Making an Offer/Negotiate with Real Estate Agents

• 

  Amaris on 24/01/2019 - 23:48

  +3

  Some REAs are very arrogant and will not make an effort to even be nice to you if they've already made a sale or you don't seem to be useful to them to make their commission. You should see how most of them call you multiple times telling you what a good deal you're getting/ what a good deal you're going to miss if you don't up the price, etc. if they haven't yet found a buyer.
  Also, if there is a cooling off period then you don't need to tell them up front that your offer is subject to finance. If the offer gets accepted you have some time (5 days here in NSW) to organise finance, do inspections, etc. They blatantly tell you less than the truth, you should also do the same.

  • 

    birdnw on 25/01/2019 - 14:06

    I guess the REAs think that the suburbs were "sought after" suburbs so none of them really were nice to us. You know how a lot of REAs give people a follow up phone call after inspection? They didn't even call us to find out.

    Unfortunately, cooling period is only 2 days here in SA so I am afraid that we won't be able to organise finance in such short period of time?

• 

  YoungQuan on 25/01/2019 - 01:04

  I am a principal of an independent real estate agency. Just to paint a picture - agents get 'offers' all the time, some of them are serious and others just testing the waters. Verbal offers, SMS, casual references in an email… most of the time there is no real indication of the person's identity, finance status, etc… For all intents and purposes a lot of offers aren't worth the paper they are written on so to speak. In addition, a lot of buyers are not upfront and try to play games with agents. Agents deal with buyers every single day and pick up on that straight away.

  Here is what I would do if I was buying a home and dealing with an agent. 1. Talk to the agent and be upfront about what you believe the property is worth. If he / she thinks it is reasonable they are likely to give you an indication. 2. Put in an offer in writing (Letter of Offer) detailing your particulars (as per 100 point ID check), contact details, the amount of offer, any special conditions, finance approval status / finance provider (ideally a name in a bank or mortgage broker), solicitor's details. 3. Do not try and lowball / 'outsmart' the agent'. At the end of the day they want to sell the property, if you make their job easier they are more than likely help you to secure the property as well. 4. Follow up if you haven't heard anything in 1-2 days. Be proactive / top of mind. If you do all this and are realistic with your pricing 9 times out of 10 you will end up with the property that you want.

  • 

    [Deactivated] on 25/01/2019 - 01:45

    +4

    No reflection on what you've said, but after submitting an offer in writing, the agent apparently didn't even submit my offer to the seller after six weeks, as I assumed he was holding out for higher commission.

    I complained to his boss, and the agent said he didn't believe I could get funding. I had near full amount in my bank, but wasn't asked about this.

    Moral: some RE agents play nasty games, not only buyers. No offense to you of course.

    • 

      YoungQuan on 25/01/2019 - 14:15

      in most states the agents are legally obliged to inform the seller of all offers

      having said that, if you put in a Letter of Offer (as explained above) covering off on your finance / solicitor's details they wouldn't have a leg to stand on. Send it via email so there is a 'paper trail' should there be any disputes in the future.

  • 

    EightImmortals on 25/01/2019 - 07:16

    +5

    "The two offers that we made were both within the price range which was suggested by the real estate agents. The first one was towards the lowest of the price range and second was more towards low-middle."

    See this is, to me is a total pile of BS concocted by a dodgy RE industry over the last 10 years or so. Last time we bought property, the seller TOLD us his price and we negotiated from there until both parties were satisfied. My 80-year-old dad had this same problem in Melbourne a couple of years back when they were looking to buy a new place. No ***stard RE agent would tell him the actual price of any houses until he eventually read them the riot act. Basically he told the RE agent "either you tell us the asking price or we are going to another agent", this seemed to work so I suggest you take the same approach.

    "1. Talk to the agent and be upfront about what you believe the property is worth. If he / she thinks it is reasonable they are likely to give you an indication."

    WHICH DEMONSTRATES MY COMPLAINT PERFECTLY!!!!!
    How about instead of ***ing me around you just TELL me what the vendor is asking and THEN I'll tell what I think is reasonable?

    /rant

    • 

      birdnw on 25/01/2019 - 14:03

      I guess we have the same issue with our two offers. Both offers were made in writing, filling out the form given by the REA.

