Phantom bidder - What would you do?

Michael H

We have been bidding on a house for almost two months, and we have just found out that the bid that shoved us 11,000 over what we wanted to pay, is almost certainly a phantom bid. We have it on very good authority, as we knew the bidders name, and the whole story/circumstances just don't add up. However, we're in a rural area and the bidder used, is a friend of the seller.

Has anyone any clever ideas of how we let it be known that we know this bid is not going to materialize and get ourselves back to our original top bid?

Addle

Just stop counter bidding and let the sale fail?

Rabbo

Just revise your bid down to the original bid. Tell them you aren't convinced that the counter bids were genuine but your first offer stands. Give them 48 hours to consider or you'll withdraw your bid.

I have a feeling this kind of thing happens more than people realise. The system is ripe for abuse

davo10

Rabbo wrote: »

Just revise your bid down to the original bid. Tell them you aren't convinced that the counter bids were genuine but your first offer stands. Give them 48 hours to consider or you'll withdraw your bid.

Agree with the first part (on the premise you actually know there is a phantom bidder) but do not put a time limit on it, you are on a hiding to nothing with that approach and you limit yourself if there is actually another bidder.

qrx

Michael H wrote: »

We have been bidding on a house for almost two months, and we have just found out that the bid that shoved us 11,000 over what we wanted to pay, is almost certainly a phantom bid. We have it on very good authority, as we knew the bidders name, and the whole story/circumstances just don't add up. However, we're in a rural area and the bidder used, is a friend of the seller.

Has anyone any clever ideas of how we let it be known that we know this bid is not going to materialize and get ourselves back to our original top bid?

Pull out, walk away and find another house. And tell them why.

mugsymugsy

If your 100% sure then play the game back at them. Beware though estate agent / seller might not engage with you.

Is the 11k worth it?

qrx

OP said 11k over what they wanted to pay. You should have stopped at what you wanted to pay. To be honest I don't see how there is any way back. EA will have the bar set at your current bid. Anyone else wants to bid in the future will have to start 5k over that.

Rabbo

qrx wrote: »

OP said 11k over what they wanted to pay. You should have stopped at what you wanted to pay. To be honest I don't see how there is any way back. EA will have the bar set at your current bid. Anyone else wants to bid in the future will have to start 5k over that.

If the other bids were phantom, the EA and vendor may be aware that the true value of the property is at the original bid price. There's no guarantee that someone will come along and pay 11k more. They might reluctantly take your offer if you stay firm

Michael H

We want this house, badly. We bought at the height of things, are in negative equity, living in a house that's way too small. The same story as so many people, and lucky to have a house at all! We've battled it out with the banks and brokers for months now to finally get mortgage approval and then, of course, it's only for 6 months.

We went to our top offer and then this 'bidder' suddenly went up by 10 thousand, we thought we'll just try 1,000 more, thinking anyone who suddenly goes up by 10,000 isn't going to be put off by another 1,000, but there he had us!

I don't want to loose the house, but I don't want to feel bitter and annoyed about it either. With everything that's going on in Ireland, housing wise, I hate that they get away with driving things up.

godtabh

Michael H wrote: »

We want this house, badly.

That's your mistake. To invested in it already and now that you are losing it you are blaming every one but yourself. Either bid or be done with it

Michael H

godtabh wrote: »

That's your mistake. To invested in it already and now that you are losing it you are blaming every one but yourself. Either bid or be done with it

Helpful, Thanks!

davo10

Op, if the property is in area where there is low demand and prices are low, you have the upper hand as a buyer with mortgage approval. But if there is even one other person who feels the same way you do, then you have to accept that another offer will be made. The price will go up.

You have to accept that an article was published today that 60% of all property purchases are cash purchases. There is therefore a greater than 50% chance that another bidder has no mortgage.

The best thing you can do is not invest in this emotionally, acknowledge your limitations, set your limit, stick to it and bid accordingly. Inform the EA you are looking at other properties, do not set time limits, and hope for the best. Some things are meant to be.

One_Of_Shanks

Just say you have seen another house you like and would like to withdraw your bid. But ask to be kept updated on bidding anyway in case you dont get the other one.

If the EA keeps coming back to you asking how its going with the other house then you know your hunch was right.

If EA comes back in a few weeks and says they're about to go sale agreed on X amount then you have a decision to make.

spaceHopper

There is a price below which the seller won't or can't sell it sounds like you are at risk of pissing them off and missing out.

mloc123

spaceHopper wrote: »

There is a price below which the seller won't or can't sell it sounds like you are at risk of pissing them off and missing out.

This was a point I mad on the previous thread about transparency. People get annoyed or suspect phantom bidders, the issue is usually that the seller will not let it go for the price the buyer wants... Despite the house been listed months without interest etc..

People assume the seller will accept an offer under asking, in reality the seller won't or can't afford to let it go for under the price they have in mind. How bidding gets there is irrelevant.

Only bid what you think a house is worth. Don't get pissed off if the seller values it higher and will not sell for that.

leinster93

A family member was in a similar situation last year. The estate agent kept upping the price through a phantom bidder. Eventually, after prolonged game playing by the estate agent the family member withdrew their interest. A few days later the estate agent phoned to say the other bidder was no longer interested and that the seller was willing to accept their previous bid. Family member told the estate agent to go and jump.
Another house came on the market soon after which they bought from another estate agent so it worked out in the end.
It transpired after, the seller was p'd off with that estate agent and took it off him to give to another estate agent. Sold 2 months after.
Moral of the story. Be prepared to walk away.

