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

Sunrise_Sunset · 29-01-2019 7:21pm #1

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.

SteM · 29-01-2019 7:23pm

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

Sunrise_Sunset · 29-01-2019 7:24pm

SteM wrote: »

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

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

facehugger99 · 29-01-2019 7:24pm

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.

Sunrise_Sunset · 29-01-2019 7:28pm

facehugger99 wrote: »

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?

lucast2007us · 29-01-2019 7:29pm

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

Sunrise_Sunset · 29-01-2019 7:29pm

lucast2007us wrote: »

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

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

doiredoire · 29-01-2019 7:30pm

lucast2007us wrote: »

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

And everyone in Ireland follows the rules:D

topmanamillion · 29-01-2019 7:32pm

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.

Vetch · 29-01-2019 8:33pm

topmanamillion wrote: »

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.

facehugger99 · 29-01-2019 8:37pm

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.

Hoboo · 29-01-2019 8:41pm

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.

4ensic15 · 29-01-2019 10:26pm

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.

Hoboo · 29-01-2019 11:23pm

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.

4ensic15 · 29-01-2019 11:29pm

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.

mkdon · 29-01-2019 11:49pm

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

jimmycrackcorm · 30-01-2019 2:17am

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.

Sunrise_Sunset · 30-01-2019 7:53am

jimmycrackcorm wrote: »

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.

Addle · 30-01-2019 8:00am

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

Sunrise_Sunset · 30-01-2019 8:03am

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.

30-01-2019 8:08am

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?

lawred2 · 30-01-2019 8:08am

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.

30-01-2019 8:12am

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?

worded · 30-01-2019 8:20am

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

30-01-2019 8:34am

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.

4ensic15 · 30-01-2019 9:05am

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.

jimmycrackcorm · 30-01-2019 11:14am

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

witchgirl26 · 30-01-2019 11:16am

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?

Askthe EA · 30-01-2019 11:41am

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.

Liam McPoyle · 30-01-2019 2:56pm

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.

Dublindamo · 30-01-2019 3:11pm

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.

eeloe · 30-01-2019 3:17pm

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

happyfriday74 · 30-01-2019 3:25pm

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.

q85dw7osi4lebg · 30-01-2019 3:26pm

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.

SteM · 30-01-2019 3:26pm

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?

rgodard80a · 30-01-2019 3:40pm

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 ?

koheim · 30-01-2019 4:20pm

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..

witchgirl26 · 30-01-2019 4:24pm

Business Cat wrote: »

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.

Tiddlypeeps · 30-01-2019 4:41pm

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.

davo2001 · 30-01-2019 4:49pm

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:

C3PO · 30-01-2019 6:56pm

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!

4ensic15 · 30-01-2019 7:05pm

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.

30-01-2019 7:36pm

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?

30-01-2019 7:38pm

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

q85dw7osi4lebg · 30-01-2019 9:03pm

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).

jimmycrackcorm · 30-01-2019 9:14pm

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!

worded · 31-01-2019 9:55am

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.

worded · 31-01-2019 10:04am

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 :-)

Henry Ford III · 31-01-2019 10:11am

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

witchgirl26 · 31-01-2019 11:11am

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.

q85dw7osi4lebg · 31-01-2019 11:44am

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.

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

Comments