How to tell if EA is bluffing?

Hi,

I went to view a house recently and the asking price was 265K. I told the EA that I was interested but would like to find out the BER rating of the house as it is a secondhand house. He informed me that the BER had not been done yet so I asked him to let me know when it was.

Anyhow, I get a call two weeks later to inform me that an offer had gone on the house for 260K and id I would like to put in an offer. I asked again if the BER rating was done. he repled no but that was only a minot thing.

My question is, is the EA trying to spring me into action with info of this offer or is he bluffing. Would someone really put an offer on a secondhand house without knowing the BER rating? I really like the house but I don't like getting pressurised like this if it is s fake bid.

Any advice??

Sure they would, BER is relative new. They might not even know about it.
If you are that worried about it, get your own one done on the house.

I agree with Colm - esp for housing stock on the market for a while. I think people are only getting BERs done when there's a firm offer and as things go to close. If it's an old house, I'd say it's even more true as no-one is really expecting any great shakes from the BER cert in any case.

ok, thanks. Point taken aout the BER cert.

Do you think that the offer of 260K is a bit close to the asking price in this climate. That is the main reason I think the EA is bluffing. If he had told me that the offer price was 250K I would have been more likely to believe him. Another house was sold in the same area for 230k. Original price was 350K back in 2008 then it dropped to 290K...250K and finally sold for 230K.

Maybe you could ask a friend to call up the EA and make a general enquiry about houses for sale in the area you are bidding on, they may give the enquirer details on the status of the house re bids received to date.

It's hard to say unless you know the EA. I don't want to invite a rant for/against EAs but, to me, it appears to be an extremely risky strategy on the EA's part if there is no actual 260k offer. I'd imagine that EAs are hard pushed to sell anything at the moment and are unlikely to take such risks so I'd imagine that the 260k offer is genuine. The EA I recently dealt with was open and helpful - I wonder really if people have the time and inclination nowadays to waste time making up bids.

That said, a lot of sales are not going through for various reasons (mortgage approval not being given, people in property chains not being able to sell etc.) Similarly, there's the gazundering possibility (the current purchaser may renege on his/her bid at a later date). You should ask the EA if the proposed purchaser has mortgage approval yet (a lower bid from you, if you do have approval in place may trump a higher, riskier bid).

If you are not emotionally committed to this particular house and you are not comfortable with a price of over 260k, then I'd hold out and let the EA know that you'll be there in the background (at €Xk) in case anything happens and the sale falls through. You're not legally bound by that bid and, if it takes e.g. 3 months to get back to you, there's nothing stopping you offering a lower bid again.

Again, at the risk of starting a housing price debate (perish the thought!), some houses are actually priced at a reasonable market value at the moment - it could just be that the house is worth €260k in the open market...

I was thinking of doing that gillarosa. Would EA let someone else know that an offer had already gone on the house I wonder?

brokeagain said:

... Would EA let someone else know that an offer had already gone on the house I wonder?

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Isn't that what he has done with you?

Have a read of Freakonomics.

In it the author analysed EA statistics and he discovered that they keep their own houses on the market for longer than their clients.

The economic rationale ? Well, they're paid a % of the sales price and a marginal increase in the final selling price won't yield much for them. Its a more efficient use of their time to close the sale on a client's property than to hang on and on and on ... in other words, a bird in the hand (firm offer) is worth more than two in the bush (an increased offer that may never materialise, or a buyer who may go elsewhere).

Setanta12 said:

Have a read of Freakonomics.

In it the author analysed EA statistics and he discovered that they keep their own houses on the market for longer than their clients.

The economic rationale ? Well, they're paid a % of the sales price and a marginal increase in the final selling price won't yield much for them. Its a more efficient use of their time to close the sale on a client's property than to hang on and on and on ... in other words, a bird in the hand (firm offer) is worth more than two in the bush (an increased offer that may never materialise, or a buyer who may go elsewhere).

