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

JDD

ted1 wrote: »

Why? Estate agents job is to get the highest price possible for the sale of a private property.

Surely you don't think it's okay for an EA to make up other bids?? It skews an open market, artificially inflating prices.

I think EAs should be regulated. They should have to keep a written verifiable record of bids which are randomly inspected and checked with the bidders.

ted1

It only inflates prices if you bid more than you want. A house is worth whatever somebody is willing to pay.


The bottom line is that somebody has owns a private property and they want to sell it for as much as possible. It’s the same as any other purchase

tobsey

Deleted User wrote: »

Ultimately, I felt the EA was very dishonest and unfair on the underbidder as they probably ended up paying way over the odds for the house and bidding an amount to blow us out of the water, thinking we were still in the game. We never had any intention of going higher than amount that was to close out sale with vendor. It didn't bother me at all as I was happy to walk away and not go any higher but felt the EA used what was meant to be a private bid to drive up the price of the house.

If you put in an offer then that was a minumum value to put on the house. Just because that offer was subsequently withdrawn it set a benchmark. The EA would have been doing the vendors a disservice if they didn't try and at least match or better that offer.

kippy

ted1 wrote: »

Why? Estate agents job is to get the highest price possible for the sale of a private property.

Not by using fraudulent means surely?

tobsey

tobsey wrote: »

If you put in an offer then that was a minumum value to put on the house. Just because that offer was subsequently withdrawn it set a benchmark. The EA would have been doing the vendors a disservice if they didn't try and at least match or better that offer.

So, even if it's an offer to close on the sale, intended only for the vendor and is subsequently withdrawn, that offer can be used in the bidding process?

My expectation was the EA would go straight to vendor as we discussed, but he went straight to underbidder and used it as leverage to get a hugely increased bid. I thought that was dodgy but maybe I am wrong.

Turnipman

Deleted User wrote: »

My expectation was the EA would go straight to vendor as we discussed, but he went straight to underbidder and used it as leverage to get a hugely increased bid. I thought that was dodgy but maybe I am wrong.

Perhaps the EA did as you wished, whereupon the vendor instructed him to run it past the other party?

GingerLily

Turnipman wrote: »

Deleted User wrote: »

My expectation was the EA would go straight to vendor as we discussed, but he went straight to underbidder and used it as leverage to get a hugely increased bid. I thought that was dodgy but maybe I am wrong.

Perhaps the EA did as you wished, whereupon the vendor instructed him to run it past the other party?

I don't understand the outrage at this either, the underbidder beat the OP's offer, what's wrong with that? Why should the underbidder not be given a chance to counter?

Graham

Deleted User wrote: »

So, even if it's an offer to close on the sale, intended only for the vendor and is subsequently withdrawn, that offer can be used in the bidding process?

My expectation was the EA would go straight to vendor as we discussed, but he went straight to underbidder and used it as leverage to get a hugely increased bid. I thought that was dodgy but maybe I am wrong.

If the boot were on the other foot and you were the underbidder, what would you think of the agent if he suddenly accepted some sort of secret bid out of the blue without giving you the opportunity to counter.

It's quite likely there would be much muttering about shenanigans and brown envelopes.

Turnipman

Turnipman wrote: »

Perhaps the EA did as you wished, whereupon the vendor instructed him to run it past the other party?

I had very little time to get something done. I told him very clearly that I was dealing with vendor only and they could take or leave my offer. I was clear that I would not be getting involved in any more bidding and wanted a yes/no only from vendor as I wanted to move on asap. Instead of a yes/no I got another bid from underbidder who had not made a move in over a month before that. I just felt they had been duped by EA.

GingerLily

GingerLily wrote: »

I don't understand the outrage at this either, the underbidder beat the OP's offer, what's wrong with that? Why should the underbidder not be given a chance to counter?

Not outraged at all. I happily walked away as it was clear vendor wanted more than my final bid. The idea of putting in a take it or leave it bid when it looks like bidding is not moving is not unusual.

My sister was involved in a similar process and never got a chance to counter. Property was just sold based on a bid that came in as vendor was happy that it would go through quickly etc.

GingerLily

Deleted User wrote: »

I had very little time to get something done. I told him very clearly that I was dealing with vendor only and they could take or leave my offer. I was clear that I would not be getting involved in any more bidding and wanted a yes/no only from vendor as I wanted to move on asap. Instead of a yes/no I got another bid from underbidder who had not made a move in over a month before that. I just felt they had been duped by EA.

The Estate Agent doesn't work for you, he did the right thing for his customer it sounds like, whether you like it or not

LirW

The vendor hires the EA to not have to deal with any bids because it can be a headache and quite confusing. There can also be 100 logical explanations why the underbidder didn't make a move earlier. Ultimately they have to achieve the highest price for the vendor, that's what they get paid for.
While I understand that it's frustrating, you don't know what the EA and vendor decided to do after you put your final offer in.

If you're selling a house you'd probably also want the best price for it.

Graham

Graham wrote: »

If the boot were on the other foot and you were the underbidder, what would you think of the agent if he suddenly accepted some sort of secret bid out of the blue without giving you the opportunity to counter.

