Putting in an offer - how can you suss if counter bids are genuine?

Hello Lady! · 20-09-2014 8:15pm #1

Folks, grateful for your advice and expertise please

We are hoping to buy a house soon, mortgage approved, confirmation of same in our hand, not in a chain. There is really very little suitable in the area we want to buy (need actually as we need to be close to family and work due to childcare).

We found a house in a very settled estate that ww already know some of the neighbours. It's in good nick but to be the house we need, it needs an extension and heating upgrade.

We put in an offer. Then there was a counter offer, back to us, we went up €1k, they went up €1k. We were then told another bidder entered. In the space of 2 weeks the house has gone up almost €20k to what it was first on at.

Both hubby and I are very keen on the house and we see it as being a long term home, particularly once tge extra work is done. We don't see that we would get anything like what we want at the moment and this is tge best alternative - buy and improve exactly the way we want.

So we are very keen on the house.

But something is itching at my instincts. I dunno why but the way the prices have suddenly raced up has me uncomfortable. The lack of property in our area seems to have created a mini property bubble. Much as I love the house I don't want to get stung either.

How do you - or can you - check if counter offers are genuine?. We had to provide proof of mortgage but how can we trust the EA that the others did? Can we ask to see the traffic on the offers? For all we know the vendor could have someone pushing up the price.

Lenny · 20-09-2014 8:18pm

Aparantly I had read that estate agents have to have a budding book, so maybe call into them and ask to see it?

Wabbit Ears · 20-09-2014 8:37pm

How long has the property been on the market?

If it was on it for a while and there's been no sale and all of a sudden there's a bidding war, Its fake as fcuk.

But you already know this, When your gut tell's you you're being fcuked, its usually because you are. That's why estate agents usually have a big smile on their face.

Hello Lady! · 20-09-2014 8:39pm

Lenny wrote: »

Aparantly I had read that estate agents have to have a budding book, so maybe call into them and ask to see it?

Thanks. We have been asked yo confirm each bid in writing so I'm fairly sure that its all 'above board' in the book, but that still wouldn't prove that those bidding against us are genuine???

Part of the reason I'm nervous is because this house was on the market for about a month before we were fully mortgage approved. Suddenly as soon as we make an offer within the space of a fortnight there are two other bidders clamouring against us to secure the house and we're looking at €20+ on the asking price. I wouldn't have said it was that undervalued to begin with.

Hello Lady! · 20-09-2014 8:54pm

Wabbit Ears wrote: »

How long has the property been on the market?

If it was on it for a while and there's been no sale and all of a sudden there's a bidding war, Its fake as fcuk.

But you already know this, When your gut tell's you you're being fcuked, its usually because you are. That's why estate agents usually a big smile on their face.

You're probably right but I'm raging....so would love this house. Not for what it is now but what it could be. It was on for a month and got an offer €3k over the asking price. Stayed there for a while. All viewings have been open viewings with multiple people viewing. Our first viewing there seemed to be a few people taking an interest but the second time we viewed most people briefly looked and left. And yet it was after the second one that the stakes got higher.

markpb · 20-09-2014 8:54pm

As far as I know, there's no requirement for the agents to record bids or share any information with you. Remember, you're not paying them, the seller is so you're the product, not the client. Pick a price you're happy to pay and if/when you reach that price, say no and walk away. If the other bidders are fake, they'll disappear and the agent will come back to you. If they're real, at least you won't make an expensive mistake.

Edit: I was was wrong, the regulations act changes this.

61.— Without prejudice to the generality of regulations made under section 46 , where land is offered for sale, other than by auction, by a licensee who is a property services employer or an independent contractor (including, in the case of a property services employer, the provision of such offer by a principal officer or employee of the property services employer) the licensee shall retain a record in the specified form for a period of not less than 6 years, of all offers received by the licensee, including conditional acceptances, in respect of the sale.

