RE Agent Tactics

[Aceyducey]

This is a tactic I had never thought of used to push up property prices when they pass in at auctions.

The source is Steve McKnight's Property Insights newsletter [plug] Well worth reading! [/endplug]

Last Saturday I attended an auction a few houses up the road from where I’m currently living. The dwelling was a three-bedroom clinker brick property in need of renovation. The agent had advertised the property at “$360,000+ buyers”.

I wasn’t interested in buying the house, just at gaining a sense of what was happening to demand in the marketplace.

There was a smallish crowd in attendance – perhaps thirty or so people. The auctioneer began his spiel, going on to say how property was the most secure asset, proven to go up in value and how prices may seem high today, but will be seen as cheap tomorrow.

He went on to outline the auction conditions and then asked for an opening bid. Not unusually, no one wanted to make the opening offer. So instead the auctioneer started by declaring a vendor bid of $325,000 and called for $25,000 rises.

It took a lot of coaxing, but eventually someone offered $350,000.

The next increase wasn’t as forthcoming, despite a hard sell effort worthy of a Hollywood epic. So the agent walked inside to talk to the vendors, who in this case turned out to be the executors to a deceased estate.

Returning a short time later, the auctioneer advised that the property had not reached its reserve. In fact, it was a long, long, long way off it. He called for new bids, to which there were none, so he submitted a further vendor bid of $375,000 in an attempt to create value from thin air.

Well, if there were no bidders before, there certainly weren’t any new bidders now!

Sensing that it was all turning pear-shaped, the agent started saying that if anyone wanted first right of negotiation then they had better put in an offer or risk missing out. No one took the bait, so instead the agent passed in the property, but not before he put in a further vendor bid of $25,000 raising the price to $400,000.

I was perplexed as to why anyone would do this, until it dawned on me that this was done to potentially misrepresent what really happened for advertising purposes.

This suspicion was later proven to be correct, with Monday’s auction results for that property reporting that it was passed in for $400,000, with a reserve of $425,000.

.............

Source:
PropertyInvesting.com 'Insider'
Issue 10, Volume 2- October 2003
By Steve McKnight
30th October 2003
http://www.propertyinvesting.com

Cheers,

Aceyducey

 

[see_change]

Acey

That trick, or variations of, has been around for a while .

My parents had a house up for Auction many years ago , and Dad was very puzzled when after brisk bidding from several bidders the house was passed in above the reserve price...

Apparently none of the bidders were genuine, and they didn't want to see it passed in ata low price.

Obviously the use of dummy bidders made it easier. but the agent you saw can still say it was passed in at such and such a price, and unless the next potential buyer was at the auction , the agent certainly aint going to tell them who made those bids...

see change

 

[duncan_m]

Originally posted by Aceyducey
This is a tactic I had never thought of used to push up property prices when they pass in at auctions.

The source is Steve McKnight's Property Insights newsletter [plug] Well worth reading! [/endplug]



Source:
PropertyInvesting.com 'Insider'
Issue 10, Volume 2- October 2003
By Steve McKnight
30th October 2003
http://www.propertyinvesting.com

Cheers,

Aceyducey

Here I go again..

Show me one other industry apart from Used Cars/Car Finance that is so rampantly self-serving, dishonest, unethical, and so damn righteous about NOT being.. Our Real Estate Industry is a national disgrace.

 

[willair]

Acey,
I may be wrong but up in queensland the auction person can only submit one vendor bid ,but then again some people call it acceptable deception.
good luck
willair.

 

[asy]

I went to an auction once where there was fast and furious bidding from several couples...

They had all turned up nicely dressed, in casual clothes, and one couple were even riding bikes, as if they had just dropped by...

The only problem was the agency was one of those inner city agencies (MEL) with the big glossy brochure, and all the agent's mug shots on the back cover.

We had a great time picking the faces of the 'bidders' off the back cover of the magazine.

I have to say, although we thought this was funny, I also felt embarrassed for my 'peers'.

To have to resort to this (or any) level of trickery is very sad.

This practice should be outlawed, as should the 'vendor bid' being the highest bid at the auction. I can see that there may be some times where the vendor bid is required to OPEN an auction, but if it is the last, or only, bid, the agent should NOT be allowed to advertise it.

The example above should have been advertised 'Passed in at $350,000'.

[/end rant]

asy

 

[Sim]

Re: Re: RE Agent Tactics

Originally posted by duncan_m
Show me one other industry apart from Used Cars/Car Finance that is so rampantly self-serving, dishonest, unethical, and so damn righteous about NOT being..

Yup... try the IT industry Dunc !

I'm serious !

 

[Aceyducey]

Re: Re: Re: RE Agent Tactics

Originally posted by duncan_m
Show me one other industry apart from Used Cars/Car Finance that is so rampantly self-serving, dishonest, unethical, and so damn righteous about NOT being..

Or the Telecommunications Industry to name another.

Who else can bill for calls that aren't made & get away with it almost every time!

Or justify providing a level of customer service which is so bad that the customers die!

Reportedly Telstra realised it had to clean up it's act after the death of that child (where Telstra had not got round to connecting the house) because the board realised that they were reducing their future potential customer base - had nothing to do with the ethics of the situation.

Cheers,

Aceyducey

 

[G&K]

Add the airline industry.
What about all the different fare structures for the same bl..dy flight. Go figure.

 

[MarkB]

[cynicism switch on]

No mention of politics or politicians as being dishonest, self-serving and unethical?

