Agents, Call to submitt offer and you are told that yours is not the only one?

Asked by Kurt Thomas, 81501 Mon Nov 26, 2007

It must be the local market here but I am curious if any other agents/brokers experiance this same scenerio.
A property is on the market for 30 or 60 days, you get your buyers in and they like it.
The offer is written and you call to let the listing agent know that an offer will be coming his/her way.
They then tell you "oh o.k., I am supposed to be getting 1 or 2 more contracts on that property today as well"
My gut feeling is that they are not telling the truth, only trying to create a false sense of urgency in the home.
Out of the last 10 homes I have worked with buyers on I would say that 7 of these have played out to be the same story I told you above.
Some are accepted, some want more money and the buyers decide to keep shopping around, the funny part is that the same home with all that activity and offers will still be active and on the market for weeks afterwords.
Does anybody else experiance this? If so how do you handle it when you are told this?

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21
Jackie Blank…, , North County, SD
Mon Nov 26, 2007
BEST ANSWER
I just dealt with one like this, my clients were interested in a property and the listing agent pretty much would not answer any questions and he just repeated over and over 'submit an offer', When we were ready, he said there were 2 offers on the table. I think he didn't care what the offer price/terems were, he just wanted 'multiple offers' as a tactic to 'motivate' his best prospect. Sure enough, the property went pending and then 2 wks later, it fell out. He called me the day it fell out to resubmit the offer. Even during this call, he said he's got 2 other buyers very interested. My buyers didn't bite and it's still active after 40days of falling out! Hmm...

Another case, I was previewing a property for a client and the agent doing the open house said the sellers just moved out and they are very motivated as they did not want to make 2 mortgages. So I showed the property the NEXT day and they liked it even though it was little futher out than they had originally wanted. I felt that it was a good property at a good price if the sellers were motivated. When I called THAT afternoon, the assistant mentioned they had 2 offers on the table so the sellers probably won't negotiate on the price! WHAT? Either they were lying, withheld information when I asked or really received 2 offers in 24hrs. And oh, BTW, it's still active! So I had to make the call of shame to my buyers and they weren't interested in going any further with the property. So now, before I show any property, I call and specifically ask if there's an offer and/or if they are expecting one. Right now, unless the property is something AMAZING, there's no need for buyers to compete with multiple offers, there are so many ones just like it available. I understand that the agent's job is to do the best for their sellers, but whatever happen to professional courtesy?
2 votes
Jim Walker, Agent, Carmichael, CA
Mon Nov 26, 2007
I have dogs. If I am making lunch they are usually content to watch me from where ever they are sitting in the other room..

As soon as one of the dogs walks over to the kitchen to take a closer inspection. ,, the other one hops up and comes over to watch too.

Kind of like people. They are interested only if someone else is interested first. If someone else is offering on a property it validates the notion that it is a "desirable" property. People will believe their hunches stronger if they know that other people think the same way they do.
3 votes
Ginger R., Home Seller, Massachusetts
Mon Nov 26, 2007
I have experienced this as a buyer. I watch a piece of land for more than a year. Theres is no activity. I finally make an offer and more times than not, I am competing against multiple offers. These are real offers because I know the parties involved. I also know why there is a football pile up when I finally make the offer: the listing agent calls all other parties who have an interest but have been sitting on the fence for months and tells them there is an offer on the table. Nothing wrong with this - the listing agent is trying to get the best offer for the client.
So here's my theory on the current phenomenon:
I'm sure that in some instances this is a ruse. But I believe that in some locales, we have some pent up demand, while buyers are waiting for that ephemeral market bottom. They have their eye on a house, but feel they can wait, since they think that in today's market it isn't going anywhere. They sit on the fence until they hear that another offer is in the works. Since we have a higher percentage of "fence sitters", we have a higher percentage of multiple offers on properties that have been on the market a while.
Not true in all locales but I think it's true in mine.
3 votes
Jim Walker, Agent, Carmichael, CA
Mon Nov 26, 2007
This has happened to me about a dozen times as a listing agent in the past decade +.
So though not typical, it isn't rare either.

