How to tell if the multiple offer is true or just a gimmick?

Asked by Mellokitty, San Francisco County, CA Fri Feb 3, 2012

In a couple of instances when we make a bid on a house that's being sitting on the market for month, there were miraculously another competing offer showing up the same time!!! I did some research online and that seem to be the common tactics listing agent used to raise the sale price. I know by the law of probability that it couldn't happen so often. So my question is how to decipher between a real multiple offer and a fake scenario. Thanks. I hope all the listing agents won't took offense at this question.

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John Sacktig, Agent, New Jersey, NJ
Fri Feb 3, 2012
Mello –

Multiple offers: It happens more than you think. Ask 1000 realtors. I can have a listing sit for 3 months with nothing.. then boom. One offer, two offers three offers in one weekend. ( probably as a result of my great advertising)

You think I want 3 offers? (Of course I do) But No! It is a pain in the butt! All three of those people sound just like you and I have to deal with all the whining. And no. You cannot see the other offers. It is between the seller and listing agent.

What you should do is be focused on the house and what you would pay for it. Make your best offer and be satisfied that you made your best offer if you lose it and walk away. Hopefully your agent is good and can give you the recent comps and analyze the market and help you come up with an intelligent offer.

I think your “research” is baloney. I can’t find anything out there that reads anything about listing agents using this imagined “tactic” it would be stupid. How so John?

Do the math. If a house is sold at 400k @ 5% that is $20,000. commission overall At 405k = $20,250. At 410k=$20,500. After the agency split of 50% ( example) the agent stands to make a maximum of $250 by increasing the offer up 10k.

Really? You think an agent is going to risk a sale and possibly losing their license for $250?

Now, be realistic and make a realistic offer on a house that will be accepted.
7 votes
Sometimes a buyer makes an offer and the sellers doesn't make a decision on that offer, but instead requests the buyers best and final offer. Unless there are multiple (essentially matching) offers then this is an example of what Melli kitty is talking about. The reason is simple. What the agent is doing here is implying that there are multiple equal offers. Otherwise the seller would simply make a decision on the best offer received. Below is a link where John is explaining the idea of best and final offers. John - you acknowledge that best and final offers are part of the realty business but deny that agents Pretend that there are multiple equal offers to drive up the price - can't you see that these 2 things are actually the same?
Flag Mon Apr 24, 2017
John I'm disturbed about your answer, and you called yourself a good realtor? "Do you think I want to deal with whining people like you", what kind of comment is that ???
I gave an offer for a house here in nj.
My offer was accepted and while my contract was under attorney review, another offer was recieved. The house was sitting for 6 months and Now this offer appears at the same week. So it's kind of weird that another offer was just show up.
This is not whining, this is called frustration. I'm in this situation now and it's hard to believe it or not.
Flag Fri Feb 24, 2017
I could see someone faking an offer to increase the sale price for the seller rather than to improve their commission. But like you said, they're risking their license so it's probably not worth it.

The important question still remains; how would you suss out a phoney offer? I guess if you think it's fake, just play the waiting game; if it's real you'll lose ;)
Flag Wed May 11, 2016
wow - this is an ignorant post. the reality is, this DOES happen sometimes. i hope this post isn't coming from a licensed realtor
Flag Wed Mar 4, 2015
John Sacktig, Agent, New Jersey, NJ
Fri Feb 3, 2012
Offense? No. Annoyed yes... but not at what you think.

I sometimes get annoyed when a posting is presented "matter of factly" as if there is something to back it up.

You post an "active rain" blog as a reference, which is an opinion written by some guys Richard and Ralph.. that really does not say anything about making up multiple offers. It reads they were upset because the Realtor came back to negotiate again.. so what that means is their people lost the house.. then maybe the high bidders then backed out.. Or their deal was no good.. Whatever. Not because of make believe bids. Nothing but Richie and Ralphie wanting to look like good guys on the internet.

Your second link ( which you do not like to do) highlights a 2007 article that states that the real estate industry ranks at the bottom of a list that is of “prestigious jobs" List.... ranking under people that do charity work... Real Estate sales, not prestigious.. really? ( that is sarcasm)

So don’t be so quick to think that I am annoyed because you “hit a nerve” the nerve you hit was one that is agitated by people that really have no clue trying to clue people in to som.ething that they really have no idea about.

I get annoyed when people post things out of context. Did you READ anything you linked to? Did you comprehend what you read? I don’t think so.

