How Can You Tell if The Estate Agent Is Bluffing or Not?

Lhydravirgo on 24/02/2022 - 15:56
Last edited 02/03/2022 - 11:51 by 1 other user

I have put down an offer on a land in Melbourne's eastern suburb.

It is a reasonable offer in the middle of the advertised asking price. Initially he said there were other enquiries as well and he will check if anyone else wants to offer. Today I got an update that they have received another offer as well and the vendor will choose between both. I can afford to offer a bit more but I am not sure if they have received a real offer or is it just a bluff to make me offer higher.

So my question is, has anyone else been in a similar situation? and what will you do?

Edit:
Thank you all for your replies. We ended up pulling our offer due to some big costs coming to light.

Edit:
For whoever is interested, its been a week after pulling our offer for that land and it still hasn't been updated to under offer. So that second offer was definitely a bluff. Feel like I dodged a bullet there.

Home & Garden Real Estate Agent

Comments

  • Hybroid on 24/02/2022 - 15:57
    +38

    Standard REA response whether they do have offer or not. Either up your own offer if you really want it or stick to your guns and see how it plays out.

    • Seraphin7 on 24/02/2022 - 16:39
      +13

      Agreed on standard response.

      What buyers need to understand though is that there **may*** well be a superior offer. Buyers need to be comfortable that if that such an offer does exist they may end up missing out without necessarily having put their "best offer" on the table.

      • sghetti on 25/02/2022 - 10:42
        +6

        We got caught in what we thought was a bluff, it was a bit odd from our perspective as the agent could've got a better deal for the vendor.

        We made our offer, after a few days agent advised there was another offer and they'd review both. Felt like they were pressuring us with a bluff to offer more, we held our ground.

        A few days pass and we got a call from the agent that we were unsuccessful. Turns out both offers were identical, same $ amount, no subject to sale, only subject to finance. The agent basically got the vendor to pick a contract at random, really odd that they didn't come back to look at squeezing a few more thousand out, we probably would've had the property at that point.

        • plasmog on 25/02/2022 - 10:45
          +26

          sounds like they did come back and you thought you were being smart by calling their bluff.

          • sghetti on 25/02/2022 - 11:22
            +5

            @plasmog: In hindsight yeah, but there wasn't really a prompt by them to push for more $$$, it really felt like it was an update on where things were at more than anything.

            We ended up finding another property, closer to the city with a similar layout, smaller backyard. Property value has increased significantly more on the one we were successful compared to the one we missed out on.

            • WhyAmICommenting on 25/02/2022 - 14:55
              +4

              @sghetti: Winning

              We bailed on an offer 5k short of what the seller wanted. I had serious FOMO at the time - it was a terrible location - corner of busy main roads.

              They ended up losing another 15k (in Brisbane this was a fair chunk 6 years ago). Soon found somewhere way better. Life is good!

              • Calvin27 on 09/03/2022 - 11:04

                @WhyAmICommenting: You need to keep in mind that you didn't just lose out by a mere $5k. You have no idea how high the other person might have gone.

                • WhyAmICommenting on 09/03/2022 - 13:30

                  @Calvin27: Pretty sure the agent told us sometime afterward. We were looking in the area, and ended up buying something else through that agent.

                  The final offer the vendor accepted was 10 or 15k less than ours. But we had already walked.

            • ChickenTalon on 25/02/2022 - 16:19
              +5

              @sghetti: You've also got an insight into the REA mind. they don't care that much about getting the best possible price. they just want the sale completed. an extra 20k on the sale price is nothing to them compared to the big commission on a sale.

      • Kangal on 26/02/2022 - 00:43
        +3

        If you're not willing to walk away from negotiations, then you are powerless on the bargaining table.

        More people need to stand up for themselves, and hopefully remove the standard practice of using housing as a speculative investment.

    • poboy on 24/02/2022 - 20:56
      +40

      Double down. Say you are looking at other properties. Your offer is valid until 5pm.

      • tabitha731 on 25/02/2022 - 08:04
        +15

        Agree, play the RE’s bluff, tell them your offer is only valid until a certain time, cause u have seen other properties of interest. Bottom line most RE just cant be trusted.

        • BinaryPirate on 25/02/2022 - 08:35
          +9

          Indeed. As a general rule it's invariably a very bad idea to put your trust in someone who is trying to either sell you something or buy something from you.
          Your best interests will never be at the head of either queue.

          The very best you can hope for is for your best interests to coincide with theirs but that's not something you would ever put money on.

