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Post by jill on Jun 7, 2007 12:56:43 GMT 1
Jill, I am a seller and I have 2 agents telling be they have 2 "hot buyers". I want the best deal for myself and I ask for the "hot buyers" to put their best offers. What is wrong with that? Remember, I am not an agent (who wants a sale), I want best deal. What would you do? Absolutely nothing wrong with that. I would accept the best offer and pay the agent that introduced that client!
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Post by jill on Jun 7, 2007 13:16:04 GMT 1
Irac, I agree, not a good scenario. But surely the purchaser holds his own copy of the prelim contract even if the 'rich' family member wanted to rip up his family's copy, and surely ALL the legal proprietors of the property(those shown on the catastal registry) have signed the document....a rich family member (not on the catastal register as an owner) can't just come back and disagree..... do you have personal experience of this or is this a scenario you have heard about?
All I can say is that during 22 years in the business here in Italy, once the preliminary agreement has been signed and the deposit (10 - 30% of total price) has been paid to the vendor we have NEVER has a case of gazumping.
Purchasers or Vendors have changed their minds/died/divorced. Roofs have fallen in...purchasers have just disappeared of the face of the earth (yes, really) but no gazumping. The vendor is obliged to repay the original purchaser double the deposit amount and that would usually be a lot of money. A gazumping offer would have to be considerably more than the original price agreed to make it worthwhile to any vendor. I understood it was a similar system in Croatia.
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Post by darcy on Jun 7, 2007 13:31:04 GMT 1
Jill, I am a seller and I have 2 agents telling be they have 2 "hot buyers". I want the best deal for myself and I ask for the "hot buyers" to put their best offers. What is wrong with that? Remember, I am not an agent (who wants a sale), I want best deal. What would you do? Absolutely nothing wrong with that. I would accept the best offer and pay the agent that introduced that client! Of course, I would accept the best offer, but there are no high offers yet (every buyer statrs from low). How can I organize a tender to get that best shot from each buyer? I can get best offer only if both buyers compete, I cannot get the best offer in one-on-one negotiations.
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Post by Carol on Jun 7, 2007 13:40:17 GMT 1
jill you are right.. its eactly the same situation in Croatia. deposits of 10% are paid at the pre-contract stage. If a seller changes his mind then the buyer has two choice: 1. ask for his deposit back and another 10% on top 2. go to court and ask them to enforce the original contract.
When the market was booming three or four years ago, it is possible (very likely) that a seller would have been able to find that in the time between pre-contract and final contract, the price has risen by more than 10% and so if he can manage to pay the extra 10% out, then he would actually be better off doing so, but it doesn't happen now - at least not in my experience and I've never heard another agent relate such a tale.
Starnge you should mention purchasers paying a 10% deposit and then just disappearing... we had one of those too. I always wondered what happened to him?
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Post by Carol on Jun 7, 2007 13:43:13 GMT 1
Darcy... why not do it this way... set a price above which you will be happy and when you get an offer which meets that criteria, just accept it?
If you don't get any offers which will make you happy, set another price (in your head) which you think is fair and accept offers at that level instead.
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Post by darcy on Jun 7, 2007 13:49:40 GMT 1
Carol ... maybe you are right... I think that is how the market is running, as there are no tender and auctions, when the market is good your have to raise the bar. (I think that is exactly what is doing on now.)
