HOW DOES A BUYER KNOW FOR SURE IF THERE REALLY IS A SECOND BID?

Asked by Rick, Sun May 11, 2008

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20
Deborah Madey, Agent, Brick, NJ
Tue May 13, 2008
Most Realtors are both honest and ethical. I won’t say most are stellar, dynamic, or outstanding in knowledge or going the extra mile. Only a few fit that bill. Most, however, give you a straight answer about what they know.

Yes, I have dealt with a handful of Realtors who pulled, or attempted to pull a fast one.

The odds are that if a Realtor tells you there are multiple offers, there really are multiple offers. As a listing agent, when asked, I will identify whether I have offer in hand, or a verbal indication of one to come. I also add the disclaimer, “Who knows if the promise of such will materialize. It may…or may not.” I don’t want to tell another agent that I am getting another offer for sure, because too often, the written copy never arrives. I also don’t withhold info about possible offers, because sure as the sun comes up, that one will show up 15 minutes after I finish talking to the other agent.

There are agents, and buyers, who disassociate with a property as soon as there is an offer, because they don’t want to get into a bid war. Who knows if the offer in hand is any good? I encourage all to submit their offer anyway. Don’t avoid putting in an offer because one is already there…..it might be low, it might have a contingency, or be weak in some other capacity. The sellers agent can’t tell you an offer is weak…..so, you don’t know.

For buyers, determine what a property is worth to you, and know your walk away number. Make your offer and it does not work, be willing to say, “next.”

For buyers, don’t assume that the presence of another offer is a reason to walk away without making your offer. Don’t let the frenzy of multiple offers force you into auction style bidding beyond the value you perceive in a property.

For buyers, don’t assume that Realtor is fabricating or imagining other offers. I have been in several situations in the last year involving multiple offers. More than likely, the Realtor is telling the truth.

Deborah Madey - Broker
Peninsula Realty Group
New Jersey
9 votes
Alan May, Agent, Evanston, IL
Tue May 13, 2008
Code of ethics..? .. didn't ex-Governor Eliot Spitzer have ethics....?
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No, apparently he did not.

There are unscrupulous people in every industry who do unspeakable things. Accountants, lawyers, doctors, priests, mechanics, politicians... the list goes on... Realtors are no exception to the list.

While you hold that "most" agents are bad, and "very few" think about ethics and fines, I contend that "most" agents are decent, and "very few" disregard ethics and fines casually.

As evidence you hold up a string (granted, I'm sure you could produce a full post full of them) of cases-in-point of illegal and unethical behavior. They are high-profile, and certainly terrible, and every ethical Realtor on these boards is mortified and embarrassed and would love to have all of those Realtors lose their licenses and purge the industry of their ilk.

Neither you nor I can prove, beyond a reasonable doubt, that we are correct. I'll concede... there are a lot of bad agents out there. Do your homework, don't just settle for the first Realtor that you hit, while swinging a dead cat. Find out something about him/her, get referrals.

If they prove to be a bad seed, please document the problems, and file a formal complaint, you'll be doing all of us a favor.
5 votes
Deborah Madey, Agent, Brick, NJ
Sun May 11, 2008
Elvis made good points, but there are times when it is beneficial for you, as a buyer to play in the auction style bidding vs. walking away.

Very few agents, or sellers will provide you a copy of another contract or offer. You can ask, but chances are slim that you will get it. Sometimes asking for things that another considers over the line can hurt you in other facets of attempted negotiations. So, tread lightly, there. As a listing agent, I would not release a copy of an offer. If my seller wanted to, I would note that it was against my advice.

You can gain insight into the situation by asking general questions… Is the other offer in house? What areas of concern does the seller have with the presented offer? How do you intend to handle multiple offers to ensure that all buyers are given equal opportunity and information? The more you ask about their needs, their intended process, and existing weaknesses, the greater your ability to gage if another offer exists, and if so, the possible merits thereof.

Here’s the point where I might disagree with Elvis, depending upon the property. There are times when a seller goes to market at an offering price under market value. This, even in a buyer’s market, creates demand and competition among buyers. If a property is listed at 350K, and comps support 400K, and you secure the contract over other bidders at a contract price of 372, is that a win? Just because you pay over the list, or over what another buyer offers, does not mean you made a poor decision. Study the comps, go in knowing your cut loose number, and give it your best shot.

