Buying tatics

[wylie]

Valuer General - not sure if they are still called that, but even after the sole agency finishes, if the buyer goes back and buys privately, you may find they are faced with being sued for the money.

It will not affect you, but you could be dragged into it somehow.

I would love to hear a current agent's comments on this. Any of you on line right now?

I was contacted by the original agent two years ago when we bought from the next agent. Different situation, but 12 months after her sole agency ran out, she got my name and phone number and called me to ask "what about my commission".

My parents bought a house once where the sellers were chased up regarding another transaction where they went behind the agents back, waited a little while and sold it privately to somebody introduced by the agent. They were chased, and I am sure they were sued for the commission.

I guess it depends on how good the agency thinks their chances of getting the money is. I do know my mum used to keep all her open for inspection sheets with peoples names and numbers and check the VG sheets. I imagine every agent does it.

 

[phil]

I've actually had the vendor approach me to cut out the agent. I said " no thanks, how would you feel if you were the listing agent ".

I believe in doing the right thing, the agent works for the vendor and should expect to get paid (if there is a potential transaction). Sorry, but I can't accept this type of shonkyness, not cool at all.

Phil

 

[Nikolina]

Whaaaat? 10%.

Maybe things are different in NSW, but most commission rates I have seen here in Vic are between 1-3%.

I just used 10 because it was an easy even number.

 

[Buddybee]

I have a very long winded story that I'll save for another day....but in summary my parents were the only serious bite on a $1 million + beach property. Agent 1 lost the exclusive, Agent 2 rang my parents (introduced to the property by Agent 1, who's details were passed to Agent 2 by the Vendor from the rejected offer paperwork)

After a couple of days of negotiations my parents and the vendor reached agreement and signed the contract. During this time Agent 1 said to my Parents, do negotiate with anyone else; we'll get you that property in 3 months time!!!! 3 months later they rang Dad and said "You bought that property......didn't you" My dad calmly said "I think you have your wires crossed" They didn't beleive him, and just recently on the 1 year aniversary for the contract signing he got another phone call from them, obviously still VERY keen to chase up their lost commission.

There were very complicated cirumstances regarding the sale/purchase of this property - Vendor had serious personal issues, serious financial issues, and serious problems with the competance of the REA - I guess his emmotional and irrational state rubbed off on the REA.

Cheers
Buddybee

 

[The Y-man]

Let's take it the other way around - remember that the agent can be used to the buyer's advantage.

Often times, people have an emotional connection to the deal - so they will generally want more than the market is willing to pay. The agent will often crunch the vendor to make a low sale go through (so they can collect the commission).

Cheers,

The Y-man

 

[handyandy]

There is also a clause in the contract of sale which can leave the buyer liable for a commission claim by the first agent.

The clause is as follows (or similar)

The buyer guarantees that [insert the name of the agent who finally makes the sale] introduced her to the property and that no other person has introduced or made knowing to her that the fact that the property was for sale.

The buyer indemnifies the seller for any financial loss suffered by him in the event that this guarantee is incorrect. (Rob Balanda http://www.clausesmadesimple.com/content.htm)

So by you approaching the vendor direct (after intro by agent) you may become liable for the commission on the sale over and above the contract price.

I have had agents so aggressive and approached us whilst looking in the window and try and obtain our name and details - just in case we end up buying any of these properties. So you think someone who waylays you in the street for looking in the window is not going to sue for the 'lost' commission.

Cheers

 

[Nikolina]

I have had agents so aggressive and approached us whilst looking in the window and try and obtain our name and details - just in case we end up buying any of these properties. So you think someone who waylays you in the street for looking in the window is not going to sue for the 'lost' commission.

Cheers

Thats Gold! I would just give them a false name, they are not an authority of law who has the right to obtain that information.

Thanks for all the feedback guys.

 

[boomtown]

If you ever get a clause in a contract that uses the word "indemnify" - and you are the one doing the indemnifying - cross that clause out and tell them to go jump in a lake. The word "indemnify" is never ever good (unless you are getting the benefit of the clause).

 

[mitch]

Hey Niko

swings and roundabouts , do you know what that means ?

Would it be rude of me to suggest that l dont think you're smart enough to make your way sucessfully through business life with that attitude ?

And im sure all these great idea's you have are foolproof and have never been tried before , so good luck , you're on a winner !

 

[Mike&Wendy]

There is also a clause in the contract of sale which can leave the buyer liable for a commission claim by the first agent.

The clause is as follows (or similar)

The buyer guarantees that [insert the name of the agent who finally makes the sale] introduced her to the property and that no other person has introduced or made knowing to her that the fact that the property was for sale.

The buyer indemnifies the seller for any financial loss suffered by him in the event that this guarantee is incorrect. (Rob Balanda http://www.clausesmadesimple.com/content.htm)

Surely, that would only apply if you entered into an agreement. If I look in a shop window and gave them my name and address (which I wouldn't anyway), there is no way they can come after me for anything.

Edit, I'll just add, to the OP, just use the agent, you know it's fair.

Mike.

 

[fernfurn]

Talk about looking in the RE window. We are in a little tourist town and all the sidewalk restaurants/RE agents are mixed. We went for a walk the other night and were looking in the window, the RE we had spoken to earlier that day was still working in the open doorway, so I said Hi, what about this one. First, she said its under contract now and I told you about that one (in an accusing tone, then she started at the top of her voice to point out all the other ones, (which we werent interested in and hadnt asked about), then, which really got up my nose, in front of all the diners at the sidewalk restaurants, she said at the top of her voice 'did we still want to stick around the $X mark?' Gosh I was ticked off, you really dont want your personal details shouted out down the street. I have also just been windowshopping and had another agent pounce out of the agency and 'grill' me

 

[wylie]

I have to say that when my mother was selling, there used to be a roster. Whoever was on roster for that half day had first chance to walk outside to the window shoppers and ask them if they needed any assistance.