          As far as REAs are concerned, their primary interest is always extracting the most money possible from buyers.

          • derrida derider on 26/02/2022 - 16:10
            +2

            @BinaryPirate: In fact they are LEGALLY BOUND to serve the seller's interest. Their contract is with the seller, not you. When it is your turn to sell you have a right to expect them to play some games to get a fast sale at top price.

            It doesn't mean anything goes - the law limits what they can do, and anyway honest REAs do exist. But when buying RE never forget for a moment who they work for.

        • Forkinhell on 25/02/2022 - 08:49
          +26

          'Nail on the head'.

          If their lips are moving, they're lying.

          Sold our house through a RE who told us we would receive $500 if we persuaded a friend to sell with him.
          Sent email to friend, who subsequently sold with him (for a drastically-reduced price).

          The RE then told us that he had done a letter-box drop which netted the new contact.
          We proved that our email was received ONE WEEK before his letter-box drop.

          When we further requested the $500, he told us to "get fxxxxxx!"

          They are the dregs of society

          • MrBear on 25/02/2022 - 09:20
            +6

            @Forkinhell: How much do two car tyres cost to replace?

            • Jackson on 25/02/2022 - 11:11
              +9

              @MrBear: Half as much as 4

              • MrBear on 26/02/2022 - 15:55
                +1

                @Jackson: As an Ozbargainer, you should know that you only by 4-for-the-price-of-3 when it comes to tyres… so not half. :)

                • Jackson on 26/02/2022 - 16:02
                  +1

                  @MrBear: Unless you are like me and get them from mycar on blackfriday in which case they are 2 for 1. Just don't slash his tyres on blackfriday

            • WhyAmICommenting on 25/02/2022 - 15:00
              +1

              @MrBear: Forkintyre?

            • jikijiki on 25/02/2022 - 17:23

              @MrBear: As someone who has never changed car tyres I feel like there's a life lesson in what you're saying. Could you elaborate?

      • nobro25 on 26/02/2022 - 13:15
        +1

        REA be like: Understandable sir! Have a nice day. Bye!
        You be like: :(

      • taoz on 26/02/2022 - 21:54
        +1

        Spot on. Offer should always be made with a time limit.
        they cant just sit on it and hope for more.
        You offer what you are happy to pay and walk away otherwise

    • supersabroso on 26/02/2022 - 19:25
      +2

      From my experience, no agent will accept your offer until you say that that's the absolute maximum you are willing to go and that you can't go any higher. Otherwise they just keep asking you to do more and go higher so you don't "miss out".

  • holdenmg on 24/02/2022 - 16:01
    +9

    Add $1 to your offer.

    • godofpizza on 24/02/2022 - 19:54
      +2

      i've usually offer 0.50cents

      • Quantumcat on 24/02/2022 - 23:49
        +12

        Half a cent?

          • photonbuddy on 25/02/2022 - 10:23
            +25

            @jollibot: LOL. 0.50 cents is half a cent! I think you meant to say $0.50.

            Who's the idiot now 🤣

            • jollibot on 03/03/2022 - 10:42

              @photonbuddy: Wasn't even me who commented originally, I was just making a joke but you do you 👍

              • photonbuddy on 03/03/2022 - 10:46

                @jollibot:

                Wasn't even me who commented originally,

                Sure, but it WAS you that made a wisecrack in response to Quantumcat!

                A wisecrack that just made you look silly. Own it …

                • jollibot on 03/03/2022 - 16:43
                  -1

                  @photonbuddy: Still don't think it makes me look silly, but OzBargain is not known for its sense of humour anyway.

          • WhyAmICommenting on 25/02/2022 - 15:01

            @jollibot: Bot is rude. Name does not check out.

  • Mokr on 24/02/2022 - 16:03

    It's illegal for people at an auction to make a agreement on price. But should it?

    • AndyC1 on 24/02/2022 - 16:05
      +3

      Where is the auction?

    • hydravirgo on 24/02/2022 - 16:09
      +1

      Its not an auction mate

      • saltypete on 25/02/2022 - 08:47
        +4

        REA turning it into one…..

        • cadwalader on 25/02/2022 - 11:46

          A private sale does not preclude negotiations for a higher offer though.

        • WhyAmICommenting on 25/02/2022 - 15:02

          They aren’t allowed to say how much the other offer is. They can just claim that there is one and ask for your “best offer” ie: more.