I think you should start making realistic offers and buy a house.
6 votes
I hate real estate agents and you know why because they are very nice until they see the money, otherwise they would react exactly like this John here.
Flag Mon Mar 13, 2017
Mack McCoy, Agent, Seattle, WA
Thu Feb 9, 2012
- I know there are good honest agent but my experience also tells me there are plenty of bad agents out there doing some "flight by night" scams.

Maybe you need to associate with a better class of people.

I would like to point out that if this agents could raise the sales price by acting as if there were multiple offers where there were none, half of real estate consumers would rejoice (Sellers). And, if it worked, that'd be one thing, but it doesn't, so it's not.

Clearly, it doesn't work - YOU didn't fall for it. So one of two things happened: there were multiple offers, and somebody else got the property, or there weren't, and they're still available.
5 votes
I've put in three offers and won one. The one that I would. I had the lucky opportunity to increase my escalation. Can you imagine that I got the house for my max escalation and countered terms for repairs needed to secure a loan. Did I mention that the competing offer was placed by an assistant in the listing agents office. I countered with a 25k credit and no escalation.
Flag Wed Mar 22, 2017
"Maybe you need to associate with a better class of people."

REALLY? You're putting your name on such an insult? The original poster asked a perfectly valid question and you basically told him that all his friends are scumbags.
Flag Sat Dec 31, 2016
Mellokitty, Home Buyer, San Francisco County, CA
Wed Feb 8, 2012

The simply answer is "YES". Just like any other professions, there are good agents and there are bad. I know there are good honest agent but my experience also tells me there are plenty of bad agents out there doing some "flight by night" scams. BTW, I did read/understand the materials I posted, maybe you should do the same. Although, I do want to clarify one thing, the point of the US news link wasn't to degrade the real state agent as a whole but to point out the trust/prestige the general public place on real estate agents, a direct correlation to all the horror stories home buyer/seller experience over the years. IF you really want to argue about statics, then show me a study or a survey that give real estate agent as a group a high trust ranking or at least something to that effect. Otherwise, it's just all...........
5 votes
Sabrina Simp…, Agent, Moorpark, CA
Sat Feb 11, 2012
If you're concerned about multiple offers, you need to be also concerned with whether your offer was even presented to the seller. If you are working with a realtor, whether you are a buyer or seller (unless you reside out of the area), you should insist that the buyer's agent present the offer directly to the seller with the seller's agent present. This way the seller has an opportunity to ask questions directly to the buyer's agent and the buyer is being represented by their agent. If the seller counters to multiple offers, they will have a box checked on the counter that states the seller is countering to multiple offers. If the seller rejects your offer, they should be doing it in writing to the buyer. The California Association of Realtors Residential Purchase Agreement has an area specifically for this type of response. READ YOUR CONTRACT. You need to understand what you are signing. If you don't understand, have your agent explain it to you or have it reviewed by a Real Estate Attorney.
4 votes
Sabrina is absolutely correct!!! Too bad most the agents themselves don't even know those details and differences of the forms. You need to find a REAL GREAT REALTOR to know all those and help you professionally.
Flag Sun Nov 27, 2016
John Sacktig, Agent, New Jersey, NJ
Fri Feb 3, 2012
" I did some research online and that seem to be the common tactics listing agent used to raise the sale price."

Please post the links to the place that shows that creating/ making up multiple offers is a common tatic used by listing agents.. I would like to see them. The only thing I find is a few links to blogs of some frustrated people. Nothing that says that this is a common tatic amongst Realtors.. rather the words are written by a few frustrated buyers that are probably making unrealsitc offers and lost out.
4 votes
I have purchased 3 houses, and I have the same experience that Realtor lied about multiple offers. One stated another buyer offered higher after it was listed for 1 year and half and asked me to raise my price, i refused then they called me in 5 mins that I got the house. Another told me they had multiple offers after 2 months listing but wouldnt response to my offer for 2 weeks, then asked me to raise my offer, i turned down, then it was mine again. So in my experience, 2 out of 3, it doesn't appear thats a common tactic
Flag Wed Jul 16, 2014
John Sacktig, Agent, New Jersey, NJ
Thu Feb 9, 2012
O.k. whatever. Good Luck in your home search!

But before I go, a suggestion. Become a real buyer and make realistic offers on a home and buy a house.

