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Should I believe my realtor?

I recently made an offer on a property listed at 300k. Location is not prime. Hours after I made the offer, my realtor informed me that there is another offer. She and the listing agent both work for the same realtor. She was appointed by the listing agent when I inquired about the property. Just today, she told me that the seller ( a relocation company) wanted the other bidder and myself to do a counter offer.  She told me to make the best and the greatest. I will make a cash purchase. My original offer was 250k because I thought the property would not sell easily in neighborhood. I am planning to up my bid to 280k contingent to home inspection. The one that the seller did came out okay but I want to hire my own inspector. My question is how can I know for sure if there is indeed another offer? Should I believe her? Could she and the listing agent were bluffing me, so that I will bid much higher, thus they get bigger comm? I don't think she can legally do that. She does know that I like the property very much. I can't contact the seller. according to my realtor she can't contact them either. She has to go through the listing agent who is also her coworker. Please give me a piece of mind. Am I worried too much or is my concern legit? Thank you.
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August 15 2013 - US
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Answers (25)

First off, I want to congratulate you on coining a phrase that every new home buyer should wear on a t-shirt while searching for their home-to-be.

But if you really think about this question, past the somewhat deserved stereotype of the conniving manipulating realtor, should you believe your lawyer, or your doctor, or your husband? You do because of trust.

You should do your best to work with a real estate agent (a buyer's agent would be a good start) who comes on from a trusted referral source or who has ample online testimonials. If you follow that line of thinking, you wouldn't have to write the cognoscenti at Zillow..

On a more general note, especially because your query can involve the other side's realtor, i.e. multiple offers, you don't really have a choice. The common thought is that listing agents lie about multiple offers to get more bids. I'm sure some do, but considering the agent risks losing an existing offer, he could cause more harm than good.

To satisfy your deepest curiosity on this issue, I have had a few buyers attempt to call an agent's perceived bluff by refusing to up their bid and each time the seller went with the competing offer.

Look at it this way: After all the back and forth negotiation, you should end up near your highest and best offer anyway.

Good luck!
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September 11 2013
If both Realtors work for the same broker (at least in California) you should sign a consent to dual agency. This should outline the duties of both Realtors. Even though you can't speak with the seller, you do have the right to speak with your Realtor's broker if your Realtor isn't making things clear enough for you. What you are being told may be the truth but it is your Realtor's job to convey information clearly and accurately and answer questions to your satisfaction. You can ask for comps to support your price and you can also get an appraisal even if you pay cash so you know you aren't over paying.
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September 11 2013
You have a legitimate question and I try to be sensitive to all of my customers regarding trust concerns.  Even though I am a professional sales person myself, I am consumer as well, and I do have my own trust issues with sales people in various industries.  So yes, I get how you feel!
I teamed up with a partner in my office for the same reasons your agent works with her partner.  My partner refers customers for his listings to me as a way to avoid any perceived conflict of interest.  We definitely don't collude with one another, and in spite of the fact that we have an excellent working relationship, he would never give away a competing offer or the lowest offer his client would be willing to accept.  Believe it or not, $20K - 50K does not make that much of a difference in earned commission, and is definitely not worth risking losing a customer or getting into trouble with our licenses.  Are all Real Estate agents honest about competing offers?  I believe most are, but when I have my doubts, the best advice I can give my client is the same  as what others have already said here - you have to decide how much you want this house and what you are willing to pay for it.  
As for contacting the seller, your agent is correct.  If you were a seller, I am sure you would appreciate being shielded from dealing with the other side on your own.  That is what a listing agent is being paid for.  
I hope you found some great answers here, and I wish you the best of luck and hope you get the house!     
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September 11 2013
The market always determines the final price.  Pay only what you think that the property is worth to you. I hope that provides you with a bit of focus, good luck!
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August 16 2013
You can proceed how you best feel and if there are other houses available, you may just want to preview those houses. 

If you are asking yourself weather or not you can believe your Realtor, you need to get a new Realtor. 
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August 16 2013
It does not seem as if she is doing anything illegal, multiple offers in this market is expected.
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August 16 2013
In todays market it is very common to get multiple offers and recently above asking price. If your agent is good they will know how to best get you through this process.

