Replies (74)
- 2 Big 2 Fail
- Contributions:11480
I have seen lots of realtors use phantom bids. And forget it, they will always exist and there is nothing you can do to eliminate phantom bids from the system.
- caliguy
- Contributions:1283
Same thing as any other salesman pulling the "I can only guarantee this offer today!" and the "someone else is interested and is coming the afternoon. If you make the offer now, that's the only way to ensure you get it, since you were here first."
As Alpine said, there isn't a realistic way to completely eliminate this kind of sleazy selling. As long as you don't let emotion override reason in your financial decisions, you should be OK.
As Alpine said, there isn't a realistic way to completely eliminate this kind of sleazy selling. As long as you don't let emotion override reason in your financial decisions, you should be OK.
- BossGuy
- Contributions:304
Errr... I sure wont say that. Its totally unethical and illegal. Would you allow Enron to exist knowing it was built on fraud. The days of Phantom bids are numbered..
- Space Acer
- Contributions:625
Well Im shocked at sucn umprofessional behavior...
- mumbletypeg_mario
- Contributions:86
This is completely common, I think. Even had a seller's agent try this one on us. Told him to accept what ever the other bidder was going to counter with because we weren't going to change our offer.
Funny that the other bidder didn't change their offer either.
It is a really stupid thing to do with people that have good bullsh*t detectors.
Funny that the other bidder didn't change their offer either.
It is a really stupid thing to do with people that have good bullsh*t detectors.
- Space Acer
- Contributions:625
Good one Pot ... i hear the comments all the time...
You can feel sorry for the fool who falls in the trap...
After one or two repeats ( god know how many in total)
the areas are now tinted with inflated prices.
This makes any local region (your or mine ) subject to doubt.
Do you really believed for example we had a electricity shortage
back a few years in Northern California? It turned out to be
Enron pulling the switch, and juicing the consumer all for the sake
of greed. Greed ... surly my favorite sin!
If so common, then we are in very big trouble because the cool aid
wont wont last. For every bubble you will find fraud behind it....
Count on it!
You can feel sorry for the fool who falls in the trap...
After one or two repeats ( god know how many in total)
the areas are now tinted with inflated prices.
This makes any local region (your or mine ) subject to doubt.
Do you really believed for example we had a electricity shortage
back a few years in Northern California? It turned out to be
Enron pulling the switch, and juicing the consumer all for the sake
of greed. Greed ... surly my favorite sin!
If so common, then we are in very big trouble because the cool aid
wont wont last. For every bubble you will find fraud behind it....
Count on it!
- Kary L. Krismer, "Krismer"
- Contributions:2443
I've never seen one, but commented in another thread about how it doesn't really affect me if another agent says they expect an offer in.
I did say in the other thread that if an agent asks if I have any offers coming in, and someone has said they'll be sending one, that I'll say something like: "Yes, I'm supposed to be getting one in, but it's worth the paper it's not written on."
Maybe phantom bids are something agents do against non-agents.
Oh, correction! I did have one once. The agent thought another bid was coming in because she'd also spoke with my wife! :-D
I did say in the other thread that if an agent asks if I have any offers coming in, and someone has said they'll be sending one, that I'll say something like: "Yes, I'm supposed to be getting one in, but it's worth the paper it's not written on."
Maybe phantom bids are something agents do against non-agents.
Oh, correction! I did have one once. The agent thought another bid was coming in because she'd also spoke with my wife! :-D
- BossGuy
- Contributions:304
And I quote...
The incoming head of the Toronto Real Estate Board has come out swinging against phantom bidding tactics after denying they even existed when she ran for the job three months ago.
“It’s dirty realty, it really is,” Maureen O’Neill said of agents who fabricate offers during bidding wars. She is now calling on the Real Estate Council of Ontario (RECO) to yank the licences of agents convicted of using phony bids.
The incoming head of the Toronto Real Estate Board has come out swinging against phantom bidding tactics after denying they even existed when she ran for the job three months ago.
“It’s dirty realty, it really is,” Maureen O’Neill said of agents who fabricate offers during bidding wars. She is now calling on the Real Estate Council of Ontario (RECO) to yank the licences of agents convicted of using phony bids.
- Alan May
- Contributions:4381
>>yank the licences of agents convicted of using phony bids.<<
I totally agree... the practice taints us all.