It's quite likely there would be much muttering about shenanigans and brown envelopes.

Wasn't out of the blue. We had the highest bid on property for over a month and we had no more time to wait. We thought underbidder had lost interest so we just out in a take it or leave it bid. As I said, we weren't too concerned when it didn't work.

My sister lost out on a property in this very manner.

MLC_biker

EA works for vendors, not for you. Buyers will submit lowest possible bid, but ask for opportunity to increase offer should the need arise. They can lose their license if caught creating bids. Extra 20k on sale price only worth €300 to estate agent so unlikely that they will do it. Wish you better luck next time

GingerLily

GingerLily wrote: »

The Estate Agent doesn't work for you, he did the right thing for his customer it sounds like, whether you like it or not

Fair enough. I wasn't bothered either way as it was clear that they were not going to sell to us at that price. We walked away and went sale agreed on another house within 24 hours.

However, the underbidder put in a huge counter offer and ultimately seems to have paid way over the odds. But that's life I suppose, you never know what or who you are bidding against. Just felt a bit sorry for them.

MLC_biker

MLC_biker wrote: »

EA works for vendors, not for you. Buyers will submit lowest possible bid, but ask for opportunity to increase offer should the need arise. They can lose their license if caught creating bids. Extra 20k on sale price only worth €300 to estate agent so unlikely that they will do it. Wish you better luck next time

Not sure if this comment was for me, but there was never any suggestion of creating bids or anything of the sort.

JDD

MLC_biker wrote: »

EA works for vendors, not for you. Buyers will submit lowest possible bid, but ask for opportunity to increase offer should the need arise. They can lose their license if caught creating bids. Extra 20k on sale price only worth €300 to estate agent so unlikely that they will do it. Wish you better luck next time

Can they really lose their licence? I've had a quick look on the PRSA website and I don't see any requirement on them except to register, to have PPI and to have minimum qualifications. There's no obligation to retain records or indeed - as it seems to me - any basis to withdraw their licence in the unlikely event the PRSA could prove that they created a bid.

All industries have bad apples, but I do think where there's an financial incentive to increase the price of a house and little to no oversight of that, the temptation to create bids must be overwhelming. An ex-boyfriend of mine went to see a house that he was thinking of buying with his now wife back in 2004. He saw it on a Saturday, put a bid in, and his girlfriend went to see it after work on the Tuesday. She was the only viewer that evening, and didn't mention her relationship. The next morning the EA rang my ex and told him that another person had viewed the house the previous evening and had put in a higher offer. When he pulled her up on it she got completely flustered and asked to call him back. Ten minutes later her manager called him and - apologizing profusely - said that the EA had mixed up two houses. My a*se she mixed them up. I'd say that happens all the time.

Heart Break Kid

Don't bid on a place unless proof of fiance has been providedby all bidders. End up losing a house only to find out they had no money to fund it.

Interested Observer

Going up 20k from the asking price really doesn't sound like anything unusual.

kippy

Heart Break Kid wrote: »

Don't bid on a place unless proof of fiance has been providedby all bidders. End up losing a house only to find out they had no money to fund it.

Is the bidder to believe the auctioneer if the auctioneer is asked whether this is the case?

theboringfox

I bid on a number of properties where I was convinced there was not genuine bidders. Checked property price register a few months later and it always turned out to be genuine. On reflection I suppose I wanted them to be bogus so much it clouded my thinking.

After a while I sat down with my partner and we decided for every house we would just set max we were willing to spend and to ignore bids vs asking price and bidding patterns etc.

The one thing we did watch for was what was the price that it went down to only 2 bidders. As if we started to go way over that we are potentially over paying because us and someone else have potentially got attached to owning property. If everyone else dropped out way back it means that's really the market price except for you two final bidders who are being too enthusiastic maybe.

I would also watch concept of jump bid. We put in 5k increased offer on house at absolute stretch. Counter bid was extra 10k. They won it and probably think it was the jump bid but reality is another 500e would have done.

ted1

I bought out family home with a 500 Euro increment. The estate agent was pushing for more, I told him I was at my limit and I’d see what I could do. Called him back with the additional 500 and said that’s it. Offer was accepted, we were bidding against another buyer , a big increment would have just cost us more. I never understand why people go up so high so fast.

GingerLily

ted1 wrote: »

I bought out family home with a 500 Euro increment. The estate agent was pushing for more, I told him I was at my limit and I’d see what I could do. Called him back with the additional 500 and said that’s it. Offer was accepted, we were bidding against another buyer , a big increment would have just cost us more. I never understand why people go up so high so fast.

We were bidding on a place, four weeks of bidding and the other bidder would always take a week to counter with a grand more, we got exhausted, and were due to get married in a week, so we did our final bid, added a good amount to it, the other bidder countered with a massive lump of their own, more then we could afford, so we walked away.

That house was lovely but wasn't a good investment at all, happy we lost that place.

davo10

[Deleted User] wrote: »

Fair enough. I wasn't bothered either way as it was clear that they were not going to sell to us at that price. We walked away and went sale agreed on another house within 24 hours.