Deborah Madey - Broker
Peninsula Realty Group - New Jersey
5 votes
Alan May, Agent, Evanston, IL
Sun May 11, 2008
In most cases, you won't know. And it makes it incredibly difficult to make an educated decision, when a major piece of information is missing.

tman's, suggestion to ask for a copy of the other offer is a good suggestion, but it will not be effective, as most listing agents (myself included) will not show you a copy of the other offer, due to privacy concerns, and if they WILL show you a copy, it would have any pertinent information redacted, making it virtually useless in identifying whether or not there truly is another offer.

The best defense against a "phantom offer", is to notify the seller, that you're withdrawing your offer from the fray. Let them know that "if and when" the negotiations are complete, to please let you know. If the deal doesn't work, you might be willing to come back and attempt solo negotiations, but otherwise you're not interested in being involved in an escalating auction-style negotiation.

If there truly is another offer... you're risking the home, and hopefully (with the inventory that's out there), it's not "THE one and only". If there wasn't another offer, they'll be back to you, and you'll be in a stronger position than before.

good luck.
5 votes
Alan May, Agent, Evanston, IL
Mon May 12, 2008
you're agents and you've become her pet project .. she writes, you answer inline .. she makes issue, you respond in favor.
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by the way... in this thread, it was just the opposite.

I wrote, she answered inline, I took issue, and she responded in favor. So does that now reverse your opinion, and Deborah is now MY pet project? I always wanted a toady.

Yikes!!! Duck!! Those look like mushroom-filled meteorites!!!!
4 votes
Alan May, Agent, Evanston, IL
Mon May 12, 2008
Be honest Elvis, you would agree if she posted mushroom filled meteorites would be hitting the Earth in 16 minutes ... why not.? you're agents and you've become her pet project .. she writes, you answer inline .. she makes issue, you respond in favor.
~~~~~~~~~~~~~~~~~~~~~~
and another conspiracy rears it's ugly head. I know I"m doing something right, when you complain, and invent a NEW conspiracy... apparently now I'm Deborah's lap dog.

Yes, I often agree with Deborah, due to her excellent answers, and clearly based on her almost 150 BEST ANSWERS, much of the Trulia community agrees.

But very nice "side-stepping". I guess, Deborah and I are now solely responsible for the loss of Realtor respect in the nation. Deborah is an excellent representative for Realtors in the public eye, and I stand behind and beside much of what she's said. And if that makes me her toady, so be it.

Yes, I ask for anything I can get... and if you'd copied the rest of the post.. you'd also note that I advocate NOT giving it. But I wouldn't be doing my job, if I didn't ask, and see if the other Realtor will cave.
4 votes
Alan May, Agent, Evanston, IL
Sun May 11, 2008
Agreeing agents certainly doesn't make it wise and questionably valid, at best.. ... it usually just means the consumer will pay a higher price.

Bids are shown all of the time, they might cross names and amounts on copies - but it's done every second of everyday ... If you can't see the paperwork, call the seller direct...
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It's interesting, somehow, in tman's fevered brain, how he sees a conspiracy to get consumers to pay a higher price, in the agreement of two independent agents, hundreds of miles apart, on how to handle a potential phantom bid.

One agent (me) suggests walking away from the deal so as to NOT pay a higher auction-style price, and somehow that's going to cause the client to pay more.

The other agent (deborah) suggests to "do your homework carefully" so that you can determine if it makes sense to "stay in the game"... and somehow that's going to cause the client to pay more, too.

While offers may be shown all of the time (apparently "every second of every day" according to tman), with all the information redacted (edited for publication by "crossing names and amounts out), the information isn't very useful...

If an agent is willing to be deceptive by telling you there's another offer (that doesn't really exist), what's to keep that same agent from "fraudulently counterfeiting an offer" since all the names and prices have been removed?

the only thing we agree on, in your last post, is "trust but verify"... unfortunately, in this instance, verification is very difficult.
4 votes
Alan May, Agent, Evanston, IL
Sun May 11, 2008
Here’s the point where I might disagree with Elvis
~~~~~~~~~~~~~~~~
We're not disagreeing. I agree with your method of "staying in" the deal. My advice was strictly for those that are concerned that there really ISN'T a second bid... who thing they're being "played". This is a way to ferret that out. You do, however, risk losing the home if there really IS another offer.

