Have you ever found yourself competing for a property with another buyer?
Recently I had the situation where two prospective buyers submitted simultaneous offers, in the form of contracts of sale, to purchase a property. As you can imagine it usually works out to be fortuitous for the seller as multiple offers often produce a higher purchase price and on occasion better terms and conditions. However, it can be a stressful situation for all involved - including the Agent! On the flip side of one happy buyer and seller of course, is a buyer that misses out.
Although not mandated in the Property Occupations Act 2014, best practice suggests an Agent should inform prospective buyers of the fact, in writing, and obtain written acknowledgement from them. At this time, I believe an Agent should also remind any perspective Buyers that agents do work for the Seller.
The REIQ often receives queries from consumers about multiple offers on a property. There have been times that suspicious prospective buyers have alleged that agents have told them that there are multiple offers on the property in order to secure a higher price for the seller, when in fact there is no competing offer. There are heavy penalties for agents who mislead or deceive buyers by telling them there are competing offers when there are not.
Real estate agents have an obligation under the Property Occupations Act 2014 to submit all offers that comply with the seller’s written instructions to the Agent. When a Seller receives multiple offers they can proceed in many ways including:
• accept either offer without giving the other a chance to increase their offer
• negotiate with one offer
• reject all offers
Here are some tips if you find yourself competing with another buyer!
Submit your best offer! You may not get the opportunity to negotiate with the seller after the offer is made! You might be interested (and shocked?) to know I have had numerous buyers offer above list price in the past. Be confident… an Agent is required to keep the details of any other offers confidential. Many times I have personally informed a buyer that they have missed out on the property and they rue the fact they would have actually paid more! Remember, your offer is not only the purchase price but also the terms and conditions. Sometimes the lure of a ‘cash’ offer is enough to sway the seller your way.
• Make sure your offer is in the form of a signed Contract of sale. A seller is certainly not likely to take your offer seriously if it is not.
• Make your absolute best offer. Does this mean an offer greater than the list price? Up to you…
• Submitting a cash offer. This means no conditions.
• Waiving the cooling off period.
• Shortening the period of conditions that cannot be waived. ie 14 days to 7 days.
• Increase the size of your deposit.
• Reduce (or if it suits the Seller, increase) the length of the settlement period.
• Take on an existing tenancy. This might be a necessity anyway if you are offering a quick settlement.
• Accepting the property ‘as is’. Sometimes the seller will have the burden of furniture/chattels/possessions that need removing or repairs that need to be completed.
You may think it is an uncomfortable situation but take a big breath and make a measured response to the Agent in a timely fashion. Speaking to your solicitor may also help in the situation. Every situation is unique, and you will need to make that call yourself. Stick to your original offer or put your best foot forward, the choice is yours!
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Posted By Shelley Fuller
Updated : 9th October 2021 | Words : 608 | Views : 3149