However, the underbidder put in a huge counter offer and ultimately seems to have paid way over the odds. But that's life I suppose, you never know what or who you are bidding against. Just felt a bit sorry for them.

This is a real headscratcher. I can't understand why you would expect a bid to be considered by the vendor, but not want him/her to give the underbidder an opportunity to bid higher, it just doesn't make sense.

The underbidder didn't overpay, they just paid more than you bid. A property is worth what someone is willing to pay for it, there is no set value for any property, it is supply and demand with a bit of emotion (I want that house, in that area) thrown in.

JDD

I suppose a perfect market assumes perfect information. Therefore if the underbidder knew that the last bid was only given with the caveat that it was a full and final offer for the house, they would have known not to put in a huge counter offer. They would know that the vendor was not willing to settle for the full and final offer, but that there was no need to go mad killing off the last offer as the OP was not willing to go higher.

In reality though it's never going to be a perfect market. Full information is never going to be known by the bidders. Therefore the final price of the house is not really the market price, but a skewed inflated market price based on imperfect information. This, of course, is in the EA and the vendors favour, so no-one is ever going change the way its done.

davo10

davo10 wrote: »

This is a real headscratcher. I can't understand why you would expect a bid to be considered by the vendor, but not want him/her to give the underbidder an opportunity to bid higher, it just doesn't make sense.

The underbidder didn't overpay, they just paid more than you bid. A property is worth what someone is willing to pay for it, there is no set value for any property, it is supply and demand with a bit of emotion (I want that house, in that area) thrown in.

Underbidder had not reacted to our bid for over a month and EA said vendor might be willing to listen to decent final offer, as it looked like all others were out. I said I would make a final offer as long as it was to vendor only to take house off market as I genuinely did not have time for anything else and needed to get deal done.

EA agreed but he didn't actually do what we agreed - he went straight to underbidder instead. The underbidder then went in with a huge counter offer not knowing ours was a final offer and we had no intention of paying a penny more. They upped our offer by 30k so I reckon they overpaid, when a fraction of that would have been enough. Vendor probably could not believe their luck.

LirW

Deleted User wrote: »

EA agreed but he didn't actually do what we agreed.

Because you're not the client of the EA. He has to inform the other party that is still interested if there are any new offers or not. Otherwise he wouldn't do his job which is getting the best price for the vendor.

davo10

[Deleted User] wrote: »

Underbidder had not reacted to our bid for over a month and EA said vendor might be willing to listen to decent final offer, as it looked like all others were out. I said I would make a final offer as long as it was to vendor only to take house off market as I genuinely did not have time for anything else and needed to get deal done.

EA agreed but he didn't actually do what we agreed - he went straight to underbidder instead. The underbidder then went in with a huge counter offer not knowing ours was a final offer and we had no intention of paying a penny more. They upped our offer by 30k so I reckon they overpaid, when a fraction of that would have been enough. Vendor probably could not believe their luck.

Why would you think the vendor/EA would not go back to the other bidder? It doesn't make sense for them not to. The other bidder probably did the exact same as you did, put in one final offer to seal the deal.

Again, a property is worth what the buyer is willing to pay for it. The "worth" of a property is what the ultimate purchaser is willing to pay for it, not what you think it's value is. You can make your final bid, if someone else bids more, then so be it.

As others have pointed out, the EA does not work for the purchaser, he/she works for the seller, they are being paid to get the maximum amount for the seller.

As with all threads like this, the shoe is always on the other foot when you come to sell a property, how would you feel if you were selling a house and the EA didn't go back to the other bidder and ask if they wanted to up their bid? You would have €30k less in your pocket, you'd be a bit sore about that, wouldn't you?

Buyers want to buy low, sellers want to sell high, but the EA only works for one side.

davo10

JDD wrote: »

I suppose a perfect market assumes perfect information. Therefore if the underbidder knew that the last bid was only given with the caveat that it was a full and final offer for the house, they would have known not to put in a huge counter offer. They would know that the vendor was not willing to settle for the full and final offer, but that there was no need to go mad killing off the last offer as the OP was not willing to go higher.

In reality though it's never going to be a perfect market. Full information is never going to be known by the bidders. Therefore the final price of the house is not really the market price, but a skewed inflated market price based on imperfect information. This, of course, is in the EA and the vendors favour, so no-one is ever going change the way its done.

A "perfect market", is based on supply and demand, the seller wants to realise maximum profit, the buyer wants maximum value In both a perfect and imperfect market, the highest bid normally wins. Its basic economics.

In this case the market worked perfectly, dancinpants made a final offer and the underbidder was asked to offer a counterbid. Dancinpants was out and the underbidder made a big offer to make sure he/she wasn't tempted to come back in. If they wanted it, they got it, fair play.

C3PO

Don't understand your logic at all Dancinpants!
The EAs job is to get the highest price possible for his client - the vendor! He should, of course, do this without breaking the law! In your case he would appear to have done both!