And if you believe there is a second offer, and you really want the house, Deborah's advice is valid (as always).
3 votes
Deborah Madey, Agent, Brick, NJ
Sun May 11, 2008
Hi Elvis...

Understood....yes, your comments are wise and valid.....as usual. :-)

Deborah
2 votes
Michael Cepa…, Agent, Tampa, FL
Thu Jun 12, 2008
Boy, this post went WAY FAR left. You don't need to know. The easiest way to prevent being put in a bidding war situation is to submit your offer as "Your highest and best" and be willing to deal with the results. Sometimes you win and sometimes you lose. You will always know that you didn't spend a penny more then YOU felt the property is worth, to YOU. No matter what it is listed for, what an appraiser says, what the CMA says, what anybody else says, you will always know you got the best deal. This way you, you never lose the right deal for you, you only lose that particular property. Good Luck
1 vote
Sylvia Barry,…, Agent, Marin, CA
Mon May 12, 2008
Hi Rick:

The Realtors I work with, when asked if there is another offer, they will say something like - No, I don't have one yet, or somebody says they are writing one but I don't have one in hand , or I have three offers now and another one says they may want to write, but I haven't seen that yet.

There is a distinct difference between somebody says they are writing vs. something they have already.

No, Realtors will not lie about whether they have another offer or not. They might have misinformation where a buyer says they want to write an offer, but then changes their mind (buyers remorse), but baring that, we tell it as what it is. We will not tell people the offering terms, but we will let people know how many offers there are (or not)

Why? Just want to give you a few reasons..

First, it is a violation of our code of ethics not to tell the truth (yes, we do follow code of ethics because we can't do business without abiding to the code of ethics). We either don't tell or if we tell, we tell the truth.

Second, there is a reputation involved. If we are the Realtor who do no tell the truth, we will end up with a reputation among our peers of being an unreliable Realtor. Believe me, none of the Realtors want to be in that position.

Third, there is no advantage to tell you there is another offer is there is none. This is a buyers market, and I have seen people shy away from writing an offer when they hear there is competition. So you might ended up losing an legitimate offer if you lie about having another offer.

On the flip side, if you wonder whether there are multiple offers now a days. Yes, even though it's a buyers market, we have seen many multiple offers when the listed price is very low - the most recent one in my office happened two weeks ago - nine offers on one house. The price was low, but not dirty cheap.

Hope this helps,
Sylvia
1 vote
Priscila Tei…, , 43212
Mon May 12, 2008
Scenario 1. considering second bid means second offer on a traditional real estate transaction. You will not know for sure if there really is a second offer. You would if all realtors would only tell facts. FYI: Listing agents have to disclosure multiple offer situation to all buyer's agent.

Scenario 2: second bid on a legitimate HUD home. BID done online via their own website. Yes, buyer will know for sure if you have the second bid and most likely your bid will be threated as a backup, in case the 1st bidder doesn't present docs within a certain timeframe and so forth... you can get more education online: http://www.nhmsi.com

Hope that helps!
1 vote
Bill Eckler, Agent, Venice, FL
Sun May 11, 2008
These tactics are a good reason to steer clear of dealing with this element..... There are so many opportunities involving homes that were purchased prior to 2003 when buyers bought for reasonable prices. These owners, that are truly motivated can potentially offer better deals than "short sales" or "foreclosures." And you don't have to deal with factions that disrespect buyers.
1 vote
Rosie Morot-…, , Miami, FL
Thu Jun 12, 2008
You will never know for shure, you just have to trust your Realtor and the Sellers Agent.
0 votes
Cindy Lee Ha…, Agent, Port Orange, FL
Fri Jun 6, 2008
Your realtor can find that out for you. Typically they (Your Realtor) will not know what the other offer is but they will be able to find out if there is another offer in or coming. The Listing Agent has a fiduciary dutie to his/her seller as does the Buyers Agent for their buyer. Not all information is available from the Selling Agent on other offers.
Web Reference:  http://www.cindyleenow.com
0 votes
Tman, , 30642
Tue May 13, 2008
>>>"No, Realtors will not lie about whether they have another offer or not>>>
>>>"The punishment for committing this type of action is quite severe">>>

Code of ethics..? .. didn't ex-Governor Eliot Spitzer have ethics....?

