Villa had first open house on Saturday with intended Auction in four weeks. A Buyer offers on the Monday $56,000 over the advertised marketing price. Real Estate now contact me by text am I interested as vendor has accepted the offer and I have 24hours to reply.
I replied yes but cant put in a offer must go to a Boardroom auction in the office of the Real Estate agent the next day.
Is this normal? Also unsure why someone would offer $56000 over the marketing price straight up.
Any advise ?
Sounds like vendor wants to sell before auction as they got an offer $56K above their market price and they seem happy sell.
This happens, REA just doing their job to see if there are others parties interested and to see if they get a higher price for the vendor (just doing their job).
Some buyers maybe super keen and don't want to wait and "shop" around.
The other buyer understands that land is scarce and isn't playing around with lowball offers.
Everyone thinks they are a wonderful investor.
Have you let slip that you are interested in the place to the agent? Or was the agent cold calling you from the open inspection log? Were there many other people at the open house while you were there? There's the possibility that the other buyer is a phantom.
he cold texted I would guess from the inspection log giving me till 5pm the next day to contact them.
I was there the 30min it was open and there may have been about 8-10 people go through
Based on those answers, the +56k offer sounds genuine. Hope it works out well for you.
I've only done one boardroom auction but it was awesome. Clear, transparent process. Straight to the chase. We ended up missing out but I'd much prefer to do that than the standard theatre that is a street auction.
The situation could be true and someone has jumped in with their best offer.
Alternatively the agent is lying about the offer.
Either case it is in the seller's interest to avoid the auction's added costs.
And the added time of another 3-4 weeks on the market if they want to sell ASAP/have already bought another property.
Yeah, this is exactly what I would do if I was a Real Estate agent.
There's any number of "potential" scenarios that exist, but they all boil down to the following …
Everything the real estate agent has told you about the "$56k over" offer is genuine. The buyer is going to accept the offer in the absence of a higher bid. They are going to arrange a "boardroom auction" to settle the situation. If you play the game you may end up buying the property (likely at an increase to the $56k over amount) … or you can not play and the property will be sold over the next several days.
The "$56k over" offer is not genuine (or at least not as iron clad as the real estate agent has made out). They are trying to smoke out a quick sale at a good price. If you want to play the game you would basically end up (potentially) buying the property at a price similar to the first scenario above. If you don't play, the property will remain on market and will likely end up with the advertised auction and you go from there.
There are a range of other factors of relevance, but the above summary is about where the action is.
You might be onto something.
If I get $56k over the market price I'd just close the deal instead of waiting until next week to maybe get another $10k. I might get another $50k if people are that stupid. But then $100k over the market price? People have got to be really stupid. It is a deposit on an investment property or even a holiday home.
How many people would just give $56k away without at least some bidding process (the agents calling between two competing buyers who are genuinely interested) then ring around people on the sheet because $56k just aren't enough and want to go for the full $100k over market.
I am not sure whether we need compulsory national mental health testing.
Without knowing the asking price of the property in question, the suggestion that someone has offered $56k "above asking" is entirely plausible.
Around my area, agents quote a "price guide" of $x … basically this translates to the reserve price/vendor's expectation of $x plus 5 to 10%. On an assumption that the "price guide" in this example is $745k, add $56k (being 7.5% above the guide) and you get to $801k. Not completely ridiculous for someone that just wants to buy the property and be done with it. Equally, quite possible that the vendor is "hoping" for $800k and is happy to take it on the basis that someone has offered it.
I know the above figures are all hypothetical and maybe completely wrong in this specific case (maybe OP can enlighten us as to the "asking price"), but the story the OP has put is entirely plausible based on what's been provided.
Yes it's normal. The other buyer doesn't want to mess around. This is how I bought my first property, someone had made an offer prior to auction…all interested parties were invited to make their offers within the next few days, I made mine and it was the highest one.
Agent would not let me put in a offer said if interested would need to go to a boardroom auction
Any legitimate offer must be passed onto the seller.
ask if they provide donuts etc. might get a free feed
btw is it even legal for them to tell you the other persons offer? I thought it wasn't, maybe state specific
Gotta love FOMO…
These people are going for broke, literally.
Even if house prices are going up by 7 - 8% per forecast it is like a year's worth of capital gains. People might as well start putting in $2m bids for $1m houses.
Where ever that person offering $56k over market got their money from (example. their parents), should seriously ask for it back.
There is no way someone is going to offer that much over the asking price, the real estate agent is looking for suckers to outbid an imaginary offer.
Not true. Houses are also bought with emotion.
E.g. might be someone's perfect location, perfect layout, perfect appearance etc etc such that they want it above all others and willing to pay for it.
No different to someone buying a PS5 at double the RRP.
People will pay for what they really want.
E.g. might be someone's perfect location, perfect layout, perfect appearance etc etc such that they want it above all others and willing to pay for it.
Maybe that person should get a job as a tarot card reader. Not even planets align like that and the science is perfect. People just talk themselves into parting with their precious money… sorry the description is "fools and their money"
The point I was making was that there are a number of considerations apart from money for someone to buy or pay more for a house.
It's not literally all those 'perfect' listed things being the case for someone to offer more money - I thought it was obvious.
@Porker: Wasn't directed at you. I've just seen it time and time again people literally talking themselves into it and it is some how my job to talk them out of it when they already decided and just getting deeper and deeper as they talk by the minute.
Houses that are going to be auctioned always are listed at a way lower price than the agent knows it will go for
Listing is the real price range. People just act against all good advice, we see that often enough in real life. Problem is when you are talking about tens and hundreds of thousands of dollars at stake.
A Buyer offers on the Monday $56,000 over the advertised marketing price. Real Estate now contact me by text am I interested as vendor has accepted the offer and I have 24hours to reply.
If vendor has accepted the offer how could they be canvassing other offers? Isn't it breach of contract if you accepted an offer and sell it to someone else.
I am confused as it was also updated on line as Under Offer but I guess they other party that has offered has not signed anything
Under offer usually means they have accepted and it is "subject to finance" or some other condition. They can still back out during cooling off that is why they want everyone in the boardroom auction.
I'd be suspicious whether it is trying to get all interested people into a room for a shake down.
the marketing was for auction between 650,00 and 690,000 of course can go for more.agent statement shows medium price range for the area is $746,000 This is the amount the buyer has offered and that is the amount the agent text me had been offered. When I said to the agent was it one bid and he said yes I also said that that is an odd amount why not just 745,000
$746k is only ~10% more than the average asking price. The closing price at a public auction could easily beat that.
This is probably rubbish . ie the agent is lying - same happened to me 15 years back . Be careful !
It’s strange that the agent told you how much someone else offered, and probably unethical. I would expect “we have received an offer above the quoted range and intend to proceed as follows …”
The agent wants their vendor to get a better price. It would be unethical for them to not to turn over every stone to get a higher price.
Thank you everyone I decided not to proceed . Will follow to see what happens. Regards
Did you hear anymore or do you think it was all fake? I’m curious!
I pulled out as felt pressured but it appears it was genuine and is now posted as sold for the price they stated. It just didn't feel right for me. Will keep looking
That is what happens when people sneeze. They lose out on a bargain.
Capital growth assets are gaining more and more value every day. The smart money will buy as many as they can now and sell it to the sideliners in few years down the track.
People either join the game today or join later at a different price.
Interesting. Lucky vendors! Market is going nuts!
Do not sign ANYTHING until you have read it from end to end as you may be singing a waver that there is NO coolling off period.