invisible other buyer

[mavman]

Hi
I'm submitted an offer on a property (private sale) and the agent has told me that another buyer has also since submitted an offer.
I have upped my bid.

My question is how do you know whether there really is another buyer or if it is only a bluff. Is there any way of finding out?

Thanks
Milan

 

[Lotana]

Milan,

It depends on the market. In the buyers market it is unlikely the agent would bluff. Where is the property? Is it unique? Has it been on the market for a while? Did you see many people at the open house? Does the agent’s personality appeal to you?

I bought my house from an agent that looked like mafiosi. At the auction he was on the phone with a remote "bidder" and the price went up beyond my threshold even before I made my first bid. He then spent 10 minutes trying to convince me to make a bid, but I didn't trust him because I felt he was dishonest. The result - the house was passed in and I bought it a couple of weeks later $40K below the highest bid of the "remote bidder".

Cheers,

Lotana

 

[mavman]

The house is in Wahroonga (Sydney). It was on the market for a few months then the price was reduced by 25K a few weeks ago. There have been a few people at the open house. I'd say the house is pretty unique.

The agent is very clean cut, comes across as very unattached.

I think i just need to stick to my best price and be unattached.

Thanks
Milan

 

[Jamie]

Hi Milan,

I agree with Lotana here. As a property investor, you should be guided by logic and reality, not emotion.

It shouldnt matter if there is another bid or not - if the property suits your investment profile, you should offer what you believe is the right price.

Do all your research on the property itself, the suburb, historical capital growth, yields, vacancies, potential debt exposure, any renovations needed etc etc, then offer a price which would allow you to hold the property comfortably in your portrfolio. If an agent is pushing you higher than you feel comfortable paying, then walk away... whether there really is another bidder or not.

As Lotana mentioned, there are numerous examples of agents using this tactic and having it backfire, then having to return to the original purchaser...

Remember the adage that "The deal of the decade comes along once a month" Dont allow yourself to be pushed too high because you are worried about losing the deal.

Jamie

 

[Simon]

My sister's story

You know my baby sister just bought a great house here with a block that can be dual occ'd very easily.

The agent told us that there was a higher offer in and she needed to come up another $5K to get the offer accepted.

We thought it was bluff so she stuck to her guns.

Anyway the agent then told us that the other buyers offer was rejected by the old lady because she liked my sister more. This just confirmed our belief...I mean who would give away $4K just because they liked a buyer that they will never meet again?

So the sale went through. By coincidence we found that we knew the niece of the old lady who confirmed the truth of this story that the old lady dropped the price for my lovely little sister!

I guess the point to my rambling is that sometimes the invisible buyer is real. And I guess that's what makes this game fun!!

Cheers,

 

[Ian (WA)]

'Evening All

Just a thought, after having put a few offers in on a few IP's; go to the agents office, ask to see him/her to 'have a chat'. When the small talk is over, ask to see the file on the property including 'the other bids'. If the agent can present it immediately without scrambling for dodgy papers then so be it. If the agent baulks, or refuses...stick to your offer and walk out....or walk away completely.

Cheers Ian

 

[Simon]

Not so sure

Ian,

The agent might have a number of reasons not to show you this file.

Perhaps one might be the Privacy Act?

Cheers,

 

[Darryn]

Hi Milan

There is a chance the Agent may be genuine, however it's more likely a classic ploy.

I recently read a book by Terry Ryder called "Confessions of Real Estate Agent" which was of some help. It's a bit biased towards the buyer but gave you a great insight in to the world of the Real Estate Agent and their motives.

Good luck.

Darryn

 

[Ian (WA)]

G'day Simon

Agree wholeheartedly; should the agent cite the Privacy Act, then it just becomes one of those things. You have to decide where to head with the prospective property and your bid.

Essentially my belief is in working with agents with a degree of respect/trust. I have found in the past that if a satisfactory working relationship can be established early....then they have met my request when asking to see other 'offers'.

There was only one occasion where the agent was clearly playing games and I challenged him to put up or shut up. He got quite surly when I suggested I had done more research than he expected....(I knew the vendor through a mutual friend). The vendor told me they had had no other offer!

As it turned out the vendor took the house off the market, but not before giving the agent a good dressing down.

Cheers Ian

 

[Jamie]

Originally posted by Ian (WA)
'Evening All

Just a thought, after having put a few offers in on a few IP's; go to the agents office, ask to see him/her to 'have a chat'. When the small talk is over, ask to see the file on the property including 'the other bids'. If the agent can present it immediately without scrambling for dodgy papers then so be it. If the agent baulks, or refuses...stick to your offer and walk out....or walk away completely.

Cheers Ian

Sorry Ian, I cant ever envisage this event taking place.

In a property transaction the agent is the representative of the vendor , and as such is legally and morally bound to deliver the best possible outcome for the vendor l. How would they achieve this if the told every purchaser what other purchasers have offered? An agents job is to deliver the best result for the seller... I cant imagine an agent showing you what someone else had offered, because it means that their position is weakened with regard to achieving the best price for the vendor.

