Why would an agent quote one price to me and something else to another buyer for the same property?

The language of real estate is ambiguous. This is due mainly to the fact that every buyer interprets information differently. Agents need to make a judgment call on how you are likely to interpret what they say before they say it.

Confused??

How much do you add on to an agent’s price guide? 10%? $50K? $100K? It is a personal thing and varies greatly from buyer to buyer. Usually the amount you add on is a direct result of your experiences in the property market. The agent doesn’t know how much you are going to add on, so he/she is going to quote the lowest figure they can get away with in order to increase the chance that you will think it is within your budget.

Now for the other buyer. The agent may know them better than you. This buyer may have missed out on another property sold by this agent. Maybe the agent has appraised their home and is familiar with their buying requirements. If there is more trust in their relationship the agent can afford to be more honest, hence a different price guide.

So, what is the solution? If you are not dealing with an agent where you have built up a trust relationship, you need to know your market. Do your own research and make up your own mind on the price.

For more information on buying property in Sydney go to www.gooddeeds.com.au.

Gazumping is legal.

In a competitive market many buyers find themselves either trying to gazump or being gazumped. And with many people, the moral code is that gazumping is fine if you are the one doing the gazumping but unethical if you are the losing party!

If a property you are keen on has already had an offer accepted but contracts have not yet exchanged, then you are free to submit an offer. But it has to be a serious offer designed to entice the vendors to reneg on their previous agreement – don’t just add a couple of thousand dollars to the price.

One of three things are then likely to happen:
1. The vendor decides to honour the original agreement (even at a lower price)
2. The vendor gives the other buyer first right of refusal at the higher price you have offered
3. They accept your offer

If they accept your offer you’d better exchange contracts quickly to avoid being gazumped…

For more information on buying property in Sydney go to www.gooddeeds.com.au

Why would an agent say “no offers” during an auction marketing campaign?

Here is a little known fact about auction price quoting. Apart from rare situations where the vendor has instructed the selling agent not to entertain pre-auction offers, there is a very compelling reason for agents to discourage offers. If an offer is rejected, they have to increase their quoted price expectation!! And they do not want to do this for fear of not being able to build interest and create a competitive auction.

To give you an example, an agent is quoting a property at “over $900,000”. You make an offer of $950,000, which the vendor rejects. The agent now needs to increase their quoting to reflect the fact that the vendor will not accept anything up to and including $950,000. Perhaps that will turn other buyers off, so don’t be deterred if you want to make an offer prior to auction.

For more information on property buying in Sydney go to www.gooddeeds.com.au

Does the Office of Fair Trading protect real estate consumers?

I have long been of the opinion that the Office of Fair Trading (NSW) is a toothless tiger. Many professional and ethical real estate agents spend a great deal of time and money ensuring their compliance with the various Acts under which they operate, while some pretty shoddy ones keep flying underneath the radar.

It is my belief that consumers have some degree of protection from under-quoting of auction price expectations and also dummy bidding but in my opinion this is due to the attention given the topic by the media combined with the fact that large auction-oriented franchises and agents do not want to be made examples of.

I believe that the vast majority of real estate agents wish to do a good job and operate ethically. However, there remain others who do not do their profession proud. If they are doing anything wrong that does not come under the auction umbrella, it seems unlikely to me that they will taken to task by the Office of Fair Trading. Maybe they just don’t have the resources…

The best chance a consumer has is to level the playing field and engage their own professional to act on their behalf – a buyers’ agent of course!!

For more information on how a buyers' agent can help you: www.gooddeeds.com.au