Six weeks go by with just a smattering of showings, not even a nibble, I start to rehearse my speech that I will have to give my seller on Monday on why a price reduction may be needed even though the house is in best condition and / or at the lowest price...., and then boom... 3 offers come in within the same 24 hour period, on Saturday - I did all that rehearsing for nothing!

Yeah, it feels wierd. but, it has happened to me over and over again. In slow markets more than the boom times - Boom times the multi offfers either came in the first week or they didn't' come.

I have always offered the buyers agent to be present in multi situations, at their option. I have always felt it to be in the sellers interest to NOT create a sense of urgency. At this point I would prefer to slow things down and ask all the buyers to read the RETDS, and other reports , (NOT asking them to waive the reports, JUST read them.) , fax over their preapprovals, Only buyers who enter into a contract with they eyes wide open are desired.

The last thing that I want is to have an anxious buyer overbid at the outset, get cold feet and cancel "because they felt rushed into it". In the meanwhile, the 1st two buyers may have found other properties or talked themselves out of mine after having lost in the bidding.
3 votes
Sylvia Barry,…, Agent, Marin, CA
Mon Nov 26, 2007
Personally I have not encountered that.

However, several times in our office meeting reporting weekly sales results, a realtor will say that their listing just received 2, 3, 4 offers; and yes, all within the last days or two and all after the house sat on the market for a long time. They themselves could not believe that, but it's true, it can happen.

As they are all very ethical (my office is famous for that) and were just reporting sales status, I will have to say that it does happen.

Just like anything else; if I am really worried, I will ask the listing agent if they have offer "in hand"; that usually clarify the situation. A lot of times a buyer's realtor will say that their clients may bring an offer in, but never really happened. Buyers do change their minds.

Sylvia
2 votes
Fred Kissin…, Agent, Sparks, NV
Mon Nov 26, 2007
Kurt, I agree with Michael. Tell your clients that you were told another offer was being submitted and let them make the decision to increase or not. I also give them my "gut" feeling as to whether it is a ploy by the listing agent to increase the offer. In my last 2 transactions I had your exact scenario occur. One had been on the market 93 days the 2nd 102. In both cases we did not change our offer and they were both accepted. One was 30,000 less than listed and included seller paying closing cost.
2 votes
Irena, , Newton, MA
Sat Jan 19, 2008
It happened to me twice last year.
One was bank owned and they said there is another offer the moment I talked to them. Client insisted on his offer and we moved on. One year late same broker called to ask if we were still interested and dramatically lowered the price. When I checked the property history there was nothing about an agreement there. Long and behold my clients had moved on.

Second was listed by a salesman who knew all the agents except for me (in business 2 years). He said it at the showing to my buyers there are offers coming in today. Did not like the guy, I guess gut feeling, and told them not to worry ( I did fret over it later). Lucky the house was extended and will be probably listed in spring again.

But it is a really tough call to make when in the situation, and Elvis does make some very good points. (Go CB). What if there are actual offers and buyer looses the property over $5000? That is why buyers need us. We are there to educate, coach, negotiate and offer our resources and council.

And Jim’s analogy is just so good, could I quote you sometimes? I always consider people to be sheep, but hungry dogs could come in handy too.
1 vote
Alan May, Agent, Evanston, IL
Fri Jan 18, 2008
I think many of us have been on both sides of this issue.

When I'm confronted with it from the buyer's side, my advice to the buyer remains consistent. If you're in "LOVE" with the house, then we have to presume that the "other offer" is real... and treat it as such. Only you (mr. and mrs. buyer) can know how upset you'll be if you find that there truly was another offer, and you lost the house because you didn't raise your offer by $5,000, or make your offer as strong as you were willing.

If, on the other hand, you're only in LIKE with the house, then I would proceed as though there was no other offer. Give them the offer that you would have given as though you're the only offer, and see where it goes. But be sure that you'll be okay if the other offer proves to be real, and we lose the house by $2,000. If that happens, will you be okay?

