Fake and Dodgy Asking Prices

Hack

Hi - An Irish agent has dropped an asking price advertised online by euro25,000, but when potential buyers offer this price the agent refuses to accept them. The agent admits to the buyers verbally that he/she only reduced the advertised asking price to attract more people to view the property.
The agent then states that the actual asking price from the client (seller) is euro10,000 higher, say euro525,000, and that the client (current house owner and seller) won't go less than that. The agent gave this actual threshold figure during viewings for the old (euro550,000) asking price and the new (euro525,000) one just weeks later, which has created a lot of confusion to potential buyers.
Is this fish-hook asking price legal or ethical? Has anyone else experienced this trick of the estate agency trade? This case is wasting people's time and those who are aware of it then question the so called bids or offers - without any proof they exist - from the agent. The National Property Services Regulatory Authority’s code of practice states that "advertising property services providers should not publish or cause to be published any material or advertisements that are false, misleading or dishonest."
- Regards, concerned citizen!

MarkAnthony

There are plenty of issues that need tightening up around the sale of property. Being blunt though people not being able to make up their own mind as to what they'll pay for a property isn't really one of them. Frankly I'd rather the agent be honest that you're dealing with a nutter vendor than come up with the same old tired rubbish you frequently hear.

The standard when buying a Mars bar is rightly the moron in a hurry. When purchasing a house the asking price is really only ever a guide. I would never put too much stock in them.

ted1

There was talk if making AMV legally binding but nothing seemed to have happened
http://www.dillon.ie/news/viewit/35

MouseTail

Entirely legal, and a common enough tactic to generate interest and entice enough people to start a bidding war. I don't see it as being particularly unethical either.

Wabbit Ears

It's just like an auction with a low start price and a reserve selling price. The OP makes it sound sinister but the hook and reel thing is millennia old.

Hack

Thanks for the replies. Excellent points. I think, Mark Anthony, that there are definitely a lot of nutter vendors out there demanding high prices and quick sales. Cheers!

davo10

Hack wrote: »

Thanks for the replies. Excellent points. I think, Mark Anthony, that there are definitely a lot of nutter vendors out there demanding high prices and quick sales. Cheers!

Vendors are "nutters" for wanting to maximise price and sell in the shortest time period? Op remember that post because when the day comes for you to sell a property, you too will be a "nutter".

The reason prices are dropped is to bait the property, make the price reasonable and allow potential buyers to become emotionally invested in the property, then the seller hopes there is more than one person interested in it and the bidding takes off. A property is worth what the buyer is willing to pay for it, not what you would like to pay for it.

MarkAnthony

They're nutters for wanting to try and sell a property well over what they are worth for a given square footage, area and condition. If a house is going to sell at x amount it's going to sell. There's no need in this market to be asking X and only willing to accept Y. That a sign of a nutter vendor IMO.

There are various reasons you may have a nutter vendor, neg equity, sheer stupidity etc. etc. when you come across one it's normally better to simply bow out.

davo10

MarkAnthony wrote: »

They're nutters for wanting to try and sell a property well over what they are worth for a given square footage, area and condition. If a house is going to sell at x amount it's going to sell. There's no need in this market to be asking X and only willing to accept Y. That a sign of a nutter vendor IMO.

There are various reasons you may have a nutter vendor, neg equity, sheer stupidity etc. etc. when you come across one it's normally better to simply bow out.

This is misguided at best. The market decides what a property is worth not the vendor. We do not sell property here in "price per square foot" in the same way that property is sold in say New York. Other factors such as location, size, condition, proximity to schools/amenities/family etc play a big part in setting the price but so does the emotion of the buyer, some people fall in love with properties that others wouldn't touch. Vendors often bring a property to market at a price lower than what they are willing to accept just to generate interest among buyers, what it is "worth" only becomes apparent when the final bid is accepted. If you "bow out" of every sale where a property is advertised for less than the selling price, then you may be waiting a very long time to buy or you will be buying a property which not even a hobo would live in.