If they wished to look at something, they became the "clients" of that particular sales agent. Of course, if they then continued looking and wanted to look at another house, and the agent they had dealt with was away, and they didn't want to wait until next day, the agent who next dealt with them would share in the commission. There were quite complicated rules, which would have done my head in.

Mum would sometimes have been looking after clients for months, and have an afternoon off. They come in and want to put in a contract on something mum has shown them. They have no idea that they are effectively giving somebody else some of her commission, somebody who has had no previous contact with them.

Some of them were quite upset if they found out as they had built a relationship with mum and, not understanding the rules, had shared her commission with somebody who just happened to answer the phone when they were trying to get her. If they insisted on putting on a contract (and the person answering the phone was NOT going to insist they wait for my mother ) then she gave away a percentage, but most clients didn't know the inner workings, and it is not their problem anyway.

Some would not have cared, but many would have preferred to deal with mum. Of course, it also cut the other way. Sometimes mum would have got a cut of somebody else's commission just because she was on hand that day.

I don't know if all offices work like this, but it was one of the big ones. I believe if her clients knew, they would either insist that she be contacted at home or they would wait, but when you decide to put a contract on, you want to do it "now".

Mum started selling before mobiles were used, and took a break 19 years ago to mind my son. After about 18 months she went back to real estate. In that short time, mobiles had become a must have, but they were still the "bricks" and not the phones of today. They really changed the way real estate was sold and meant that agents could be contacted even on their day off, which wasn't so much the case prior.

The agent effectively "owned" the person they chatted to at the window if they went on to look at something with them, effectively beginning a client relationship. But I never heard of an agent chasing a window looker for commission if the window looking didn't result in at least some type of client relationship.

 

[Perp]

Nikolina, I can only reinforce that you're far from the first person to have thought of trying this. I guarantee you the agent is legally entitled to their commission, based on what you've told us, regardless of the nature of the agency agreement.

All RE agents - and many property professionals, including many investors here - have access to government listings of property transfers, including names and contact details of both parties, and they absolutely chase up every property that they've listed and not received a commission on (for whatever reason). This information is not private, I hate to tell you. You can subscribe to this information, eg RP Data, PDS online, etc.

Apart from the legalities, what you're proposing is highly unethical.

If you need to steal or defraud to make the deal profitable, then there's obviously not enough profit in the deal and you should look elsewhere.

 

[buzzlightyear]

I just used 10 because it was an easy even number.

Nikolina, at a theoretical 10%, I would agree with you, that there would be a financial incentive to go direct to the vendor. But at between 1-3%, given the extra work or uncertainty that many vendors may feel to do this themselves, is their a value proposition here?

Taking your example, at say 2% (midpoint between 1% & 3% in my example, for a $330,000 price, the commission is $6600. Arbitrarily, you share the windfall evenly between the vendor and yourself, which is $3300.

Different people will make differing assessments on the value of whether this is worth it. Ethics aside.

 

[The Y-man]

Taking your example, at say 2% (midpoint between 1% & 3% in my example, for a $330,000 price, the commission is $6600. Arbitrarily, you share the windfall evenly between the vendor and yourself, which is $3300.

Different people will make differing assessments on the value of whether this is worth it. Ethics aside.

Ok, so the reverse and (probably) just as unethical/illegal: Offer the agent a "gift" worth $200 and get him/her to talk the vendor down $10k...

Cheers,
The Y-man

 

[Jon Chown]

Well I've had a good laugh at Nikolina's comments.

On almost every Investment site I visit, I see post on just how lousy, unethical, rude, and distrustful agents are, and now I read a post about how as investers we can cut them out of their commission by back dooring them.

Nikolina, with an attitude like yours, I'm sure you are destined for an eventful time in property investing. Good luck, I think you might need it.

www.BrisbaneUnits.com

 

[Perp]

On almost every Investment site I visit, I see post on just how lousy, unethical, rude, and distrustful agents are, and now I read a post about how as investers we can cut them out of their commission by back dooring them.

Hi Jon, welcome to Somersoft. I hope you're encouraged by the fact that most investors would agree with you that what Nikolina proposes is outrageous.

 

[Rockstar]

Nikolina,

I try to establish harmonious relations with all the agents in my area and build up knowledge and trust with our dealings. It is well worth doing as I find them extremely valuable assets in achieving my investment goals. Success comes by building a network of trusted professionals around you and the RE Agent is one of them.

 

[Nikolina]

Hey Niko

swings and roundabouts , do you know what that means ?

Would it be rude of me to suggest that l dont think you're smart enough to make your way sucessfully through business life with that attitude ?

And im sure all these great idea's you have are foolproof and have never been tried before , so good luck , you're on a winner !

Rude? YES! At the age of 22 i am very sucessfull with my business life! My attitude has gotten me where i want to be.

I don't need the good luck, because as of yesturday my offer has been accepted!

Now looking for IP no 2!

Thanks again.

 

[wylie]

Interesting and pleasing to hear you are successful in your business. I imagine you would be quite upset if somebody tried to do you out of some of your well earned income, like you were considering trying to do to the estate agent.

Not wanting to get into an argument, but surely you will agree that what you were suggesting is highly unethical, and that you would not appreciate it if you were on the receiving end.

Real estate agents have to make a living and put food on the table too.