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Bidding race for property

magicEye

Hi all,

just a quick question, is there any way one can prove there is indeed another party bidding for a property? we are looking at a house that took forever to sell initially, now the current owner is looking to sell on, however, at the time we made our first enquiry there were no offers on the house, and then suddenly, another bidder appeared, and not only that, but they appear to be bidding against themselves, as they raised their initial offer prior to us even making an offer on the house. seems a little too convenient in my opinion.

Any ideas, greatly appreciated.

Thanks,

Magic

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frank730

no way to find out for sure, set your upper limit and be prepared to walk away

spaceHopper

Get a friend to do a secret shopper, ring up and book a viewing ask if there are any offers and then compare notes. EA's are required to record bidds in book that can be inspected by their professional body, not by you. Any good well know EA probably wouldn't make up bids. So if it's SF, DNG, Lisney, Youngs... I'd expect it's a real bidd.

herbalplants

https://www.boards.ie/discussion/2058271849/bidding-race-for-property

Welcome to the club of buying houses. You will encounter this at every house you view, they all have these hidden buyers prepared to bid against you the moment you wish to put a bid in 🤣. I encounter the same.

Don't agents change their game, someone should tell them so.

Do your own valuation of the property, and maximum you want to bid on, put the bid in and be prepared to walk away. Don't invest yourself emotionally as this is what agents pray on.

herbalplants

https://www.boards.ie/discussion/comment/119876652#Comment_119876652

Are you for real? I know for fact, DNG made up a fake bid for a property I bid on. I have proof. Rang the office.

Don't fool yourself with all that they get fined, how often do they get audited by a professional body 👀. Not at every house they sell.

Former Former Former

https://www.boards.ie/discussion/comment/119877307#Comment_119877307

. I have proof. Rang the office.

?? Not only did they make up a bid but they confessed to it?

No offence but...

Padre_Pio

I doubt they make fake bids, but i can see some EAs not properly vetting bidders.

I've never had an EA ask for proof of AIP or any other document, and I know of a good few sales that fell through because the highest bidder didn't even have funds or playing games.

An EA should match the buyers offer with the sellers expectations. Most of them only get paid a few % so maybe 20 euro per 1000 on the sales price. No doubt some are shade enough, but I don't think they'll risk their reputation over a few quid.

Furze99

There's a good reason why estate agents come low down the scale when it comes to public trust. Same sort of guff when we were looking about 30 years ago, in their nature.

herbalplants

https://www.boards.ie/discussion/comment/119877491#Comment_119877491

No offence taken. You have the right to believe whatever you like. I am not forcing you to change your lovely opinion on estate agents...

quokula

For an EA, fake bids drag out sales and risk alienating buyers for a fairly negligible increase in commission, so it's unlikely this is the case, even if they choose to ignore the fact that it's against regulations which they're required to follow.

magicEye

i think that the EA is related to the vendor. there seems to be no urgency to sell and when asked about a timeline, we were told it could take 4 months from the time it goes sale agreed. this seems like a very long time.

DownByTheGarden

As with all conspiracy theories you just have to ask why would an estate agent make up bids?

Cant see it being worth the the time or the effort for the difference it would make to their bottom line.

You would think the faster the sale the less time spent selling it, so the more money they would make compared to dragging it out for a few euro extra. Pretty sure the extra cost in time would outweigh any extra money fake bids got.

Del2005

https://www.boards.ie/discussion/comment/119876652#Comment_119876652

It's as easy for the seller to get a friend to bid on a property as it is for a buyer to get a friend to be a secret shopper. The seller wants the most money they can get, the estate agent gets very little extra from a bidding war. But yeah all estate agents make up fake bids, yet all sellers are completely honest and have no interest in getting several thousands more for their property.

spaceHopper

https://www.boards.ie/discussion/comment/119877705#Comment_119877705

There are 3 prices, the price the seller won't sell below, the price the buyer won't buy above and the price another buyer is willing to go to.