As Simon mentioned, there are also privacy issues involved in this situation. An offer is made to a vendor through an agent... as such, the only people who should have access to the details of the offer are the purchaser, the agent and the vendor. If you made an offer, would you like the details being broadcast to other potential purchasers, only to have them trump you at the last minute. Remember, these practices work both ways...

The point in my previoius post in this thread is that as an investor it shouldnt matter if there really is another offer... You have a pre-determined price at which the property ceases to fit your criteria. You do everything within your power to secure the property as far below that price as you can. Once bidding, other offers, agent pressure etc. pushes you above that price, you walk away.

It shouldnt matter what anyone else is doing...

Jamie

 

[Ian (WA)]

G'day Jamie

In the last sentence of my initial post, and the first sentence of my last post I alluded to all you are saying (I concur with you).....have a final offer in mind and stick to it, walk away etc.

As for envisaging it never happening..... it has and it does!

I would like to think that the moral and ethical principles would be observed and adhered to by all agents....and indeed professionals in any type of employ. Sadly there are those who will have moments of weakness to get what they want.

Human nature, or human failing? Call it what you want.....but it does happen.

Fortunately I have found the bulk of agents, especially ones I have dealt with recently (3 x properties), to be professional and straight up re discussion on 'other offers' ie: "Sorry but I can't divulge that information but if you are saying that this is your best offer, then I will present it to the vendor", or, "There is another offer which is in excess of your current offer, so if you have scope to increase your offer I will present it to the vendor". etc.

Yes, it all comes down to how much you are prepared to pay for a property and nothing else should really matter.....but if you feel the need to ask, then by all means do so!

Cheers Ian

 

[Kevin Hockey]

Hi Guys,

A Real Estate agent is duty bound to get the highest price possible for the vendor but that doesn't excuse them from deceiving a purchaser by claiming another buyer which is a figment of their imagination. They are obliged to be truthful and not overstate the situation. Reality, I know, is very different but they will place themselves in a liable situation by doing so.

The best way to know what's happening is to ask questions, lots of them. And then ask them again the next day and see if the answers match up. You might be surprised how some agents will elaborate when asked the same question a couple of times.

Kev

www.nundahrealestate.com.au

 

[asy]

I quite often tell a purchaser that there's another person interested!

But

Only

when

there

IS!!!

It's a little damned if you do, and damned if you don't...

If I tell someone that there's another person looking at the property, or interested in the property, or has made mutterrings about making an offer on the property, you can be damned sure there is.

If I tell someone there is another interested party, I am accused of trying to get the price up through deception. If I don't tell a purchaser that there's another interested party, and the property gets sold while they are 'thinking' or gets a higher price, and theirs is rejected, then I get in trouble. What am I to do?

As Kevin quite rightly said, it's very naughty not to be truthful...

And, I agree that asking lots of questions is a very good idea...

asy

 

[Ian (WA)]

Kev & Asy

Thanks for your feedback.....greatly appreciated!

Asy you have highlighted the conundrum perfectly; such is the predicament an agent would find themselves in, I should imagine, on a regular basis.

It would clearly provide a deal of pressure when trying to negotiate the property with a prospective purchaser.....how much information do you provide and at what risk.

As I mentioned, most of the agents I have worked with have been thoroughly professional, there has however been a need from my part to push for the current status of offers so I could make a once and once only offer, the agent was aware and provided me with evidence of other offers when I made it clear I would walk away if he played cat and mouse.

As I see it, you have also very strongly and correctly outlined your position when confronted with this situation.....at the end of the day you can only go with what you know to be the 'right thing to do'. If you are unable to provide information without compromising yourself or your ethos, then I am sure you wouldn't....and damned the deal if it comes to it!

Thank you for providing a valuable first hand response to this discussion.

Cheers Ian

 

[brains]

Just be honest at all times......no conundrum.

 

[Topnotch]

Sounds like another case of " Real Estate Agents Honour" to me.

My thoughts though are stick to your price and don't chase the deal, there's always another one coming. Leave your existing offer standing with the agent as the other one may fall through on finance or something and he needs a second choice to fall back on.

 

[Sim]

Off topic posts moved to this thread

 

[see_change]

Sim

My first reply to this post was on turramurra / wahroonga and relevant to the original topic. It's missing from this and the split post.

See change

 

[Sim]

mmm... not sure about that one SC - I haven't deleted any posts from this thread myself (don't think any other moderators have either)... so if it's not in either thread I don't know where it is (I didn't see it when looking at the post list for splitting the thread).

Is it possible that it never got posted properly (due to network error or something) ?

Sorry if it was lost SC - I can't explain that.

 

[Mike]

Hi,

I've deleted my original post because I am concerned that my negotiation strategy may offend some people.

Regards, Mike