My bidding war!

[Rooster]

I do understand what best and final offer is however, if it had gone to auction i would have known what the other bids were. I could have paid up to 400k on the property if i had wanted to but, why would i have put in 400k offer as best and final offer if bidder 1,2 or 3 best and final offer was only say 330k? Ive just screwed myself over with 70k.

Why are you comparing your offer with everybody elses?

You need to work out what is a workable figure for the deal. At what figure is the deal still a good investment.

It has nothing to do with the other players. You seem hell bent on getting a percieved bargain rather than working out the maximum figure where by the deal is still a goer.

All the ifs, but and maybes in the world are irrelevant. You were given prior opportunity to give you best and final offer and you still decided to go in low!

I still think you aren't grasping "best and final offer".

Cheers


Rooster

 

[battler]

I would have topped it without even having to think twice about it, but with inceases of say 5k. That way i would have had some gist of what that offer was.

But you couldn't because the Agent allowed you several offers in negotiations but then stopped you offering again.

Why did the agent even allow a second offer from you?

 

[Nikolina]

But you couldn't because the Agent allowed you several offers in negotiations but then stopped you offering again.

Why did the agent even allow a second offer from you?

I don't know, In total i made four offers...

 

[JamesGG]

The idea for the agent, in that type of scenario, is to create an 'anxious' buyer out of a 'willing' one.

Then, properties get sold for above what might ordinarily be considered fair market value (typically defined as what a 'willing but not anxious buyer will pay'). So, because none of the potential buyers know what the others are offering, they become anxious and offer $x amount more to try to secure the sale.

Perhaps, whilst maybe a little emotional about it after the event, the reason that you didn't offer enough, Nika, to buy the place is because your emotions were actually in check during the offer process; you were willing, but, not yet anxious?

 

[battler]

I could have paid up to 400k on the property if i had wanted to but, why would i have put in 400k offer as best and final offer if bidder 1,2 or 3 best and final offer was only say 330k? Ive just screwed myself over with 70k.

And the Agent just lost 70k for the vendor by not allowing the process to proceed.

 

[Nikolina]

That is correct...

 

[Nikolina]

Either your conveyencer is a lawyer and knows sumthin all the others dont, or your both too full of yourselves.
And the vendor is free to take whatever offers they please and sell to whoever they want even if they aint the highest bidder.
Learn how to deal with REAs I'd suggest.
There's plenty posts about it round here.

She must know something others don't. I have much confidence in her. She is EXCELLENT! Even with my last purchase, she did things i didn't even think were possible. I just wish i could have seen the agents face when she tore shreds of him! Would have been priceless! Agent did something illegal & i got a nice little sum from the agent after settlement. I got RESULTS!

 

[aussierogue]

Heres what you do

Say to the agent - if I offer 330k will the house be mine. You need to pin down the agent and the buyer.

In your type of situation (that you described) I would never give an open offer, despite the assurances, because you will be screwed.

But if you say to them specifically - if I give you a 330k offer will it be accepted - and then they say yes... then you send them the offer for reply 20 minutes and get a signature. Thats will sort them out.

The whole situation was too open ended.

Cheers
Aussie

 

[Perp]

I do understand what best and final offer is however, if it had gone to auction i would have known what the other bids were. I could have paid up to 400k on the property if i had wanted to but, why would i have put in 400k offer as best and final offer if bidder 1,2 or 3 best and final offer was only say 330k? Ive just screwed myself over with 70k.

Nikolina, but you knew it wasn't going to auction. I don't think you do understand BAFO, because if you were happy to buy it at $400K, you'd have offered $400K. You were taking a gamble that the vendor/agent didn't mean it when they said "final".

As Rooster has said, what other parties are willing to pay is irrelevant; the whole point of a BAFO is that you have to decide what the property is worth to you. You have to find that $ figure at which you hope your offer is accepted. Too low, and you risk being in the position you are now - disappointed that you missed out by offering too little. Too high, and you feel that you're ripped off. It really doesn't matter what anybody else offers; this method forces you to do the hard work of deciding what the property's worth.

It has nothing to do with the other players. You seem hell bent on getting a percieved bargain rather than working out the maximum figure where by the deal is still a goer. ... I still think you aren't grasping "best and final offer".

Agreed.

And the Agent just lost 70k for the vendor by not allowing the process to proceed.

Not necessarily; we haven't been told how much bid was that won the deal. If Nikolina had properly understood what BAFO meant, then she should have offered $400K.

She must know something others don't.

I'm willing to bet that she doesn't.

