Are There Really Other Offers Coming in on this Property?

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I was recently reading a discussion on our forums, where someone asked “How can you know for sure if someone is really making another offer? What if this happens…is there anything you can do?” There were some good responses on the forums, but I wanted to share a little story about a situation I recently went through that I thought people would find interesting.

According to one of our members:

2. Never believe anything a Realtor tells you about “other offers”. A place that’s been on the market for a year, with ZERO interest will “magically” receive multiple offers about the time you show an interest. When this happens just tell the agent what my dear wife told one; “I guess we’re not meant to get this house then-but our offer stands AS IS.”

I agree with this advice, but I have to comment here. I was house shopping for my permanent residence back in January here in Denver, when there was over a foot of snow on the ground and I was the only person making tracks anywhere. My wife and I found a great house that we were excited about and placed an offer on it. Now, mind you, I had looked at 30 houses and had not seen one other set of tracks in the snow by these houses, including this one. Our offer was a lowball one (as it should be), and the next day I was told by the agent representing us that it was rejected. I was surprised, asking why the seller hadn’t countered us. The house had been on the market for a while, and it just seemed strange that we’d be flat out rejected.

As it turns out, there was another person interested in the house. Apparently, their agent had a deal with the selling agent that she’d be told if anyone came to see the house. When we made an appointment twice, the selling agent let the other agent and their client know, and they went out and made an offer. I guess they dropped the real estate agent’s feverish pitch that we were making a serious offer and their client’s offer, out of nowhere, was well over asking; this certainly locked in the property. for them.

I think it brings up two interesting thoughts:

  • First, never assume that no one else is interested. We had to be the only people to see this place for at least a few weeks due to weather and holidays, yet a magical offer arrived the same day as ours.
  • Second, the agent representing the woman who bought the home really must have been pretty good, convincing their buyer to offer so much. In this case, a place with zero interest, suddenly DID have other offers. I’m glad I didn’t win that game!

The house was not worth close to what the buyer paid, and the fear/excitement generated by their agent put them in a bad position, especially in the current real estate marketplace. I’m actually surprised that the loan could have gone through, but then again, we all know that many apraisers will tell you a property is worth whatever you want it to be . . . but that’s another story.

Low and behold, I went on to find a place I liked even more the next day (good thing!) and ended up getting even a better deal then I would have gotten had my offer the day before been accepted!

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About Author

Joshua Dorkin (@jrdorkin, Google+) is the founder and CEO of BiggerPockets.

5 Comments

  1. April Shipowick on

    YOu really cannot believe Real Estate agents. The honest ones are very infrequent. If you have to deal with one though, here are a few tips:
    Check on their local reputation

    See if they are known for hard work or “working it”. Usually we find they work it, but don’t know the meaning of hard work or follow through.

    See if they will work for 3% instead of 6%.

    Don’t buy from the listing agent. Their loyalty is to the seller not the buyer. I’m sure you can see the point there. We have certainly learned that one the hard way.

    Always try “for Sale by Owner” first. It can literally save you thousands and even hundereds of thousands of dollars.

    April Shipowick

  2. Vicki Porter on

    It is hard to explain, but when selling property I have often had the experience that a listing will receive two offers on the same day – whether it is a new listing or one that has been on the market for awhile. A buyer has to make an offer that is appropriate whether the agent says there is another offer or not, because you can’t really ever know. Even if there were no other offer at the time the buyer submits one, another could come in before acceptance.

  3. Steve Ladin on

    Great post!

    As a real estate broker myself, I see this “technique” used quite often. I’ve represented multiple buyers and it frustrates me to no end why an agent would do this. It’s VERY unethical and should be against the law. I’ve actually walked away from deals just because of dishonest agents presenting these “phantom offers.” You never know what else they have made up!

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