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Post by Aleksandra on Jun 7, 2007 19:30:40 GMT 1
Kitty, If you get into situation when there are multiple buyers for a property, what do you usually do in Croatia? Also, do you split your commision with the other agent? Hi Darcy, We have a bit unusual setup. We are fairly new on the market, UK based and we do not deal with sellers. I would say we are not the agency ourselves, we are agency's representative in UK, kind of "sales/marketing/services" arm. We only deal with buyers and we see ourselves as a "buyer service". We have ONE agency for whatever area we choose to cover who sources us properties. We do not want to deal with multiple agencies for the same area due to conflict of interest. We have a very good relationship with the current agency we are dealing with and they are completely above the board - honest and straight. I know that pre-contract is binding from monetary perspective - either the buyer loses the deposit or the seller must return the double deposit. From that point on it is more straight forward as it is, as Carol says, fairly rare for either the buyer or the seller to pull out in the current property climate. What we do is if a buyer is serious and intend to buy a property, we ask the buyer to put a small "goodwill deposit", valid for roughly 15 days and which is held in our Client Account in UK. During that time we stamp the property with "under offer" and take it off the market. If anyone else asks about this property, we say it has been "reserved". As we are not dealing with seller, and we are not the agency, we do not have to notify the seller if a higher / different offer arises. We return the "goodwill deposit" in full to the buyer when the pre-contract has been signed, or if the seller changes their mind, or if we find there are legal impendiments in purchasing the property during our searches and the buyer decides not to proceed. If, however, the buyer decides not to proceed with pre-contract and searches were fine, they will forfeit the "goodwill deposit", which covers our costs. We have found out that when the buyer is serious, they pay the "goodwill deposit" and 99% of these transactions go through. We inform the agency we are dealing with in Croatia about "goodwill deposit" being paid and fax them the proof. They in turn inform the seller of it. Most sellers at this point would only back out of the sale if someone else comes with a higher offer AND puts the money at the table, as they do not believe in "will bring you next week" kind of offer, fearing they will lose this sale with strong intention proven, so it has to be a serious second buyer waving the money, and this is rare. So far this has worked well for us. But the last time we were in Croatia, after inspecting the property with the potential buyer, the seller called the agent (we were in agent's office when the call came through) and gave the message saying "I have another serious buyer who is likely to put the deposit on the property in 2 weeks time so your client better hurry up...". I am almost sure the seller was trying it on, but my question was - do I tell this to the buyer and how as we do not want to do a "hard sell" as this is not how we see ourselves. I guess where we differ really is that we see ourselves as being on a buyer side. We do not take seller's commission and we have the agreement with the agency in Croatia to take all or part of buyer's commission depending on how much work we did with the buyer. Uhmm.. I can see this email raising more questions than it answered!
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Post by Carol on Jun 7, 2007 19:44:30 GMT 1
The question it raises for me is how meaningful it is when you and the agent you deal with mark the property under offer? I understand that neither of you will offer it to any other buyer, but what about the 15 other agencies which also have the property?
I can't see how you have a choice: it is your duty to keep your client informed of the current situation. You can tell him that in your opinion the seller is trying to hard sell the property but really it is the buyers choice whether or not to proceed. I don't really see his problem though... two weeks is plenty time to check the documentation, draft and agree the pre-contract and arrange for him to get his money in place. So if he wants it, then he should go for it at the already agreed price and if he doesn't then why what difference does it make to him what the seller of a property he does not want is trying to do? What have I misunderstood of the situation?
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Post by Aleksandra on Jun 7, 2007 19:55:21 GMT 1
Just because the information could be seen as a ploy to force the buyer to put "goodwill deposit" quickly - I think if I was the buyer I would be wondering if the agent or seller is trying it on. The press here in UK is quite bad about unscrupulous agents and would not want to be put in the same basket.
You are right that "goodwill deposit" does not protect from other agencies, but as the seller is aware of the "goodwill deposit" being put down they know they have a serious buyer and 2 weeks to sign pre-contract. The other buyer from the other agency has to be as serious as to put the deposit down, in which case we return the deposit and cut our loses, but this has happened very rarely.
So far I have concluded I should tell the buyer openly and yes, it should be their call whether to believe it or not.
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Post by irac on Jun 8, 2007 6:30:15 GMT 1
I don't think you understand it properly Jill, sorry, my bad. The "rich" family member arrives back, offers to buy the place. It happened to my colleague and she ended up handing in her resignation over it. The deal collapsed and the vendor simply handed back the money to the town office and a torn up contract. It was cold-blooded and a little later another local agent turned around and was offered to take it on board but knew the score and knocked them back. As I was told by a former client - "you're not in Europe now". Irac, I agree, not a good scenario. But surely the purchaser holds his own copy of the prelim contract even if the 'rich' family member wanted to rip up his family's copy, and surely ALL the legal proprietors of the property(those shown on the catastal registry) have signed the document....a rich family member (not on the catastal register as an owner) can't just come back and disagree..... do you have personal experience of this or is this a scenario you have heard about? All I can say is that during 22 years in the business here in Italy, once the preliminary agreement has been signed and the deposit (10 - 30% of total price) has been paid to the vendor we have NEVER has a case of gazumping. Purchasers or Vendors have changed their minds/died/divorced. Roofs have fallen in...purchasers have just disappeared of the face of the earth (yes, really) but no gazumping. The vendor is obliged to repay the original purchaser double the deposit amount and that would usually be a lot of money. A gazumping offer would have to be considerably more than the original price agreed to make it worthwhile to any vendor. I understood it was a similar system in Croatia.