Then how about:http://www.rockymountainnews.com/news/2008/apr/07/brokers-li…

Or maybe:http://www.post-gazette.com/pg/07321/834721-54.stm

Perhaps: http://tracypress.com/content/view/12896/2242/

Lets not forget: http://blownmortgage.com/2008/03/17/realtor-magazines-30-und…

This only holds 4,300 characters, but you could fill it easily.. you certainly don't have to go far,just read the posts around Trulia.. the papers and the blogs are filled with "bad" agents doing bad things...
http://www.flippingfrenzy.com/2008/04/09/texas-real-estate-a…
http://www.flippingfrenzy.com/2007/12/04/high-profile-realto…
http://www.flippingfrenzy.com/2007/11/08/three-california-re…

Yes Sylvia, realtors do lie... I'm sure you're honest and forthright, but a large percentage of agents ~
lie1
(lī) pronunciation

I'm sure you have ethics .. and you also might be naive enough to believe that every agent out there has ethics ... but ethics are measured how.?

Did the agent "kinda" make up the story they had a bid.? ...

.. did the agent "kinda" forget the other buyer had to sell their other house in Alaska first ..?

.. did the agent "kinda" forget the other bid was based on getting 12 co-signers and getting the down payment from a grandmother that is in ICU...?

Did the agent "kinda" forget to leave their ethics at home....?

There is more consumers sitting in a house right now they can't afford because some agent "kinda" had ethics --- so lets stop the Playhouse 90...

Except for yourself and a few others, very few agents consider or even care about "potential" fines or any punishment, but the courts are filled with cases ... and now, more than ever, consumers have to be aware ... most agents haven't seen a commission check in months..

It's humorous .. Brokers are now paying "customer appreciation" checks in the thousands 15/20 months after a closing --- are they just sharing the "love"..?

Nope, they're paying settlement money so they don't end up in court and get their name splashed all over the community.


naive
(nī-ēv, nä-)Unsuspecting or credulous: “Students, often bright but naive, bet—and lose—substantial sums of money on sporting events” (Tim Layden).



: ^)
0 votes
Tman, , 30642
Mon May 12, 2008
>>>>"in the agreement of two independent agents, hundreds of miles apart" >>>>

OMG .l.o.l...

Be honest Elvis, you would agree if she posted mushroom filled meteorites would be hitting the Earth in 16 minutes ... why not.? you're agents and you've become her pet project .. she writes, you answer inline .. she makes issue, you respond in favor.

People thought more of you when you were an Independent thinker, not Deborahs poster pet from "hundreds of miles apart" .... now you wonder why Rick and other American consumers don't give much "street cred" to realtors anymore.?

This from your previous post:

>>> "I ask for anything I can get. I have asked for copies of other offers before, and they have been given to me....names and all.>>>


-
0 votes
Tman, , 30642
Sun May 11, 2008
Rick,

Agreeing agents certainly doesn't make it wise and questionably valid, at best.. ... it usually just means the consumer will pay a higher price.

Bids are shown all of the time, they might cross names and amounts on copies - but it's done every second of everyday ... If you can't see the paperwork, call the seller direct...

You'd be "stunned" on how many "bids" have a wonderful tendency to dissipate when you want action ...

Keep in mind Rick, it's easier to work the buyer than the seller ... no matter who your agent is.

You can trust, but **always** verify ... it will only save you thousands.!

-
0 votes
Tman, , 30642
Sun May 11, 2008
Rick,

Most times a buyer won't know ... and pushing the emotion button on any potential buyer is a trick used everyday.

Ask the agent for the contract dated and signed ... if there is nothing to hide, then it won't be a problem.


: ^)
0 votes
Dianne Dibley…, Agent, Port Orchard, WA
Sun May 11, 2008
Ask the listing agent, if there is competition, an escalation clause works well, you can cap your max bid, you have a good chance of beating any other offers, if accepted the other offer you beat will be included when you get a signed around offer showing what you beat. Talk to your Realtor
Web Reference:  http://www.diannedibley.com
0 votes
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