Prices are at the year 2000 level.. like anything else, the market goes up and it goes down. The market is down now..and those that sit around will pay more for a home once the market starts rebounding and multiple offer situations arise.

Ther are plenty of realistic people in the world right now.. in my area seeing that homes are at prices from 10 -12 years ago and making great purchases. Be one of them or you can sit around and make stuff up. make excuses.

Take care and good luck!
3 votes
John Sacktig, Agent, New Jersey, NJ
Wed Feb 8, 2012
"usually its a gimmick"

Daniel, instead of just blowing smoke up our canals with your 4 word reponse... how about an explanation as to how and why this "gimmick" is implemented, how it works and who benefits? From your experience, of course.

Mello, from where I come from..I have pretty much seen a whole bunch of "three card monty" "Brick in a TV box" hello, electric company, automotive scams and many more. But really.. Those mentioned are scams been that have honed and crafted by not nice people. You really think that Realtors who earn their living selling houses would risk their licenses, that they pay good money for to attain, maintain and carry.. would risk it for a seller to make $5000 and the realtor to make an $250. in commission?
The stupidity of that thought is tremendous.
3 votes
What is the risk? As you mention above, there's no way the buyer can prove whether or not the realtor was telling the truth about multiple buyers. Sometimes realtor's are selling there own homes so, the make a lot more that 250 dollar commission. Other realtor's aren't licensed or just doing it part time so, they are risking very little to nothing.
Flag Mon Nov 7, 2016
What is the risk? As you mention above, there's no way the buyer can prove whether or not the realtor was telling the truth about multiple buyers. Sometimes realtor's are selling there own homes so, the make a lot more that 250 dollar commission. Other realtor's aren't licensed or just doing it part time so, they are risking very little to nothing.
Flag Mon Nov 7, 2016
Shirley Cheng, Agent, San Jose, CA
Fri Feb 3, 2012
Before any realtor is sworn in, we are all required to take a ethics class in order to prevent these kind of bidding wars and unethical dealings with buyers. Unfortunately, there are realtors that will play this type of game to bid the price up. Here is a general rule.... If the price is too good to be true, usually they probably are. Just know when to be firm and be ready to walk away.
Web Reference:
2 votes
Mellokitty, Home Buyer, San Francisco County, CA
Wed Feb 8, 2012
thank you all for the answer. Interesting to see that most, even including agents (except for 1 obviously) have seen this situation before. We're definitely sticking to our budget and won't get into emotional overbid situation.
1 vote
Mellokitty, Home Buyer, San Francisco County, CA
Fri Feb 3, 2012
John, it seems like you really did took offense, guess I hit a nerve there. Here is a link from one of your rank and file talking about this exact issue (and this link come from the 1st page from Google on "fake multiple offer" search term). I'm sure there is no national statics on this issue since most of those who commit this fraud won't report it and there is currently no real possibility of enforcement any way. But I'm sure a bit of research and survey by some reputable University will shed more light on this. Any how, you can said what you want and I can believe what I believe.…

I don't usually like to do this, but here is a link on least prestige career based on survey on US News. When you have a chance, go check out who is on top of the least list.
1 vote
Joan Braunsc…, , Morris County, NJ
Fri Feb 3, 2012
Listing agents who would use the tactic of making up offers in the hope of generating some sort of fake bidding war are their own worst enemy since its bound to backfire.
Unfortunately, they are also their sellers' worst enemy since its bound to backfire.
If any agent was proven to use this tactic, they should have their license taken away as far as I'm concerned because dishonesty simply should not be tolerated and guess what, its bound to backfire.

Regardless, the best way to approach this for yourself is to research the fair market value of a property you are interested in, come up with a final price that you are comfortable with, do not bid over what you feel the property is worth and be willing to walk away. A bidding war, whether real or imaginary, is no excuse to overpay for a property.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Fri Feb 3, 2012
Keep in mind that when a property is priced on target, or has had a recent fair reduction, multiple offers do occur; what is your agent advising....
1 vote
Ngraham47, Home Buyer, San Jose, CA
Sat Apr 1, 2017
I have been in PLENTY of multiple offer situations as a buyers agent. YES it happens everyday and we hate it! Nothing worse than having to call your buyer and tell them someone else got the home they wanted.

I'll sum it up short for you: If inventory is low, don't expect to make a $20k offer below asking price and "think" you have a chance at getting a good deal, because someone else is probably making a offer too.