        • AustriaBargain on 25/02/2022 - 15:02
          +1

          REA merely said there were two offers. OP would be pissed if they missed out and weren’t given tge opportunity to offer more.

  • AndyC1 on 24/02/2022 - 16:04
    +9

    Call the REA and say that you need an answer by COB today or you are walking away. If he gets back by COB and says that there is abetter offer etc then ask how much was the other offer and you will get back to him in the morning if you can make a better offer or have to let it go.

    Bluff the REA into getting back to you ASAP and then string him along for a time for a better offer as if you give a better offer straight up the REA will keep trying it on.

    • hydravirgo on 24/02/2022 - 16:21
      +8

      Its very hard to get an offer amount out of them. In my experience they never tell you how much the other offers are

      • Summoner on 24/02/2022 - 16:30
        +2

        It because the are not allowed to do so.

        Conduct which may be considered misleading or deceptive and/or unconscionable can include, but is not limited to: an agent playing potential buyers off against each other in an attempt to draw out further offers and drive up the sale price

      • AndyC1 on 24/02/2022 - 16:37

        Waste of time responding as you have already bought before by the sounds of it an know how it works.

  • skid on 24/02/2022 - 16:05
    +5

    Most times they are bluffing. The annoying thing is that sometimes they are not.

    You probably wouldn't want to follow what I do as I am a sucker. A couple times I called their bluff because I didn't see many other interested people about and won. When there was lots of interest, I knew the agent isn't bluffing. Once I called their bluff and they immediately told me that I had lost the deal. The latest time I really wanted the property, so I up'd my offer. I doubt there was another buyer but didn't want to take the chance.

    • hydravirgo on 24/02/2022 - 16:25

      This is what I'm thinking as well. Do I like the place so much to go with my best offer or stick with the current price and see how it goes.

      • Seraphin7 on 24/02/2022 - 20:32
        +4

        The thing here is that many buyers don't really know what their "best offer" is.

        You often see buyers confusing "best offer" with the extremes of "what is someone else going to pay?" and "how much can I physically afford?".

        I always counsel people that their "best offer" should be the price at which they are happy to buy the property (regardless of what others might pay), but above which they are not unhappy to have missed out.

  • EightImmortals on 24/02/2022 - 16:10
    +16

    "Today I got an update that they have received another offer as well and the vendor will choose between both."

    I call BS.

    If the vendor has 2 offers they would take the highest one. What is there to 'choose'.

    • Settero on 24/02/2022 - 16:21
      +6

      1 - it implys they are open to a counter offer.
      2 - it's not common but sometimes a seller will go with the better buyer if the difference is small e.g. selling to a new family instead of a developer who plans to knock down.

      • EightImmortals on 24/02/2022 - 16:23

        Sure, but the OP said it was just a block of land.
        Cheers

      • CBrads4 on 25/02/2022 - 09:06
        +6

        Less money but a shorter settlement and other conditions like that are also points that I have seen taken into consideration for property sales. Not necessarily always just the highest dollar value.

    • Seraphin7 on 24/02/2022 - 16:44
      +8

      If the vendor has 2 offers they would take the highest one. What is there to 'choose'.

      The classic example is settlement terms. Once party may want an extended settlement (three to six months) vs the standard six weeks. Depending on the difference in price, many sellers will prefer the standard terms, noting they want cash in their pocket to get on with whatever else they have going in their lives.

      • EightImmortals on 24/02/2022 - 17:10
        +1

        Fair enough, good point.

      • Saver Scott on 26/02/2022 - 07:31

        This one got me last year. I wanted 45 days and agent said seller wanted less. I said COVID needs longer settlement just in case of lockdowns or illness. Agent said too bad and sold the house for $50,000 less than my offer. Which is insane! Did the seller really not want to wait two weeks for $50,000 extra on a piece of shit house?

        • Scrooge McGoose on 26/02/2022 - 07:54
          +1

          Seller probably already bought a new house and needed the money sooner rather than get a bridging loan.

  • garetz on 24/02/2022 - 16:11
    +8

    Does it really even matter ? Stick to your offer, there is no point in bidding against yourself.

    • geoffs87 on 25/02/2022 - 09:43
      +1

      depends on the climate.

      Sydney - Northern Beaches early last year i was faced with the same issue. Made an offer that wasnt accepted (on a house we loved), had already missed out (by a country mile a number of others). Agent did the same thing, called to say there was 2 other buyers, and would be taking the best offer by 5pm.