Dee01

mloc123 wrote: »

the issue is usually that the seller will not let it go for the price the buyer wants.

Have to agree with this. I sold last year and top bidder of 4 weeks was furious that we wouldn't accept their offer despite no counter offers. He had the EA tormented and EA had me tormented to agree to their offer. but I would have preferred to take the house off the market than accept an offer below X.

Kristopherus

godtabh wrote: »

That's your mistake. To invested in it already and now that you are losing it you are blaming every one but yourself. Either bid or be done with it

Bloody hell !!! Is that the best you can offer:(

davo10

Kristopherus wrote: »

Bloody hell !!! Is that the best you can offer:(

Never invest emotionally in property, it's a business transaction with admittedly emotional ties. If your advice is an emotional transaction with business ties, that is bound to end in disappointment.

canneyj

Agree to a certain extent, yes, if it doesn't make financial sense, it doesn't make sense, but a business person is no good at a business they're not passionate about and why would you buy a family home that you don't love.

Interesting to read from people who sold. I can fully understand that people have a price they can't go under, but why can't auctioneers just say that. Phantom bidders just give a false sence of what's really going on.

There needs to be an independent register, where you can formally register your bid and anyone interested in the property can view it.

Delphinium

If you have decided that you must have this house then you are too emotionally involved. You say you are already in negative equity so you must realise that overpaying is a serious mistake. There is an excuse for the last purchase as we all thought a hard landing would not become a reality.
So do your sums and decide on the actual value of the house to you. If you can't afford it, then you just have to walk away. An extra €11,000 is a huge amount of money to pay if the house is not worth it.
Walk away if necessary. You might even have to change your entire outlook. If the present situation is difficult have a look at how you live and use the space. Maybe de-clutter and look at clever ways of using existing space.
Thinking this way might take some of the urgency about this house away.

April 73

Michael H wrote: »

We have been bidding on a house for almost two months, and we have just found out that the bid that shoved us 11,000 over what we wanted to pay, is almost certainly a phantom bid. We have it on very good authority, as we knew the bidders name, and the whole story/circumstances just don't add up. However, we're in a rural area and the bidder used, is a friend of the seller.

Has anyone any clever ideas of how we let it be known that we know this bid is not going to materialize and get ourselves back to our original top bid?

Ask yourself if you withdraw your bid & the house goes back on the market is it likely to attain the same price again? If it is, then you're not overpaying.

11k is a lot if the house is valued at say, 150k. It's not a lot on a house worth 400k.

We bought two years ago & started bidding at 20k below asking. There was a couple of bidders but Im pretty sure the last two counter bids to ours were phantom bids. However we ended up at 5k over asking, I'm sure the seller held off until he got to this level (by whatever means) and ultimately we got the house we wanted.

Good luck with your decision. While I understand why people say you shouldn't get emotionally invested in a house, I think it's inevitable that you must be a little - to go through with the whole stressful process!

Sleeper12

I hear whispers & rumours around most properties I've looked at. Even going back 30 years I've heard things like this. I've never found them to be true.

How sure are you on this. Are you sure enough to risk the house you really want?

If I was sure there was a phantom bid I'd walk away but there is a big difference in bidding in a property that is an investment /business & your dream home. Most investors get better deals because we have no emotional attachment to what we are bidding on.

Phantom bid or not you've shown that you can pay the extra 11k and you have shown that you are willing to pay the extra 11k. If I was selling to you I wouldn't back down because I am 85 percent sure that you will pay the 11k regardless of what you threaten. It's like a game of poker. I've seen your hand & I know that the odds are stacked in my favour.

qrx

I hate the poker analogy. Personally, I don't see any similarities. You bid until you can't bid anymore or the house has lost its appeal. There is no poker involved. Some estate agents or purchasers might like to think they are playing poker and might like to think they have the best poker face at the table but really none of it matters. The only thing that matters is what you are willing to pay or what you can afford for a property.

OP, you've been in negative equity. You've already over paid for a house and now you're talking about doing it again. The fact you're on here asking opinions show you are already regretting it. Do yourself a favour, walk away. It's very likely you'll still get the house at a cheaper price.

Sleeper12

qrx wrote:

I hate the poker analogy. Personally, I don't see any similarities. You bid until you can't bid anymore or the house has lost its appeal. There is no poker involved. Some estate agents or purchasers might like to think they are playing poker and might like to think they have the best poker face at the table but really none of it matters. The only thing that matters is what you are willing to pay or what you can afford for a property.

The poker comes into it from the start.
The buyer doesn't run up to the ea & show the max amount of money that they have to spend or how high they are willing to go. They keep this close to their chest. You have more bargaining power the less the ea knows.
Quite often a buyer will bluff, and say that is my highest bid, we can't get anymore money even though they might be willing to pay 10k more.

It's not a big deal if you compare it with poker or not. In this case the seller & ea know that op has the extra 11k and they are willing to pay it.

If I were the op, 100 percent believed that it is a phantom bid yet really wanted the house I wouldn't mention the phantom bid. I would say that I was borrowing the extra 11k from a family member and it fell through. This is way the ea isn't sure about the extra 11k.

It's all well and good getting high & mighty telling ea that you know about the phantom bid but the ea still knows that he can get that extra 11k out of you. Better not mention phantom bids but to pretend that you have less money than you expected.

I also haven't read that ops bid with the extra 11k was accepted. It might be a bit rash removing the bid in the first place.