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Bidding on a house - ask for proof of another bid?

  • 29-01-2019 7:21pm
    #1
    Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    When bidding on a house, do people generally take the Estate Agent's word for it that they have received another bid for X amount? Or do you ask for proof?

    We want to place a bid on a property. There is one bid that has been "rejected by the seller". I'm wary because in boom times when we bought our first property, we feel strongly (in hindsight) that the Estate Agent at the time had us involved in a fake bidding war of sorts. We don't want to fall into that trap again.


«13

Comments

  • Registered Users, Registered Users 2 Posts: 6,859 ✭✭✭SteM


    What sort of proof do you think you could ask for?


  • Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    SteM wrote: »
    What sort of proof do you think you could ask for?

    No idea. Is there a way to verify another bid?


  • Registered Users, Registered Users 2 Posts: 7,376 ✭✭✭facehugger99


    What 'proof' are you hoping for?

    The Estate Agent won't be giving you any personal data on another bidder.

    The idea of 'fake bids' is a myth. While you may "feel strongly" that you were previously in a fake bidding war, facts generally trump feelings.


  • Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    What 'proof' are you hoping for?

    The Estate Agent won't be giving you any personal data on another bidder.

    The idea of 'fake bids' is a myth. While you may "feel strongly" that you were previously in a fake bidding war, facts generally trump feelings.

    What are the facts? And where can I get this information you are so sure of?


  • Registered Users, Registered Users 2 Posts: 801 ✭✭✭lucast2007us


    New market rules do not allow them to make up fake bids


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  • Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    New market rules do not allow them to make up fake bids

    When did that come into force? And how is it enforced?


  • Registered Users Posts: 120 ✭✭doiredoire


    New market rules do not allow them to make up fake bids

    And everyone in Ireland follows the rules:D


  • Registered Users, Registered Users 2 Posts: 3,382 ✭✭✭topmanamillion


    Estate agents are heavily regulated so faking bids really isn't in their interests. If they were audited they would be asked to provide proof of other bids. If they were unable to do that they could expect heavy fines and ramifications for their licenses. Most work off a base price + commission so there's little point for them of inflating a house price.
    Essentially, they have very little to nothing to gain by fabricating bids and a lot to lose by doing so.
    The best advice I can give is have a price in mind that you are willing to pay for a house.
    To state the obvious, if your price meets the valuation and is the highest bid you'll get the house. That's the simple equation you should focus on.


  • Closed Accounts Posts: 422 ✭✭Vetch


    Estate agents are heavily regulated so faking bids really isn't in their interests. If they were audited they would be asked to provide proof of other bids. If they were unable to do that they could expect heavy fines and ramifications for their licenses. Most work off a base price + commission so there's little point for them of inflating a house price.
    Essentially, they have very little to nothing to gain by fabricating bids and a lot to lose by doing so.
    The best advice I can give is have a price in mind that you are willing to pay for a house.
    To state the obvious, if your price meets the valuation and is the highest bid you'll get the house. That's the simple equation you should focus on.

    Are EAs audited as a matter of interest? The EA I bought through asked for all offers in writing so maybe this was their proof if required. So just wondering if audits happen.


  • Registered Users, Registered Users 2 Posts: 7,376 ✭✭✭facehugger99


    lililanny wrote: »
    What are the facts? And where can I get this information you are so sure of?

    The 'facts' are that you have no evidence of a fake bid.


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  • Registered Users, Registered Users 2 Posts: 3,590 ✭✭✭Hoboo


    If the EA is on 2%, they'd be up a grand on 50k. That's the company. The agent is say on 10% commission, so gets €100. After tax, €50.

    Neither the agent or agency would waste their time for crumbs, get it wrapped up and signed asap and onto the next one.


  • Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Hoboo wrote: »
    If the EA is on 2%, they'd be up a grand on 50k. That's the company. The agent is say on 10% commission, so gets €100. After tax, €50.

    Neither the agent or agency would waste their time for crumbs, get it wrapped up and signed asap and onto the next one.

    If they don't get the price, they won't get the next one.


  • Registered Users, Registered Users 2 Posts: 3,590 ✭✭✭Hoboo


    4ensic15 wrote: »
    If they don't get the price, they won't get the next one.

    Not sure what you mean. The market dictates the price not the seller. If someone bids 300 and no one else bids 310 but the seller wants 320 then the buyer is told it's 320. They don't say there's another bid at 310 to try get 320 and risk a complete fook up. If that's the final bid the seller is told, they decide. I've family and friends in the business, I've had this discussion before, they want it sold asap at the best price offered, wrap it up. Time and advertising is worth far more than 2% on a a fee extra grand.


  • Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    Hoboo wrote: »
    Not sure what you mean. The market dictates the price not the seller. If someone bids 300 and no one else bids 310 but the seller wants 320 then the buyer is told it's 320. They don't say there's another bid at 310 to try get 320 and risk a complete fook up. If that's the final bid the seller is told, they decide. I've family and friends in the business, I've had this discussion before, they want it sold asap at the best price offered, wrap it up. Time and advertising is worth far more than 2% on a a fee extra grand.

    If the neighbours think they didn't get the best price for the property they will not instruct that agent. Saying that agents don't want to get the best price because the additional commission is minuscule is missing the fact that getting a good price is the best marketing there is. I once heard an auctioneer boast to his boss, "I sold house x". The boss immediately asked him "what house did you get in to sell in place of it?" It is all about a chain.


  • Registered Users Posts: 419 ✭✭mkdon


    i agree with the poster seems there is a hell of a lot of fake bidding going on because there is simply no evidence of bids... where is the regulation... who can one whistleblow on a dodgey estate agent.... who audits EA s i see no change from 10 years ago and the estate agents are as unregulated as can get and unprofessional mind you


  • Registered Users, Registered Users 2 Posts: 14,345 ✭✭✭✭jimmycrackcorm


    mkdon wrote:
    i agree with the poster seems there is a hell of a lot of fake bidding going on because there is simply no evidence of bids... where is the regulation... who can one whistleblow on a dodgey estate agent.... who audits EA s i see no change from 10 years ago and the estate agents are as unregulated as can get and unprofessional mind you


    My ex went to a viewing and made a bid on a house. But she doesn't have mortgage approval yet.
    The agent took her details and rang her, she made a bid off the cuff.

    So is that a fake bid?
    The agent didn't know. He took it.


  • Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    My ex went to a viewing and made a bid on a house. But she doesn't have mortgage approval yet.
    The agent took her details and rang her, she made a bid off the cuff.

    So is that a fake bid?
    The agent didn't know. He took it.

    Could be described as fake yes, in my opinion, because it pushes the price up, and the bid has no basis. The Estate Agent did tell us they are asking for proof of mortgage approval before making a bid on this property. However, he did say AIP is fine, and we know, AIP is certainly not the same as mortgage approval.


  • Registered Users, Registered Users 2 Posts: 4,812 ✭✭✭Addle


    But agent is genuine in that case.
    He doesn't know the bidders circumstances.


  • Registered Users, Registered Users 2 Posts: 1,215 ✭✭✭Sunrise_Sunset


    Addle wrote: »
    But agent is genuine in that case.
    He doesn't know the bidders circumstances.

    Should it be the EA's responsibility to ensure that the bidder has mortgage approval? Otherwise "fake" bids are driving up the price unnecessarily.

    I would describe that as a fake bid of sorts.


  • Posts: 0 [Deleted User]


    mkdon wrote: »
    i agree with the poster seems there is a hell of a lot of fake bidding going on because there is simply no evidence of bids... where is the regulation... who can one whistleblow on a dodgey estate agent.... who audits EA s i see no change from 10 years ago and the estate agents are as unregulated as can get and unprofessional mind you

    That is nonsense. You don’t believe the bids are real because there is no evidence, yet you have no evidence the bids are fake? At a time when supply is low, demand is high, a significant proportion of buyers are cash buyers, the number of mortgage approvals is increasing, and most importantly, property prices are rising (albeit slowly at the moment) and selling well above asking, you think a hell of a lot of bids are fake?

    Can you offer a shred of evidence of fake bids?


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  • Registered Users, Registered Users 2 Posts: 24,457 ✭✭✭✭lawred2


    lililanny wrote: »
    Could be described as fake yes, in my opinion, because it pushes the price up, and the bid has no basis. The Estate Agent did tell us they are asking for proof of mortgage approval before making a bid on this property. However, he did say AIP is fine, and we know, AIP is certainly not the same as mortgage approval.

    You think someone should be at loan offer stage before making a bid?

    Sure what if your bid got rejected? And you move on to the next house! That's a new loan offer.

    That's not how it works. AIP is exactly for the purposes of giving someone the parameters within which they can make valid bids.


  • Posts: 0 [Deleted User]


    lililanny wrote: »
    Should it be the EA's responsibility to ensure that the bidder has mortgage approval? Otherwise "fake" bids are driving up the price unnecessarily.

