Investors must have a sharp eye to see when an agent is bluffing or a property is about to be sold, according to the Real Estate Buyers Agents Association (REBAA).
Too many buyers miss out on properties because they doubt the selling agent’s intentions, according to REBAA vice president Cate Bakos.
Only 7% of Aussies rank real estate agents highly for their ethics and honesty, according to a 2018 report by Roy Morgan.
“As much as buyers don’t like being thrust into a competitive situation for a property they want, the sales agent is being paid by the vendor and has a primary commitment to get their client the highest possible price. That is their job,” said Bakos.
The selling agent has to determine how to deal with competing buyers. They have the right to host the competitive process in various formats, according to Bakos.
Knowing the signs of when an agent is unlikely to bluff sets a smart buyer apart from a mistrusting one, said Bakos.
“Sometimes it just makes limited sense for a selling agent to bluff. When buyers do have an opportunity to buy a suitable property at a fair price, they should anticipate that good quality property is likely to attract competition. Being clear about the agent’s rules, being honest about niggling trust-related doubts and requesting a specific style of negotiation is what differentiates a mistrusting buyer from an astute buyer,” said Bakos.
These are the three signs a property is about to be sold and an agent unlikely to bluff, according to REBAA:
When an agent is working closely with a buyer and a colleague of theirs in the office has another buyer
In most scenarios, the sales commission isn’t shared. The agents are in an “all or nothing” position when it comes to eligibility of the sales commission component of the company revenue for that particular property sale. Each agent will be hoping that their respective buyer is the purchaser and they will feel an allegiance to their buyer. There is little reason why an agent would lie about another agent’s offer when their income is at stake.
When an offer is received before the auction
An agent would be publicly exposed if they lied about an acceptable offer being received before the auction because the market would then see a public auction unfold days later if the earlier claim was a bluff. If the agent had been slack with paperwork and hadn’t properly documented an offer on a contract in this instance, it is possible that the offer was genuine at the time but didn’t proceed. It would be considered bad practice to call off an auction without a formally documented and acceptable offer, so this scenario would be highly unlikely to be a bluff.
When the agent receives multiple offers and chooses one over another
Buyers who are concerned that their offer wasn’t presented to the vendor will be able to find out at a later date what the winning bid was. The agent would have reputational risk at stake if they undersold the property to an alternative buyer. Ask for direct contact with the principal of the business before offers are presented if there is any doubt.
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