Unusual Estate Agent Request?

sketchpad · 02-07-2014 9:49am #1

Hi, We want to bid on a house but the estate agent has said he is only accepting offers from people who have gotten an engineers report.
My understanding was that you make an offer on condition of the engineers report. If the offer is accepted then, pending everything being ok with the report, you pay the deposit.
I think its ridiculous to shell out c.€400 on an engineers report just to make an offer.

godtabh · 02-07-2014 9:58am

Then walk away?

L1011 · 02-07-2014 10:02am

I'd instantly suspect the agent knows something is horribly wrong with the place and walk away.

sketchpad · 02-07-2014 10:02am

godtabh wrote: »

Then walk away?

Thanks for the helpful advice.

I was wondering if this was normal practice or is the EA taking the mickey?

Clearlier · 02-07-2014 10:04am

sketchpad wrote: »

Thanks for the helpful advice.

I was wondering if this was normal practice or is the EA taking the mickey?

The latter, walk away.

Swanzee · 02-07-2014 11:01am

If the property is old and requires modernisation then this is good and proper advice from the estate agent. It would be standard practice not to accept an offer on a house that requires work unless the client has the house surveyed and knows exactly what they will need to spend on it. Otherwise they might get a shock later on in the process and the agent could have lost a sale by not doing their job correctly.

murphaph · 02-07-2014 11:15am

Indeed. Is it an older house? Is it obviously in need of some work?

Clearlier · 02-07-2014 11:15am

Swanzee wrote: »

If the property is old and requires modernisation then this is good and proper advice from the estate agent. It would be standard practice not to accept an offer on a house that requires work unless the client has the house surveyed and knows exactly what they will need to spend on it. Otherwise they might get a shock later on in the process and the agent could have lost a sale by not doing their job correctly.

It's absolutely not standard practice and would be very bad practice on the part of the estate agent as anybody with any sense will walk away from such a requirement unless the house is of unique interest and even then they probably would.

To bring it to slightly absurd levels if 100 people were interested enough in a house to consider making an offer then they'd all have to get engineers reports.

You only survey a house after you've agreed a price for it. If the survey throws up something unexpected then the price can be re-negotiated or the sale lost. If the sale is lost the seller then has the opportunity to commission their own survey and reconsider how they present the house for sale.

By requiring that offers have been preceded by an engineers report the pool of potential buyers is greatly reduced. If I were selling my house I'd be getting rid of the estate agent who brought it up as an option.

cpoh1 · 02-07-2014 11:16am

MYOB wrote: »

I'd instantly suspect the agent knows something is horribly wrong with the place and walk away.

Or...there are several serious bids on the property which is very near to closing and the estate agent wants to determine the best bid to go with. From a sellers point of view if there are 3 couples bidding on a house it would be nice to know that the person has had an engineer look at the house and wont be looking for discounts afterwards based on a few small items in a report. You bid knowing what you are getting.

This is standard practice in popular houses that go over asking that may have a few minor issues that need resolving. Its a sellers market!

Telling someone to instantly walk away is silly advice without knowing the house or the bidding circumstances.

cpoh1 · 02-07-2014 11:19am

Clearlier wrote: »

It's absolutely not standard practice and would be very bad practice on the part of the estate agent as anybody with any sense will walk away from such a requirement unless the house is of unique interest and even then they probably would.

To bring it to slightly absurd levels if 100 people were interested enough in a house to consider making an offer then they'd all have to get engineers reports.

See my example above. This is standard practice on an older house or a house that has lots of interest. It weeds out the bluffers who may look for discounts after. It protects the seller and ensures he gets the strongest buyer from a price perspective.

L1011 · 02-07-2014 11:23am

cpoh1 wrote: »

Or...there are several serious bids on the property which is very near to closing and the estate agent wants to determine the best bid to go with. From a sellers point of view if there are 3 couples bidding on a house it would be nice to know that the person has had an engineer look at the house and wont be looking for discounts afterwards based on a few small items in a report. You bid knowing what you are getting.

This is standard practice in popular houses that go over asking that may have a few minor issues that need resolving. Its a sellers market!

Telling someone to instantly walk away is silly advice without knowing the house or the bidding circumstances.

You're assuming a level of acumen that the average Irish estate agent simply does not have there. The EA is playing silly buggers, not trying to ensure a "best bid" of anything other than the highest figures.

About the only bit there that would be accurate for Ireland is the trying to stop someone renegotiating the price later - and they're doing that to protect themselves and their cut, not for the seller.

Clearlier · 02-07-2014 11:27am

cpoh1 wrote: »

See my example above. This is standard practice on an older house or a house that has lots of interest. It weeds out the bluffers who may look for discounts after. It protects the seller and ensures he gets the strongest buyer from a price perspective.