I recently called a condo (that had been on the market almost 6 months, with NO price reduction) and brought them an offer from my client, at 80% of list. As soon as I called, I was informed that co-incidentally they had received another offer that very morning... (how about that??)... so we're in multiple offers. I don't know this agent personally, only by reputation, and her reputation isn't that "shiny".

So in my counsel with my client, I suggest that this may well be a phantom offer, and since we're not in LOVE with this condo, and we have other condos to choose from, we just allow our offer to stand with no changes. My client agrees. When I pass this information along to the listing agent, she's aghast.."does he understand that he's in multiple offers?", "Yes, he understands... the offer stands as is".

The listing agent calls me back no fewer than 6 times, lowering their price each time... our offer remains firm... no change... they chase the price all the way down to our price, at which point my client accepts. Do I believe there was another offer? NO! Can I prove it was a 'phantom offer'?... no. ;-(
1 vote
Carrie Crowe…, Agent, Southaven, MS
Tue Nov 27, 2007
Kurt,
Great question. There are a lot of us that have experienced this. I had it happen to me a short time back. It made my buyers nervous and they did feel rushed or pushed. The house did go under contract and sold within a matter of weeks, so I don't feel I was being scammed, however it did make the buyers uncomfortable.

I like the way you handle it Jim. You are very wise!!!!
1 vote
Sylvia Barry,…, Agent, Marin, CA
Mon Nov 26, 2007
You are right on, Jim, as usual.

The other thing is that because this is a buyer's market and a lot of buyers are looking for bargains; if they hear there are multiple offers, they might just get cold feet and disappear and then you ended up with one or zero offer. .

If I am the listing agent in this market, I will be very happy with one solid offer and my client should be too!

Sylvia
1 vote
Jed Lane, Agent, Petaluma, CA
Sat Jan 26, 2008
I agree with RCW that presenting your clients offer to the seller in person is the right way to do our job in representing the buyer. I have noticed im many aspects of life that people are like cattle. When I worked retai the store would be empty and then all of a sudden it would be jammed.
I want to point and I find it suprising that no one else mentioned it. If the agents we are refering to that are possibly misleading us are Realtors and members of NAR and local boards they have sworn to be fair and honest with all parties to a transaction. If you ask a direct question or the agent on the other side and they lie to you or mislead you they have committed an ethical breech and they should be straightened out ASAP. My mentor trained me to ask prior to submittal "Do you have any other offers at this time"? And "Have you been informed that anyone else is going to bring you an offer". If they say yes ask who the other agents are. It's a material fact for your representation for your buyer client to know who they are up agianst. Don't allow yourself to be lied to with out taking action against the licensee.
I also want to chime in with Jim Walker, as a listing agent many times I've had agents with buyers that are sitting on the fence about my listing ask me to call if anything changes. When anyone tells me I am receiveing an offer I am on that phone to the other agents to try to create a multiple situation and that is my job for my client.
Web Reference:  http://www.JedLane.com
0 votes
RCWessel & A…, , 60525
Fri Jan 25, 2008
I read most, but not all, replies to this post. I am surprised that no one mentioned presenting their offer in person. Yes, make an in-person presentation. The truth is that most agents have gotten Lazy. With all the modern conveniences available today, e.g., fax machines, email, scanners, and pda's, agents seem to have forgotten (?) one of the most basic tools in their arsenal.

When you have an offer, simply suggest the listing agent present any other offers at the same time. The code of ethics allows you to present, in-person, your offer to the seller. The code does not permit you to be present while your offer is discussed by the seller and listing agent. If the agent claims the seller does not want personal presentations, immediately ask for a copy of the written direction from their seller so stating this request. Chances are they don't have it. If you still encounter resistance, speak to the broker. Since time is of the essence here (they may be contacting their buyers while delaying you as long as possible) it is important to quickly resolve this issue. Be familiar with the code of ethics; if you are at an impasse with the listing agent and broker and have not received a reply in a reasonable period of time (3-4 hours in an offer situation), contact the seller, explain the situation, and proceed with your presentation.