I totally agree... the practice taints us all.
- Kary L. Krismer, "Krismer"
- Contributions:2443
BTW, again I've never seen this, but if another agent says they have an offer in and they don't, they're probably more likely to discourage the buyer making an offer at all.
I really don't see this as being a major issue--at least when it comes to agent to agent dealings.
I really don't see this as being a major issue--at least when it comes to agent to agent dealings.
- BossGuy
- Contributions:304
Kary some background on me...
In mid 2004, I took the first step and went to few open houses to get my feet wet. It was common to hear from realtor saying "we expect multiple bids, put in your best offer"
I contacted a well know realtor firm in the SF Bay area. Met an agent and we started to chat. Pretty much within 10 minutes he tells me... "there are multiple bids in the market, therefore you must bid higher by number of other bids times 1.5%, 10%. Ok I said. ( as uninformed and naive I was back then)
After a 3 weeks of open houses. I found a SFR I was interested. When my agent and I sat down to write the offer, he informs me of 7 other offers are are also being submitted. But did not mention how much. The impact was offering 10% above asking. The asking was $400K, therefore my offer was over $440K. My offer of $440K was accepted. Within the week I was to sign the final contract, my employer announced we were to be acquired. Well for me, all bets were off. I backed out and did not sign the contract. I had my deposit returned. Fair enought.
That may have been the end of it, however then I found the home I bid and won, actually sold for $390K per Domania, $10K below asking. I was floored! What the 'you know what' I asked. Where were the other 7 bids?
I called my realtor asking for the reason behind all this. He was not helpful and frankly broke contact with me. That was it! I asked around a few people I knew who sold their homes about multiple offers they may have recieved. Pretty much all said, they were only given one offer, which they were told was the highest. In one case, the seller had only one offer which was nearly 15% above asking. Yes only 1 offer after one month on the market.
In mid 2004, I took the first step and went to few open houses to get my feet wet. It was common to hear from realtor saying "we expect multiple bids, put in your best offer"
I contacted a well know realtor firm in the SF Bay area. Met an agent and we started to chat. Pretty much within 10 minutes he tells me... "there are multiple bids in the market, therefore you must bid higher by number of other bids times 1.5%, 10%. Ok I said. ( as uninformed and naive I was back then)
After a 3 weeks of open houses. I found a SFR I was interested. When my agent and I sat down to write the offer, he informs me of 7 other offers are are also being submitted. But did not mention how much. The impact was offering 10% above asking. The asking was $400K, therefore my offer was over $440K. My offer of $440K was accepted. Within the week I was to sign the final contract, my employer announced we were to be acquired. Well for me, all bets were off. I backed out and did not sign the contract. I had my deposit returned. Fair enought.
That may have been the end of it, however then I found the home I bid and won, actually sold for $390K per Domania, $10K below asking. I was floored! What the 'you know what' I asked. Where were the other 7 bids?
I called my realtor asking for the reason behind all this. He was not helpful and frankly broke contact with me. That was it! I asked around a few people I knew who sold their homes about multiple offers they may have recieved. Pretty much all said, they were only given one offer, which they were told was the highest. In one case, the seller had only one offer which was nearly 15% above asking. Yes only 1 offer after one month on the market.
- BossGuy
- Contributions:304
2nd part of my comments.
More recently the sales volumn is down 50% with inventory nearly double in many parts. Walk into an open house and you still get the ... "we expect lots of interest". A coworker of mine recently purchased a home. He too got hit and was told to go above asking. He too was floored and started asking, "where did all these offers come from in the last minute" Fact is there were less than 10 sales in that area with nearly 4x more homes on the market than last year, around 90. We are still seeing further declines in sales with more inventory moving higher.
Thats pretty much it... I will wait until the market corrects for all the fraud baked into this bubble. The subprime is just one layer. The appraisal fraud and phantom bidding is the other more toxic layer. I dont think anyone wants to touch either in fear of setting off a "toxic melt down chain reaction".
When you get a change read the "Irrational Exuberance" by Robert J. Shiller.
The bottom of this market will be 120% of 1997 prices just to get back to fundemental in SF Bay Area. For other places it may be 120% of 2000 prices.
Prices in the long run only appreciate at rate of inflation.