I've never ever heard of it before*. If the house is a ruin then it's going to be pretty obvious. I'd strongly suspect that the seller knew that something serious was wrong with the house that was hidden and was hoping that an engineer wouldn't spot it. Perhaps where a house was not known to the seller (e.g. inherited) and a quick sale was required I could see why a seller would require it but it would probably reduce the pool of buyers and potentially the price.

My advice to anyone coming across a house that required an engineers report prior to accepting an offer would be to walk away.

* which obviously doesn't mean that it doesn't exist

cpoh1 · 02-07-2014 11:31am

MYOB wrote: »

You're assuming a level of acumen that the average Irish estate agent simply does not have there. The EA is playing silly buggers, not trying to ensure a "best bid" of anything other than the highest figures.

A friend bought a house under these exact circumstances. 3 serious bidders on a 1950's house, in decent condition but with some cosmetic flaws. Bidding was 40k over asking and was near closing. Estate agent asked bidders to carry out a survey so that the bidders could place final bids knowing of the cost of any potential repairs etc. 1 bidder dropped out after this request, two remained and they got their surveys and made their final bids knowing the flaws and potential costs of any future work to the house. Friend won and house sold for final bid price.

Its simply an estate agent looking out for their client when in a position of strength looking for a quick sale to go through.

For me there is nothing worse than seeing couples bidding over others on houses with the explicit intention of re-negotiating after sale agreed following surveys, its sharp practice. There are exceptions but a lot of the time stuff the engineers report is telling you is staring you straight in the face during viewings.

L1011 · 02-07-2014 11:48am

cpoh1 wrote: »

Its simply an estate agent looking out for their client when in a position of strength looking for a quick sale to go through.

Or, far more likely, their commission.

cpoh1 wrote: »

For me there is nothing worse than seeing couples bidding over others on houses with the explicit intention of re-negotiating after sale agreed following surveys, its sharp practice. There are exceptions but a lot of the time stuff the engineers report is telling you is staring you straight in the face during viewings.

Forcing people to pay for an engineers report with no guarantee of their bid being accepted is sharp practice.

cpoh1 · 02-07-2014 11:57am

MYOB wrote: »

Or, far more likely, their commission.

I genuinely have no problem with that, these guys are earning a living and only make money when houses sell.

MYOB wrote: »

Forcing people to pay for an engineers report with no guarantee of their bid being accepted is sharp practice.

Its a sellers market unfortunately. Someone has to lose out but if i was towards the end of a bidding process and determined to buy the house a survey wouldn't deter me in the slightest.

L1011 · 02-07-2014 12:09pm

cpoh1 wrote: »

I genuinely have no problem with that, these guys are earning a living and only make money when houses sell.

If its a "sellers market", the house is going to sell regardless. This is an attempt to squeeze the last hundred quid of commission.

cpoh1 wrote: »

Its a sellers market unfortunately. Someone has to lose out but if i was towards the end of a bidding process and determined to buy the house a survey wouldn't deter me in the slightest.

Not being allowed make an initial offer != "towards the end of the bidding process". Its anything but in fact.

cpoh1 · 02-07-2014 12:30pm

MYOB wrote: »

If its a "sellers market", the house is going to sell regardless. This is an attempt to squeeze the last hundred quid of commission.

Nice way to spin this an an "estate agents are evil" story. This is primarily a way to get a seller a fast straightforward sale and if I was selling a house would have no problem with my estate agent doing. Sorts out the messers before going sale agreed and in a lot of cases is doing the buyers a favour too so they go in with eyes open.

MYOB wrote: »

Not being allowed make an initial offer != "towards the end of the bidding process". Its anything but in fact.

As I stated earlier we don't know the OPs circumstances. They could be coming to the table really late in the day. If its a really old house or proper renovation job its also a fair request from the estate agent to ensure a straight forward sale after an offer is accepted. Why waste everyones time if someone bids with the expectation the house isint too bad but requires more than the eye can see?

If its neither of the above then its a strange request but you get strange folk in all walks of life...

L1011 · 02-07-2014 12:34pm

cpoh1 wrote: »

Nice way to spin this an an "estate agents are evil" story. This is primarily a way to get a seller a fast straightforward sale and if I was selling a house would have no problem with my estate agent doing. Sorts out the messers before going sale agreed and in a lot of cases is doing the buyers a favour too so they go in with eyes open.

And if I was the seller, I'd tell the agent to stop messing around and risk driving away actual buyers.

This has all the hallmarks of an EA out to get more cash and nothing else.

cpoh1 wrote: »

As I stated earlier we don't know the OPs circumstances. They could be coming to the table really late in the day.

That's not relevant at all to the example you gave, of you not being bothered about being asked for a survey if you were towards the end of a bidding process.

cpoh1 wrote: »

Why waste everyones time if someone bids with the expectation the house isint too bad but requires more than the eye can see?

