Initial & final best offer strategy

Today I put my initial and then my final best offer as per the agents instructions. I called the agent after receiving the email about putting in initial offer; I said what does the both mean? He pretty much said the initial offer will get you into the final round.

Anyone else hate this process. I would rather much prefer offers above and then to take that to the vendor to accept or not. However, the two agents I spoke and dealt with were very good and friendly.

It's pretty much like an undisclosed auction.

The advert was offers above xxx.
 
WTF?

Why would they accept your initial then if they have your best offer?
Sounds like a daft system to me.
I like it to be - offer, counter off by them.
 
It's quite a smart system. It weeds out the lowballs and arguing over price. The interested buyers will be scared enough to try put in a non-cheeky offer and the vendor can still try push them for more. Works well.
 
Common technique in boom times. So how did you go Will?

Doesn't look promising. The cut off time was 17:00 yesterday. I rang the agent at 17:10 asking how I went. He said there are about 13 offers and needed to go through. He said he would respond later in the evening or tomorrow morning as he needs to present these to the owner. It's now 10:56 am so doesn't look like I got it but there is obviously someone else out there who is happy. I was thinking at the time..how hard is it to find the highest offer and just advise me at the time that I was not successful. I did make a note saying my offers expires today at 18:00.

There is another one in the same block for sale as well with the offers over xxx. I asked if there was any NEG as the price seems a bit high compared to others on the market. Agent said it?s unlikely he will NEG as owner is not in a rush to sell. When I then asked for the contract to review, the agent said its still being prepared by the solicitor. I'm now asking myself, if he isn't in a hurry to sell, why have an open inspection when the contract isn't even ready.

I don't want to make an offer unless I have something to sign against. What is the point in making an offer where I cannot sign the contract; it will just allow the agent to use my offer as leverage for other buyers.
 
Today I put my initial and then my final best offer as per the agents instructions. I called the agent after receiving the email about putting in initial offer; I said what does the both mean? He pretty much said the initial offer will get you into the final round.

Starr Partners?
 
I hope you get it but agreed you should know by now.
However I put in an offer on Saturday and I still don't have an answer and it's Tuesday today! Seems the Buyers are off on annual holiday with the wife OS and the hubby on a fishing charter. Sigh!
 
Aaaaaaaarrrrrrghh!!! $2k. Faaaaaaark

I'm starting to think whether it was a better approach to have rang up the agent just before 17:00 and advising him that I am about to submit my offer and to get an indication for a successful offer. Perhaps this is what the winning party done. The agent may have favoured them and told them to call them right before 17:00 and to then submit your offer. That why I submitted my offer at the last hour to try an avoid this.

In any case, I can now focus on the other one in the same block. This one has the bedrooms facing south and lounge facing north where as the one above had all three facing north. Would you of preferred a hot north facing bedroom as opposed to a cool facing bedroom?

I know my current north facing bedroom req the air con on all day during summer.
 
Better strategy is just not to use real estate agents like that. Doing your small contribution to one day shut them down and we'll be left with the legit ones.
 
That's annoying missing it for 2k. Why would the agent tell you that?! not sure what purpose it serves. At least you know your offer was very close, so can feel good about that. Hope you get the other one!
 
Just got a call from agent; someone got it for 2k more. I feel very pis#ed off now.

Got steam coming out of head right now.

The question you need to ask yourself is why did you offer $2k less?
Is it because you thought that $2k was no longer fair value.
If that's the case then you shouldn't be upset by it.

If you offered $2k less hoping you could get away with it then it backfired.

What if you offered $10k more and found out your offer was higher by $8k, would you be equally annoyed that could you have saved $8k?

Thing is, understand what has happened and re-focus yourself. Don't let this cloud your judgement and throw a stupidity high offer on the next property just because you missed out on this on. (I've been in your shoes and lucky I had my wife stop me each time from offering $50k-$100k more than what i should simply because I couldn't think straight).
 
That's annoying missing it for 2k. Why would the agent tell you that?! not sure what purpose it serves. At least you know your offer was very close, so can feel good about that. Hope you get the other one!
The purpose is to psyche you up so that you pay more than you should for the next one.

You should pay what you think something is worth. Not what you think you can get away with (exception to that rule is if you have ALL the information - kind of like insider trading).
 
I'm starting to think whether it was a better approach to have rang up the agent just before 17:00 and advising him that I am about to submit my offer and to get an indication for a successful offer. Perhaps this is what the winning party done. The agent may have favoured them and told them to call them right before 17:00 and to then submit your offer. That why I submitted my offer at the last hour to try an avoid this.

This isn't ebay. Sniping does not work.
Most of these first and final offers work with sealed envelopes.
Granted there are cases the agent can tell other parties they favour to bid more (once they know the result). But I daresay this is rare - the agent has nothing to gain and lot more to lose (unless its family member - or the agent really really hates your guts).
 
This isn't ebay. Sniping does not work.
Most of these first and final offers work with sealed envelopes.
Granted there are cases the agent can tell other parties they favour to bid more (once they know the result). But I daresay this is rare - the agent has nothing to gain and lot more to lose (unless its family member - or the agent really really hates your guts).

Good points and I agree.
 
The question you need to ask yourself is why did you offer $2k less?
Is it because you thought that $2k was no longer fair value.
If that's the case then you shouldn't be upset by it.

If you offered $2k less hoping you could get away with it then it backfired.

What if you offered $10k more and found out your offer was higher by $8k, would you be equally annoyed that could you have saved $8k?

Thing is, understand what has happened and re-focus yourself. Don't let this cloud your judgement and throw a stupidity high offer on the next property just because you missed out on this on. (I've been in your shoes and lucky I had my wife stop me each time from offering $50k-$100k more than what i should simply because I couldn't think straight).

Good points here as well.

I think my offer was prob a tad over market value but I knew CG is good in this area. In saying market value, what does this even mean anymore. Market value could be driven by one person when the rest are not willing to pay. The market value of today is different tomorrow.
 
The purpose is to psyche you up so that you pay more than you should for the next one.

You should pay what you think something is worth. Not what you think you can get away with (exception to that rule is if you have ALL the information - kind of like insider trading).

Will work well if it's the same agent selling both properties, for sure! Anyway, there is some comfort to know that his price estimation was almost on the money so the value he put on the property was accurate...just not accurate enough to win it ;)
 
Will work well if it's the same agent selling both properties, for sure! Anyway, there is some comfort to know that his price estimation was almost on the money so the value he put on the property was accurate...just not accurate enough to win it ;)

Doesn't have to the be the same agent.
If MightyWill gets upset and pays more than they should for the next property in the same suburb, then they would have set a new benchmark.
All agents from the area would benefit as a result.

Remember agents aren't after the final price. They only care about the commission.

If property in certain area is worth more, their job is made easier isnt it ?
 
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