More recently the sales volumn is down 50% with inventory nearly double in many parts. Walk into an open house and you still get the ... "we expect lots of interest". A coworker of mine recently purchased a home. He too got hit and was told to go above asking. He too was floored and started asking, "where did all these offers come from in the last minute" Fact is there were less than 10 sales in that area with nearly 4x more homes on the market than last year, around 90. We are still seeing further declines in sales with more inventory moving higher.
Thats pretty much it... I will wait until the market corrects for all the fraud baked into this bubble. The subprime is just one layer. The appraisal fraud and phantom bidding is the other more toxic layer. I dont think anyone wants to touch either in fear of setting off a "toxic melt down chain reaction".
When you get a change read the "Irrational Exuberance" by Robert J. Shiller.
The bottom of this market will be 120% of 1997 prices just to get back to fundemental in SF Bay Area. For other places it may be 120% of 2000 prices.
Prices in the long run only appreciate at rate of inflation.
- Kary L. Krismer, "Krismer"
- Contributions:2443
Bossguy, there's a form called an escalation clause that would have worked in the situation you describe (the offer for $440,000). Basically the way it works is you could have bid $390,000, but have your offer increased to the extent there are other offers. They have to show you the other offer for it to be implemented.
It really sounds like your agent wasn't doing a very good job representing you, which makes me wonder whether they were representing you. It was not that long ago that in Washington State, in the situation you describe, the agent would have represented the seller rather than you. Perhaps that was also the law in your state at the time.
Washington's law was very questionable and very bad, and thankfully it's been changed. I don't think there was any way the average consumer knew or understood on a timely basis that the agent that showed them 20 houses represented the sellers and not them.
It really sounds like your agent wasn't doing a very good job representing you, which makes me wonder whether they were representing you. It was not that long ago that in Washington State, in the situation you describe, the agent would have represented the seller rather than you. Perhaps that was also the law in your state at the time.
Washington's law was very questionable and very bad, and thankfully it's been changed. I don't think there was any way the average consumer knew or understood on a timely basis that the agent that showed them 20 houses represented the sellers and not them.
- Kary L. Krismer, "Krismer"
- Contributions:2443
BTW, it's a fallacy that prices only increase at the rate of inflation over the long term. There's no reason on earth why that should be the case.
I can prove that by making the following statement: Over the long term the price of oil will only increase at the rate of inflation.
I can prove that by making the following statement: Over the long term the price of oil will only increase at the rate of inflation.
- BossGuy
- Contributions:304
Kary... it was one offer and one offer onely per the realtor! Well in California they dont tell you what the other offers are. I doubt there were 7... more like one other under asking. This is all standard operating procedure.
I suggest you check Gary Shillings book on Irrational Exhubernce,
I suggest you check Gary Shillings book on Irrational Exhubernce,
It is not SOP in CA. I have neither done, nor have my clients been victims of, phantom bids.
- BossGuy
- Contributions:304
Marci - There are no checks and balances. There is no internal control in the matter.
- BossGuy
- Contributions:304
When you have no control over human behavior, emotions like Greed
are let out... In many well known corporations internal control keep
peoples behavior in check. It also comes down to ethics.
I do recall the problem of ethical behavior back in the Savings and Loan
Crisis, Wall Street and other issues back in the 80s and then later with tech and Wall Street in the 90's.
are let out... In many well known corporations internal control keep
peoples behavior in check. It also comes down to ethics.
I do recall the problem of ethical behavior back in the Savings and Loan
Crisis, Wall Street and other issues back in the 80s and then later with tech and Wall Street in the 90's.
- Rachel Pajaczek, "Seattle Agent"
- Contributions:438
BossGuy- you should report that realtor who lied to you.
Sorry that happened to you.
Sorry that happened to you.
- BossGuy
- Contributions:304
Report to who? provide what kind of documentation as proof?
My word against the agents? Who will believe who?
My word against the agents? Who will believe who?
- Jeri, "Aratinga"
- Contributions:439
We experienced that on the offer we made two months ago. We offered $670K on an asking price of $675K; the seller countered right back up to the asking price, and my agent told me that when he received the faxed counteroffer, the seller's agent had handwritten at the top, "Respond ASAP -- multiple offers expected".
We said, "O RLY?" and walked away.
House is still unsold two months later and asking price is now $659K.
PWND!
