Property listings throughout the metropolitan area are down to 5,400 on reiwa.com. Four years ago, there were 14,000 properties on offer. Sales volumes are consistently at around 950 per week, outpacing supply so it is hardly surprising that buyers find themselves making an offer to purchase in competition with others.
Agents have differing approaches as to how to deal with multiple offers but normally will inform buyers that their offer is one amongst others. When a property is offered for sale by private treaty, details of competing buyers’ offers are not normally revealed so as a buyer offering in competition with others, it is difficult to know what price and conditions will ensure purchasing success without paying significantly more than the next highest offer.
ask the agent if there are any other current offers
Buyers should remember that agents have a responsibility to act in the best interests of the seller unless it is unlawful or unethical to do so. Agents have a legal responsibility to work at getting the buyer to pay the highest possible price on terms favourable to the seller they represent.
One of the most effective ways to achieve this and discharge their fiduciary responsibility is to have multiple purchasers competing to buy. Naturally, buyers don’t like having to compete as it is much harder to gain a negotiable advantage in such circumstances.
My advice to buyers is to always ask the agent if there are any other current offers on the property before submitting your own offer. Agents are not obliged to tell you that there are, so this knowledge might influence your initial offer.
Also, consider removing any less-essential conditions of your offer such a timber pest inspection clause if one had been done recently, especially for more modern homes and consider aligning the settlement date to suit the seller. A bigger deposit might make your offer more appealing or an ‘odd’ price offering rather than neat 5 or 10-thousand increments might make your offer stand out from the others.
The notion that agents should assume the buyer’s first offer is not their “best offer” is nonsense. A buyer who tells the agent that this is their best offer should not assume the agent thinks it is a lie and remember that the seller is under no obligation to provide you an opportunity to negotiate further.
Buyers who miss out through competition are naturally disappointed but ought to come away from the experience knowing they gave it their best shot. In this competitive market, buyers will find it difficult to gain any negotiating advantage.
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