Can estate agents place fake bids to increase the price of a house?

EllieVH

Hi everyone,

As per title, we saw a house three weeks ago and the asking price was 85,000. Placed a bit for 82 and heard nothing for 2 weeks. I contacted the EA to see was there any news and he said he'll let me know. The next day, another bid appeared and the price has been going up ever since. The "other person" always comes back with a counter bid after 1-2 hours and always increases the price by 1,000.

My question is, could the EA be pretending that there is another bidder to drive up the price? We (mistakenly) looked very eager when we viewed the house.

Is there anything that I can do to protect myself from this? If we end up buying the house, can I ask for proof of the other bids?

I'm a FTB and this bidding war is quickly taking a toll on me

Thanks

Samuel T. Cogley

They potentially could. You can make a complaint to the PRSA (I think that's what they're called). The chances are though they're not, and if they are, they know how to get away with it. It's much more likely you have another interested party who is as keen as you.

ZaffizaKunt

Bid up to what you think the house is worth and you can afford. If someone bids more than you then move on, its not the house for you.

If the ea is chancing their arm then they will be back to you again when the other buyer "disappears". You then have the choice to either chance your arm and reduce your offer or go ahead and buy the house.

Bigus

82 k is quite possibly below the cost of building this house never mind adding cost of buying site and paying fees, so if that's the case be prepared to jump up a bit, to shake off other party. If that doesn't work I'd place a last (almost)best offer and say that's your limit, but tell him to keep you informed . A decent mobile home is near 80 k now , to put things in perspective.
A recent family member was is the same position and my logical advice was that although the price jumped way above initial asking it was still less than cost to build . She paid 21k over asking in November but exact same property is making 25 to 30 more today , i.e. 45 over October 16 asking price and selling fast.

spisteker

This is called shill bidding and I am pretty sure it is illegal. Although it's a different kettle of fish, I suspect I have fallen victim to this on eBay auctions where the seller sets up fake accounts and bids against me and other genuine purchasers. Usually, the seller would come crawling back when you call their bluff and stop bidding; with some excuse that the other buyer had payment problems or that the seller had gotten another item in stock.

A quick google search brought up a BBC article which stated:

'Trading standards officers warn it is illegal to push up a price artificially by bidding against yourself or by getting family or friends to do so. The process is known as shill bidding and breaks new European Union fair trading rules. Offences carry a maximum fine of £5,000 in UK law.'

davindub

EllieVH wrote: »

Hi everyone,

As per title, we saw a house three weeks ago and the asking price was 85,000. Placed a bit for 82 and heard nothing for 2 weeks. I contacted the EA to see was there any news and he said he'll let me know. The next day, another bid appeared and the price has been going up ever since. The "other person" always comes back with a counter bid after 1-2 hours and always increases the price by 1,000.

My question is, could the EA be pretending that there is another bidder to drive up the price? We (mistakenly) looked very eager when we viewed the house.

Is there anything that I can do to protect myself from this? If we end up buying the house, can I ask for proof of the other bids?

I'm a FTB and this bidding war is quickly taking a toll on me

Thanks

Hard to know, it definitely happens, but its hard to know when it is happening. But definitely take your time bidding, I take as long as possible and make a song and dance over very bid. See if you can bid a extra hundred (the EA will prob refuse), say you need to see if you can raise funds and go back etc.

Problem is when bids are coming in fast, both parties get competitive. You feel like killing the EA etc.

But take this advice go look at other houses and if you like one bid on that as well, don't be worried about walking away from any house, other houses will come onto the market.

If you feel the EA is dodgy or taking too much pleasure in the process just avoid them altogether in future.