When estate agents can’t or won’t negotiate on behalf of their vendor clients we see the “Buyer Declaration” trotted out as a means of proving to the vendor that there is no point in trying to negotiate a better price.
We received the Phillip Webb Real Estate version of the Buyer Declaration from Phillip Webb real estate agent Martin Froese. At first glance the Buyer Declaration appears legitimate. It indicates that the purchaser is effectively telling the vendor not to bother coming back to negotiate any further – the purchaser has made her offer, and is not prepared to go any higher.
No doubt the estate agent will explain the use of the Buyer Declaration in terms of its being a tool for ensuring that the purchaser is aware that she will not get a second chance, and that her offer had better be a good one. Somehow this is supposed to encourage the purchaser to make the highest offer she possibly can. At the same time, the Buyer Declaration can be shown to the vendor to “prove” that the purchaser will go no higher with her offer, and that there is no value in returning to her in the hope of negotiating a higher price.
But there is another side to the use of the Buyer Declaration. It can also be used as a tool for lazy estate agents who don’t want to have to waste time with negotiations. This explanation fits well with the recent revelations of well known Melbourne estate agent Ian Reid, of Ian Reid Vendor Advocacy who tells visitors to his website:
“(Estate agents are) so hard to reach in the first place, and then all they want you to do is attend an Open for Inspection, at a time that suits THEM! And from vendors, we hear constant complaints that agents don’t seem to be showing their homes properly (standing at the front door taking names and phone numbers is hardly showing a home’s benefits off, is it!) and they’re only too eager to recommend another home “just around the corner”. For a vendor who’s invested considerable money in attracting buyers to their home in the first place, that can be a very upsetting outcome.”
An estate agent who wants to achieve a quick sale without having to waste time with negotiations, and who may have another property around the corner to sell to purchasers who are on the rebound, could put the Buyer Declaration to very good use. Of course, Martin Froese would never take such an approach, and Phillip Webb certainly would not condone such behaviour.
Our experience in representing vendors and purchasers of real estate confirms to us that the Buyer Declaration is really little more than a conditioning tool, used to placate the vendor when the estate agent suggests that the vendor should take what is being offered. Purchasers are often keen to sign a Buyer Declaration, as they see it as a means by which they can stop the estate agent from bothering them, while turning the estate against the vendor.
Note that the purchaser acknowledges having been made “…aware that there is another offer being made on the above property” Surely common sense would dictate that the purchaser should be told what this offer is so that she can better it. Similarly, the competing bidder would be told the amount of the new offer, and given the opportunity to go higher – after all, this is how auctions are supposed to work. So why would the estate agent ask the purchaser to sign the Buyer Declaration instead of negotiating properly?
My view of the Buyer Declaration is that it is really a declaration by an estate agent about his/her own ethics.