Good Luck!
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August 16 2013
Seems legit to me. People are prone to assume shady stuff is going on and rarely it is. This market is extremely active and you have to exceed your own expectations to get an offer accepted these days.
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August 16 2013
Hello and congratulations on finding a property that you want to buy. In my local area it is not uncommon for properties to get multiple offers. Sometimes a home sits on the market with some buyers "circling" but not ready to jump in with an offer. When one offer is presented the listing agent then notifies the other agents of the interested buyers to let them know. Then anyone who wants to jump in can present an offer. You can understand that the listing agent is working on behalf of the seller in hopes of getting the best offer... whether it's price, financing vs. cash, closing time frame, "as is" vs with inspections, etc. There are many factors that make one offer better than another. You need to not focus on the other offers but make the best offer you would feel comfortable with in the case yours is accepted. Don't worry if you don't get the house. I always tell my clients that "everything happens for a reason". Good luck!
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August 15 2013
5004757,

Competing offers are not uncommon in my area either.  As previously indicated, "Best and Final" is routinely offered to buyers as a professional courtesy when a "dueling buyer" situation arises.

It should give you peace of mind to know that Realtors adhere to a stict code of ethics which regulate how we are to conduct our businesses.  Does this insure against unscrupulous agents, of course not. However,  code of ethics violations are dealt with seriously, and the penalties can be hefty, including fines and revocation of an offenders license. That said, some people are unethical regardless of consequenses, as we all know.
 
If you have done your homework and your REA, along with their company, have a sound reputations in your community then it is unlikely that they would jeopardize their hard earned status over one deal.

And remember, you don't have to change your offer one cent. If your confident that you have made a fair, "market value" offer then roll the dice. If the contrary is true and your offer is less than a fair offer than you might consider coming up to market value.   Your being asked for best and final - that doesn't mean the other offer is better than yours.
Best of Luck!
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August 15 2013
Most agent that I know are honest hard working agent, I would just look her in the eye and ask, however it seems to be the world of multiple offers. Good Luck.
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August 15 2013
its not a requirement eric its a curtacy and usually benefits the sellers interests which the listing agent is required to "look" out for.  So they will normally inform the potential buyers that other offers exist.... but they could simply sit down and present both offers to the seller and let the seller decide to accept 1 or counter 1 or the other.  Is it fair no and it usually gets messy if done, so its also simpler to just be transparent to all involved of exactly what the situation is.  

It also could be in the buyers interest if they are offering low and hoping for a counter from the seller.  As "highest and best" eliminates all the back and fourth and gets right to what the buyer is willing to pay saving everyone time.  Buyers are normally prepared an have a top price they are willing to go when they make the initial offer.  If they are not comfortable in a bidding war they can always withdrawal or hold there ground at the original offer
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August 15 2013
It is not uncommon in a multiple offer situation for the Seller to ask the buyer to come back with highest and best offer by certain date.   Regarding the concern of the other offer.  You can request putting in a counter with escalation clause.   Basically, state in the event other offer bests your offer your offer will increase in increments of $XXX up to $xxx,xxx.  Proof of completing offer to be provided. ( they cant give you the agent or the buyer information - most just black it out.)  Most all contract have a 10 day inspection period & finance clause - If using cash and want to have appraisal done with purchase contingent you may need to write it in.   Best Wishes!
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August 15 2013
Your realtor is likely trustworthy. It is a requirement that the agent inform you that there is a multiple offer when other offers appear.

It would appear that this property is a higher value than originally hoped for, so you certainly need to establish your max price. Are you intending to sell it quickly, or repair it and then sell?

The agents working in the same office is probably no issue.

Your realtor is following licensing protocol and doing the correct move.

