Auction passed-in Within agent guide

bargainbargain on 17/12/2016 - 23:10

Hi there

We went to an auction today with the intent to bid. The agent wrote to me few times during the campaign that the property has to be sold as they are committed to another property. And couple of days back before auction, agent emailed saying that vendors have reasonable reserve.

Auction day I was the highest bidder and the property was passed in as according to agent the vendors may sell at high end of their range and she had higher offers but the parties finance fell away.

We were bit mad given it was within their guide and the representation that it has to be sold n reasonable reserve.

Do you guys think this is classified as underquoting or just poor form of agent.

Thanks

Home & Garden

Comments

  • CyberMurning on 17/12/2016 - 23:38

    Yeah I don't understand either about passing

    Vendor should not have reversed price. If vendor don't want to sell under 200k for example just make the auction starts at 201k so any bids will be higher than that and vendor must sell.

  • [Deactivated] on 18/12/2016 - 02:56
    +1

    I think the email communication can still be 'true' on their side and the property still sold without misrepresentation.

    If they started the auction with 'must be sold' there might be grounds for misleading or misreprestative behaviour.

    It's frustrating :( The seller will likely have prepaid large advertising costs, so a cheeky fishing lower offer might be worthwhile. Reality and thinking time might set in.

    PS I think offers that are subject to financial approval are ridiculous and should be outlawed. They come up on realestate.com.au as under offer and hurt interest.

    • jason101 on 18/12/2016 - 07:19
      +2

      If offers that are "subject to finance" were outlawed I think every 1st home buyer in Australia would be in trouble.

    • toristo on 18/12/2016 - 10:19

      If you're making offers on properties and not making it subject to specific finance approval, you're ridiculous. If you are reliant on finance, you'd want to hope it is on your terms.

      • [Deactivated] on 18/12/2016 - 15:06

        Ridiculous is bellicose. People placing offers should have pre-approval with their financial provider. If that falls through, the seller should be able to recover costs involved, as there are many. It's just tire kicking on a grander scale.

        • CacheHunter on 19/12/2016 - 08:00

          Frugal, I see where you're coming from, but many people don't understand what pre-approval is. It merely means that the bank has checked your employment/income details. Pre approval is always subject to the bank accepting the property as collateral, doing its valuation and any limits it has on the amount of loans in a month to a particular suburb or postcode. Therefore, it's not unusual for a bank to turn down a loan to someone with a pre-approval. In the past it wasn't common, but is becoming increasingly so as the market stagnates in some areas/property types.

    • bargainbargain on 18/12/2016 - 14:27

      I was quite prepared to go some thousands more but her word to me was if I pay $90k more she might get them to agree for a deal. So i thought its probably not worthwhile yet as the gap is too far. May be need to give them sometime before I re-engage.

      We like the place 7-8 out of 10. Its not a must for us but if we can secure will be good.

      What do you suggest?

  • Hiroko on 18/12/2016 - 04:13
    +1

    nothing out of the ordinary.
    typical underquoting parameters to draw more attention.
    whatever you do dont let your emotions get in the way.
    agents can sense this from you and will take advantage.

    • bargainbargain on 18/12/2016 - 14:24

      thanks mate. Surprising she came running to me and said i can get vendors to do a deal if you pay $90k more !

  • mmd on 18/12/2016 - 04:56
    +2

    Firstly, how high are the ceilings?

    Underquoting is to get ppl into a bidding war which didnt happened in this case.

    • JIMB0 on 18/12/2016 - 09:34
      +2

      Under quoting is done to draw a large crowd making the agent look good.

    • Slippery Fish on 18/12/2016 - 09:36
      +1

      Hahaha, you read that thread too?

      • mmd on 18/12/2016 - 11:49

        Yes, funny recent threads along with the heist at Woolworths and avoid Nissan

  • garetz on 18/12/2016 - 05:21

    They obviously lied to you, to get your interest, common selling tactic in auctions. I would say its the agent entirely at fault here.

  • jason101 on 18/12/2016 - 07:18
    +1

    On the day of the Auction the Vendor agrees the reserve price with the Agent, usually with the guidance of the Agent. It is entirely possible the Vendor simply decided they want a higher reserve or they weren't going to sell.

    It is also fairly normal that if high offers are received prior to the Auction for the Vendor to have their expectations raised and for the high offer they receive (even if it falls away as you stated occurred) to form the benchmark as to what the Vendor believes their property is worth.

    It would be usual if a property is passed in below reserve for the Agent to then commence negotiations with the highest bidder - did the Agent speak with you after the Auction?

    You should be within your right to walk up to the Agent and ask, "what will it take to secure this property today?". If they tell you and you accept this price (or negotiate to reach an agreement) the home is yours, if you walk away - well it was never going to happen anyway.

    Remember that no one gets paid unless the sale and settlement occur.

    I love a good story but this is pretty much a group beat up.

    • bargainbargain on 18/12/2016 - 14:32

      I guess my point is that neither the reserve was reasonable nor it was like the property had to be sold. So their was a market message which was bit different to where vendors were really sitting.

      She did speak to me but it was like speaking sort of speaking with everyone else at the same time as she didnt wanted the 3-4 active bidders to disappear in midst of speaking to me.

      She played to me I had someone at $200k more than the price it got passed in for but their finance fell. I sort of don't believe it - because at that price they should have sold it any day !

      • noob999 on 18/12/2016 - 22:02

        It sounds like
        a) the agent is fluffing his own ego saying they had high offers.
        b) the offer was high so the buyer could grab the house of their dreams just laying it all out there to 'get that property now' on a pre-approved loan, but the finance fell through because the bank did not value the house at what the buyer wants to pay, hence the buyer now has to come up with another 150k…. which they dont have… and well their dreams crushed.

    • holdenmg on 18/12/2016 - 09:31
      +1

      What a great read.

  • Slippery Fish on 18/12/2016 - 09:40
    +1

    Now that the auctions over knock 15k off your winning bid as an offer. Lol my parents when buying their property were knocked back offered 25k less and all of a sudden they accepted that first offer. :)

    • PVA on 18/12/2016 - 13:05

      yep, do exactly what Slippery Fish said.
      I bet the RE comes back to you trying for more dollars. Come back with less now and the contract has the usual conditions like finance, inspection etc.

  • askme69 on 18/12/2016 - 09:59
    +1

    Real estate in Australia. What a disaster on all fronts.

  • xssive on 18/12/2016 - 10:00

    Sometimes the agent may not know the reserve until the day of the auction, and their reserve might of bumped up after feedback from the inspections and other offers received.

  • slow on 18/12/2016 - 12:50

    This is completely normal. Properties never sell for between the range the agents say.

  • Savas on 18/12/2016 - 14:07

    I think in Canberra it's illegal

  • Mad Max on 18/12/2016 - 18:20
    +3

    This practice of underquoting and deceiving people to suck them into a bidding war should be illegal. Especially when, like in this case, the final auction price is above the guidance and the property gets passed in.
    It cost serious bidders money to do their homework prior to bid at auction. Building and pest inspection, searches and loan approval (if you need a mortgage) cost a lot of money and time. And you need to do all of that before you bid because auctions are final and unconditional (only for the buyer unfortunately).

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