Home Buying in Washington>Question Details

dbrownofdc, Home Buyer in Washington, DC

Agents claiming to have offers?

Asked by dbrownofdc, Washington, DC Sat Feb 9, 2013

Is it a common practice for agents to claim to have offers when they don't? I'm looking at a house that has been on the market for 70 days. The sellers' agent is saying that they have five offers. How likely is it that this is true? Could they be claiming to have offers in order to get me to come in high?

They have also not lowered the asking price one cent since listing!

Thanks

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16
Agency law dictates that we must follow the direction of the client, but can't lie on the behalf of the seller. Transactional brokerage states probably dont have to follow the seller direction since they dont work for the seller but the transaction. thats a rant I have made elsewhere. First question is to ask that listing agent did his client get authorization to share that information with you. As a listing agent, I would not want to let a seriously interested buyer walk because some dont want to get in a bidding war. Inversely, what if he didn't tell you when you wrote the offer and home went to another buyer? That happens too. A buyer writes an offer, and seller responds with another buyer offer accepted without a chance for your final and best. Everything is supposed to be based on the seller direction. Our code of ethics says we have to treat all parties honestly, not fairly. So in a normal exclusive or designated agency situation your agent can find and work toward you gaining advantage as a buyer, again unlike transactional brokerage where each agent advances the transaction not either party .

DC is a hot market from what I've read, likely to expect competition on the "good" properties and be prepared to go in over asking price. Ask your agent to run a buyer CMA for that house and maybe its underpriced, and the 70 market time reflects thanksgiving to christmas lull.

If you like my answer, thumbs up and best answer me, thx!
1 vote Thank Flag Link Sun Feb 10, 2013
Why would you think otherwise?
If you are looking for a conspiracy behind every tree, YOU WILL FIND ONE.
The reality may be there is an offer the seller will be considering.
The agent is giving you an opportunity to be noticed.
The agent is indicating that a low-ball may not serve you well.
The agent is indicating the owner has not signed the offer.
The agent is indicating the opportunity to buy this home will not last forever.
The agent is suggesting, if you are a buyer, you need to get in the game.
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Now.let's put the shoe on the other foot.
What about the one who HAS submitted the offer, the one you assume to be fake.
They may present a question, "IF I've submitted and offer, is it 'right' for the agent to collect other offers?" This buyer who actually submitted an offer, a real buyer, can suspect a conspiracy behind every tree, concluding that receiving additional offers will result in a 'Highest and Best" ultimatum. So, to this real buyer, you are the fake player!
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You can't have it both ways.
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One waterfront listing gets floods of offers on a cyclical basis. Feast or famine. It's uncanny. If there is one offer, there will be two more. Yes, it has been on the market more than 70 days. Maybe the price will be reduced. It is more likely it WILL sell for 99% of current list price. At waterfront price points the wait is economicly justifiable.

Sincerely,
Annette Lawrence, Broker/Associate
Reamx Realtec Group
Palm Harbor, FL
727.420.4041
http://RealEstateMadeEZ.us
Movie Tour
http://youtu.be/g1H-_ny-Mnk
1 vote Thank Flag Link Sun Feb 10, 2013
For a listing agent to claim there are multiple offers on a property when in fact there are none, would be playing a very serious game with the seller being the real loser. Many potential buyers walk away from multiple offer scenarios. This is aside from the fact it is totally unethical.
1 vote Thank Flag Link Sun Feb 10, 2013
I really don't think it is common practice. There is no way of verifying but I would hope the agent is honest and upfront and not just trying to get you to go in high. You answered my first qiestion which is if they had just lowered the price. Are you workign with an agent? Does your agent have an experience with the listing agent? You need to go with your gut and offer what you can live with - low enough that you won't regret paying too much and high enough you won't regret if you don't get the property. I would go in with your best offer and not try to go low and wait for a counter offer though.

Godd luck!
1 vote Thank Flag Link Sat Feb 9, 2013
Hello dbrownofdc,

Its unethical if it is not true. There is a possibility the offers have presented to the seller, and the seller may not have agreed to any... at the moment. I know it is odd and unusual, but it does happen.

You could ask your agent to present the offer to the seller in person

Good luck
0 votes Thank Flag Link Tue Feb 19, 2013
Not common practice and very unethical.
0 votes Thank Flag Link Fri Feb 15, 2013
With more buyers than there are homes for sale, it is common to get multiple offers. When looking at dom it goes through Thanksgiving and Christmas when most homes dont sell no matter what they are priced at. Having a good buyer agent who can guide you through teh process and assess what the home is worth in todays market and base your offe ron that. In this market you may need to make your best offer first becuase you may not get a second chance.
0 votes Thank Flag Link Sun Feb 10, 2013
Hi DBrown,

No is not common practice and is extremely unethical to do so. 70 days on the market is not so bad, depending on exactly where the house is. If you can give us the address, we can look up the history of the listing to see what changes have been made to it. It's possible this house was on the market before, expired and they listed it again at a lower price then just sat there for a while.

