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

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24

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    #32
    eeloe
    Moderators, Music Moderators Posts: 3,713 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


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    #33
    happyfriday74
    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.


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    #34
    q85dw7osi4lebg
    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.


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    #35
    SteM
    Registered Users Posts: 6,578 ✭✭✭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?


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    #36
    rgodard80a
    Registered Users 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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    #37
    koheim
    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..


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    #38
    witchgirl26
    Registered Users Posts: 2,082 ✭✭✭witchgirl26


    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.


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    #39
    Tiddlypeeps
    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.


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    #40
    davo2001
    Registered Users Posts: 3,317 ✭✭✭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:


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    #41
    C3PO
    Registered Users Posts: 3,746 ✭✭✭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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    #42
    4ensic15
    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.


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    #43
    Dav010
    Registered Users Posts: 14,131 ✭✭✭✭Dav010


    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?


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    #44
    Dav010
    Registered Users Posts: 14,131 ✭✭✭✭Dav010


    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


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    #45
    q85dw7osi4lebg
    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).


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    #46
    jimmycrackcorm
    Registered Users Posts: 14,330 ✭✭✭✭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!


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    #47
    worded
    Registered Users Posts: 4,545 ✭✭✭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.


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    #48
    worded
    Registered Users Posts: 4,545 ✭✭✭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 :-)


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    #49
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,644 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.


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    #50
    witchgirl26
    Registered Users Posts: 2,082 ✭✭✭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.


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    #51
    q85dw7osi4lebg
    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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    #52
    Sunrise_Sunset
    Registered Users Posts: 1,211 ✭✭✭Sunrise_Sunset


    Well, we've been outbid on this particular property anyway. We were bidding against one other interested party. Then at a late stage a mysterious third bidder came into the equation. We've dropped out.


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    #53
    Tombo2001
    Registered Users Posts: 6,508 ✭✭✭Tombo2001


    I've said this a number of times before on Boards, so apologies for repeating....

    When I was bidding on a house, it was just before the register was introduced.

    However when it was introduced - it was backdated for two years, so I could see all the multiple of properties I was outbid on.

    Long winded way of answering the question - I was outbid maybe 7 or 8 times; each time I thought to myself:

    "This estate agent is bull ****ting me here, there is absolutely no way someone is paying that much for that house"

    And in each case, I was wrong.

    Estate agents don't make up bids*; its just one of those (internet) myths that people make up so they can vent their frustrations.

    *What you can however ask the Estate Agent is what evidence they require when accepting a bid; for example to they need to know someone is mortgage approved.


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    #54
    happyfriday74
    Registered Users Posts: 194 ✭✭happyfriday74


    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 :-)

    Happens all the time. Used when a number of bidders are battling it out bidding with each other and they begin to get fed up, especially if one of them keeps going up in small silly increments.

    Everyone is told to put their best bid forward and seller progress with one of them.
    I've never seen a sanction against an estate agent for fake bids. Regulation doesn't happen in this area imho.

    The Industry is very tightly regulated. I work in it(not in sales at the moment). There hasn't been many of the firms sanctioned because, despite urban legend, it doesn't happen very often.

    Reputation is everything. Get caught doing this and they will have you booted out the door


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    #55
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    happyfriday74 wrote: »
    Happens all the time. Used when a number of bidders are battling it out bidding with each other and they begin to get fed up, especially if one of them keeps going up in small silly increments.

    Everyone is told to put their best bid forward and seller progress with one of them.



    The Industry is very tightly regulated. I work in it(not in sales at the moment). There hasn't been many of the firms sanctioned because, despite urban legend, it doesn't happen very often.

    Reputation is everything. Get caught doing this and they will have you booted out the door

    I think anyone making an offer needs to have some skin in the game - ie money eg security lodged with auctioneer. Think this would help prevent fake bids. Some oversight needed thiugh


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    #56
    Lolle06
    Registered Users Posts: 235 ✭✭Lolle06


    We knew all the EAs around our small hometown. We also knew that they wouldn’t make up fake bids, because word spreads around quickl . As a local EA you really wouldn’t risk it. Property at a good price is selling itself these days and other bidders are coming out of the woodworks suddenly, once a bid is placed. Sometimes you will have to bid against yourself to meet the sellers expectations - but only bid what the property is worth to you. We stuck to that and it served us well.


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    #57
    mariaalice
    Registered Users Posts: 12,390 ✭✭✭✭mariaalice


    People do stupid things, when I sold my house, the EA received an offer told me about it but said it's not going to happen the bid was too impulsive and he knew they were going to withdraw years of experience give him a sixth sense about these things, nonetheless it was a bid so he went to the other parties with it.

    Was it a real bit? The way I say it was it was not a fake bid.


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    #58
    mickdw
    Registered Users Posts: 23,285 ✭✭✭✭mickdw


    Of course they fake bid against interested parties.
    That is basically their job.
    It's not even so much about the commission but getting the best price for client to make their name.
    In current climate around the major cities, there is little need for such action however where things are a bit slower and a single bidder might be in danger of getting a bargain, you can be damn sure the agent will have 'other bids' to bring the price up.


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    #59
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    mickdw wrote: »
    Of course they fake bid against interested parties.
    That is basically their job.
    It's not even so much about the commission but getting the best price for client to make their name.
    In current climate around the major cities, there is little need for such action however where things are a bit slower and a single bidder might be in danger of getting a bargain, you can be damn sure the agent will have 'other bids' to bring the price up.

    You must have made a killing sueing agents via the PSRA I take it. How many agents have you caught with their pants down? Have they all since lost their licence ?


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    #60
    Lolle06
    Registered Users Posts: 235 ✭✭Lolle06


    mickdw wrote: »
    Of course they fake bid against interested parties.
    That is basically their job.
    It's not even so much about the commission but getting the best price for client to make their name.
    In current climate around the major cities, there is little need for such action however where things are a bit slower and a single bidder might be in danger of getting a bargain, you can be damn sure the agent will have 'other bids' to bring the price up.

    That wasn’t our experience as we met the person who outbid us on the first property (who actually sounded like a „fake bid“ as he came into the bidding at the last minute, was from „outside of town“ and outbid us by 1k each time!) in person after he moved in and knew the person who was interested in the 2nd property fairly well. It‘s really hard to keep secrets in small towns and the local EAs are aware of this. The EA is interested in a sale first & foremost. Getting the highest price is the second priority. We ended up getting a „bargain“, as the other party wasn’t in a position to move quickly and the seller didn’t want to wait.


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    #61
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    300k house
    1% commission


    Offer of 300k - fee = 3000
    Offer of 310k - fee = 3100

    Tell me again how it's worthwhile for an agent to drag out sales with fake bids


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