CHOICE membership

Real Estate practices

Twice now I have gone to advertised open houses for “Mortgagee in Possession” sales only to be told the house has been sold.
Nothing on the advertisements to indicate this and when I complain to the agent that this is a waste of everyone’s time, they say they have to keep on for the advertising period by law.
I live in Qld and it sounds very “sus” to me.

2 Likes

I don’t know about the requirement to keep publishing the ads but I can see no reason that they could not have them overprinted with SOLD as I have seen many times in ads for non Mortgagee In Possession ads.

2 Likes

It is possible that buyers on the real estate agents lists were aware of the property immediately on becoming available for sale. These buyers may have had access to inspect (appointment only) prior to the open house with one of the buyers making an offer that the finance company accepted. The house then goes under contract before the advertised open day. Adertisements are usually locked in a few days to a week before publishing in papers etc. Online advertisement platforms can be updated at anytime and should be more current.

Often, while it can be a real nuisance as they will make contact regularly, it may be worth registering your details with real estates in the area you are interested in purchasing. Then they may contact you when a new property is listed…giving you a foot in the door compared to other buyers.

2 Likes

As Fred123 says, why can’t they overprint “Sold” or “Under Contract” on the ads?
I used to work for a major newspaper and that could be done up to a few hours before the paper was printed.
It’s false advertising, advertising it’s for sale when it’s not…

2 Likes

I agree that it is a disappointment. Did you get to look through? or get an idea of the price paid? Maybe an opportunity to gazump?

Our local paper comes out once a week and open houses are listed about a week to two weeks before the date. I know of people with Mortgagee in Possession whose families are trying desperately to keep the family home, and lenders who only want the price to cover the debt who may be happy to take a matching offer. But things move slowly in real estate (apart from an auction) there are contracts, cooling off periods, subject to finance, building inspections etc… Not trying to excuse them, but there might be reasons why an Open House might be cancelled due to advanced sale or finalised sales.

3 Likes

Very true…and it is also okay to ask the agent why the open house was cancelled immediately prior to it occurring.

It could be that they ‘hedge their bets’ in the very early stages of a contract being signed as there are things like cooling off periods or other exit clauses (e.g. finance) which could leave a real estate with a terminated contract and then no open house if they cancel too early.

It is also possible that an offer has been made by the buyer and the real estate is waiting for the vendor to accept it before preparing a contract of sale. A real estate agent may cancel a open house if they think that the vendor will accept and a contract will be signed. The buyer may be known to the agent (say has bought before or is on their buyer listing) and confident that a sale will proceed. I would get annoyed if I turned up to a open house to find that an offer has been made subject to vendor approval/has been approved but contract yet to be prepared and signed…as this means it would have wasted my time (as well as everyone else who attends).

It is also possibly a good practice to call the real estate agent in the hours prior to the advertised inspection to ensure that it is still occurring, especially if one is relying on printed media which may be out of date on the day of the inspection. Real estate agents tend to advertise their mobile phones with a properties advertisement.

It may also be worth checking online listing platforms, (such as realestate.com.au or domain.com.au if the property has been listed on one of these) or the real estate’s own website to see if the agent has changed the status of the property.

And lastly, real estates aren’t obliged to only sell a property at an advertised inspection. Signing a contract can occur at any time and some buyers may even chose to place a contract sight unseen (a very risky practice).

1 Like

The first one we looked at initially had “Sold” on the Realestate.com page and the following week it was listed without it. That’s when I rang the agent to check and she said that it was sold but that’s the way it had to be advertised until settlement, according to the bank.

2 Likes

A sale is not really a sale until it is settled, so I can imagine a bank being interested to keep interest alive, and possibly a backup buyer or two in the wings should the ‘sale’ go pear shaped.

4 Likes

I bought a Mortgagee in Possession - sad story, but their own fault, the family were buying on interest only loans against the rising prices due to a mining boom in a nearby town, but it was buying a gym in a major town that bought the whole house of cards crashing down. Then mining went bust … Parents were desperately trying to get funds together to save their children’s investments. Mortgagee had valued it on mining boom prices so refused their offers. The tenants were in turmoil not knowing if they would be evicted.

I went to the auction and was the highest bidder. It was not passed in to me; the lender instructed the real estate agent to seek bids from his “list” which he tried, but they all knew the market. Eventually he convinced them to try me again, so 8 months on, I was the owner, on my terms. Had I been time constrained, or an interested party, I would have been very annoyed at not being allowed to bid for the property for 7 months. So, yes, strange things happen around Mortgagee sales. Ethical? Depends on who you refer to. Legal? probably yes, the vendor can withdraw, refuse to sell below reserve etc. No doubt the bank had moral obligations to the lenders to strive to get the maximum return for them, but this was complicated by bankruptcy etc.

6 Likes