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Post by jill on Jun 8, 2007 7:51:11 GMT 1
Ahh, now I understand. What a bummer.
My commiserations to your colleague. Hopefully, not too many families have relations rich enough to buy back properties....I assume the original purchaser got his money back at least.....probably not worth taking it to court for the 10% compensation though what with all the aggro it entails.
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Post by jill on Jun 8, 2007 8:03:44 GMT 1
What we do is if a buyer is serious and intend to buy a property, we ask the buyer to put a small "goodwill deposit", valid for roughly 15 days and which is held in our Client Account in UK. During that time we stamp the property with "under offer" and take it off the market. If anyone else asks about this property, we say it has been "reserved". As we are not dealing with seller, and we are not the agency, we do not have to notify the seller if a higher / different offer arises.
Good grief. I can only see this system being fraught with problems. The only surprise is that you haven't come badly unstuck before this. Clients suing because they've lost the property when they've 'put down a deposit' etc. arghh the implications don't bear thinking about, let alone the stress it must put you under not knowing whether another agency will sell the property from under your nose, believe me that happens a lot, it's normal competition and helps keep agencies on their toes and efficient! I agree that if you are coming out from the UK specifically to hold client's hands and sell them a property you need to cover your costs, couldn't you charge a small fixed fee that is 100% returnable if the client buys a property through your introduction? That would make more sense. No deal is 'safe' until a preliminary agreement is signed with the legal owners and money has changed hands with them.
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Post by irac on Jun 8, 2007 9:53:14 GMT 1
Jill, no he never intended to buy the property, it's a ploy to bump up the price. The money dropped back to the town office and they just left it at that. Croatia is still totally wild and even though our guys had trained in Ireland under the system there, they still found it impossible to get things done here with both red tape and idiotic vendors. Ahh, now I understand. What a bummer. My commiserations to your colleague. Hopefully, not too many families have relations rich enough to buy back properties....I assume the original purchaser got his money back at least.....probably not worth taking it to court for the 10% compensation though what with all the aggro it entails.
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Post by Aleksandra on Jun 8, 2007 14:20:32 GMT 1
Good grief. I can only see this system being fraught with problems. The only surprise is that you haven't come badly unstuck before this. Clients suing because they've lost the property when they've 'put down a deposit' etc. .... I agree that if you are coming out from the UK specifically to hold client's hands and sell them a property you need to cover your costs, couldn't you charge a small fixed fee that is 100% returnable if the client buys a property through your introduction? That would make more sense. No deal is 'safe' until a preliminary agreement is signed with the legal owners and money has changed hands with them. Hi Jill, I do not think we would get sued as this is not a "reservation deposit" for the very same reasons you are stating. This is all listed in an agreement to be signed between us and the buyer and where is also stated under which circumstances the money is returned to the buyer. Vendor changing mind during these two weeks is one of these. Once the pre-contract is signed then the goodwill deposit becomes obsolete. We do also have inspection trips, fee of which (for one person) we refund if the property is purchased through us. It IS a hard work though!
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Post by jill on Jun 8, 2007 16:44:35 GMT 1
I do not think we would get sued as this is not a "reservation deposit" for the very same reasons you are stating. This is all listed in an agreement to be signed between us and the buyer and where is also stated under which circumstances the money is returned to the buyer. Vendor changing mind during these two weeks is one of these. Once the pre-contract is signed then the goodwill deposit becomes obsolete.
Phew, that's a relief, I was getting quite nervous for you.
Real Estate has got to be one of the most nervewracking stressful businesses around, being entrusted with other peoples money for such a large and important investments is much more difficult than people think and is not just about making a quick buck, there are so many things that can go wrong and there is no such thing as a sale without a problem, although I admit is is very rewarding financially and otherwise in the 99% of cases when things go right, you have delighted vendors and purchasers who you can still call good friends. Just do your best, remain completely honest and individual and don't get embroiled in anyone elses devious plans!
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