REA pushing for offer prior to Auction

[Pete_d]

Been looking at a property the last few weeks, due for auction this coming weekend and the real estate agent has mentioned a few time that the owners would like an offer prior to the auction. Not after being asked just put forward out of the blue.

What's you thoughts on this. Is the agent worried there is little interest in the property and doesn't want a dead auction. Why else would he be pushing so hard for an offer before the auction.

 

[evand]

I'd say he could be trying to condition the vendor before the auction. Its a common practice.

 

[Ausprop]

would it be appropriate to play ball and submit a very low offer?

 

[Pete_d]

I'd say he could be trying to condition the vendor before the auction. Its a common practice.

What do you mean, condition the vendor to a lower price. Do you mean perhaps the vendor has unrealistic expectations?

 

[alexlee]

What do you mean, condition the vendor to a lower price. Do you mean perhaps the vendor has unrealistic expectations?

Maybe the agent over quoted the price to get the listing. Say the property is really worth around $300k. The agent quotes $400k (or whatever), the vendor gets dollar signs in their eyes and signs with the agent. Now the agent needs to bring the vendor back down to earth. A few offers around the $300k mark, say, allows the agent to say 'you know, with all the interest rates rises and US subprime stuff and ducks flying backwards this year, the market is saying your property is only worth $300k'.

Whether they accept your offer or not is another issue. So on auction day if the offers go to around $300k, the vendor is more likely to accept.
Alex

 

[pebbles]

i've occasionally made a written offer before auction. typically an agent will use this as a minimum or reserve when someone else asks about the property. if you think the place is worth pursuing and you've done your homework, why not give him a modest written offer that expires within 24 hours with an accompanying deposit? this forces the vendor to consider it as its only on the table for a short time and the agent knows you're serious because of the cheque...

 

[chrispy]

Agent also knows to what point they can push you at auction and can start conditioning you saying others are willing to pay a little more etc. Been there, walked away. I put in an offer at the top price I would pay, vendor would not accept, so no point in going to auction

Although saying that, I saw a situation recently where an offer was put in for a terrace house in Carlton North for $845k, vendor refused, went to auction and highest bid on the day was $810k. After auction negotiation resulted in sale at $825k

Chris

 

[Pete_d]

would it be appropriate to play ball and submit a very low offer?

Doesn't seem like a bad idea. However, am I in a better position by not disclosing too much information and keeping my estimated sale price to myself. Reducing the leverage if the auction fails to get much action?

 

[evand]

Probably, as the agent will use your offer and go back to the vendor with it.

"The market is telling us this much.....blah blah"

The vendor then is more likely to accept a lower bid at auction. Which is exactly what you want as you might pay less and exactly what the agent wants as he wants a sale.

So you can use it to your advantage if you have some knowledge of how it works. And now you do

would it be appropriate to play ball and submit a very low offer?