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If the above is true the EA is deffo bluffing. Why bother contacting me to tell me he had an offer on the house? Only time will tell I suppose.

Why bother contacting you? Because you said you were interested and the EA is trying to maximise the price for the vendor. While in the boom times, EAs would only contact people who had actually bid on a property when another bid was placed, in these times, EAs will contact those who merely expressed a real interest.

Freakonomics is a good book (I preferred the Undercover Economist) but I don't think what's discussed there applies in these times - it was more applicable when houses were actually selling. Plus it talked about the US only. And, even if it does apply, it isn't relevant here - the EA isn't risking the alleged firm offer by getting back to you to see if you want to put in a higher offer. If you don't put in an offer, the vendor can just simply accept the €260k offer.

WaterSprite said:

Why bother contacting you? Because you said you were interested and the EA is trying to maximise the price for the vendor. While in the boom times, EAs would only contact people who had actually bid on a property when another bid was placed, in these times, EAs will contact those who merely expressed a real interest.

Freakonomics is a good book (I preferred the Undercover Economist) but I don't think what's discussed there applies in these times - it was more applicable when houses were actually selling. Plus it talked about the US only. And, even if it does apply, it isn't relevant here - the EA isn't risking the alleged firm offer by getting back to you to see if you want to put in a higher offer. If you don't put in an offer, the vendor can just simply accept the €260k offer.

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That is if the offer actually exists!! I would have put an offer in for 250K but now that there is an offer in for 260k there is no point. He could end up losing a potential buyer over phamtom offer. (if it is a phamtom offer).
If it's not a phomtom offer..well fair play.

I wouldn't say there's no point in putting in a €250k offer, if that's what you are prepared to pay. Then you're in the background in case the first offer falls through.

Was the 265 price a steal? If it was then it is quite possible there was an offer. If it is not a great price then you just have to use your judgement. Where is the house just out of interest?

My friend is buying a house (has been looking for the past year) and was told about offers on 3 different house that she had viewed, same scenario, the EA phoned to tell her about an offer and would she be making one, she felt really pressuried. So in the end she just held tight and did nothing. All 3 houses remain on the market a couple of months later...... Thats not to say that all the bids weren't real and the bidders had to pull out for some reason or another....

gillarosa said:

Maybe you could ask a friend to call up the EA and make a general enquiry about houses for sale in the area you are bidding on, they may give the enquirer details on the status of the house re bids received to date.

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This is an idea that should always be used.

Come on folks be honest, [broken link removed], banks aren't giving out mortgages and the country is awash with empty properties for sale and there are Estate Agents everywhere trying to sell. They're not telling the truth. Anyone that is making an offer on a property isn't going to bid so close to the market value. You'd have to be an idiot. They're trying to get a push from anyone that looks like they are interested at all.

Couple of on-topic articles in the Irish Times today:

[broken link removed]; and

[broken link removed]

I have to say that I don't buy the whole "offer X% below asking" as a sweeping statement. IMHO some asking prices are now reflecting market value, or close to. That's borne out by the first IT article, albeit taken from a smallish sample - at least it's finally concrete data on actual selling prices. None of us can comment on what the house OP is considering is actually worth.

I do believe in the old chestnut (for PPRs) that, if it's worth it to you (and you can properly afford it), then it's worth it to you.

Back to one of the op's questions ... the BER. I though it was the law since the turn of the year that a house for sale or rent needed a BER.

dtwhaler said:

Back to one of the op's questions ... the BER. I though it was the law since the turn of the year that a house for sale or rent needed a BER.

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Yes, it does. But you don't need a BER cert merely to put a house up for sale. It just needs to be done before it's sold - so I reckon people are waiting until there are firm offers before having it done.

How do you tell if he is bluffing?

You walk away. Simple as that.

If you had no intention of paying more than €260k for the place then politely tell the EA that and let them know that you would be happy to hear from him/her if the circumstances change.