As opposed to wasting everyone's time and money regardless of any outcome at all, as this does.

The OP will find a property for sale with a more normal EA, hence being advice to walk away from what is clearly a mess in one way or another is perfectly sound advice. If everything's as you suggest the sales process is a cluster**** of the highest proportions and the more realistic scenario suggests the house is in bits.

cpoh1 · 02-07-2014 12:46pm

MYOB wrote: »

And if I was the seller, I'd tell the agent to stop messing around and risk driving away actual buyers.

This has all the hallmarks of an EA out to get more cash and nothing else.

Sure thing, because an estate agent really stands to gain loads from a buyer looking to reduce the costs of a sale by 10k after a survey. Thats €100 for your own information.

MYOB wrote: »

That's not relevant at all to the example you gave, of you not being bothered about being asked for a survey if you were towards the end of a bidding process.

As opposed to wasting everyone's time and money regardless of any outcome at all, as this does.

The OP could be coming to the table with bidding nearing conclusion and seller looking to close fast. In this case its not unheard of for the EA to ask people to get surveys done so that he gets not only the very best price for the house but also a more straighforward closing process after.

You dont like that? Fine, thats up to you but it happens and in a sellers market you sometimes just have to play ball. Its €400 euro and if you are really certain you want the house its not a massive sum to pay.

MYOB wrote: »

The OP will find a property for sale with a more normal EA, hence being advice to walk away from what is clearly a mess in one way or another is perfectly sound advice. If everything's as you suggest the sales process is a cluster**** of the highest proportions and the more realistic scenario suggests the house is in bits.

You clearly have never bought property before if you think looking for a survey pre going sale agreed is a "mess". If the OP has found a house they love and are really serious about buying it this wont be a problem. If its enough to deter them straight away in the face of competition or potential issues if its a fixer upper how serious are they?

Sorry but ive explained my logic to you plenty and wont be engaging any further, its not my problem you find this concept not to your taste.

SpaceTime · 02-07-2014 12:52pm

In most more sensibly regulated markets, the seller has to provide an engineer's report, and things like proof of an up-to-date wiring inspection.

Can't see that happening in Ireland though! We like things done in the most buyer-unfriendly way possible when it comes to property.

L1011 · 02-07-2014 12:58pm

cpoh1 wrote: »

Sure thing, because an estate agent really stands to gain loads from a buyer looking to reduce the costs of a sale by 10k after a survey. Thats €100 for your own information.

We see enough phantom bids being done to push a final €50 on here.

cpoh1 wrote: »

The OP could be coming to the table with bidding nearing conclusion and seller looking to close fast. In this case its not unheard of for the EA to ask people to get surveys done so that he gets not only the very best price for the house but also a more straighforward closing process after.

Introducing a few days delay per bidder that turns up is not an efficient way to get a final bid in quickly.

cpoh1 wrote: »

You clearly have never bought property before if you think looking for a survey pre going sale agreed is a "mess".

I have, actually. Being forced to get a survey before bidding is a mess - no two ways about it.

cpoh1 wrote: »

If the OP has found a house they love and are really serious about buying it this wont be a problem.

"house they love" - are you an estate agent by any chance? Getting emotionally hung up over something you only have a chance of owning (and are being forbidden from bidding on) is illogical; but is something that agents themselves love as it guarantees more cash for them when people bid more than they want to to guarantee getting something they've become emotionally attached to.

cpoh1 wrote: »

Sorry but ive explained my logic to you plenty and wont be engaging any further, its not my problem you find this concept not to your taste.

Its not valid logic, though. You're proposing forced waste of time and money by virtually everyone involved and justifying it by claiming it'll save time and money - when realistically all there is is (possibly) a few more quid in it for the pisstaking EA.

cpoh1 · 02-07-2014 12:58pm

SpaceTime wrote: »

In most more sensibly regulated markets, the seller has to provide an engineer's report, and things like proof of an up-to-date wiring inspection.

Can't see that happening in Ireland though! We like things done in the most buyer-unfriendly way possible when it comes to property.

That's definitely helpful but would you really trust a sellers engineer reports (no matter how well regulated) when spending that sum of money? I would want my own survey anyway.

Another anecdotal reference but another friend had a survey on a house (with clean bill of health) and decided on a second after hearing some funny reports about the engineer. The second report brought a lot of issues to light that the first guy missed. Its really important to get a guy that knows his stuff.

SpaceTime · 02-07-2014 1:01pm

In markets where it's the norm, yeah you can trust it because if the engineer doesn't do it correctly he/she could end up being struck off and the seller could be held responsible for any the consequences of any dodgy surveys.

The result is that everyone does their job properly and it runs quite smoothly.

You'd trust it much like you'd trust audited accounts.

There's a lot of room for reform here, but anyway this isn't the thread for it.

