Lucy Macken June 30, 2012
Question
At auction, how do we know what our vendor bid should be or is it just the same as our reserve?
Charles, Newtown
Answer
Not the same, but in a buyer's market it's vital to get both right. Contrary to the actions of many an overly optimistic vendor, an unrealistic reserve won't actually force a happy result. The vendor bid is the better tool with which to kick off negotiations; the reserve is about clinching the deal. Knowing where to set both depends on the number of buyers and their enthusiasm. As one savvy agent says: if you have only one or two bidders, a higher vendor bid will take negotiations to a better place, but the more players, the lower you can set it.
Question
Can an incoming landlord (who has exchanged but not settled) give valid notice to a tenant of a rent rise that counts for the 60-day notice? The buyer could ask the existing landlord to give such notice, but that could disadvantage them if the tenant leaves within the settlement period, so the existing owner has no incentive to do so.
Brad, Collaroy
Answer
You said it, Brad. The vendor could be pressed to include a rent rise in the contract of sale but that is not in their - or their tenant's - best interest. The rule is, the incoming landlord cannot give notice of a rent rise before settlement because they are not yet the landlord. After all, the buyer has bought the property, not the tenant.