I can't see anything that indicates who the data should be made available to though.

kippy · 20-09-2014 8:58pm

It amazes me that there isnt a requirement of somesort on the EA to at the very least maintain a record that can be checked by a third party of bids taken on a property. Estate agents than engage in the behaviour that is bein talked about here are essentially defrauding the buyers involved.

markpb · 20-09-2014 9:01pm

kippy wrote: »

It amazes me that there isnt a requirement of somesort on the EA to at the very least maintain a record that can be checked by a third party of bids taken on a property. Estate agents than engage in the behaviour that is bein talked about here are essentially defrauding the buyers involved.

Remember that the agents job is to get the best price for the seller, not to help the buyer.

Wabbit Ears · 20-09-2014 9:08pm

Exactly, they are working on commission and it would be incredibly hard to prove that the other bids were fake. There really is nothing to stop them doing this and its not a conspiracy theory, this is a completely standard modus operandi. For them its a win win win, they get higher commission, The seller gets a better price and the market inflates, meaning other sales in the area go up in price for them also.

brianwalshcork · 20-09-2014 9:43pm

Is it really worth it to the agent? If he is on a flat %, then why risk x% of the asking price just to gain a little bit more? His time would be better spent closing the sale, sticking his Sold sign up and getting more houses on his books.

If the commission is 2% then he gets €20 for every 1000 the fake bidder ups the price at the risk of the real buyer walking away, along with his 4k commission ( assuming the house is 200k)

kippy · 20-09-2014 10:30pm

markpb wrote: »

Remember that the agents job is to get the best price for the seller, not to help the buyer.

One would assume that the caveat of 'within the confines of the law' would apply. One also has to remember it could be in the sellers best interests to have a log of bids from bidders as well.....

kippy · 20-09-2014 10:31pm

Wabbit Ears wrote: »

Exactly, they are working on commission and it would be incredibly hard to prove that the other bids were fake. There really is nothing to stop them doing this and its not a conspiracy theory, this is a completely standard modus operandi. For them its a win win win, they get higher commission, The seller gets a better price and the market inflates, meaning other sales in the area go up in price for them also.

It wouldnt be that difficult to to stop them doing this were the will there.

Balmed Out · 20-09-2014 10:40pm

brianwalshcork wrote: »

Is it really worth it to the agent? If he is on a flat %, then why risk x% of the asking price just to gain a little bit more? His time would be better spent closing the sale, sticking his Sold sign up and getting more houses on his books.

If the commission is 2% then he gets €20 for every 1000 the fake bidder ups the price at the risk of the real buyer walking away, along with his 4k commission ( assuming the house is 200k)

There's the reputation gained from achieving a good price for other potential vendors.
That said, anytime I've dropped out because I've been suspicious it has ended up on the price register as the last known bid or above it. I'm sure it does happen but perhaps not as often as we suspect.

Ortiz · 21-09-2014 2:42am

Guys agents have to keep a record of bids and we are allowed to request to see the log of,offers - but surely that is a breach of data protection? The agents surely record bids with each bidders name and there is no way they can release that data to anyone. Possibly on request of a solicitor I suppose.

OP it sounds to me like there are genuine bidders in your situation. Maybe I'm wrong but the fact that they are requesting your offer in writing and that there have been multiple viewers makes me think there are other genuine bidders.

From my experience agents making up offers is a bit of a myth. Every time I've suspected it I've been wrong. I'm sure it happens with some bad apples but not half as much as we think.

Hello Lady! · 21-09-2014 6:14am

Ortiz wrote: »

Guys agents have to keep a record of bids and we are allowed to request to see the log of,offers - but surely that is a breach of data protection? The agents surely record bids with each bidders name and there is no way they can release that data to anyone. Possibly on request of a solicitor I suppose.

OP it sounds to me like there are genuine bidders in your situation. Maybe I'm wrong but the fact that they are requesting your offer in writing and that there have been multiple viewers makes me think there are other genuine bidders.

From my experience agents making up offers is a bit of a myth. Every time I've suspected it I've been wrong. I'm sure it happens with some bad apples but not half as much as we think.

