Real Estate Agent Lying to Us about Other Offers

Sex on 06/07/2016 - 23:15
Last edited 06/07/2016 - 23:17

Hi,

My partner and I are currently in the process of buying a property. We placed an offer on one that we liked, and was told by the agent that he'd already had 5 offers but that there was only one offer higher than ours. He asked if we were willing to place a higher bid and hinted that if we bid slightly higher we'd probably win it.

In our excitement, we did. He called us to say that we were now the highest bidder. 5 minutes later, he called again, and said that another party had entered the equation, and that they had placed an offer a little above ours. Again, we increased our bid (by this time we had offered an additional 10k over our starting offer).

This is where it gets interesting…

He tells us that our new bid was equal to that of the other party, and that if we can get to him to sign the property before the other party, we would get the property. He also mentioned that the other party was very keen and that we should come into his office to sign straight away to ensure we got it.

This doesn't make sense to me. If this 'other party' did exist and our offer were the same, why wouldn't he just get one of us to offer higher? I know it' not legal, but could he have made all this up in order to get us to bid higher because we sounded keen and because there's no way we can prove otherwise? I mentioned this situation to my colleagues and they say that it sound quite suspicious.

What do you guys think?

Home & Garden

closed Comments

  • dandandan on 06/07/2016 - 23:30
    +3

    You need to determine what the property is worth and what you are willing to pay. Trying to guess the agents bluff is part of buying, some times you win some times you loose, more often loose in my experience, however I am in the 20km ring of Sydney where buying can be tough. When I bought my current place over 3 years ago now, I encountered the same issues. When it came down to negotiating over two properties, one we eventually bought, I found the agent that tried bluff us ended up selling the place $20k lower than what we had offered. Them playing hardball and not believing it was a two horse race from our end lost them the deal with us, I suppose we got lucky. I am a believer if you have a long term timeframe that you pay what you can afford for a property you plan on living in.

    • GnarlyKnuckles on 07/07/2016 - 00:37
      +2

      You need to determine what the property is worth and what you are willing to pay.

      This advice is 100% on the money. Try not to let 'hypotheticals' that may or may not be true sway your judgement in any way. The other 'phantom buyer' may be completely fictitious, or the agent may be playing you guys off against each other, or there might even be other factors at play as well.

      What dands says above is sagely advice; just decide on your bottom line, and stick to that. That way, you are always 'in control' of the situation, and will not feel manipulated. Afterall, why should the amount that YOU are willing to pay for a property be influenced by what SOMEONE ELSE (either real or fictitious) is willing to pay for it?

  • Almost Banned on 06/07/2016 - 23:35

    If you can prove it, and if you have suffered loss, I think you've got a good claim for M&DC. Not to mention a complaint to the REA board in your local state for unethical conduct.
    Otherwise, you've got nothing.

    • GnarlyKnuckles on 07/07/2016 - 00:30

      Clearly no 'loss' has been suffered here yet, as no deal has been done/no money has changed hands.

  • TPbMe on 06/07/2016 - 23:48
    +11

    Hello……he's a Real Estate Agent!!! How do you know if a REA is lying? His mouth is moving.

  • GnarlyKnuckles on 07/07/2016 - 00:32

    … but could he have made all this up in order to get us to bid higher because we sounded keen and because there's no way we can prove otherwise?

    Not only is that 'possible', it is pretty obviously the most likely scenario.

    Remember that the higher he sells the property for, the bigger his commission is.

    • ninetyNineCents on 07/07/2016 - 09:09
      +1

      Trying to get an extra few thousand makes no difference to his commission. One percent of ten thousand is nothing. In fact to get their commission it's better to just sell at any price…

  • FeRGan on 07/07/2016 - 02:23

    Its a trick that can be used when ever selling something. The old "there are a lot of people interested you better hurry up" method.

  • FeRGan on 07/07/2016 - 02:24

    You should go along with it and then call him out on it just before you sign anything to mess with him.

  • ExtraSalt on 07/07/2016 - 07:27

    hmm this exact thing happened to us so we changed agents 3 times before settling on one was can 'trust'…im pretty sure by law, agents cannot state whether your offer is higher or lower than another persons, nor can they call you to ask for a higher bid. We placed 2 offers on 2 different homes each time having the agent call to say there was a higher bid….after we bought our house (3months later), we found those previous homes sold below what he/she told us was the highest bid.

  • godofpizza on 07/07/2016 - 08:20

    i thought offers needed to have a small amount of money included? like 500$.

    if you think it possible for someone to drop in, talk and and make another cash offer within 5 minutes then it up to you to decide whether the REa is lying. sounds more like they called the owner and they wanted more money or the REA said they could get more from you.

  • hangdog on 07/07/2016 - 08:44

    This kind of fake auction is common. You think you're being lied to, but the charade-slash-extortion is structured in such a way that nothing is provable. We went through this also when we bought our house. Another reason to hate dealing with real estate agents.

