Can estate agents use "ghost bidders" to drive up price of house?

It would seem so, yes.
I found this report:

I guess some (not all) EA's get greedy.
The more they can sell your house for the fatter their commission cheque is.
 
They "can". I say this because they can't according to the guidelines set down by their governing bodies in Ireland - IPAV & IAVI. Then again, if there is no paper trail then there is no way to catch them out.

Edited to add:

The Estate Agent may be acting on their vendor's instructions by creating phantom bids to drive up the price. They may give a verbal amount over the phone but if you were to inspect their files you would not see any paper trail created to match the bid.

NOTE
I have worked for at least 2 estate agents in the past and while it was not common practice I have seen it happen.
 
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At the end of the day, the estate agent is acting on behalf of the seller. They are not your "friend".
What you pay for a house should be driven by what you feel it's worth to you, not what someone else might be willing to pay. Especially in the current market.
Slightly related, I believe it's perfectly legal for auctioneers to take bids "off the wall" while the bidding is still below the reserve.
 
missus09 said:
anyone shine a light on this issue?
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No they cannot, but do some professionals operate outside the rules? Of course be it builders, bankers, shop assisstants etc there are those who will turn a blind eye to ethics and pursue a path to personal gain.
 
I assume there are big moves within the estate agent industry/IAVI to clamp down on this widespread & dishonest practice?

I thought not.
 
Robin Banks said:
I assume there are big moves within the estate agent industry/IAVI to clamp down on this widespread & dishonest practice?

I thought not.
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It's dishonest alright, but widespread may take a little evidence rather than mass paranoia when it comes to bidding on a house. In a booming market what need was there to ghost bid? in a fallen market why take the risk of losing a real bidder? When you think of it logically rather than emotionally it can lead to a different outcome.
 
Robin Banks said:
I assume there are big moves within the estate agent industry/IAVI to clamp down on this widespread & dishonest practice?
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Yeah right !!! And pigs will fly. Probably the most dishonest profession in the land.
 
Is there not some sort of book that all bids have to be written in...or am I watching too much UK property ladder?
 
i hate to feel cheated into paying a higher price for a house if im the only one bidding ..thats all! and i dont feel i can trust the estate agents 100% to be honest!
 
Happens regularly - becomes apparent when the genuine bidder comes second - they usually get a phone call from auctioneer saying the seller will now accept their bid (albeit the second highest).....
 
Whatever about dishonest, they are awfully unaccountable! They played a big part in the bubble but will unlikely be held to account. Large problem too, in that it takes no qualification really to be an auctioneer.
 
pjmn said:
Happens regularly - becomes apparent when the genuine bidder comes second - they usually get a phone call from auctioneer saying the seller will now accept their bid (albeit the second highest).....
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Sounds like interesting reading, where can I pick up the factual details behind your comment?
 
whackin said:
Whatever about dishonest, they are awfully unaccountable! They played a big part in the bubble but will unlikely be held to account. Large problem too, in that it takes no qualification really to be an auctioneer.
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That is a real part to the problem and it is one that should now be properly looked at. We have a chance to overhaul the profession while it is in the doldrums, but having said that qualifications do not make men honest.
 
I have no illusions about the property agents so I'd say yes. We have found ourselves in a situation like that just recently and as the house was really great, we did not know whether there is a genuine bidder or a "ghost bidder" so when we were calling with our counterbid I mentioned something about this being just about where we were willing to go, because though we liked the house we did not believe it was really worth more and voila, we got the sale agreed the next day.
 
How is an estate agent (or anyone auditing an estate agent) supposed to verify the validity of an offer? And even if they do, what is the point, given that offers are non-binding and can be withdrawn at any time?
 
MrMan said:
That is a real part to the problem and it is one that should now be properly looked at. We have a chance to overhaul the profession while it is in the doldrums, but having said that qualifications do not make men honest.
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And what did the IAVI do with this issue when the boom was at its height? Exactly, says it all really....
 
YOBR said:
And what did the IAVI do with this issue when the boom was at its height? Exactly, says it all really....
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The IAVI have looked for regulation for decades, they had 95% backing within the organisation for a regulatory body and at the end of it all they do not write the laws.
 
haminka1 said:
I have no illusions about the property agents so I'd say yes. We have found ourselves in a situation like that just recently and as the house was really great, we did not know whether there is a genuine bidder or a "ghost bidder" so when we were calling with our counterbid I mentioned something about this being just about where we were willing to go, because though we liked the house we did not believe it was really worth more and voila, we got the sale agreed the next day.
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It would take someone with a compulsive gambling habit to try and push a bid with a ghost bidder in the current market would you not agree?
 
MrMan, we went really low with our initial bid so we were still willing to go up - again, if you happen to read my input properly, you'd see that we did not know whether there was a ghost bidder or a real one -the house is really great as is the location so another person interested in it wouldn't be a surprise. Yes, the market is full of cheap houses but we found one we liked and which suited us and went for it - not blindly, we set ourselves a limit which we did not even come close to and we were willing to pull out should the other side go any higher.
 
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