Softening house market?

When it comes to the integrity and behaviour of estate agents, I like to share the following story. This is anecdotal, but take it for what it is.

Back in the Celtic Tiger days, when I was a young lad, one of the men with whom I was working related the story of his buying a house in Dublin. He had just gone sale agreed on a house across the street from his parents in Dublin.  

He was happy with himself until he received a call from his father who wanted to know whether his son had pulled out of the sale. My colleague replied that he hadn't, and his dad told him that the estate agent was conducting a viewing.

Naturally words were exchanged with the agent, who made a series of excuses about how there was a mix up. This would perhaps be understandable if the agent in question had not conducted the sale for my colleague and if the house itself did not have "SALE AGREED" plastered on a sign in the front garden.

In the end, the gentleman who related this tale to me did actually get the house. The punchline is that the agent who gave him the keys was the same agent who was acting the maggot. My colleague took the keys and told the agent to get the f**k off his property immediately.

Of course, we must not make generalisations. Not all snakes are venomous, I suppose...

I had that earlier this summer, after a small bidding war we ended up the top bidder on a property at slightly over the asking price. We heard absolutely nothing from the estate agent for over a week, despite asking for an update. Eventually she comes back to us and says the other bidder has indeed pulled out but the vendor wants another 20k. Eh no, we're not bidding against ourselves and we told her this. A new bid 5k over ours then magically appeared right on time, we said no thanks and bowed out at that point. Never heard about it again.

Did it ever hit the PPR?

We had similar in 2021. Won the bidding at c150k over asking. Other bidder dropped out, agent ducked our calls for a week much to our confusion. Eventually sheepishly said his client wanted another €100k. We laughed. Two new bidders joined a few days later. Had all the same skepticism you did about ‘fake bids’ and were going mental, but lo and behold it hit the PPR a few months later at €300k over the asking price.

Estate agents are slimy, but I really don’t think there would be many risking their careers and the reputation of their firms by manufacturing fake bids to get themselves an extra few k in commission.

Whether a desperate seller might ask a friend to fake interest, perhaps. But that’s not on the EA.

All properties->07/11/22 to 13/11/22

All Dublin

30 Price changes

24 Decreases

06 Increases

Rest of Ireland

92 Price changes

71 Decreases

21 Increases

Why wouldn't they? What are they risking? They control the bidding. The vendor and the buyer are completely dependent on the information supplied by the estate agent as regards offers made. The only the thing the estate agent may be risking is possibly making a loss on their gamble, but sure you win some, you lose some.

But there is lies the problem, the process is not transparent.

No firm is going to openly admit this and provide this data. I would agree though this is less likely in a larger firm or brand agency. Plenty of agents also working for themselves or in small firms where this is plausable and although I also don't beleive it is widespread, its all to easy to have one fake bidder against a genuine bidder in a sellers market.

When the genuine bidder can no longer match the last fake bid when they reach the top, 'fake' bidder suddenly pulls out. EA contacts the genuine bidder giving a 'second chance' if they match, otherwise going to go back to market. Genuine buyer jumps at chance because of FOMO. There is no mechanism verifying this. Anectdotal, but I know a few people who have bought in the last 2 years where this has happened and they wonder if they have overpaid as a result.

The latter happens all the time for sure but buyers do pull out all the time for real reasons. Change of heart, change in circumstance, funding falls through, survey issues.

I just believe that’s far more plausible than fake bids. One thing with committing fraud, is it usually involves the person doing it gaining huge benefit. For an EA, they’d literally get 1.5% of the benefit of their mischief and they’d have countless cases where a genuine sale falls through because of their fake bid shenanigans and costs them a boat load of time. It all just seems very far fetched to me.

Id well believe that sellers ask mates to put in fake bids on occasion.

I fear a friend of mine walked into this trap. Became emotionally attached to a house. EA claimed loads of interest, had to do a 'Three Hour Open Viewing' on a Thursday afternoon. At this point I told my friend to take off work and go to this mysterious midday viewing or send someone down, unfortunately they didn't. Bidding went to 166% of asking. Friend reached their limit and pulled out but within a week the highest bidder dropped out. My advice was take it slow, take 20k-40k off the last bid since you were bidding against someone who now has no interest. Unfortunately my friend did the opposite and upped their last bid slightly just because the EA asked.

I had warned of all these tactics beforehand but it didn't wash. Happy for them to have the house but I do wonder if they will later have regrets and the current rental situation seems to have been the main motivation for buying.

This again.

The PRSA have very little power/don't seem bothered enforcing what power they do have.

The checks that they actually do on firms are farcical, and are easily navigated by using GDPR as an excuse not to reveal who the bidders were.

On top of that, if someone wants to submit a complaint about an agent, they don't get to do so anonymously. All their information is given to the agent they are complaining about.

Bids should be handled by an independent body who are there to ensure legitimate bidding/bidders only.

I have put bids on SherryFitz and all they had was my email and phone number. So are they better?

175k in 2002 is probably the equivalent of nowadays 340k anyway

I know for fact that any questions, a potential buyer has are sent to the seller straight away on the same day and seller responds through their platform.

I also believe every buyer has a responsibility to do their homework on the area, they are responsible for the bid they put in the heat of the moment, you cannot blame the agent on that.

I requested the building report the agent had on a house I was looking to bid, another old known estate agent, the report I got didn't have a small mention on the crack above the garage. I am not saying the agency is at fault, but what I am saying is agent had no breeze on the potential issue on the house.

So perhaps no estate agent knows too much the area or the house they are selling. It is down to you the buyer to do your homework.

If an EA generates an extra €10k through fake bids he gets €150 for the firm.

If the fake bid causes the sale to fall through as many on here claim it did for them because they wouldn’t stand over their offers, then the EA will regularly going through re-listing, new viewings, whole new bidding process. I am very confident the estate agencies very carefully monitor the amount of hours spent per sale as it would directly impact their fee structure. Sales falling through is an absolute disaster for them, getting them sold quickly and efficiently is much more important than eeking out a few extra quid.

There is no chance it can be economical for any estate agent to conduct business the way people are saying.

It really doesn't seem likely, as he would also potentially get a reputation for sales falling through the whole time. It is such a small amount of money, there is too much additional work involved for very little return.