TBH it's not that the EA is being so much as knowing if the other bidders are. My bro-in-law has a property rented out and was considering selling, so he chatting to someone who buys and sells property very regularly. My BIL was concerned about the price he would get and the other person basically said straight out to him 'do you not know anyone who can put in offers?' BIL looked at him confused and he winked and said see if you can get someone with a different surname to get in on the bids. BIL couldn't believe it and on the back of it advised us to check out that the bidders are genuinely interested in the property.

But sure how can we do that? Other than trust the EA that they too have supplied proof of ability to complete the sale.

And I'm assuming that if one bidder makes a final bid too rich for the rest of us but then doesn't complete the sale it will come back to whoever has the next highest offer. But if they were not genuine in the first place, then the price is still inflated!

Sirry to be a ditz about this, all new to us. And unless Phil Spencer volunteers to help any day soon we'll remain a bit clueless! In our naivete we thought we were 'strong' buyers (good deposit, no chain, looking to complete quickly) and might stand a chance of getting something with minimal hassle because of that.

Its a sickener really cos this mini bubble that has emerged has prices zooming up. For eg less than 3 months ago a 4 bed, 2 reception, 3 bath house in a very desirable estate was on at €195 and went sale agreed at €205. Now houses much smaller,3 bed, bog standard sitting room kitchen diner lay out are on for €195 and in our case getting a frenzy of interest. We're not really in a position to hold out and see if the bubble bursts (or at least deflates!). I'm terrified of making further bids on this house and in 6 months time prices go back down!

davo10 · 21-09-2014 7:22am

OP the scenario you are describing would appear to suggest there are multiple bidders.

• there is a housing shortage in the area so you said there is a "mini bubble"
• it's a nice house.
• it is only in the market for 4 weeks which is a short period of time.
• bidding only starts when 2 people want the same house so going up in €1k is common where you have 2 people who have mortgage approval and want it for themselves.
• a €20k bump is a sign of an experienced bidder entering the fray, he/she has been watching the bidding going up by small increments and is probably hoping to knock at least one of you out of the bidding by increasing the offer by this much.

You now have to decide if you want this house and what you are willing to pay for it. The EA does not work for you, his/her job is to sell the house for as much as possible and if you ever sell your house, you would want it's selling price maximised as well. We get emotionally attached to property in Ireland, but often when we lose out on one, something better comes along later.

It is more important that you don't pay more than you can afford than it is to pay more than the house is worth.

Hello Lady! · 21-09-2014 8:19am

davo10 wrote: »

OP the scenario you are describing would appear to suggest there are multiple bidders.

• there is a housing shortage in the area so you said there is a "mini bubble"
• it's a nice house.
• it is only in the market for 4 weeks which is a short period of time.
• bidding only starts when 2 people want the same house so going up in €1k is common where you have 2 people who have mortgage approval and want it for themselves.
• a €20k bump is a sign of an experienced bidder entering the fray, he/she has been watching the bidding going up by small increments and is probably hoping to knock at least one of you out of the bidding by increasing the offer by this much.

You now have to decide if you want this house and what you are willing to pay for it. The EA does not work for you, his/her job is to sell the house for as much as possible and if you ever sell your house, you would want it's selling price maximised as well. We get emotionally attached to property in Ireland, but often when we lose out on one, something better comes along later.

It is more important that you don't pay more than you can afford than it is to pay more than the house is worth.

Just to clarify it has gone up a total of €25k on the starting price, in €1k increments. Its not that a third bidder came in and offered €20k above the last offer. It was on for a month with little movement other than €3k over the asking. Since we started offering 2 weeks ago its gone up a further €21k. If we decide to offer again that will be €25k. Its been on the market for just over 6 weeks.