    I would describe that as a fake bid of sorts.

    What if a buyer has mortgage approval and makes bids on multiple properties, are they fake bids?


  • Registered Users, Registered Users 2 Posts: 4,608 ✭✭✭worded


    The greatest danger of fake bidding is by a mate of the seller. The EA would be unaware


  • Posts: 0 [Deleted User]


    worded wrote: »
    The greatest danger of fake bidding is by a mate of the seller. The EA would be unaware

    The seller is the fake bidder?

    Surely the seller could just tell the EA that bids will not be considered / property will not sell below a certain price.


  • Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    mkdon wrote: »
    i agree with the poster seems there is a hell of a lot of fake bidding going on because there is simply no evidence of bids... where is the regulation... who can one whistleblow on a dodgey estate agent.... who audits EA s i see no change from 10 years ago and the estate agents are as unregulated as can get and unprofessional mind you

    There are a hell of a lot of naive bidders placing bids. It is not a supermarket. people who wouldn't buy a car from anyone but a main dealer expect to be told all kinds of things by an estate agent who is working for the other party in the transaction.


  • Registered Users, Registered Users 2 Posts: 14,345 ✭✭✭✭jimmycrackcorm


    worded wrote:
    The greatest danger of fake bidding is by a mate of the seller. The EA would be unaware


    Hardly in the sellers interest though


  • Registered Users, Registered Users 2 Posts: 2,206 ✭✭✭witchgirl26


    If you think an EA is making up fake bids to push the price up you can report them to the regulatory authority who would be the ones to audit them. But as others have pointed out, the cost to the EA personally and the company would be such that the rewards of a fake bid wouldn't be worth the risk. It's very simple - people will not always do the right thing but they'll do the easier thing. It's easier for them to do the right thing for EA's as it will cost them a lot.

    As for using AIP - that's exactly what it's for! For giving you boundaries in which to bid on a property. If you had to go through the full loan process for every house you wanted to potentially bid on, the process would be so drawn out and it would take so much longer as well to get the approval that people would be up in arms about that.

    OP realistically they're not going to show you anything that proves another bid as doing so could actually breach GDPR (they can't exactly send across someone's emailed bid). And if they redacted all the personal information in it, how would you know it was more real than them telling you?


  • Registered Users, Registered Users 2 Posts: 724 ✭✭✭Askthe EA


    Once again, fake bids just dont happen.

    I know people like to believe they do, but they dont. Its simply not worth the risk to our license and therefore our careers.


  • Closed Accounts Posts: 14,846 ✭✭✭✭Liam McPoyle


    Askthe EA wrote: »
    Once again, fake bids just dont happen.

    I know people like to believe they do, but they dont. Its simply not worth the risk to our license and therefore our careers.

    I'm not so sure. We went sale agreed on a property late last year. The under bidder was allegedly €4.5k under our winning bid. Unfortunately the sale of our house fell through so we had to withdraw our offer. Through out the process the vendor and agent had told us the under bidder was still in the loop and their offer stood. I checked the property price register yesterday and the house sold for €15,500 less than what we had been told the under bidder had offered.


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  • Registered Users Posts: 34 Dublindamo


    Askthe EA wrote: »
    Once again, fake bids just dont happen.

    I know people like to believe they do, but they dont. Its simply not worth the risk to our license and therefore our careers.

    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.


  • Moderators, Music Moderators Posts: 3,756 Mod ✭✭✭✭eeloe


    We were looking to move 2-3 years ago, and one quite large and high profile estate agent in our town had us in a bidding war.

    The house was up for 320,000, we went in with a low ball offer of 260k, within an hour another couple were at 265.

    Over the course of the next three weeks, this other couple ended up with an offer on the house of 325,000.

    We asked the estate agent to retract our offers, to which he was highly insulted.

    The house is still for sale right now at 280,000


  • Registered Users Posts: 194 ✭✭happyfriday74


    I'm not so sure. We went sale agreed on a property late last year. The under bidder was allegedly €4.5k under our winning bid. Unfortunately the sale of our house fell through so we had to withdraw our offer. Through out the process the vendor and agent had told us the under bidder was still in the loop and their offer stood. I checked the property price register yesterday and the house sold for €15,500 less than what we had been told the under bidder had offered.