MarkAnthony

davo10 wrote: »

This is misguided at best. The market decides what a property is worth not the vendor. We do not sell property here in "price per square foot" in the same way that property is sold in say New York. Other factors such as location, size, condition, proximity to schools/amenities/family etc play a big part in setting the price but so does the emotion of the buyer, some people fall in love with properties that others wouldn't touch. Vendors often bring a property to market at a price lower than what they are willing to accept just to generate interest among buyers, what it is "worth" only becomes apparent when the final bid is accepted. If you "bow out" of every sale where a property is advertised for less than the selling price, then you may be waiting a very long time to buy or you will be buying a property which not even a hobo would live in.

I'm not sure what's got you so riled to be honest.

There is a certain good faith requirement when selling one is expected, by sensible buyers, to adhere to. For some reason, generally advanced by the property selling propagandists - such as the Indo et al - some vendors think that buyers should be willing to accept whatever they're willing to throw the buyers way.

On such thing is setting an asking price somewhere in the vicinity of what they actually want for the property, doing otherwise is simply wasting everyone's time including their own. The norm where one or two people are interested is for the house to sell at asking. Not for asking to be 15% lower than the vendor is ever going to accept. Now do I begrudge a vendor with 5 interested parties playing out the bidding process? No of course I don't.

The fact is though if you're having to resort to 'tactics' to generate interest in this market you've probably over estimated the value of the property. The sensible thing to do at that stage is reassess and reprice, genuinely, or wait until the market improves. The other option drops you in nuttersville. Luckily there are plenty of nutter buyers inhabiting Nuttersville also, I'd encourage the OP and others not to engage.

davo10

MarkAnthony wrote: »

I'm not sure what's got you so riled to be honest.

There is a certain good faith requirement when selling one is expected, by sensible buyers, to adhere to. For some reason, generally advanced by the property selling propagandists - such as the Indo et al - some vendors think that buyers should be willing to accept whatever they're willing to throw the buyers way.

On such thing is setting an asking price somewhere in the vicinity of what they actually want for the property, doing otherwise is simply wasting everyone's time including their own. The norm where one or two people are interested is for the house to sell at asking. Not for asking to be 15% lower than the vendor is ever going to accept. Now do I begrudge a vendor with 5 interested parties playing out the bidding process? No of course I don't.

The fact is though if you're having to resort to 'tactics' to generate interest in this market you've probably over estimated the value of the property. The sensible thing to do at that stage is reassess and reprice, genuinely, or wait until the market improves. The other option drops you in nuttersville. Luckily there are plenty of nutter buyers inhabiting Nuttersville also, I'd encourage the OP and others not to engage.

I'm not riled up, I just don't think you understand the difference between "asking price" and "worth". The asking price is just the price that the vendor instructs the EA to bring the property to market. It is a guide and the vendor will always want to maximise the price and often there is a limit below which the sale will not proceed. The buyer on the other hand will always want to pay as little as possible (usually making an opening bid below asking price so it cuts both ways) the "worth" of the house is what someone is willing to pay for it. Human nature being what it is, homes will always be more than mere bricks and mortar, we see property as a fiscal and emotional investment so we will tend to bid more than others to buy even when we think the house is worth less, so value or worth is different to everyone. Advising all not to engage means that those who do not engage, do not buy and continue to pay increasing rents while property prices rise.

MarkAnthony

davo10 wrote: »

I'm not riled up, I just don't think you understand the difference between "asking price" and "worth". The asking price is just the price that the vendor instructs the EA to bring the property to market. It is a guide and the vendor will always want to maximise the price and often there is a limit below which the sale will not proceed. The buyer on the other hand will always want to pay as little as possible (usually making an opening bid below asking price so it cuts both ways) the "worth" of the house is what someone is willing to pay for it. Human nature being what it is, homes will always be more than mere bricks and mortar, we see property as a fiscal and emotional investment so we will tend to bid more than others to buy even when we think the house is worth less, so value or worth is different to everyone. Advising all not to engage means that those who do not engage, do not buy and continue to pay increasing rents while property prices rise.