We can afford (mortgage wise) a lot more than this house is. But this house needs a bit of work as it currently stands (new windows, boiler, kitchen and redecoration of the bathroom and general sprucing up). To get it to where WE want it to be a better family home than we are currently in it needs an extension and heating upgrade. If we got it, further down the libe we would be looking at external insulation and an attic conversion. So lots of potential in the long term. The appeal to me is that after the extension, size wise we will have the type of house we want with about €40k less of a mortgage. The extension will be funded by savings and a small loan. I would hope that in a year or two with the value we have added we might be able to renegotiate the mortgage with a lower LTV.

However if we buy using our full mortgage approval we will only get slightly more house - not as much as this house with the extension.

We feel very torn....do we keep going or walk away? Even if it goes up another €10k thats only €1k extra deposit and not a huge amount more mortgage each month. I just feel like we are getting sucked in and carried away. I dunno why but my spidey senses are tingling. But I do love the house (would love it more the less we have to pay!

)

I'm guessing that the other bidders must also be planning on buying to improve and live there or rent out as at the current price there is little profit to be made in flipping it.

ted1 · 21-09-2014 10:14am

kippy wrote: »

It amazes me that there isnt a requirement of somesort on the EA to at the very least maintain a record that can be checked by a third party of bids taken on a property. Estate agents than engage in the behaviour that is bein talked about here are essentially defrauding the buyers involved.

Their salespeople their job is to get the highest price possible fit their client, no one is forced to buy a house, a much as it sucks they should be free to achieve the highest price

davo10 · 21-09-2014 12:22pm

Hello Lady! wrote: »

Just to clarify it has gone up a total of €25k on the starting price, in €1k increments. Its not that a third bidder came in and offered €20k above the last offer. It was on for a month with little movement other than €3k over the asking. Since we started offering 2 weeks ago its gone up a further €21k. If we decide to offer again that will be €25k. Its been on the market for just over 6 weeks.

We can afford (mortgage wise) a lot more than this house is. But this house needs a bit of work as it currently stands (new windows, boiler, kitchen and redecoration of the bathroom and general sprucing up). To get it to where WE want it to be a better family home than we are currently in it needs an extension and heating upgrade. If we got it, further down the libe we would be looking at external insulation and an attic conversion. So lots of potential in the long term. The appeal to me is that after the extension, size wise we will have the type of house we want with about €40k less of a mortgage. The extension will be funded by savings and a small loan. I would hope that in a year or two with the value we have added we might be able to renegotiate the mortgage with a lower LTV.

However if we buy using our full mortgage approval we will only get slightly more house - not as much as this house with the extension.

We feel very torn....do we keep going or walk away? Even if it goes up another €10k thats only €1k extra deposit and not a huge amount more mortgage each month. I just feel like we are getting sucked in and carried away. I dunno why but my spidey senses are tingling. But I do love the house (would love it more the less we have to pay! )

I'm guessing that the other bidders must also be planning on buying to improve and live there or rent out as at the current price there is little profit to be made in flipping it.

OP, €25k above guide is not unusual, particularly if there are three bidders. Always assume that if you want it, why wouldn't someone else? particularly if there is a shortage of houses in the area. There is another thread on here where an apartment in leitrim has gone up by €40k. You should only bid what you can afford, every buyer goes through the same emotions you are going through but at the end of the day it makes absolutely no difference. Either there are three bidders, there are no other bidders or the owner has told the EA the property will not be sold at a lower price.

If you want to call their bluff, tell them the next offer is your final one (don't say it's on the table for a week, they won't give a damn about time frames especially if the market is on the way up), but brace yourself that you will be "showing your hand" that you are at the limit of what you can afford and the other bidder will just up it by €5k to finish you off.

JustAddWater · 21-09-2014 12:34pm

ted1 wrote: »

Their salespeople their job is to get the highest price possible fit their client, no one is forced to buy a house, a much as it sucks they should be free to achieve the highest price

The are free to do it. What they're not free to do is gouge people by using fake bidders

davo10 · 21-09-2014 1:26pm

JustAddWater wrote: »

The are free to do it. What they're not free to do is gouge people by using fake bidders

Yes they are, you are entitled to ask the identity of the other bidder, you are not entitled to be told, so how do you prove who is fake and who isn't.