In Ireland though, I'd always do my own survey before paying anything. I know my folks were stung badly by taking someone at their word when they moved here.

MAJOR roofing issues were covered up by the seller.

Clearlier · 02-07-2014 1:40pm

MYOB wrote: »

We see enough phantom bids being done to push a final €50 on here.

Introducing a few days delay per bidder that turns up is not an efficient way to get a final bid in quickly.

Its not valid logic, though. You're proposing forced waste of time and money by virtually everyone involved and justifying it by claiming it'll save time and money - when realistically all there is is (possibly) a few more quid in it for the pisstaking EA.

I agree with most of your analysis but you're mistaken if you think that an EA is interested in getting the last few quid in a sale. One of those freakonomics facts is that EA's own houses take longer to sell than their customers because they will wait for the best price but advise their customers to accept an early offer because the marginal gain for the EA is tiny and they're better off turning over homes quickly than doing extra viewings to extract the very best price.

I can see why it might lead to speedier negotiations although in terms of the time it usually takes to buy a house I would have thought it relatively insignificant.

On the whole though this isn't a good idea for anyone and I would be running away from an EA that suggested or required it as did one of the bidders in the case that cpoh1 mentioned. I wonder how much the EA lost their client in that one.

JimsAlterEgo · 02-07-2014 2:28pm

OP, did you ask why this is the case?

sketchpad · 02-07-2014 2:44pm

JimsAlterEgo wrote: »

OP, did you ask why this is the case?

Yes, its an older house and will need renovating. The EA said he doesnt want people putting a bid in without knowing how much the reno is going to cost them. He seems like a genuine guy. This house is in a desirable location and will attract a lot of interest. If there are several bidders then several people will loose money on their engineers reports. This doesnt seem ethical to me.

cpoh1 · 02-07-2014 4:54pm

sketchpad wrote: »

Yes, its an older house and will need renovating. The EA said he doesnt want people putting a bid in without knowing how much the reno is going to cost them. He seems like a genuine guy. This house is in a desirable location and will attract a lot of interest. If there are several bidders then several people will loose money on their engineers reports. This doesnt seem ethical to me.

Why is it unethical?

How can you agree on a price for the house without knowing the extent of the work that is required? How do you know how much the house is worth to you without getting an idea of the flaws and work to modernise?

What if you end up in a bidding war and win only to come back once you have surveyed looking for a large price reduction because there is work required that you didn't anticipate?

Think of it this way - while it may cost you €400 for the survey, you will save more if you avoid solicitors fees, valuations etc. once you proceed at sale agreed only for it to fall through over the engineers report. Not to mention the time wasted with banks, insurance, estate agents, valuations.

If you really want this house and are serious enough to put a bid on it (commitment to buy remember) why is an engineers report such an obstacle. This requirement will also weed out a lot of timewasters which will be to your benefit.

sketchpad · 02-07-2014 5:03pm

coph1 you're missing the point. Your comments are based on my bid being the winning one.
In this scenario if there are 10 bidders then 9 people ultimately end up out of pocket to tune of €400. Thats the unethical part.

cpoh1 · 02-07-2014 5:10pm

sketchpad wrote: »

coph1 you're missing the point. Your comments are based on my bid being the winning one.
In this scenario if there are 10 bidders then 9 people ultimately end up out of pocket to tune of €400. Thats the unethical part.

Im not missing the point, as a guy who was house-hunting for close to 12 months in 2012/early 2013 in Cork I wasted hours chasing EA's on particular houses, multiple visits to said house etc. etc. went sale agreed on a house only to fall through on the report and wasted money on fees, valuations. All time wasted which is just as valuable to me as €400.

I would rather view a house once, be serious about buying it, spend €400 to get a detailed report on what condition it is in and (a) walk if its a mess or too expense to fix for me or (b) proceed with bidding knowing i wont have too worry about the most common post sale agreed issue that causes sales to fall through (the engineers report).

There wont be 10 people bidding (its Cork!) but there may be 3/4 serious bidders but at least the people bidding will have peace of mind as to what they are getting into. If you really want the house the €400 is small money and for me anyway irrelevant when you consider the time it takes to bid and go for a house.

sketchpad · 02-07-2014 5:16pm

Out of curiosity, when you were house hunting how many houses did you bid on before you were successful?

cpoh1 · 02-07-2014 5:23pm

sketchpad wrote: »

Out of curiosity, when you were house hunting how many houses did you bid on before you were successful?

Two. One we missed after a cash buyer usurped us at the last minute. The other was sale agreed before falling through with major structural issues. Third time lucky.

Believe me if i had spent the €380 on the survey for the second house up front id have saved 3 months of wasted time and effort - its hours of time and stress looking to go sale agreed on a house. The cost of the survey is irrelevant in comparison.

Unusual Estate Agent Request?

Comments