Perhaps it goes without saying?

[cynicism switch off]



Oh... I'm sorry... what were we talking about?

MB

 

[see_change]

My observation is that no profession / job is immune to unethical behaviour.

Oh Bugger it.

Actually it's human nature for a significant section of this planets population.....

Why pick on REA's , they're no better or worse than the rest of us.

see change

 

[MarkB]

Originally posted by see_change
My observation is that no profession / job is immune to unethical behaviour.

Actually it's human nature for a significant section of this planets population.....

True.

Please refer to my little sign off (below).

MB

 

[duncan_m]

Why pick on Real Estate Agents?

Because the industry is so riddled with deceptive, unethical and corrupt practices..

In securing a listing they:

- Suggest they have buyers lined up when they dont.
- Suggest they can sell a property for X when they really know X - Y is more likely
- Get kickbacks on advertising
- Sell advertising in order to advertise their firm more than the vendors property.


In selling a property

- They lie to vendors about what buyers are saying.
- They lie to buyers about what the vendor is saying.
- Deliberately engage in 'conditioning' to crush a vendors perception of what their property is worth, a perception that was generated by the agents own suggestion of what they could sell a property for..
- They lie to people looking through properties about rent potential, price range etc.
- They invent bids at auctions.
- They use auctions to put extreme pressure on vendors to declare the property on the market.. irregardless of the reserve previously agreed..

In Managing properites

- They get undisclosed kickbacks from tradespeople on referred work.
- They promulgate agency contracts they you could drive a truck through under the guise of 'its a standard contract'..



I could go on.. but I still think the industry is one of the most unethical, morally corrupt, self serving ones in our society.. And as they're dealing with what is most peoples largest asset they should be one of the most beyond reproach industries in our society..

I'll shut up now.. at least until the next thread about agents erupts

 

[christobel]

and dont forget the kick backs they get from advertising..this is exactly what Neil Jenman writes about in his books Don't Sign Anthything and Real Estate Mistakes.

 

[Ross Sondergeld]

I totally agree...

Duncan said

-------------------------
Why pick on Real Estate Agents?

Because the industry is so riddled with deceptive, unethical and corrupt practices..

In securing a listing they:

- Suggest they have buyers lined up when they dont.
- Suggest they can sell a property for X when they really know X - Y is more likely
- Get kickbacks on advertising
- Sell advertising in order to advertise their firm more than the vendors property.


In selling a property

- They lie to vendors about what buyers are saying.
- They lie to buyers about what the vendor is saying.
- Deliberately engage in 'conditioning' to crush a vendors perception of what their property is worth, a perception that was generated by the agents own suggestion of what they could sell a property for..
- They lie to people looking through properties about rent potential, price range etc.
- They invent bids at auctions.
- They use auctions to put extreme pressure on vendors to declare the property on the market.. irregardless of the reserve previously agreed..

In Managing properites

- They get undisclosed kickbacks from tradespeople on referred work.
- They promulgate agency contracts they you could drive a truck through under the guise of 'its a standard contract'..



I could go on.. but I still think the industry is one of the most unethical, morally corrupt, self serving ones in our society.. And as they're dealing with what is most peoples largest asset they should be one of the most beyond reproach industries in our society..

I'll shut up now.. at least until the next thread about agents erupts
---------------------------------------



I totally agree... new agents appear and disappear every week.

And if you are honest and professional.... then you'll get run over by 100's of rookie agents or old profesionals.

Arrrr.... you got "love the game" !!!


Ross Sondergeld
Ross for Property

 

[duncan_m]

Originally posted by christobel
Neil Jenman

Pffffft..

 

[alpina]

i really have no trust in auctions

went to one recently where the agent said the expected selling price was going to be between $825-$875k. the property was passed in at $971k.

how is this legal? i see it as disgraceful. if the vendors reserve is $1mill for eg, shouldnt the agent be legally obliged to set the expected selling price above $1mill to save people the effort of turning up and expecting to pay considerably less (as per above eg)???

julie

 

[suggo]

The reason he said where he did is he probably thought he could 'condition' the vendor down that far!!

It really is disgraceful!!!

 

[abcdiamond]

Just going slightly of topic here, I was reading this thread, and was just at Asy's post, and her photo appears on the left.

My 7 year old came in to my study, and said "who is that lady", pointing to Asy's picture ( I assume it is a picture of asy?)

I replied; "It's just a Real Estate Agent"

Her reply - " It doesn't look like one, she looks nice !"

The comment seemed quiet appropriate in a way, and NO, I don't always put Agents down...

 

[asy]

Originally posted by abcdiamond
My 7 year old came in to my study, and said "who is that lady", pointing to Asy's picture ( I assume it is a picture of asy?)

I replied; "It's just a Real Estate Agent"

Her reply - " It doesn't look like one, she looks nice !"

Hehehe...

It is supposed to be a pic of me, just don't tell anyone I shaved about 10 years off... hehe

Tell your daughter I said, thanks!!! And, bring her round to the office, I'm sure we can find a lolly for her somewhere!!!

oh, and, I aint JUST an agent!!! lol

asy

 

[geoffw]

Originally posted by Pitt St
[cynicism switch on]

No mention of politics or politicians as being dishonest, self-serving and unethical?

Perhaps it goes without saying?

[cynicism switch off]

True hearsay. A pollie reported to the help desk that the CD rom was not reading correctly.

The help desk person opened the drive, turned over the CD rom, and closed it agaian.

All working OK again.