    Could have been any number of reasons. Bidding would have halted at Sale agreed but there still weeks or months of conveyancing after that to close the sale. Buyer could of chanced a price chip at the last minute(poor form but it happens) for a delay in the sale, maintenance issue, funny title issue etc

    Agents are supposed to get records bids in writing, the PSRA can and will do audits and if they get a scalp of a bold agent doing this they will wave it to show they are doing their job.

    Despite what a lot of people here think and say the industry is highly regulated and also its a small town. If you get caught doing this you will loss your licence and your reputation.


  • Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    Vetch wrote: »
    Are EAs audited as a matter of interest? The EA I bought through asked for all offers in writing so maybe this was their proof if required. So just wondering if audits happen.

    Yes they are audited by the PSRA at random.


  • Registered Users, Registered Users 2 Posts: 6,859 ✭✭✭SteM


    Dublindamo wrote: »
    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.

    Or that the other interested party dropped out just like you did. It dropping in price to 699 a week later would suggest to me that the asking of 735 was to high in the first place, you realised it so why couldn't the other interested party?


  • Registered Users, Registered Users 2 Posts: 568 ✭✭✭rgodard80a


    I thought estate agents have to maintain a "bid book", and anyone (I assume mainly bidders) could turn up at the estate agent office and ask to inspect it ?


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  • Registered Users Posts: 156 ✭✭koheim


    The solution would be to make ALL bids 100% binding. That will sort out the market and the industry.
    And yes this is possible and happens in other countries..


  • Registered Users, Registered Users 2 Posts: 2,206 ✭✭✭witchgirl26


    I'm not so sure. We went sale agreed on a property late last year. The under bidder was allegedly €4.5k under our winning bid. Unfortunately the sale of our house fell through so we had to withdraw our offer. Through out the process the vendor and agent had told us the under bidder was still in the loop and their offer stood. I checked the property price register yesterday and the house sold for €15,500 less than what we had been told the under bidder had offered.

    That could have happened for a few reasons. The under-bidder may have reduced the offer upon the survey of the property if works were needed which led to the drop in price.
    Dublindamo wrote: »
    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.

    Maybe it was but the other parties pulled out due to their financing falling through or them not being able to sell their own house or even just changing their minds.
    eeloe wrote: »
    We were looking to move 2-3 years ago, and one quite large and high profile estate agent in our town had us in a bidding war.

    The house was up for 320,000, we went in with a low ball offer of 260k, within an hour another couple were at 265.

    Over the course of the next three weeks, this other couple ended up with an offer on the house of 325,000.

    We asked the estate agent to retract our offers, to which he was highly insulted.

    The house is still for sale right now at 280,000

    Again maybe the other couple were uncomfortable at the bidding war also and pulled their offer. If there were only 2 really interested parties and the property was artificially inflated from the bidding war, this could easily happen.

    Look if people are that concerned, report the EA in question to the PRSA and get them to look into it. Otherwise there isn't any proof of fake bids.


  • Closed Accounts Posts: 2,103 ✭✭✭Tiddlypeeps


    koheim wrote: »
    The solution would be to make ALL bids 100% binding. That will sort out the market and the industry.
    And yes this is possible and happens in other countries..

    This is how it works in Ontario (not sure if it's the same in all of Canada). An official bid is a legal document outlining the bid and conditions and if accepted you are then actually committing to buy, and there are penalties if you withdraw at that point. In practice tho people add get out clauses to these documents, common ones would be pending finance, or if buying a condo it would be pending a review of the documents from the condo board outlining it's history and what sort of shape it's in. But when the market is very hot many will submit bids with no conditions as they would otherwise be ignored.

    It works well for making sure there is no funny business, but it also causes buyers to do stupid **** in a hot market, but I guess thats pretty normal regardless.


  • Registered Users, Registered Users 2 Posts: 3,320 ✭✭✭davo2001


    My bother used to a work for an EA during the boom. Readily admitted to me that fake bids are a thing, anyone that says it doesn't is naive, not that a lot of people here will admit it, I'm sure the majority of EA's probably don't but it definately does happen.

    If you're to go by a lot of boards users, everyone follows all the rules 100% of the time :rolleyes:


  • Registered Users, Registered Users 2 Posts: 3,773 ✭✭✭C3PO


    Dublindamo wrote: »
    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.

    That's a bit of leap!! 1+1 = 4!


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  • Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    koheim wrote: »
    The solution would be to make ALL bids 100% binding. That will sort out the market and the industry.
    And yes this is possible and happens in other countries..

    That would mean the bidder would have to go to the expense of having title investigated and surveys done before bidding. the owner would have to prepare draft contracts before putting the property on the market. It only works in Ireland with auctions. it is not feasible otherwise.