      5pm rolled around, "have to wait until 11am tomorrow as one of the other buyers needs more time". If I didnt love the place, and/or the market wasnt nuts - I would have threatened to pull my offer. Instead i increased my offer by ~3% haha. I purchased the property - will never know if i pid 3% more than i needed to… but we love the house, so happy we bought it (and thanks to 2021 price rises the value has apparently increased by 24% since then anyway, noting will probably drop this year haha).

      Long story short - who the F knows. If you love the house - pay what you're happy to not lose it for if the market is hot. if the market is not hot, there'll probably be another one you can buy if you miss this one.

  • GG57 on 24/02/2022 - 16:13
    +4

    "You can always trust a real estate agent"

  • bloom on 24/02/2022 - 16:15
    +10

    You know what they say… if the agents lips are moving their lying

  • MS Paint on 24/02/2022 - 16:19
    +19

    Check the rego due date on the REA's BMW using the VicRoads rego check.

    If it due soon then he's not bluffing. He wants his commission because very likely his insurance renewal is also due.

  • mskeggs on 24/02/2022 - 16:20
    +10

    If there is an emotional attachment to the place, up the offer.
    If it is just a block of land and you could find a substitute, stick to your guns.

    If it is the ideal place for all your hopes and dreams, you’ll always feel a twinge you missed out when you drive by in future. Worth a little to avoid that feeling.

    • moo on 27/02/2022 - 12:15

      If there is an emotional attachment to the place, up the offer.

      Whilst I understand the point you’re trying to make, the ‘emotional factor’ is what gets people to spend beyond their means.

  • Drpepper666 on 24/02/2022 - 16:21
    +1

    Sounds like grade A BS to me. Never listen to anything an agent says.

    • spaceflight on 26/02/2022 - 11:42

      I ignored them when they told me my offer was accepted as I thought it was grade A BS.

      I only realised I had the house when I received a letter from their lawyer demanding payment.

  • Soluble on 24/02/2022 - 16:26
    +3

    My last 2 purchases, the land didn't have a varying range, so purchased on the spot, my current place had a range, I offered the top of the range, there were 6 offers, only one offer was the same and they had a condition of selling their own place. (This was 5 days from listing to done). 15 months later, the place is now valued close to 300k more.

    If you WANT that block, offer the Max of the range, what's 10, 20k etc over 30 years anyway?

    • buckethat on 24/02/2022 - 19:49
      +3

      what's 10, 20k etc over 30 years anyway?

      A lot.. assuming 4% interest rate over 30 years… it'll be 32-65k.

      • geoffs87 on 25/02/2022 - 09:45
        +2

        $65k is much less than the $300k its apparently gone up…

        If prises are rising, could end up paying that $65k now (plus the 30yrs of interest on that 65k) to get something similar in an increasing market.

    • hydravirgo on 24/02/2022 - 16:35

      Thanks jv. Is there a similar article for phone conversations?

      • spaceflight on 26/02/2022 - 11:43

        jv's article works for video phone conversations

    • Sapiens on 24/02/2022 - 16:41

      Good comment

  • SF3 on 24/02/2022 - 16:29
    +1

    How Can You Tell if The Estate Agent Is Bluffing or Not?.

    Key here is, they are a REA.

  • typhon on 24/02/2022 - 16:33
    +7

    I recently experienced this very situation. I asked for proof of the offer and, after initially being reluctant, REA sent copy of the email outlining the offer from the other interested party with personal details redacted.

    As much as REAs will try to screw you over to get a higher price for the vendor (via underquoting, verbal bluffs etc), they are unlikely to fraudulently send a written document to achieve this.

  • Keplaffintech on 24/02/2022 - 16:38

    Agents don't tend to lie so explicitly, e.g. 'another party offered higher than that yesterday'. This lie might turn away a buyer and the agent would be left with no buyer. The agent's priority is just to sell the property, not necessarily get the highest price.

    Ask them about the property though and they'll lie their nose off. ('The best street!', 'all that is council approved!')

    • skid on 24/02/2022 - 17:04

      They do lie that explicitly. If you call their bluff, they'll call you the next day and tell you that the other party has withdrawn their offer and now if you want it, offer a little more and it's yours. So you offer $1 more.

  • Porker on 24/02/2022 - 17:03
    +4

    You'll never know if they're bluffing or not.

    I made an offer on a house that sold for less than my offer - turns out the agent sold it to his friend for something like $30,000 under what I offered. It wasn't slight difference either, but rather sold for $300,000 to my $330,000 offer (houses were much cheaper in the early 2000s).