I recommend you be clear about your bottom line to make the purchase still work for you.
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August 15 2013
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I offer what I feel is appropriate for the home. If your REA is asking you to enter a bidding war with someone else, all buyers loose. Nothing good comes to buyers in a bidding situation.
Remember that the other offer could be non existent or it could be lower or higher than what you offered. I would not enter a bidding situation.
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August 15 2013
I know EXACTLY how you feel.  This exact thing happened to me when I was purchasing my home.  At the end of the day, if they don't close, they don't get paid anything.  You owe them nothing and you all you would have wasted was your time.  I feel that agents, especially buying agents, are trying to just get the deal done at the lowest price possible because they know that you aren't obligated to them.  They want to just make you happy.  I suggest you have a sit down with your realtor in a neutral setting to discuss your feelings about this situation because if you don't trust them, that's a BIG ISSUE.  I wouldn't involve anyone I don't trust in such a transaction.
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August 15 2013
Unfortunately in every profession there are professionals with high standards of integrity and there are others without the same qualifications.  Should you ever feel not easy working with your professional, I suggest finding one that is.  Personnel references works best.  As for your deal, we are in a market where properties are selling quickly and near asking prices so this very much sounds like a legit possibility.  Good Luck!
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August 15 2013
You're worried too much.

As Jarrid pointed out, if you truly were the only offer, they'd give you a counter offer, rather than bluff that there was another offer.

The problem with telling you there is another offer is that you might decide to go away. Sure, you really like it, and sure, you might be willing to pay more, but maybe you just don't want to compete. Poof! Now there are no offers.

I wouldn't worry about the agents working in the same office; believe it or not, we're not so tightly knit as to spend our time conspiring against our client's interests.

All the best,
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August 15 2013
You do not need to raise your offer. However it is not uncommon for the listing agent to inform all parties that there are multiple offers and give everyone the opportunity to submit their highest and best offer according to their desire to win the bid and of course their financial means. I would base my decision on what the market is telling me the property is worth and how bad I want that property. I would most certainly hire  my own inspector so as to insure my best interest was looked after. 
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August 15 2013
Definitely get a Home Inspection! You need to hire someone who is looking out for your best interest.
It is common practice to get a highest and best if more than one offer comes in on a property. You do not have to raise your price if you do not want to.
Also a cash offer is often preferred, because there is no required appraisal. So that will be taken into consideration, if the other offer is financed!
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August 15 2013
Hi there,
Most real estate agents are honest, this is what I truly believe.  I have been in the same situation with my buyers.  It is not a good position to be in when you have to go back and tell them that there is another offer on the table.  I will tell you this, properties are getting multiple offers and it is customary to tell all buyers to submit their highest and best when this happens.  To answer your concern about the agent bluffing so they could receive higher commissions, I don't think this would be the case. In the scheme of it all, the amount does not make much of a difference.  Your agent is correct about you or her not being able to contact the seller directly.  In the end, ask your self how much do you like the property? Is it a good investment at $280,000? What do the actives, pending and solds reveal about this price.  Also, you should get another inspection always, even if the seller has already had one, just make sure you pick a good one.  Good Luck, I hope it all works out for you :)
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August 15 2013
I agree with Carine, get your own home inspection, the home inspector is working for you, when you are paying for the inspector.

We buy and sell properties with other agents in our office, we want to get deals done, I do not believe that the agents would be colluding together to force the price up. It is illegal and immoral as all you know what, and their licenses are on the line here. If you feel there is an issue, speak with the Broker/Manager and discuss your concerns.

Best of luck to you,
Liz
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August 15 2013
This actually happens quite often. if you don't want to raise your bid then don't and if your offer is better than the other you will get the home.
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August 15 2013
if there was not a second offer and they just wanted you to raise your bid they would of just countered your offer with a different figure.  Often although not required agents will inform buyers of a multiple offer situation allowing all buyers to be aware "equaling" the playing field.

The seller can not counter both of you because what if you both except?...so he's bouncing the ball back at the buyers and then comparing there "new" offers. 

You don't have to raise your offer at all or you can if you choose.  Offers are not only compared on price but also terms keep that in mind.  I wouldn't doubt there is a second offer i've run into multiple offers 7 times with my clients this year.  The reason is the amount of buyers vs the available of listed homes which is resulting in multiple buyers competing for the same homes!!
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August 15 2013
This is a tough one considering your agent and the listing agent both work together. If you don't feel right about it then you need to make the decision that you feel most comfortable with. You don't want to end up with buyer's remorse. Also with regards to the home inspection, you should always get one for yourself and not rely on the seller's inspector. That way you know they are looking out for your best interest. 

Hope that helps! Good Luck!
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August 15 2013
 
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