Read the OP, the scenario outlined is not a vendor behaving reasonably. As I said above I've no issue with a Vendor maximising their sale value; what the vendor in this case is engaged in is bad faith and frankly wasting their own time as much as everyone else's.

Again it's one thing to bring a property to market at a genuine asking price, have a lot of interest and end up selling 15% or more over asking. This is a vendor that's clearly over priced the property and is now resorting to 'tactics' to try and sell. I'd suggest that they're also more likely to try sticking the price up come contract time. i.e. nutter.

There are plenty of decent sellers out there, simply trying to get the best price and fair play to them. I've never suggested people don't engage with the market, although your fevered approach does betray your position. What I've suggested people do is not engage with nutters. This is one of the reason so many sales are falling through, neither party is negotiating in good faith.

Good old fashioned chancing which seems to have become so prevalent in recent years.

davo10

MarkAnthony wrote: »

Again it's one thing to bring a property to market at a genuine asking price, have a lot of interest and end up selling 15% or more over asking. This is a vendor that's clearly over priced the property and is now resorting to 'tactics' to try and sell. I'd suggest that they're also more likely to try sticking the price up come contract time. i.e. nutter.

.

What? So by your logic the vendor should guess what someone out there is willing to pay for a property and no matter how long it remains unsold, stick to that price or put it up for sale at a lower price and accept that price even if someone else is willing to pay more? Have you ever bought or sold a property?

Of course in this case the vendor realises the property is not selling so drops the price to see if more interest can be generated, hopefully by two interested buyers so that the price goes up. These "tactics" are logical when interest is static, only a "nutter" would leave a property unchanged on the market when there is no interest in it. They say the definition of stupidity is doing the same thing over and over again and expecting a different result, tactics are used by both buyers and sellers to try and change the outcome in their favour. In the simplistic view you offer, a price would be set for each property and the seller would sell at that price, of course the flip side may be that the buyer should not be able to buy below that price but how do you arrive at that price without testing the market to see what it's worth to the person who wants to buy it?

Op the seller can pretty much sell at what ever price he/she likes as long as there is someone willing to pay for it and until contracts are signed the price can change though most honest sellers will not alter the price once it is accepted and the deposit is paid. But to call a seller a nutter or to insinuate some dishonesty is involved in a situation like this indicates naivety. Buyers and sellers will use various tactics to achieve their goal, that is effectively what negotiations are, you alter your position if you have to, to achieve a better result.

MarkAnthony

Are you even reading my posts?

Would you care to address some of the points?

What part aren't you understanding perhaps I can clarify it for you?

I'll try and make it clearer for you. For a market to function properly there needs to be a minimum standard of good faith. The clue is in the name, asking price is exactly that, a price at which if no higher bid is made the vendor is willing to sell at. I delimited a number of scenarios for you. If you don't understand any of them, I'm again happy to try and walk you through them. This scenario outlined in the OP is that the Vendor a chancer. I suggest not engaging with chancers for obvious reasons (I can list them if you need me too again just let me know).

There is nothing wrong with reducing an asking price if it's a genuine reduction, what part of this not being a genuine reduction are you missing?

Now for the umteenth time I've explained my position and offered to guide you to through. You keep coming back and trying to quote and say well X means Y. As I say I can only assume you don't understand or that you can't come up with a reasonable counter point. Either way it's not helping the credibility of your argument. The latest one is you suggesting that I'm saying houses should sell for the asking price, a first past the post system as it were. That's not been suggested at any point.

davo10

MarkAnthony wrote: »

Are you even reading my posts?

Would you care to address some of the points?

What part aren't you understanding perhaps I can clarify it for you?

I'll try and make it clearer for you. For a market to function properly there needs to be a minimum standard of good faith. The clue is in the name, asking price is exactly that, a price at which if no higher bid is made the vendor is willing to sell at. I delimited a number of scenarios for you. If you don't understand any of them, I'm again happy to try and walk you through them. This scenario outlined in the OP is that the Vendor a chancer. I suggest not engaging with chancers for obvious reasons (I can list them if you need me too again just let me know).

