Phantom offers
A few times a month, I get a comment about an entry that has been hanging around in cyberspace for months. About a month ago, DBL wrote this about last year’s bidding war poll results (three pages, 1, 2, 3.)
DBL wrote:
This poll is interesting. I think it points to some unethical practices by real estate agents. Doesn't seem suspicious that it is only buyers who are experiencing multiple offers (80%) and not sellers (only 9%)? I've been trying to buy a house in Ohio and have made two offers. Each time another offer has miraculously appeared. I think these are phantom offers to get buyers to put in a higher bid. In one of my cases, I think the other offer was legit - but that deal hasn't closed yet - so we'll see….
Are the other offers legit, or do brokers make them up?
I want to hold brokers accountable for their claims that offers are coming in. I need your help, house hunters. If you are hurried by a broker who says another offer is in, I want to know. Please note it on my survey. If no offer gets accepted, I will see it. I will report on these offers, real and phantom, for the rest of the spring season.
Now, to answer DBL’s question.
Why is it that a house can be sitting on the market for months, and then once one offer comes in, others follow?
That one is easy. When an offer comes in, not matter how low-ball it is, a good seller’s agent will call everyone who had a whiff of interest to tell them. Like the popular kid in high school, a house with an offer on it is more attractive because someone else wants it, too.
Follow up question:
Can a broker just write an offer of $1 and say there is an offer in? NO. It needs to be a real offer from a real buyer (no matter how weak the offer is.)
So, if you think that some seller’s agent made up an offer just to get you excited, let me know. Click Here to take survey
My advice to buyers: When faced with a hurry-up, your response should be to quiet down and think about the house objectively. Just because someone else may want it, does not make it a better house for you. Try to resist reacting to your fear of losing this house and focus on whether the house is something you want to try for. You are still in control. You do not have to buy that house. If you go forward, keep to your negotiation plan and top limit. Since Day-1 on this blog, I have warned against making the EBay mistake.
