One for the Real Estate Agents

There have been at times (and one property that I will attending an auction tomorrow) where the agent has declined to put anything approximating a price on the property. IN this specific example, they have indicated $400,000 to $500,000. It is worth over $475k, IMHO.

Why would an agent not nominate a price? They even said that they don't have a reserve, but the vendor will nominate one on the morning of the auction.

Do they not really know how much the property could go for or is this a deliberate tactic from the REA?
 
Quite seriously its friggin irrelevant what the agent thinks. You have a price that you woud be prepared to buy the property at and that's the end of it.
 
Thanks boomtown, I understand the market will dictate the price and I have my view of what's fair and reasonable.

I am merely trying to understand the tactics/psychology behind the REA actions.
 
Do they not really know how much the property could go for or is this a deliberate tactic from the REA?

They'll say "they never really know what a property is worth until the hammer falls, but I think you've answered your own question with that last comment.

Auctions work best with competition. Get people there, get them interested and bidding and hope that the emotion of the moment takes over....
 
Sometimes unusual properties are difficult to value.

We have all seen agents get it really really wrong and these cannot all be deliberate errors.
 
Psychologically its not a bad tactic - it keeps the low payers interested and does nothing to disusade the high payers from thinking its worth X+20%.

You want a big crowd at the auction even if many of the punters will never bid just because that puts pressure on the real bidders. So if you draw the punters with an under market price promise so be it.
 
They'll say "they never really know what a property is worth until the hammer falls"

.....and as we all know, with quite a few legal precedents to prove it so, that the "hammer falling" means diddly squat.

Go and offer 5K more after the hammer falls to the Vendor and see which one they take. The 'first call' drama and slapping of a hammer is pure theatrics to get the punters to bid higher that don't amount to a hill of beans.

If you are prepared to bid higher - the theatrics are unnecessary.

1. Hammers falling don't cut it.
2. Signing contracts don't cut it.
3. Paying deposits doesn't cut it.
4. Having an unconditional contracts of sale doesn't cut it.

You never really know what a property is worth until the place has settled.

5. Title deeds physically swapped for cash - that cuts it.
 
Well the vendor thinks its worth $550K. The agent knows there is no chance of that, and if they put a realistic range on the advertising they're going to get an angry call from the vendor. To get the listing the biggest liar wins.

So the agent has been spending the vendors money "advertising" the property in all the glossy mags & newspapers knowing full well it's unlikely to meet the vendors expectations.

When the highest bid comes in, (from a local who saw the FS sign, not any advertising) they can turn to the seller and say they've done their very best, this is what the market says the place is worth, so it's sell now or sit on the market for 6 months to get a few thousand more.
 
picture of an agent with a hat on, covered in fishing flies, holding a fishing rod, line cast out into the river, winding the handle vigorously, with a big smile on face.
 
Why would an agent not nominate a price? They even said that they don't have a reserve, but the vendor will nominate one on the morning of the auction. Do they not really know how much the property could go for or is this a deliberate tactic from the REA?

Hi Buzz,
Perhaps they might have had the wind put up them with the recent case of some McGrath offices being fined for under-quoting?????

http://www.news.com.au/business/money/story/0,25479,23749592-462,00.html

.............and maybe I'm being too generous to the REA in saying that too.
 
I like & smirk at the REA quote....
I think the only thing we're guilty of is achieving a good price for our vendors."
I can actually here him saying that too. But then again, he did so he maybe he was right :confused:


As advertisement marketed the property at "$340,000 plus". The property sold for $435,000.

In Sydney's West, Terry Comino of Ray White Blacktown and his agency face two fines of $2200.

Mr Comino did not return calls to discuss his offence involving an agreement with the vendor stating an estimated selling price of between $360,000 and $370,000.

Fair Trading claimed he told buyers "similar property had sold for $330,000 to $370,000".

Last week I went to an auction in Hawthorn (old style 2br flat in Hawthorn) with great view of the city, quoted at $360-$390k, sold for $478k. Not dissimilar to the above.
 
.....and as we all know, with quite a few legal precedents to prove it so, that the "hammer falling" means diddly squat.

Go and offer 5K more after the hammer falls to the Vendor and see which one they take. The 'first call' drama and slapping of a hammer is pure theatrics to get the punters to bid higher that don't amount to a hill of beans.

I have heard this before on SS and wonder if anybody has ever had it happen to them, or seen it happen at an auction. My mum sold real estate for over ten years and I have never heard one instance of it happening.

If a buyer bought on the "hammer falling" and somebody waltzed up and offered another $5K I wonder what would happen. If I was the buyer and it happened to me, I would be kicking up a real stink. I don't really think an auctioneer or agent would risk doing such a thing. They certainly would know they would be on the front page of the next newspaper.

I wonder what the legal position really is? I do know that we once offered $15K more than was verbally agreed on a house. In Qld a contract is not a contract until it is signed by both parties, but I know that our offer never reached the ears of the vendor, so we missed out. However, in an auction situation, our offer could not have been hidden if we had openly offered that extra $15K after the fall of the hammer. I wonder what would happen in such a case?

Would love to hear from the agents on SS as to whether this has ever happened. Believe me, when something unusual or unethical happens, it spreads like wildfire through the industry. I know plenty of "funny" things that have happened before, during and after the sale of houses but have actually never heard of this "after auction gazumping".

But, as you say Dazz, after the hammer falls, and before the contract is signed there is that window of opportunity for a jolly good gazumping, and I would love to know if anybody has seen it happen.
 
I agree Dazz, but I asked my mum this morning, and she had never seen or heard of this happening after an auction. An auction is so transparent with the vendor, agent, auctioneer and purchaser knowing what was the agreed sale price. I would think someone offering another $5K just would not have "legs". Too many people to kick up a stink.

Any REA's care to comment.
 
I agree Dazz, but I asked my mum this morning, and she had never seen or heard of this happening after an auction. An auction is so transparent with the vendor, agent, auctioneer and purchaser knowing what was the agreed sale price. I would think someone offering another $5K just would not have "legs". Too many people to kick up a stink.


Wylie, I am also sure that if you ask your mum she will also tell you that after almost all auctions we will get the obligatory phone call from anti auction buyers who will tell you that they would have paid more than the auction price. They are so dumb that they can’t even see the stupidity of their own statement.

Boomtown is on the money with his statement;
Quite seriously its friggin irrelevant what the agent thinks. You have a price that you woud be prepared to buy the property at and that's the end of it.

And before ‘Bayview’ comes rushing in on his big white Jenman charger, let me just say that Auctions are not the only way to sell but they sure work if done correctly.

Buzz asks
Why would an agent not nominate a price? They even said that they don't have a reserve, but the vendor will nominate one on the morning of the auction.

Queensland Government recognized that this area is open to abuse and so legislated against Agents giving any advice as to price expectation unless authorized by the Vendor and then only in the same CMA form that was applicable to the Vendor. Anyone serious about purchasing will already have a fair idea what the value of the property is to them those who have to ask have not done enough research yet and hence are not likely to be buyers for this property.
 
Buzz, the reason the Vendor doesn't set his "reserve" until the morning of the auction is cos if the agent knows the vendors reserve (X) - they must quote the advertised price as "X plus buyers".

Think there's a saying - quote 'em low and watch 'em go :)
 
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