    For more insight into the Australian real estate industry's tricks and corruption, Neil Jenman's book "Real Estate Mistakes" is worth a read. https://www.amazon.com.au/Real-Estate-Mistakes-Neil-Jenman-e…

  • tassieeagle on 07/07/2016 - 09:08

    Sounds like typical agent lies to me. Ask him to show you a signed offer / contract from the other party to prove it's a serious offer

  • wazzoj on 07/07/2016 - 09:17

    Tell him that if you wanted to get into a bidding war, you'd go to an auction.

    It's not like you won't find another place, with a better agent.

  • ykwon10 on 07/07/2016 - 09:32

    Its all about mental games. Call his bluff if you don't think its genuine. Worst case scenario is you lose. Then move on to another property and potentially pay more or less. The dilemma is when you fall in love with this property. Personally, I agree with some comments above about how much you feel comfortable paying.

    Not all REA are scumbags. Build a relationship with them. Show them you are a serious buyer. When I bought my property, the REA called all prospective buyers to place their offers after viewing. I placed an offer which I was comfortable with and REA called back saying mine was highest with excess of $5k. He gave me a courtesy call to reduce my offer by $5k. At the end, I saved $5k from that purchase. To the REA, 1% of $5k or $10k doesn't amount to much. Most importantly is to sell.

    My personal advice to you…don't get emotionally involved if you can help it. Maybe get someone else to do the bidding for you to eliminate the stress/emotional attachment. I believe most people would have paid more than what they believe their house is worth but if you look at it long term, what is $5k or $10k over 30 years? Ultimately its all down to you.

    • JimB on 07/07/2016 - 10:33

      WTF?

      The REA works for the Vendor and basically cheated the Vendor out of $5k.

      • ykwon10 on 07/07/2016 - 10:39

        Pretty much! Obviously vendor doesn't know of this. This is the power of relationship building does for you.

        • JimB on 07/07/2016 - 10:46

          I think the REA had an issue with the Vendor.

          The REA could get sued for it.

        • ykwon10 on 07/07/2016 - 10:51

          @JB1: Of course! Not defending the legality of the issue. REA disclosing offers from other buyers, under-quoting, making up "ghost" offers, etc can be sued if you can be bothered and proven.

  • tik tok on 07/07/2016 - 09:50

    He is most probably gaming you - and its gotten to the point its so ridiculous that even he doesn't want to take it any further.
    If I were you, I'd shoot him an email and say 'my offer is X (your very first offer) on the property and my offer expires in 48 business hours - Yes or No'. After which, move on.

  • Sex on 07/07/2016 - 10:28
    +1

    Hi all! Thank you for the responses. I ended asking him outright whether he actually got the offers.

    He was not offended but instead pulled out a folder and was able to prove that he did. There were original emails of the offers he received and we saw that they were consistent with what he was saying.

    I was pretty surprised that this guy was actually being honest!

    • Pumpkin_rrr on 07/07/2016 - 10:39

      You beat me to it, I was about to respond.
      Whilst most of the responses above bash the REA, I'd just like to share what I know about this industry.
      REA is obliged to inform you when there are multiple offers, hence the lengthy paperwork. Some years back one REA insisted I put all my offers in writing and I was rather annoyed. Poor man had to come to my house 3 times to pick up my written offer, $2k increase each time (hey I was young and poor then). Looking back, the commission he earned from that $6k, assuming commission is 2.5%, is only $150. Not really worth the effort of driving and phone calls (2 parties combined). With total commission of between $5k to $10k, this $150 "extra" is really peanuts. If I were him I would gladly take the first offer and move on to the next one.
      I was told that they need to keep these records and yeah, if needs be, they can prove it.

      Good luck and hope you get your dream house!

    • ykwon10 on 07/07/2016 - 10:42
      +1

      There you go! Not all REA are scumbags. As I said above, I met a good REA (at least from my perspective, not for the vendor).

  • DaneD on 07/07/2016 - 10:35

    Previous worked in a real estate office as a buyers agent and then sellers agent.

    1. Most importantly I would take the advice of the first post, figure out what you are comfortable paying and stick to that figure.

    2. I worked in QLD, rules are set by the state but at least in Queensland (some years ago) you were not allowed to directly disclose what other people had offered for the property. Secondly, tassieeagle who suggested get the agent to show you a signed offer from another buyer, legally you are not allowed to do this. However, you can show potential email offers as nothing is signed.

    3. To some of the people who suggested that they offered higher than the sale price OR that an agent told you a figure higher than the actual sale price there are 2 options. Either the agent lied (very possible happens all the time) or there was a reduction in the sale price due to issues with the house eg. building and pest, retaining wall etc (also very common). Building and pest inspection was done after contract was accepted in QLD.

    4. People are pretty much correct getting another 5/10k out of you, really does not do anything major for an agents commission. A bad agent will just try to sell the property at any price.

    5. Remember that the agents job (a good agents job) is to achieve the highest possible price for the seller as they are working for the seller, therefore if they believe you have more money they may suggest there are other parties interested or there actually may be other parties interested.

    Either way most of these things should not matter, figure out what the property is worth to you and stick to that figure.

    Any other questions feel free to ask, I have not been in the industry for 5-6 years but still have some knowledge.

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