  • Posts: 0 [Deleted User]


    Dublindamo wrote: »
    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.

    Though what you say is possibly true, other explanations are, buyer changed their mind, buyer was bidding on other properties, buyer couldn’t get finance for amount bid, EA thought they were messers etc.

    I suppose it comes down to having some kind of tangible evidence to back up your opinion, have you anything at all to support it?


  • Posts: 0 [Deleted User]


    koheim wrote: »
    The solution would be to make ALL bids 100% binding. That will sort out the market and the industry.
    And yes this is possible and happens in other countries..

    By making them binding, you mean if you bid on a property there would be a legal obligation to buy it? Interesting


  • Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    One of the countries largest agents now have a sub site where you can register to bid and see current offers in properties. A quick Google will bring you to it my(insertagenthere).


  • Registered Users, Registered Users 2 Posts: 14,345 ✭✭✭✭jimmycrackcorm


    Dublindamo wrote:
    Naive to think this doesn't happen. We were very keen on a house recently. Asking was 735 and EA said they had an offer of 727 on it. They were sure we would bid but we didn't in the end. The following week the asking was reduced to 699. Showed to me that the 727 offer was not genuine.

    Ironic you suggest that when you pulling out also ensured that the price was lower than your own offer!


  • Registered Users, Registered Users 2 Posts: 4,608 ✭✭✭worded


    Dav010 wrote: »
    The seller is the fake bidder?

    Surely the seller could just tell the EA that bids will not be considered / property will not sell below a certain price.

    What I said ....

    Quote: worded
    The greatest danger of fake bidding is by a mate of the seller. The EA would be unaware

    Update > And if it goes over that amount in a bidding war all the better. What I mean is the seller mate would make counter bids to max the selling price and is in on or creates a bidding war. This mate drops out before the final bid obviously so it has to be carefully gauged. But where the incremants are small it’s tempting as a genuine buyer to keep counter bidding.

    The seller has the ear of the EA who tells the seller if the genuine bidder is running out of steam. This info is used by the seller to guage whether or not to throw in another false counter bid.

    There is a possibility it happened to me years ago but I can’t prove it. There was no one interested in a property for months then there was myself and two others all of a sudden. Was highly suspicious and I believe the EA was just a messenger in it all and the buyer had a mate trying to max the price.

    I was being advised by a retired broker friend at the time on what to bid.


  • Registered Users, Registered Users 2 Posts: 4,608 ✭✭✭worded


    koheim wrote: »
    The solution would be to make ALL bids 100% binding. That will sort out the market and the industry.
    And yes this is possible and happens in other countries..

    Happens in Canada as someone said earlier.
    All offers are a cheque sealed in an envelope by each party interested.
    On a given day all envelopes are opened and highest cheque wins.
    It’s simple and legally binding and not open to an auction and counter bidding

    But oh no that’s too simple for us Irish folk :-)


  • Moderators, Business & Finance Moderators Posts: 17,752 Mod ✭✭✭✭Henry Ford III


    I've never seen a sanction against an estate agent for fake bids. Regulation doesn't happen in this area imho.


  • Registered Users, Registered Users 2 Posts: 2,206 ✭✭✭witchgirl26


    worded wrote: »
    Happens in Canada as someone said earlier.
    All offers are a cheque sealed in an envelope by each party interested.
    On a given day all envelopes are opened and highest cheque wins.
    It’s simple and legally binding and not open to an auction and counter bidding

    But oh no that’s too simple for us Irish folk :-)

    A similar thing operates in California but from talking to my cousin there it's just as rife for problems as the system here. He tried going through the process without a real estate agent working on his behalf and was always outbid. He finally decided to bit the bullet and pay one and was telling us that the agent had in an "in" with the selling agent who would tell him exactly what time the bids were closing at and their feeling of where it was going so that his bid could be the last in and also most likely the highest. Outbid on 4 properties before the agent and magically got the first with an agent involved.


  • Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    worded wrote: »
    Happens in Canada as someone said earlier.
    All offers are a cheque sealed in an envelope by each party interested.
    On a given day all envelopes are opened and highest cheque wins.
    It’s simple and legally binding and not open to an auction and counter bidding

    But oh no that’s too simple for us Irish folk :-)

    That's called best and final and Irish agents do offer it. It's funny you mention it because I've been involved in such a sale and the wining bid was €30,000 higher than the second highest. It's a sure fire way to pay way more than has to be paid, if you are the successful bidder.


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