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Interesting technique for tender

Discussion in 'Real Estate' started by Jacque, 26th Feb, 2006.

  1. Jacque

    Jacque Team InvestEd

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    I read this recently as a buying technique, when a buyer is up against a property going to tender or a dutch auction type situation, and would like to know what you all think about it....
    It got me thinking, anyway :)

    Buying a property this way can be like driving a car with a blindfold on. You're not in control, have no idea of the benchmark, yet want the property- but not at any cost. Solution: put your offer in the envelope and present it to the agent along with the others (if there are any) stating that you will pay $x more than any other bona fide purchaser.

    Thoughts?
     
  2. TryHard

    TryHard Well-Known Member

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    Tricky

    I have 3 points of view :

    Confusion :
    Might be difficult if 6 potential purchasers all handed in an envelope saying "I'll pay $x more than any bona fide purchaser" and they were the only 6 ;-)

    Equity :
    I reckon the technique would be interesting if the agent convinced someone to put in a bona fide offer for 50% more than the property value, then holds the "plus $x" person to their implied Contract ?

    Scabbiness :
    The technique reminds me of my unfortunate sale of a speed boat which was sending me broke. The wheeler and dealer who came tyre kicking knew I was doing it tough and had spent thousands on it. Standing right in front of me on the lawn he said "Carl, I will write on this piece of paper my best offer, to give you cash and take it away today". I watched a bit dumbfounded as he carefully wrote on the paper and folded it and handed it to me. I opened it, saw a quite insulting number in the low hundreds, and said "Can I borrow your pen?" I wrote "*&#^ off" and handed it back to him. It made me feel a lot better ;-)

    I would think an offer is only valid when presented on the official REIQ contract anyhoo ?
     
  3. Jacque

    Jacque Team InvestEd

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    Love the boat story Carl :) Would have loved to have seen the guy's face when he read your note!

    Agree 100% with you about mistrusting the validity of any bona fide offer- after all, it's not that difficult to get a pal to write a letter of offer :) Naturally, a signed contract of sale has more legal punch, but, with privacy laws, no agent is going to be able to show another potential buyer the name of the buyer anyway! Besides getting their name, their bank balance and a Stat Dec it would be pretty near on impossible to validate a genuine buyer :D

    I just have trouble with the whole concept of dutch auctions and sale by tender. It's a flawed system, riddled with opportunity to engage in "less than honest" practices.