There is nothing wrong with reducing an asking price if it's a genuine reduction, what part of this not being a genuine reduction are you missing?

Now for the umteenth time I've explained my position and offered to guide you to through. You keep coming back and trying to quote and say well X means Y. As I say I can only assume you don't understand or that you can't come up with a reasonable counter point. Either way it's not helping the credibility of your argument. The latest one is you suggesting that I'm saying houses should sell for the asking price, a first past the post system as it were. That's not been suggested at any point.

Easy tiger, I understand what you saying, I just don't agree with it, this is a discussion forum. I have a lot of experience of both buying and selling properties over the last 20 years so I've seen and used most of the "tactics". Vendors will never be limited to accepting the asking price while there is a possibility of getting more, particularly in a rising market and it is naive to think a vendor should accept a price which was effectively a guess of what a property is worth when first advertised. Similarly there is nothing to stop a buyer bidding below the asking price in the hope or expectation that it will sell below that price advertised, so to you is the buyer any less moral or showing any less "good faith" by offering less than a buyer who wants more?

MarkAnthony

The vendor can choose to accept or decline any offer, there is no moral argument there. There is little point in repeating what I have stated many times over, I'm glad it's finally sinking it.

It absolutely fine to disagree with a point, that's indeed what a discussion forums is for. Putting words in someone else's mouth on the other hand is not what a discussion forum is for.

There has been some movement toward regulating this type of behaviour. I don't think, as per my original post, it needs to be a priority. However it is being a chancer, plain and simple. Unfortunately that behaviour seems to go unchecked in Irish society, that's just they way it is. I'd again reiterate that it wouldn't be the type of transaction I got involved in. I don't feel the need to parade my personal life here to make the point frankly. Suffice it to say I'm happy where I am and what I paid.

davo10

MarkAnthony wrote: »

The vendor can choose to accept or decline any offer, there is no moral argument there.

Good, the second part of that sentence should read " and the buyer can choose to make an offer or not". The parties start from positions which are polar opposites, one wants to get as much, one wants to pay as little, "tactics" will be used on both sides to alter the final price in their favour. As a previous poster said, these "tactics" have been used for millennia. Simples.

MarkAnthony

davo10 wrote: »

Good, the second part of that sentence should read " and the buyer can choose to make an offer or not". The parties start from positions which are polar opposites, one wants to get as much, one wants to pay as little, "tactics" will be used on both sides to alter the final price in their favour. As a previous poster said, these "tactics" have been used for millennia. Simples.

Again the nuance of the point is being lost. I pick my words and sentence construction carefully. You missed the point that there is a disparity in bargaining position, anyway moving on. The reason purchasing and selling a property in Ireland is such a nightmare is chancers on both sides with people trying to make out everything's fair in love and war. An auction is an entirely different animal. Bidding on a property and going over asking again completely different.

I'm sorry you don't get it. I'm sure being a chancer has worked in your favour, it's a shame you don't see the bigger picture and can't even engage with the point. The inability for parties to engage with each other in good faith basis damages the market and forces regulation increasing the cost for everyone.

While it's not illegal and neither should it be, buyers should be aware of the chancers out there, unfortunately few are. It comes home to roost, unfortunately not always on the ones who deserve it.

NinjaTruncs

From my experience Lisney (are we allowed name names?) usually recommend setting asking price a little below what the vendor wants. They do this in the attempt to generate interest and get a bidding war going. While Sherry Fitz tend to over estimate valuations in an attempt to maximise selling price. Either way I have never come across an agent/seller who would accept asking price straight away anyway, they will always try to generate higher bids.

MarkAnthony

NinjaTruncs wrote: »

From my experience Lisney (are we allowed name names?) usually recommend setting asking price a little below what the vendor wants. They do this in the attempt to generate interest and get a bidding war going. While Sherry Fitz tend to over estimate valuations in an attempt to maximise selling price. Either way I have never come across an agent/seller who would accept asking price straight away anyway, they will always try to generate higher bids.