As s**tty as you think an EA is when you are buying, you will love their tactics when you are selling.

rubberdiddies · 21-09-2014 1:33pm

If it were me, but if course I wouldn't advocate doing this or anything, I'd get a friend or relative to bid on another house on the same agents books and see if similar happens.

Then when that house also goes up 20k or so tell them your pulling out but offer your original offer. See what happens

There's a good chance that the agent is completely above board and doing everything correctly but when I'm spending that much money id be inclined to do the above

davo10 · 21-09-2014 1:41pm

rubberdiddies wrote: »

If it were me, but if course I wouldn't advocate doing this or anything, I'd get a friend or relative to bid on another house on the same agents books and see if similar happens.

Ah come on, if the friend does that, it just pushes the price up for another bidder on that property. Two wrongs don't make a right.

Ortiz · 21-09-2014 1:51pm

rubberdiddies wrote: »

If it were me, but if course I wouldn't advocate doing this or anything, I'd get a friend or relative to bid on another house on the same agents books and see if similar happens.

Then when that house also goes up 20k or so tell them your pulling out but offer your original offer. See what happens

There's a good chance that the agent is completely above board and doing everything correctly but when I'm spending that much money id be inclined to do the above

That is ridiculous and unfair. You are either pushing the price up for someone else or giving the owner on that house false expectations.

rubberdiddies · 21-09-2014 2:04pm

Ortiz wrote: »

That is ridiculous and unfair. You are either pushing the price up for someone else or giving the owner on that house false expectations.

You're right. I wasn't thinking along those lines.

Having been stung a few times I'm generally a cynic these days. And wen spending that amount of money it's good to be thorough.

Not sure how to go about checking though without giving the agent a final figure. But of course if the other bids are real and chances are they are then you are at risk of losing out

kippy · 21-09-2014 4:10pm

ted1 wrote: »

Their salespeople their job is to get the highest price possible fit their client, no one is forced to buy a house, a much as it sucks they should be free to achieve the highest price

So they can do this outsode of consumer protection and trading law?

kippy · 21-09-2014 4:13pm

davo10 wrote: »

Yes they are, you are entitled to ask the identity of the other bidder, you are not entitled to be told, so how do you prove who is fake and who isn't.

As s**tty as you think an EA is when you are buying, you will love their tactics when you are selling.

Would you really? There are stories from the otherside of the spectrum of EAs screwing over their own clients. Personally anyone with the scruples to make up fake bids shouldnt be trusted by either party.

davo10 · 21-09-2014 4:34pm

kippy wrote: »

So they can do this outsode of consumer protection and trading law?

Which articles of consumer protection and trading law are you referring to?

davo10 · 21-09-2014 4:38pm

kippy wrote: »

Would you really? There are stories from the otherside of the spectrum of EAs screwing over their own clients. Personally anyone with the scruples to make up fake bids shouldnt be trusted by either party.

The seller employs the EA, if they feel the EA is screwing you as the seller, and you have proof, then you can sue the EA for misrepresentation and breach of contract. On the other hand, if EA maximises the price you receive for your property, well, happy days, that is exactly what you paid them to do.

Chris_5339762 · 21-09-2014 5:40pm

If you feel it is fake bidding, drop your bid by €10k and tell them it expires at the end of the week. That'll force their hand, or lose you the house.

Depends how brave you are

davo10 · 21-09-2014 5:47pm

Chris_5339762 wrote: »

If you feel it is fake bidding, drop your bid by €10k and tell them it expires at the end of the week. That'll force their hand, or lose you the house.

Depends how brave you are

EAs and sellers couldn't care less about a buyer who puts a time limit on an offer, in this case OP said there is a "mini bubble" in the area where the house is, with high demand and low supply. Drop the price and put a time limit will signal their exit from the bidding and the EA will think OP is not a serious bidder.

Putting in an offer - how can you suss if counter bids are genuine?

Comments