BiggerPockets

We put in an offer on a house this morning. The house had little activity on the RE sign in sheet on the counter and no offers as of this morning and has been on the market 11 days (not long, I know). But I find it ironic that we put in our offer this morning and the listing agent contacts our agent saying that at 4pm they received another offer so he's sending over a multiple offer sheet to sign.

This has happened to us a number of times and there is a part of me that wonders if RE agents do this to try and get a higher price? Now, I'm not trying to offend any RE agents on this board so please don't take it that way but in the world in general there are dishonest people and I'm sure that includes people in various professions, including RE.

Has anyone else suspected that an agent might be trying to up the offer by doing this kind of thing?

By the way, we aren't budging on our offer, that is our final and best offer as it's just not worth more than that. If there is a real, viable offer from someone else and they are an investor since the bank requires cash only, they might have an advantage over us of either a higher price and/or not asking for an inspection. I guess we'll see what happens...

Wow, I'm not sure if I should feel relieved about that knowledge or not LOL! On the one hand if it's a common practice it's very possible there is no other offer! On the other hand it's disturbing to know there could be that much dishonesty going on.

Bank had a house listed at 125k on the market for over 100 days. I submitted an offer at 83k. They dropped the price to 100k that afternoon then countered me multiple offers the next day. I stood pat on my offer because I thought it was BS but stuff like that happens all the time.

The realities of the real estate business.

85% of agents do not survive the first year.Of the 20% that survive the first year 90% of those are gone by year five.

It's a brutal and unforgiving business where only the best of the best not only survive but thrive.

If you are an agent on a 70/30 split and you sold 1 house a month at 100,000 sales price it would look like this.

12 sales at 3k commission is 36,000 at 70% is 25,200 before costs to the agent.Take away all the dues,fees,gas,etc. they are making the poverty level.

The average agent yearly income is in the 30's. The problem is the numbers are skewed.You have many making nothing to 10k a year and a few doing well above the 30's in income.

So NO I am not surprised at thing agents do to stay in the business and pay their bills.I am not agreeing with it just stating reality for many of the agents.

With the failure rate of agents you have a constant churning of agents into and out of the business.So a majority of agents want to make the most out of the few sales they do a year before they fall out.

Some other brokers and agents always get mad at me when I state this but the facts are the facts.If you want to close deals we can't be in fairyland of how things are supposed to be in a perfect world. Instead you deal with reality to get the deal closed.

J Scott,

I think there is a difference between asking for highest/best up front vs. lying.

For example;

Party A puts in an offer. RE Agent says there is suddenly another offer by Party B (who doesn't exist at all) and the agent comes back to Party A and says give us your highest and best. In my opinion this is manipulation on the RE part. Creating a fictitious offer from a party that doesn't exist in order to try and get the original party to go higher on their offer is just plain wrong.

It reminds me of how some auction houses will put in a fake bidder (s) in the audience to bid against real bidders in order to jack up the price. It's just a slimy business practice IMO.

If I could prove that an agent was doing this, I'd report them to the powers that be. I think if more people did and there were reprocussions for the agents that got caught, we would possibly see less of this happening.

Originally Posted by J Scott

You make it sound like the agent is doing a bad thing by trying to get a higher offer. It's not just the agent's job to get the highest price for their client, it's their legal/fiduciary responsibility to try to get the highest price.

I have a feeling that if you were the seller as opposed to the buyer, you'd have more appreciation for the agent's efforts and tactics. Btw, most REO agents I know are now calling for highest and best regardless of whether there are multiple offers. In many cases, they don't even mention multiple offers, as it just doesn't matter.

I usually agree with your responses, but the agent not only has a fiduciary duty to get the best deal for his client, but under the Realtor Code of Ethics, they cannot also give false information to another agent or party to the transaction. It is always ok to ask for the "highest and best" or to counter an offer. They just shouldn't say there are multiple offers if there are not.

Kel...good luck. You will find out soon enough if yours is the best (or only) offer!

It's unethical and if an agent were to do that in my office I would be dismissing them but in cases where it does happen a prudent agent would use all means possible to get the highest price for his/her clients.

Yes, I have a scanner but ironically the other day the 3 in 1 printer/scanner/copier decided it isn't going to work. So I've been messing with it trying to install new drivers, etc., Argg! So not for lack of technology...just technology isn't being nice to me right now.

If the call was for H&B, period, then at a minimum I'd ask the listing agent to state (or ask through your agent) whether there are "multiple offers" at this time. At least you gain some valuable info that way. If they're honest, and won't make this affirmation because there are in fact no other offers, you may want to temper your bid as a result. Just not a lot you can do here, other than know your max offer.

The listing agent is trying to get a viable offer (few contingencies) that hits the asset manager's minimum for the property. I've been curious as to whether the LA normally knows what that minimum is, or if they're just making a highly educated guess based on DOM, knowledge of lender, premium accorded to a no-contingency offer, etc. I assume it's the latter.

Generally the asset manager is trying to hit 90% of the BPO value.

The listing broker/agent completes a BPO when listing and then every 15 to 45 days thereafter depending on the asset manager will be asked to do a new evaluation as to what the property price should be changed to.

Initially before listing the asset manager also gets a third party broker/agent who does not have the listing to complete an interior BPO.The asset manager puts more weight on the third party BPO as that person is simply being paid a fee (usually 50 to 90 dollars) instead of getting the listing assignment.

Sometimes the asset manager will go lower on a property.It depends on activity on the property so far,condition of the property,how much already that is non-performing on the books that they need to purge etc.