I have a quick question, recently I was dealing with a very well respected estate agents. I was looking at a house and made an offer of the asking price. The estate agent came back and said that the seller has no interest in selling at the listed asking price and won't even consider an offer at that price.
I know that placing on the market lower than expected price is normal to drum up bids but... My question is, Is there any rules on estate agents placing houses at prices they know won't even be looked at by the seller or is it just a put up and shut up situation?
There are various selling and marketing tactics they can use. The owner will decide what type of selling tactic and what they are willing to let it go for. EA facilitate this and negotiate the deal. The ea may recommend techniques that work but the owner at the end of the day makes the final call. Theres no rules behind this and you can use whatever sales technique you would like
Set price low to get demand. You offered asking. EA can go to next couple and say we have asking. EA gets another offer. Repeat.
I'd suggest you read this forum a bit to understand how things work.
That's a pretty condescending answer! I think it's a valid question: "Is there anything in the guidelines that precludes a Property being intentionally listed at a price on which a bid will not be accepted"
The answer is probably No but I don't know the answer
thats why I'm suggesting you read this forum. You seem very naive in your dealings with the EA. He isnt your friend. He isnt even working for you.
It's basically dishonest though. Suppose you went into your local shop and picked up a bar of chocolate priced at €1. You go up to pay and the shop owner says, 'sorry I can't sell at that price, it's really €1.50'.
What would you think, would you ever go near that shop again?
Oh people will say the property market makes it's own rules blah blah, but the above type of carry on is what drags down the reputation of estate agents etc., into the gutter in the minds of the ordinary public.
I'll follow up on my OP.
For those informing me condescendingly or questioning how naive I must be by stating that the EA will price low to get bidders I addressed that in the OP and is not part of what I'm questioning. I also understand that the seller will decide the price he wants to sell for or will take the house off the market. I'm questioning the knowingly misleading pricing, in most sales environments this is illegal.
To add some context, the house was listed a few months ago at a higher asking price and got no bids, they have re-posted the house and the price is set at lower than the seller is willing to sell for.
I understand the tactic but wanted to know if there was any rules or regulations against knowingly misleading pricing by the EA.
From the current responses it looks like there isn't which is a bit of a shame.
The EA is advertising the property on behalf of the seller/vendor, ultimately it is up to the seller whether the bid is accepted, not the EA.
Advertised prices are just a guide, nothing more, it certainly isn't like an auction where once a minimum threshold is passed, the property will sell. The market sets the price rather than the EA.
BarryD2, you should look back on your post whenever you sell a property. An EA guides it at say €250k, but bidding goes to €280k, will you think the EA is dragging down the sector, or will you understand that €250k was just a guide and it's great that someone was willing to pay more?
Re the example in the shop - the listed price the bar is advertised is only an invitation to offer, the shop owner is under no obligation to accept your offer of €1.
Its the exact same in property so to answer the OP no there isnt any regulation but at the same time the EA can only do so much the vendor is pulling the strings at the end of the day.
Looked at a small commercial unit 18 months ago. Listed 90k with a sitting Tennant. Existing tenants rent would pay for the unit after 5 years. We knew that it was too good to be true and came in with an offer of 110,000. Estate agent said landlord wouldn't dream of excepting anything so low. We offered 120,000 as cash buyers and showed statements with the cash sitting there. Don't know what it went for but estate is came back saying that they had an offer of 130,000.
It's easier for investors because they are not emotionally attached to the property. If this falls through we move on. For homeowner itself harder. You are picking out curtains in your head, and or planning what school you will pick, waiting to hear back from the estate agent.
Your buying a brand new chocolate bar at a set price of 1e. Its the same for houses. If you buy a brand new house, they advertise the set price when you buy it.
If you are buying a second hand product on adverts.ie or ebay, its a bidding mechanism similar to second hand houses.
Dunno about your example. If I were to say advertise a second hand bike on donedeal or whatever for say €250. I figure a prospective customer who comes along to view it will want to buy at €250 at most and probably will want a few bob knocked off to boot.
If it were a property auction, yes it's reasonable to expect the guiding price to be just that and that the bidding will rise.
But where a property is advertised at a given asking price, as a member of the public, I expect the asking price to be just that, as in the bike above.
well you also provided expectations of what people think when they buy a vehicle.
I provided expectation of other situations. Buying a second hand house is like an auction. You will have multiple bidders and the highest bid wins...The only difference between a normal auction you mention and bidding on a house, is that its not as quick
I'm afraid you have this the wrong way around.
At an auction, once the reserve price placed on the property is reached, it will sell at that price, or above if the offers exceed the reserve. The rules at an auction are different from standard house sale in many important ways. The seller, usually a bank or receiver is bound by a contractual agreement with the auction house to sell once the reserve is met, no such agreement exists between a vendor and EA in a standard sale.
You would be naive to expect a house to sell on the open market just because the guide is reached. At an auction the property is there to sell on the day of the auction, in a standard sale the vendor is usually in no hurry and is not bound by a reserve/advertised price. The seller may be happy to leave it on the market for months until the bids have maxed out, that is the sale price.
Sellers often instruct the EA to put it on the market below what it is worth and what they will accept, to generate interest and in the hope that a couple of bidders will drive the price up. In today's market properties regularly sell above asking due to lack of available houses and buyers determination to buy, even if it's more then they had intended to pay.
Property sales are not governed by the SOGASA so there are no regulations about advertised prices and as another poster has pointed out to you, shops are not obliged to sell goods at the advertised prices, it is just an invitation to you the consumer to buy something.
Taking your donedeal example, you could advertise your bike at that price, but if you get 2 offers, one for the advertised price and one for €50 more, there is no reason why you cannot accept the higher bid for the bike.