Phantom Bidding - How to prevent?

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dotsman

Registered User
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Hi there,

Im a FTB and am thinking of placing a bid on a property. In today's market, I was hoping to place a bid for 10% less than the asking a settling for 5% approx below. However, the EA has already said that there is an offer for 5% below (before I indicated that I was willing to bid).

What I am now thinking (cynical/paranoid I know) is as this house has been on the market for 3 months now, and that, these days, many buyers are looking to bid under the asking price, that the EA is just making up the original bid so that my initial bid is close to the asking price and that he can then get me to settle for/above the asking price.

Is there any way that I can find out if the other bid is real or not? I like the place, but don't want to pay a cent more than I have (bloody thing is expensive enough already!) Are Estate Agent's obliged to give you the identity of the other bidder?

P.S. As I said already, maybe I'm just being paranoid/cynical, but I just don't trust EAs.
 
There is no way that you can tell whether the bid is real or not, you will have to go on the EA's word.

However, a few thinking points for you -

The vendor and not the EA is the one driving the asking price and has instructed the EA not to accept anything under the asking.

The EA has received a bid and it has actually been declined by the vendor.

The vendor is tied into the asking price due to their financial commitments....... and so on.

Is the EA a member of the IAVI or IPAV?
 
I would be very suspicious about other bidders in the current market especially if the property has been on the market 3 months or more.

Bid 15% below and say that's your final offer, walk away and my guess is that the EA will call you back in about a week saying the other offer has fallen through.
 
mo3art said:
Is the EA a member of the IAVI or IPAV?
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Yes, the EA is one of the main EA chains out there.

Thomas22 said:
I would be very suspicious about other bidders in the current market especially if the property has been on the market 3 months or more.

Bid 15% below and say that's your final offer, walk away and my guess is that the EA will call you back in about a week saying the other offer has fallen through.
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That's my feeling as well. I am afraid to underbid though, as I do like the place (despite everyone saying that there's too much property on the market, there's very little out there that I like!). If it turns out the other bid is real, then I'm afraid that the EA will know I was bluffing the first time 'round and then take me for everything I got! The thing is that I can technically afford the asking price, but I don't want to go that high unless I absolutley have to.

I wish it was more like eBay or something!
 
dotsman said:
Yes, the EA is one of the main EA chains out there.


That's my feeling as well. I am afraid to underbid though, as I do like the place (despite everyone saying that there's too much property on the market, there's very little out there that I like!). If it turns out the other bid is real, then I'm afraid that the EA will know I was bluffing the first time 'round and then take me for everything I got! The thing is that I can technically afford the asking price, but I don't want to go that high unless I absolutley have to.

I wish it was more like eBay or something!
Click to expand...

It is a risk but I still think it is a risk worth taking if it saves you €15k-€20k.
To be honest I just wouldn't believe the EA. Have you checked if the house has dropped in price in the last few months and by how much
 
Thomas22 said:
IBid 15% below and say that's your final offer, walk away and my guess is that the EA will call you back in about a week saying the other offer has fallen through.
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It's a poor negotiating strategy to say "take it or leave it" on your opening bid. If they don't take it (very likely) you'll either have to walk away or loose all credibility and revise the offer.

I'd put in a bid along the lines of:

- I'm very interested in the property
- I'm a FTB with loan approval and can move very quickly
- I think the price is on the high side in the current market
- I'd like to put in a bid of X - 10% (or whatever: it can be lower than the existing "bid" though), in case the other one falls through
- I'm looking at other properties on the meantime

Then sit back.....

It's the EA's job to put as much pressure on you to get you to increase your offer. The best way to counter this is to ignore it and put the pressure on them. In the current market, you're in a much stronger position than the vendor: use this to your advantage.

They'll probably come back and say no, in which case emphasise how much you'd like the property, how fast you can move on it, it's not conditional on selling somewhere etc. etc., say the offer's still on the table if they change their mind and then leave it for a three or four weeks. Then put in a phone call to see how things are. Do not increase the offer until they move off the asking price.

You'll find it hard to sit back and wait, but keep in mind:

- it's been on the market for months already: how likely is it they'll suddenly get what they're asking?
- there's plenty of property on the market: if you don't get this one there are plenty of others
- it's real cash you're negotiating with

Best of luck!
 