If the EAs makes up a fake bidder it might be to get you to go up to above the first of the 3 prices. They get 2 percent commission max so that 20 euros in every 1000 extra you bid. It's not worth the trouble they would be in if they get caught.

We we bought it was in 2012 and prices were down. Nothing was going over asking. My approach was to have a spread sheet with all our saving, and mortgage approval. What the repayments would be per 1000 borrowed and what I expected any work on the house to cost. I used that as a guide. The house we bought, we ended up below what the seller was willing to accept and had to bid against ourselves. I have zero regrets about doing that. My advice is to work out what you can afford and stick to it. If bidding get hot on a house, another one will come along so don't fret it. Still it's so nice when you can stop looking and have a free weekend instead of looking at houses that aren't what you thought they were from the picture.

Pomodoro

When I was buying in 2021, I missed out on several other houses due to being outbid, in each case by just one other buyer. At the time it was hard to know if they were real bids or not, but for every house we lost out on, we could see that it did get sold for the price the estate agent said the highest bid was at.

I do think there is an incentive for EA to push a high selling price beyond just a small bump in commission. Getting higher prices both boosts the price floor in the estate agents area, and boosts that EAs rep for getting good money for houses.

[Deleted User]

https://www.boards.ie/discussion/comment/119877307#Comment_119877307

In all my years on boards, and all the allegations about fake bids, it’s great that someone finally has proof that an EA made up fake bids.

Is your proof written or verbal, did DNG actually tell you that they made up the bid or did they write/email you to admit they did it?

Op, just consider why anyone else would be interested in the property, is it possible that the answer is the same reason you are? And sometimes bidders keep an eye on a property to see if the seller drops the price and will only engage when someone else makes a bid.

herbalplants

https://www.boards.ie/discussion/comment/119878374#Comment_119878374

Did I touch a sensitive nerve there? Do you work for DNG?

I am sure plenty of estate agents lurking on the forums to defend themselves.

Don't worry, don't need to explain myself further to you.

L1011

https://www.boards.ie/discussion/comment/119878423#Comment_119878423

If you're going to make a very serious accusation I'd expect you to have some evidence.

And you aren't allowed accuse people of working for somewhere, either.

[Deleted User]

https://www.boards.ie/discussion/comment/119878423#Comment_119878423

God no, I work in healthcare. But I’ve seen loads of people speculate on fake bids, you are the first to have proof, or not.

MrMusician18

https://www.boards.ie/discussion/comment/119877691#Comment_119877691

Agents can make up bids not to increase the extra few hundred they might get in commission but to make the sale. If the vendor has a target price, the EA can use fake bids to bid up a sole bidder on a property to this price.

I strongly suspect that one agent has tried this on me.

Dante

https://www.boards.ie/discussion/2058271849/bidding-race-for-property

This happened to me too, I was highly suspicious.

A property up for months with no bids then the day I submit a bid I got a call from the estate agent saying there was a higher bid submitted earlier that same day.

Former Former Former

https://www.boards.ie/discussion/comment/119877630#Comment_119877630

Lol, I would rate estate agents alongside recruitment agents and guys who knock on your door offering to "fix" your gutters.

What I find hilarious is the idea that you rang up an estate agent and they just confessed to inventing fake bids.

Del2005

https://www.boards.ie/discussion/comment/119879270#Comment_119879270

Why would they make up a fake bid to get a person to the asking price? All they have to say is that the vendor rejected your bid, then ask for another bid or stick.

There's another thread here of people complaining about being under bid by cash buyers and getting the property, how does that work into your conspiracy theory of estate agents driving up bids?

MrMusician18

https://www.boards.ie/discussion/comment/119885459#Comment_119885459

They make up a bid because anyone with sense doesn't bid against themselves. Say a house is asking 600 and I bid 575 and I am the sole bidder. I won't budge because I have no competition and the vendor won't budge because his head has been filled with shite about its value and is determined to get 600. The agent above all wants the sale to happen but is employed by the vendor.

You can ask the bidder to go up voluntarily but that rarely works. Prodding them up with fake bids is a better strategy to find a sole bidders true ceiling.