This can also just be a quirk of the market. I had listing in DC that went for 3 months with nothing, no showings, no offers and then....boom! In one week we had four offers. We're still scratching our heads over that one, because the offers all came in during the holidays which are typically a slow season.
0 votes Thank Flag Link Sun Feb 10, 2013
I'm not sure why an agent would lie about something like this. Do you think they are trying to push you to make an offer?

If you want to make an offer because you like the home, do it. If not, don't. It's pretty much that simple.
0 votes Thank Flag Link Sun Feb 10, 2013
Ask the listing agent when the offers are being presented to the sellers and put an expiration clause in your offer for the following day.

You're asking questions that can be resolved by any competent realtor. I'm curious to know why you're not working with a realtor who represents your interests. The services of a realtor are free to you as the buyer. The listing agent will collect the entire listing commission (by listing contract) regardless of whether or not you are represented.

If the house is in the DC metropolitan area and it's been on the market for 70 days, it's overpriced. Possibly, if the price is above $1.5M, it may not be overpriced. In that price range, houses simply take longer to sell.

Santiago
202 552 5624
testa@testarealestate.net
0 votes Thank Flag Link Sun Feb 10, 2013
No, it would be unethical for the listing agent to claim to have offers if he/she does not. Your agent can make the listing agent prove those offers exist if you feel that is necessary. He is under no obligation to reveal offer price, however.

I don't want to misunderstand your use of the verb. Are you saying that they seem to be collecting offers? Your contract can specify duration if you require a response from the seller within a certain time frame. This is not a good strategy to use with banks (REO or short sale) as they will let it pass if it doesn't suit their agenda. In a multiple offer situation the listing agent will usually go back to all offers and ask for best and final. Do you mean the agent has said there were five offers but implied none were worth following up on?

Don't chide the seller for not lowering the price, you may resent the question when you're the seller. It can seem like an act of desperation to chase the market down with the result being buyers sitting back waiting for more price drops. If there have been five offers, chances are you're not going to see a price drop (not that your offer wouldn't be for less) since the property is getting attention.
0 votes Thank Flag Link Sat Feb 9, 2013
If the property is bank owned, the listing agents are often required to leave the property on active status for x number of days or until execution is finalized. If the property was located in South Florida my response would be that the agent just "forgot" to place it on pending sale status.
0 votes Thank Flag Link Sat Feb 9, 2013
Good questions, dbrown.

It is not common practice for agents to claim to have offers when they don't. It is virtually certain that they have five offers. While it is possible that they are lying to you, isn't there also the risk that by lying to you that they might chase you away?

All the best,
0 votes Thank Flag Link Sat Feb 9, 2013
Are you working with an agent? If you are, you should have your agent ask when the seller will be looking at all offers. It might be possible that the agent has other offers on the property but the seller is waiting to see if they can get a higher offer. Also, is this particular property a bank owned property or short sale? If it is, the bank might take a long time until they give an answer regarding offers.

A listing agent can suggest and recommend to a seller to lower the price of a property that has been on the market for a while but it is up to the seller to decide whether or not to lower the price. The listing agent only works for the seller and must follow the seller's instructions. Again, if you are working with an agent, your agent assist you with this by talking to the listing agent. It is really in your best interest to have a real estate agent represent you, if you do not have one.

Michelle
0 votes Thank Flag Link Sat Feb 9, 2013
Hi dbrownnofdc. It is not a common practice to make false claims. Maybe the listing agent will be able to provide you with a reason for the unchanged listing. Is it a foreclosure, because it is possible they are in a bidding war?
0 votes Thank Flag Link Sat Feb 9, 2013
Nope. It's not a foreclosure. There was an offer very early on that fell through.
Flag Sat Feb 9, 2013
I need to have more information in order to better answer this question. If it is a short sale then I can understand why it is still on the market for the past 70 days. Short sales are contingent upon 3rd party approval which is usually the bank. Http://www.buyandsellnewhomes.com
0 votes Thank Flag Link Sat Feb 9, 2013
It doesn't matter if it's a short sale though. MRIS rules are that if you have a ratified contract with the seller then the listing must be changed within 48 hours. The bank gets no say so in keeping it Active. If you keep it Active while it's under contract, the buyer can report you to MRIS and you'll pay $100 fine per day that it's not changed.
Flag Sun Feb 10, 2013
It's a standard sale. DC7953378
Flag Sat Feb 9, 2013
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