. This is important if you intend to go to an auction on say Saturday afternoon at 3:00 pm and it is Friday and you need an answer.

You have told the agent that you want an answer today but will leave your offer on the table until next Wednesday.

Regards

Ross