This is my 31st year as a licensee, and I can remember many times driving back and forth to obtain counters and counter counters, ad nauseam, until midnight sometimes - just to get the deal together. I have also employed the tactic described above and never had a problem with my local board even though an occasional agent has filed a complaint, which was dismissed.
0 votes
Kim Marone, , Middlesex County, MA
Mon Jan 21, 2008
I also come across the same scenario many times. Now before I submit an offer I call to see if there are any other offers in or forth coming to their knowledge. So far so Good!
0 votes
Steve Ragghi…, Agent, San Rafael, CA
Fri Jan 18, 2008
I think this happens in all areas. I have had it happen to me as well. What I found works is that you explain to the listing agent that your buyer insists that you present the offer in person to the seller. At this point during your presentation, I would simply mention that you understand that there are multilple offers. One one occassion the sellers looked shocked and said that they only were told of mine. I would also explain to my buyers that this may be true and it may not be true, and let the buyers decide what they want you, the agent, to do as their representiive.

Hope this helps
0 votes
Trulia Roger, Home Buyer, Alameda, CA
Thu Jan 17, 2008
These days, I wonder if this scenario is due to timing (assuming the other agent is telling the truth). I've been watching my local market for a couple of years now, and informally it seems to me a lot of homes will stay on the market for a while with no offers, until the sellers get a clue and drop the price. In the meantime, they've gathered a crowd of buyers waiting for the price drop. When the new, lower price hits Trulia (or the MLS, or craigslist, or the newspaper), several buyers are ready to pounce, and the listing agent does receive multiple offers in a short amount of time.

I suspect I'm overthinking this and that Kurt's assumptions are actually correct, though.
0 votes
Christopher…, Agent, Hemet, CA
Thu Jan 17, 2008
I have had the same experience here in Riverside County, CA and actively watch those listings where this has happened. Some have sold....some have not. There still is competition within the market. Even with MANY homes for sale, the range and type homes that I am dealing with are very attractive to a "normal" home buyer and investors as well. When I first started experiening this, I felt the same as you yet, have found most situations where multiple offers have "suddenly" come in to be true. One aspect that I do find aggrivating is the agent who leaves as active with an accepted offer....sometime multiple and then, when you present and offer, more have "suddenly" come in. I have found that speaking with the agent in advance, before viewing, after and before the offer, tends to give them the opportunity to be a little more truthful. In conversations with them, I also express my concern for this type of activity and my expectation that the listing is truly available. Be thankful that you have a buyer and understand that we will have a bit more "grilling" to do before spending too much of your, or your clients, time.
0 votes
J R, , New York, NY
Tue Nov 27, 2007
I agree Jim, for some reason when one offer comes in, a couple more are sure to follow. This happened with my last two listings. In two days, each had 3 offers.
0 votes
Lisa Hunt, G…, , Hutto, TX
Tue Nov 27, 2007
You might avoid this by contacting the listing agent prior to showing the property and inquiring about if it is currently available and/or are there any offers on the table.
0 votes
Sylvia Barry,…, Agent, Marin, CA
Mon Nov 26, 2007
I think you are right, Ginger That's why I tell lmy buyers not to wait too long if they really like something. My advise is that they should just go ahead and make a low offer and see if the seller will aceept that.

A smart lising agent should always ask their sellers to counter back if the offer is low but keep the offer alive.
0 votes
William, Home Seller, 18951
Mon Nov 26, 2007
Kurt - thank you for this post. We have friends who were interested in 3 homes, all on market for a long time - and on each one they were told offers were coming in as soon as they expressed interest. Tough position for an agent - no way to tell if they're lying!

I certainly would appreciate working with a realtor like Fred who would tell me their gut feeling if they thought it was a manipulation tactic - this is the type of experience and negotiation help I would expect from my realtor!
0 votes
Aileen-Manha…, , New York, NY
Mon Nov 26, 2007
Yep. I've come across this scenario... when it happens I lose all professional respect for the agent. I try and not jump to conclusions, but when it's clear the agent lied about competing offers... I'll just say it's a small community, even in NYC.

I inform my clients of other alleged competing offers, give my professional opinion and let them make the decision of whether they would like to walk away or continue.
0 votes
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