We said, "O RLY?" and walked away.
House is still unsold two months later and asking price is now $659K.
PWND!
- BossGuy
- Contributions:304
Exactly Aratinga... just imagine how many times that has been used over the past few years now. Have incomes risen 10-20% region wide year over year.
I saw a nice town home in a so so neighborhood back in 1998 at 189K,,,
by 2000 it went to 550K ,,, today its at nearly 750K.
Its more than just low interest rates and exotic loans driving these prices.
I saw a nice town home in a so so neighborhood back in 1998 at 189K,,,
by 2000 it went to 550K ,,, today its at nearly 750K.
Its more than just low interest rates and exotic loans driving these prices.
- joshsemerjian
- Contributions:10
I don't find it surprising that there are agents who poorly represent clients. In fact, I've heard stories where I would question whether they were representing them at all. The bar is set quite low to become an agent, and thus, it makes sense that not everybody maintains the level of service, integrity, know-how, and diligence as the best agents hold.
That said, there are ways to protect oneself if there is a feeling of being cheated. First, using an escalation clause protects one from overbidding. Also, it never hurts to ask to see the other offers in writing.
I hope this is helpful!
That said, there are ways to protect oneself if there is a feeling of being cheated. First, using an escalation clause protects one from overbidding. Also, it never hurts to ask to see the other offers in writing.
I hope this is helpful!
- BossGuy
- Contributions:304
Too late for escalation clauses. We are up 400% in 9 years.
Areas may well be too far peppered with inflated prices until
we have a much needed market correction to get back to
fundemental values.
Areas may well be too far peppered with inflated prices until
we have a much needed market correction to get back to
fundemental values.
- BossGuy
- Contributions:304
LOL What ever happend to... Buy now or forever be priced out...
- Kary L. Krismer, "Krismer"
- Contributions:2443
Price reductions are not evidence of anything, other than a reduction in price. Using them as evidence of anything is like pricing based on active listings. Even in the hottest markets you get price reductions.
- Aldreth
- Contributions:4226
"Price reductions are not evidence of anything, other than a reduction in price."
---OMG You figured it out! Ju R Sa Smert!
---OMG You figured it out! Ju R Sa Smert!
- Jarrod Chambers, "Gallo de fuego"
- Contributions:1943
If they cracked down on Phantom Bid Realtors around here, half would be gone. I know which agents use the tactic though. The funny thing is, most of the people who do this can't remember their own lies. When I catch them in a lie, I make it very uncomfortable for them. Maybe thats why they don't sell my listings. haha. ohh well.
Some realtors have multiple offers on "every" listing. I don't think so.
Some realtors have multiple offers on "every" listing. I don't think so.
- Kary L. Krismer, "Krismer"
- Contributions:2443
Jarrod, maybe it's a regional thing? Something has to explain why I've seldom had an agent tell me they have an offer in, and you see it all the time.
phantom bid
MIKE DONIA, veteran Toronto realtor
The secret’s out on phantom bids
Registry, open bidding needed to stamp out phony offer scams, some realtors say
http://www.thestar.com/News/GTA/article/256968
The incoming head of the Toronto Real Estate Board has come out swinging against phantom bidding tactics after denying they even existed when she ran for the job three months ago.
“It’s dirty realty, it really is,” Maureen O’Neill said of agents who fabricate offers during bidding wars. She is now calling on the Real Estate Council of Ontario (RECO) to yank the licences of agents convicted of using phony bids.
“Boot them out, we don’t need them in the business,” O’Neill said. “I don’t think these people should be allowed to sell real estate.”
Phantom bids can be used by selling agents to spark extra rounds of bidding or to spook potential buyers into rushing or raising offers. The practice is considered a breach of ethics under the Real Estate and Business Brokers’ Act of Ontario – administered by the Ontario council – and realtors who are caught can face hefty fines.
Bidding and bitterness
http://www.thestar.com/article/256092
Many in the industry will say – off the record – that selling agents are attempting to manipulate the process and scare potential buyers into raising or rushing offers with talk of bidders who may not exist.
They say there’s nothing to stop agents in Ontario from doing so because – unlike in Quebec – they are not obliged to disclose bid amounts to potential purchasers’ agents in an open process.
The lack of transparency means some competing bids, especially those that have been “faxed in” to the selling agent, can’t be verified.
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