      We talked to the first REA, there was no offer made at the time and he indicated the above middle of the range figure. Since we were the first to make an offer and we thought the house did not worse that much for us, we put in a lower range offer.

      We also talked to the second REA and made an offer according to her recommendations, we still didn't get the house, I think our offer was just below the sold price a bit but she wouldn't give a figure. I was just surprised that she didn't even give us a second chance?

      I just feel that what's the point of having a price range if they only want to sell closer to the top of the price range?

      • 

        EightImmortals on 25/01/2019 - 18:27

        Here's the thing. If I was not getting any satisfaction and communication from the REA and I was really interested in the property I would go and knock on the door and talk directly to the vendor. I would also let them know that the REA was not acting in their best interest. A serious offer NOW would be way more beneficial to a wished-for higher offer later IMO.

        • 

          birdnw on 25/01/2019 - 22:39

          @EightImmortals: It will be interesting to knock on the door and talk to the vendor directly… I think they may be quite surprise that a stranger actually knocks on their door? What does this mean to the vendor.. I guess they will still feel more comfortable talking the REA as they will not be comfortable to handle the sale themselves?

          I think that this may be something we should considering trying in the future. For the last two offer though.. the first vendor was interstate and the second house was actually rented out so it wouldn't have worked anyway!

          Thanks for your advice though!

          • 

            EightImmortals on 26/01/2019 - 06:49

            @birdnw: If they have signed with a REA they have to pay them commission regardless of who negotiates the contract. My point is though that if I told a vendor that I tried to enquire about their property and the REA refused to give me a price or enter into negotiations they may have reason to terminate that contract or find a better REA. If my knocking on the door resulted in a sale that the REA would have missed because of their greed then it would be a win-win for me and the vendor.

  • 

    Amaris on 25/01/2019 - 12:31

    In addition to the 100 point ID check should we, may be, include a copy of the bank statement and conditional loan approval?

    " if you make their job easier they are more than likely help you to secure the property"

    They will never HELP you, just pretend to do so while trying to take the most money from you!

    • 

      birdnw on 25/01/2019 - 14:04

      It seems like the 100 point ID wasn't required in SA and the REA also didn't ask for a bank statement or anything. I am not sure if this would be good if they found that we can borrow more than what we put in the offer?

      • 

        Amaris on 25/01/2019 - 14:50

        +1

        Was being sarcastic about the approval and bank statement.

    • 

      YoungQuan on 25/01/2019 - 14:09

      there are 10,000 agents employed in the industry across the country, the term 'they' doesn't actually mean anything. Every agent works differently which reflects on them as an individual.

      by ID I meant simply your full legal name, that can later be verified once the sale paperwork is raised…no 100 point ID check is required upfront, simply a real name which half the time isn't even provided

      yes, absolutely include the finance pre-approval letter

  • 

    birdnw on 25/01/2019 - 14:09

    We have tried to talk to the REA before making an offer but I feel that it's hard to get an honest indication from them. I think they are of course trying to get as much as possible but we are trying to pay less if possible?

    • 

      YoungQuan on 25/01/2019 - 14:14

      the agent has a legal obligation to the owner to get the highest possible sale price

      • 

        birdnw on 25/01/2019 - 16:21

        Of course that is the case and that's why it is hard for us because we are not familiar with dealing with REAs… we understand that we are not looking for a bargain but also not willing to pay too much more than needed if possible, and this is the most difficult part. By saying that, I also understand we are not the only one who struggle with this, of course.

        To be honest, we went to the bank to see how much we could borrow but did not apply to get pre-approval from them. It's because the bank informed us that the pre-approval will only be valid for 3 months and we will need to apply for another one if we didn't find anything within the 3 months period. We were unsure how long it will take for us to look for a place and are reluctant to do a credit check every 3 months. It has been more than 3 months since we talked to the bank but we still haven't secured anything we like. We think that we should be fine applying for a mortgage though.

        • 

          YoungQuan on 25/01/2019 - 16:34

          @birdnw: i highly recommend getting pre-approval

          if we have any bankers feel free to correct me, but I don't think re-approval every 3 months actually incurs another credit check. I have a couple who have bought an off-the-plan property 2 years out and have finance approved (their mortgage broker is doing the re-approval process every 3 months)

    • 

      Amaris on 25/01/2019 - 14:51

      I think honest and REA are mutually exclusive terms!