Low inventory = a sellers market.
0 votes
Kvitali, Home Buyer, San Jose, CA
Thu Mar 2, 2017
I do have to say that is not unusual to get multiple offers on a property after it has sat on the market. it happens more than you think.

I am always surprised after a home has been on the market for months to all of a sudden have 2 or 3 buyers come forward at the same time.

But I have been selling real estate for 15 years and it does happen more frequently then you would ever imagine.
0 votes
Danrlehmann, Home Buyer, San Jose, CA
Mon Nov 7, 2016
A lot of people/realtor's are dishonest and what is the risk for the realtor? There's no way the buyer can prove whether or not the realtor was telling the truth about multiple buyers. Sometimes realtor's are selling there own homes so, they would pocket all of the profit. Other realtor's aren't licensed or just doing it part time so, they are risking very little to nothing. They are just like car salesman, they just want to get you to sell/buy the house at the highest possible price in the shortest amount of time so the can pocket there share of the money and move onto the next house. You need to decide on a fair price that you are willing to pay and stick to it. :)

If they were actually doing the job we are paying them thousands of dollars to do, the selling agent should be trying to get the best possible price for the seller and the buying agent should be trying to get the best possible price for the buyer. The mean the realtor might have to wait a year for the home to be sold or purchased and finally get paid, we all know that' not going to happen...
0 votes
Hickister, Home Buyer, South Houston, TX
Thu Aug 25, 2016
I am in the same situation...except the house we put an offer on has had no traffic in over 4 months. It's a relo. Our original lower offer was 93% of asking and they declined. We put in another offer which is at 95% (which was 10K higher than our last). All of the sudden there are multiple offers. We won't go any higher. I feel like its BS so we will wait and walk away if it's not.

Just to give a few more details...
There are 2 houses on the block one is priced a bit higher.
1st house (ended up leasing no house in the neighborhood is going for what either of these are asking)
-wouldn't go below asking
-3500+ sq ft
-media room
-wood floors

2nd house
-price has decreased significantly
-floor plan is odd (we are hoping to be able build out)
-no study
-no dining
-no media room
-3000+ sq ft

I truly believe this is a BS multiple offer situation. I could be wrong, but they even asked our realtor what our top budget was, and he just retorted with the house isn't worth (what they are asking), because it's not.

We are ready to walk away, but we have also seen what feels like EVERY single house in the area. I'm ready to give up and become a beach bum.

To answer your question, a month I don't think is long enough to actually say there is a fake multiple offer.

We sold our house in 2 days (probably sooner if we hadn't given a 24 hr notice to show).

We had 8 showings and 5 offers. That was a real multiple offer situation. So I know it happens, frequency I don't know. Right now houses are flying off the shelves, but the inventory is really high.
0 votes
Joe Pascual, , Tuckahoe, NY
Thu Feb 28, 2013
In answer to the broker who has clearly taken offence - no, maybe lying about competing offers doesnt do brokers any favors financially (although it depends on the house price, theyre are a lot more 1Mn houses in Westchester than not), but who said this was all about the broker? The seller takes home cash money - if theres b/s going on, 9 times out of 10 it will be the seller who has requested the broker to play the game, they are the ones that stand to gain.

Look at your seller's situation - usually the least desperate they are to sell (maybe a long dated closing date as part of the contingency) the more likely theyre trying to get more cash out of you whilst they can
0 votes
Mellokitty, Home Buyer, San Francisco County, CA
Fri Feb 10, 2012
To answer your question, Mack. The properties are still on the market though we have move on...
0 votes
Ruth and Per…, Agent, Los Gatos, CA
Thu Feb 9, 2012
Hi Mellokitty

Multiple offers have become common place in Silicon Valley.
Inventory is at a 2 year low.…

Good luck

Web Reference:
0 votes
Taylor Grant, Agent, Fort Collins, CO
Wed Feb 8, 2012
It just depends on the agent and the market. In my area I've received multiple offers and as long as it's "OK" with my seller we'll provide proof of the other offers on the table so the buyer knows it's not BS - I never disclose any info about the other offer price but proof that other offers do, in fact, exist. I can't stand it when agents lie about a multiple offer situation. Ask for proof. Get them to show you something, anything.
0 votes
What would proof of an offer even look like?
Flag Wed May 11, 2016
Daniel, , Baton Rouge, LA
Mon Feb 6, 2012
usually its a gimmick.

stick to your budget, to your plan, make the offer that you are comfortable with, prepare to walk away
0 votes
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