That's not really the scenario the OP has outlined. To be fair one expects a bit of toing and froing when a property hits the market. The issue I have is a reduction in asking price which isn't a reduction in a bid try and get people to bid up. The issue there is if you're willing to take that step you're probably not above throwing in the odd phantom bid or gazumping a purchaser during the 'engineering'; hence why it's sensible to walk away.

Uno my Uno.

Fact is in this country when it comes to buying or selling property all is fair in love and war until the contracts are signed. My experience (both professionally and anecdotally) of peoples's feelings about that, depends entirely on whether they have won or lost and has nothing to do with their position as buyer or seller.

MarkAnthony

Uno my Uno. wrote: »

Fact is in this country when it comes to buying or selling property all is fair in love and war until the contracts are signed. My experience (both professionally and anecdotally) of peoples's feelings about that, depends entirely on whether they have won or lost and has nothing to do with their position as buyer or seller.

It's a definition of winning though IMO. We got all sorts of behaviours going on; people placing booking deposits on multiple properties, gazundering, gazumping, vendors playing silly buggers with the asking prices to name but a few. I've happily secured the 'forever house' but it's been a sodding nightmare and my vendors were simply lazy rather than messers.

Having successfully purchased property here and in Scotland and anecdotally from people purchasing in other jurisdictions we seem to have a very difficult system frankly, and I don't level this accusation lightly - hopefully as you know, feeding into vested interests in keeping the system as complex as possible. Frankly it's probably time for a reverse agent, if such a system doesn't already exist.

Even in England there seems to be a convention on not messing about with asking prices, although it's been a while since anyone I know has bought there - open to correction. We've the rest of their flawed system though it seems.

Uno my Uno.

MarkAnthony wrote: »

It's a definition of winning though IMO. We got all sorts of behaviours going on; people placing booking deposits on multiple properties, gazundering, gazumping, vendors playing silly buggers with the asking prices to name but a few. I've happily secured the 'forever house' but it's been a sodding nightmare and my vendors were simply lazy rather than messers.

Having successfully purchased property here and in Scotland and anecdotally from people purchasing in other jurisdictions we seem to have a very difficult system frankly, and I don't level this accusation lightly - hopefully as you know, feeding into vested interests in keeping the system as complex as possible. Frankly it's probably time for a reverse agent, if such a system doesn't already exist.

Even in England there seems to be a convention on not messing about with asking prices, although it's been a while since anyone I know has bought there - open to correction. We've the rest of their flawed system though it seems.

I don't think the system is controlled by vested interests but rather the behaviour of sellers and buyers. Parties from both sides will seek to avoid being bound until the last moment in certain circumstances and will always seek to gain the best bargain until that happens, there isn't any law against gazumping or gazundering and so it continues.

The fact is that a swift and certain process already exists, Auction. The seller gets his title and contract in order, the buyer sorts out his Financing, the Auction happens and the when the gavel falls the contract is binding. everyone knows what the situation is and all the major legal work is already done.

The problem is, that doesn't really suit people because both seller and buyer must be much more organised ahead of time and incur some costs. My experience is that both sides are usually happy to bumble along causing delays over minor matters while complaining about the system and blaming lawyers for why it moves so slowly.

MarkAnthony

Uno my Uno. wrote: »

My experience is that both sides are usually happy to bumble along causing delays over minor matters while complaining about the system and blaming lawyers for why it moves so slowly.

While I agree with you to a degree there seems to be some shocking solicitors out there doing conveyancing.

gaius c

Something I'm seeing now is asking price reductions to whatever the current highest bid is.
It drums up interest in those who passed up the higher asking price and the risk of "losing" the current bid is fairly low. It does mean that any new bidders have to instantly beat the new asking.
Plus EA's can claim it sold for asking or possibly above rather than having to admit it sold for less than asking. Big factor when it comes to dealing with new vendors.

Smart EA's (and vendors) go in low to start with to get interest & bids.

Uno my Uno.

MarkAnthony wrote: »

While I agree with you to a degree there seems to be some shocking solicitors out there doing conveyancing.

No doubt. My experience is that it is down to either incompetence or laziness. No one gets rich from conveyancing by dragging things out, quite the opposite.