    Another agent would always come to a friend of mine to offer houses and my friend would buy (he has something like 40 houses). The agent would always ask for some obscure amount, like $500,500, such that he could go back to the vendor and say 'I even squeeze them for another $500 - it's the best offer you're going to get'.

    Agents' income is in turnover of houses, not the 'best' price for each party.

    • bobbified on 24/02/2022 - 18:28
      -4

      … turns out the agent sold it to his friend for something like $30,000 under….

      Admittedly, that's exactly how I bought my place! I'm not complaining though… :)

    • [Deactivated] on 26/02/2022 - 04:55

      how did he manage that one? surely the owner would have wanted the extra 30 k?

      • Porker on 26/02/2022 - 05:05
        +2

        Presumably agent never told the owner about the offer and sold to his (agent's) friend.

        Agents not telling sellers is not uncommon. Friend made an offer on a house which was rejected by agent. House eventually to auction and friend won, and got it for less than his offer. When signing the papers, he saidto sellers 'you should have accepted my earlier offer', to which they replied 'what offer?'

        Friend said agent turned red.

        • [Deactivated] on 26/02/2022 - 05:23

          would that not be illegal?

          • Porker on 26/02/2022 - 20:50

            @[Deactivated]: I did follow up and reported him, particularly also because I had provided a $10,000 cheque as part of my offer.

            He still practises today as i see his name around here and there. I knew he sold to a friend because another friend that knew the agent told me - the other friend didnt know I had put in an offer.

            • [Deactivated] on 27/02/2022 - 02:31

              @Porker: that is really scummy. i would be reporting it to the person who owned the house and letting them get all worked up about it, they lost out on 30 k after all, so they would be motivated to get something done.

        • Blitzfx on 26/02/2022 - 20:24

          What was the follow up? Any penalty?

  • salmon123 on 24/02/2022 - 17:03
    +2

    If you're willing to play the long game, send in a friend/relative as another prospective buyer.

    Makes it a bit easier to suss out agent BS. Both the buyers should ask pointed questions like - "How many contracts have you issued?" They may not answer truthfully, but different answers should set off your BS meter.

    Your friend should drag their feet on making an offer, using excuses like "waiting for broker valuation, etc" or "bank valuation came back lower than expected" or "potential construction issues".

  • SnowDragon on 24/02/2022 - 17:04

    A conveyancer friend of mine told me when you're making an offer to tell the agent that you have the ability to offer more. They are obliged to relay that information to the client.

    • bobbified on 24/02/2022 - 18:30
      +3

      …tell the agent that you have the ability to offer more.

      That might be shooting yourself in the foot though. It gives them the green light to try and squeeze more from you!

      • buckster on 24/02/2022 - 18:54
        +4

        Could later clarify you meant an extra $10

      • SnowDragon on 24/02/2022 - 19:26

        But if you really want a property and you put forth a reasonable offer, it gives you an opportunity to put yourself forward ahead of someone who may have offered slightly more than you.

        • buckethat on 24/02/2022 - 19:52
          +1

          If as a seller… I receive an offer with an additional note of 'the prospective buyers have the ability to offer more' then guess what I'm going to do?

          Ask for more.

          • Ace26 on 26/02/2022 - 21:55

            @buckethat: Then the seller has to show their cards by giving a number they want. I did this when I bought my house and it worked in my favour.

    • taoz on 26/02/2022 - 21:59

      wouldn't be getting any more negotiation advice from them

  • Drakesy on 24/02/2022 - 18:29

    FOMO is real.

    Just look at the bank's forecasts of plateau/tiny increase through 2022 and when interest rates bite in 2023 carnage (10% drops).
    Don't get suckered into Realestate.com and Domains 'news articles' that they pass through Newscorp media businesses, it's all propaganda.

    60% of investment properties are losing money.
    And the market has just peaked with New Zealand about 6 months ahead of us (we're following them).

    • buckster on 24/02/2022 - 18:54

      Yeah but that's what they've been saying since 2010

      • Drakesy on 24/02/2022 - 18:56
        +1

        But there is one common theme between then and now, decreasing interest rates.

        With a big uptick in inflation the long overdue increase in rates is going to be inevitable.

      • Seraphin7 on 24/02/2022 - 19:49
        -1

        They've been saying it since Adam was a boy!

    • hydravirgo on 24/02/2022 - 19:29

      Same thing was said about UK. Interest rates have gone up, inflation has kicked in really hard (e.g. energy price hikes) but the housing market is showing no signs of slowing down.

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