And that's what happens.

[Deleted User]

https://www.boards.ie/discussion/comment/119886149#Comment_119886149

And then loses a €5750 fee when you drop out, for the sake of another €250?

Nah, can’t see it. Why risk the larger amount for the smaller one? Any EA in their right mind wouldn’t care if a €600k house sells for €25k less.

MrMusician18

https://www.boards.ie/discussion/comment/119886402#Comment_119886402

Because they are not risking 5750 for 250. They won't get 5750 unless they make a sale and with an obstinate vendor with an over valued property that will take time an EA doesn't have in a turnover business.

The play is a zero risk one. Bidder stays still, there is no sale and no commission. Bidder gets prodded up, chance of a sale increases as vendors expectations are closer to being met. Added bonus is commission gets slightly bigger but thats ultimately an irrelevance.

It's the same reason a underbid cash buyer might be preferred. Agents in the regular residential market work on volume and if a cash sale completes even marginally quicker and they get their commission sooner then that's worth the small difference to them.

The strategy isn't exactly grandmaster chess.

[Deleted User]

https://www.boards.ie/discussion/comment/119886961#Comment_119886961

Seriously? You are just making the narrative up to suit your point of view.

If there is only one bidder on a €600k house, and that bidder is at €575k at a time when prices aren’t rising like they were, interest rates are going up and most economists are predicting a recession of varying degrees, the EA will be more likely than not be making it clearly obvious that the seller should take the offer rather than playing silly buggers over 25k.

It’s not grandmaster chess, I agree with you, that is why the EA is more likely to push the sale through for the benefit of the client, and themselves. It most certainly not a zero risk game, the seller could be stuck with their property in a market which may become more difficult to sell in, the EA may not get paid, and you might go off and buy a different property advertised by a different EA, all for the sake of 4% of asking price.

Stick to the draughts music man.

MrMusician18

https://www.boards.ie/discussion/comment/119887033#Comment_119887033

Sometimes the vendor is not for turning even in a falling market. And sometimes in a rising market they are away with the fairies too. In all cases the EA just wants to make a sale.

The EA won't make a sale if a bidder is far away from a vendor and a bidder won't move unless there is pressure to so. Ideally the vendor would come down to the market value, and a good agent will explain this. Sometimes the vendor says no and tells the agent they want more and then there's nothing they can do other than prod the bidder up, either by asking them or the creation of a fake bidding war. If they push it too far, you can always have the mysterious lead bidder drop out - and now the real bidders ceiling is known.

And if the real bidder pulls out, well then it's no loss as they didn't reach a price the vendor was happy with so a sale would never have happened. That's the important bit, and that's why fake bidding is essentially a risk free strategy for the agent and the vendor.

[Deleted User]

https://www.boards.ie/discussion/comment/119887235#Comment_119887235

There certainly is a loss, the EA has no commission on a sale, the seller has no guarantee that they will sell for the price they want as the only bidder has walked away for the sake of 4% of sale price.

We are both posting about hypotheticals, but you join the long list of those that seem to know that fake bids are used by EAs to push prices up, but have no proof of it happening. It’s a tiresome, oft repeated accusation usually made by people who have lost out in the bidding process, and does nothing for sellers or other prospective buyers.

byrne249

https://www.boards.ie/discussion/comment/119887251#Comment_119887251

I was in a 'bidding' war before, 2 bids against me, went up 1k at a time. 4k in total. I told EA on the phone I was at my limit and he says first person to bid 2k more wins. Yea right, that was all the proof I needed that there was no other bidder. I offered the 2k more and went sale agreed. Suspicious doesn't even begin to describe the situation. An okay house in a bad area, nobody at open viewings, and yet there was a bid not far off asking that they were just sitting on until I came along? Yea right.

I would not trust some of these small family run operations anyway.

[Deleted User]

https://www.boards.ie/discussion/comment/119889397#Comment_119889397

Suspicious in what way?

The seller has an offer which was below what they would accept, you came along and bid, the EA told you/bidders what the seller would sell at etc?

Am I missing something?