Thanks ang1170, that's what I've been thinking. Hopefully it'll work out. Will post back here to let you all know how I get on!
 
Just for info, I put in a bid on a place about 5% below asking but the seller held out for more for a couple of months before I told them I wasn't interested any more.

So it is not an unusual situation. Also it doesn't really matter whether or not someone else had bid if the seller won't sell at that price.

I do wonder though if the EA is telling purchasers that they had a bid of 5% under the asking, implying a higher bid is required, when in reality that bid no longer applies.
 
I have a friend who put her house (in Dublin) on the market a few weeks ago. After the first viewing she received an offer of the full asking price. Next viewing 2 days later got a bid of 2k above asking. This subsequently fell through and the original bidder had found somewhere else but again she has an offer of the asking. This has all taken about a month.
So it's not completely out of the question that there are other offers on the house.
 
Why not bid on 3 or 4 houses, if possible? That gives you some good leverage, and allows you to 'take it or leave it'.
 
ang1170 said:
I'd put in a bid along the lines of:
- I'm very interested in the property
- I'm a FTB with loan approval and can move very quickly
-
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I would say NEVER say you are really interested then they wil pester you to up the price with ghost bidders etc etc,
but i would say i was bidding on other houses and that i can move quickly when sale agreed happens and that i want to be in my house sooner rather than later....
 
nelly said:
I would say NEVER say you are really interested then they wil pester you to up the price with ghost bidders etc etc,
but i would say i was bidding on other houses and that i can move quickly when sale agreed happens and that i want to be in my house sooner rather than later....
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Why not say it? OK - its a pain to get phone calls all the time from them, if that's the way they operate, but it's hardly the end of the world.

You have to convince them you're a serious bidder, and that you'll discus price when they start to move, but not before.

You just need to be firm and consistent in what you say, and not be pressured into raising the bid unless they're actively negotiating. Get them to blink first: you hold all the cards in the current market!
 
Hey Dotsman,

Why don't you get a friend to call the estate agent about the house and ask what offers are in?

The estate agent may have sensed that you were keen and quoted accordingly. Either way, the Estate agent will be caught out if lying.

Good Luck!
Jinty.
 
ang1170 said:
Why not say it? OK - its a pain to get phone calls all the time from them, if that's the way they operate, but it's hardly the end of the world.

You have to convince them you're a serious bidder, and that you'll discus price when they start to move, but not before.

You just need to be firm and consistent in what you say, and not be pressured into raising the bid unless they're actively negotiating. Get them to blink first: you hold all the cards in the current market!
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From my experience in the current market anyone who bids is considered serious
 
From my experience in the current market anyone who bids is considered serious
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That is definitely not the case, some people think that all the doom and gloom equates to a half price sale. A blanket 15% drop across all properties is not going to happen and hasn't happened, but when one figure is bandied about, people seem to latch onto it and apply it to their area regardless of whether it makes sense or not. I had 2 people bidding on the same house yesterday and one thought that I was using a ghost bidder ( which I was not). We are within 2% of asking price now, but vendor wants 2% above!, so like I've said before not all properties can be treated in the same way. We have dropped prices on some and achieved asking on others.
 
an apartment in our block was on the market for months yet sold for 5k under the asking so being on the market for months doesn't necessary mean there's no interest just that the vendor is holding out.
 
Hey thanks for all the info.

For the record, it wasn't a phantom bid!

I rang up to bid 5% below the asking (ie match the phantom bid), but the EA said they had received another bid at 3% below. As I was still suspicious, I said that the most I could go is 5% below and "if the other bidders don't close", to let me know. Plan was to let them consider this for a week or 2 and if it was a phantom bid, then they'd get back to me and settle. If they were still sticking to their story, then I would accept that it's most likely real and I would up my bid.

Rang them this week (under a false name) to enquire about the property only to be told that they had closed the sale at the asking price!

So I guess I was just being paranoid. Oh well - lesson learned. The upside is that, having had time to think about it, I wasn't 100% sure that was the property for me. I'll just chalk it down to experience (something I'm very lacking in when it comes to buying property)!
 
Call me paranoid but I wonder sometimes if EA's post here pretending to be buyers who are suspiscious of phantom bids only to discover the phantom bids don't exist...!

Not saying that's you dotsman, but I would not be surprised if this starts happening.
 
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