 

[Nikolina]

Nikolina, but you knew it wasn't going to auction. I don't think you do understand BAFO, because if you were happy to buy it at $400K, you'd have offered $400K. You were taking a gamble that the vendor/agent didn't mean it when they said "final".

As Rooster has said, what other parties are willing to pay is irrelevant; the whole point of a BAFO is that you have to decide what the property is worth to you. You have to find that $ figure at which you hope your offer is accepted. Too low, and you risk being in the position you are now - disappointed that you missed out by offering too little. Too high, and you feel that you're ripped off. It really doesn't matter what anybody else offers; this method forces you to do the hard work of deciding what the property's worth.

Agreed.

Not necessarily; we haven't been told how much bid was that won the deal. If Nikolina had properly understood what BAFO meant, then she should have offered $400K.

I'm willing to bet that she doesn't.

Don't insult me. I 100% understood what the agent meant and even if the agent called me back right now saying i could make another offer, i still would not offer 400k. I would make offers with 5k increases.

 

[Perp]

Don't insult me. I 100% understood what the agent meant and even if the agent called me back right now saying i could make another offer, i still would not offer 400k. I would make offers with 5k increases.

Then don't complain when you miss out, as this strategy is not compatible with this sale method.

It's like turning up to an auction, making a conditional offer, then getting cranky when the property is sold at auction for a lower price than your conditional offer. It's pointless; an auction seller doesn't want a conditional offer, they want the best price they can get under auction conditions.

Similarly, a seller selling by tender (which is what this effectively was) doesn't want to have to think about what the lowest price they'd possibly accept is, particularly when they have 4 eager buyers! They want to find out the best price they can get, not the worst.

 

[andrew_de_a]

She must know something others don't. I have much confidence in her. She is EXCELLENT! Even with my last purchase, she did things i didn't even think were possible. I just wish i could have seen the agents face when she tore shreds of him! Would have been priceless! Agent did something illegal & i got a nice little sum from the agent after settlement. I got RESULTS!

what do you mean you got something from the agent? what did they do that was illegal?


why would you stuff around with 4 offers? that to me is ridiculous and you deserved to miss out on it.

 

[JamesGG]

No offence but you sound like a real idiot.

One of my pet hates is when someone says 'no offence, but' and then follows it with something clearly intended to be offensive.

Poor form, really.

Although, in this case, perhaps a little ironic...

Four offers is a negotiation process. From what I can understand from reading this thread, the main issue was in communication; either the agent didn't convey the idea of 'best and final offer' properly, or, Nika hasn't been through that style of closing a deal before and was surprised when the agent actually acted as intimated.

Neither scenario makes her an idiot. We all know that investing in real estate has a constant learning curve. I'm sure that Nika will be able to take the lessons from this experience, and, use them to her advantage when the next opportunity comes up.

 

[andrew_de_a]

Thanks kind sir, you are a noble soul.

 

[battler]

Then don't complain when you miss out, as this strategy is not compatible with this sale method.

The Agent must have changed the sale method then, as he allowed three offers from Nikolina in the negotiations prior to making it a fixed price tender?

 

[Nikolina]

The Agent must have changed the sale method then, as he allowed three offers from Nicolina in the negotiations prior to making it a fixed price tender?

That is correct.

 

[Lil Skater]

I agree it sucks, and you're smart for not putting an offer of $400k, but at the same time, if the agent has said final offer, then nothing illegal has happened.

But, a lesson has been learnt.

 

[Gremlin]

My second PPoR started off as a block of land, which was being sold cheaper because the owner had been injured and needed to offload it. It was originally $69k, but was now for sale for $60k. It was decent value at this price.

I went and talked with the agent as an enquiry only, and ended up and said I'd buy it, but couldn't pay any money at that time, so would come back the next day with a cheque.

Next day, the agent calls me and says there is another interested party who were going to offer more, and I'd have most likely have to put in a higher offer.

Being the King of scepticism, I thought there was probably no other party at all, and he was just trying to get me to pay more.

So I nicely said; "If someone else wants to pay more than $60k for it they are welcome to it. My offer is still $60k."

And left him with that. Trying to call his bluff - if it was one. I was taking a gamble, but was prepared to not get it.

Don't want to hijack the thread, but I've faced a BAFO on a few occasions where I also suspected there was no other party. The conversation goes:

Me: Thanks for that. Given the circumstances, I'd like to rescind my earlier offer and get back to you with a revised offer in x hours/days.

On three separate occasions where I suspected I was the only interested party I've actually offered less than my earlier offer - on two of the three occasions I bought the place at the reduced price.

On each occasion I presented the reduced offer face to face with the agent and on the two that I bought I could immediately tell from their reaction that I'd correctly called his/her bluff.