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It can be real or it can be a bluff. Here in New Jersey, if an agent says that there is a bidding war, your agent can request to see the contracts if you have an offer in the "pool". I would imagine this would be very similar everywhere. Again, here in NJ if you are caught doing this the agent is subjected to many fines and possible suspension. I would ask to see the contracts!! GOOD LUCK!
I buy, renovate and sell in Charlotte NC. I come across this tactic once a week.
Does anyone know if one can ask to see the contracts in the state of N.C.?
To-date I've been told "No can do".
TIA
I actually haven't come across this yet, but reading this post doesn't change what I'd do. Count me in as one of those buyers who won't deal with the bidding wars. If an agent told me there were multiple offers and to resubmit then I'd do one of two things:
1) resubmit the offer at the same price if I really want the property
2) resubmit a lower offer because I really hate games when so much money is on the line
I expect to see a normal counter and normal negotiations. With foreclosures only getting worse I can sit around and play chicken with the market. New opportunities are always getting listed. The property may be right, but if the seller wants to play games in the negotiations then I would suspect the whole process will eventually become convoluted. There are other fish in the sea.
Has anybody run up against this issue. Agency A lists a home for $39K. Agnecy B (me) submits cash offer for $52K. I loose bid to lower Agancy A $46K cash offer. How do I verify that this was not interagency collusion, fraud and rackateering? Paul B - Phoenix Arizona
Has anybody run up against this issue. Agency A lists a home for $39K. Agnecy B (me) submits cash offer for $52K. I loose bid to lower Agancy A $46K cash offer. How do I verify that this was not interagency collusion, fraud and rackateering? Paul B - Phoenix Arizona
You probably can't unless someone involved has evidence they are willing to share (good luck with that).
You probably can't unless someone involved has evidence they are willing to share (good luck with that).
If the seller is a large organization (IE a bank), you may be able to have the sale reviewed by an internal auditor. It probably won't do you any good, but if nothing else a dishonest bank representative may get disciplined or a local 3rd party agency may be blacklisted.
Has anybody run up against this issue. Agency A lists a home for $39K. Agnecy B (me) submits cash offer for $52K. I loose bid to lower Agancy A $46K cash offer. How do I verify that this was not interagency collusion, fraud and rackateering? Paul B - Phoenix Arizona
Any other contingencies with your offer? Inspection? Closing date?
Has anybody run up against this issue. Agency A lists a home for $39K. Agnecy B (me) submits cash offer for $52K. I loose bid to lower Agancy A $46K cash offer. How do I verify that this was not interagency collusion, fraud and rackateering? Paul B - Phoenix Arizona
The seller does not have to sell to the highest bidder. As long as they don't violate fair housing laws by discriminating against a protected class, they can pick whichever offer they like. I've seen a seller take an offer for $20k less than the highest because it was a buyer who was going to actually live in the house, as opposed to a developer who wanted to knock down the house and develop the ground. Totally legal.
It is also possible that the seller nets better with the lower offer because of a reduced commission rate. In my area, this is called a "Variable Rate Commission" and has to be disclosed on the listing. It means that if, in your example, Agency A brings a buyer, there will be less commission paid overall, thus putting Agency A in a better bargaining position than anyone else. Totally legal, but at least here, it has to be on the listing.
The seller does not have to sell to the highest bidder.
That's absolutely correct. I'm amused by the whining on this thread (admittedly from some older posts) about offers being rejected and the properties selling for lower amounts. Sellers consider more than just price when deciding what offer to accept. I, myself, did not accept the highest offer when I sold my home a few months ago. We received five offers on our house, two with escalation clauses. I didn't choose the highest offer because the offerror seemed a little shaky - both financially and emotionally. I thought that there might be a chance that he could change his mind. Instead, I went with the cleanest offer: high price, impeccable financial background, a $50k deposit, no concessions, and only a general inspection with no possibility of receiving a nitpicky list of items to correct.
Bottom line: it is not always about the bottom line. (pun intended)
Being told there are multiple offers when there really isn't is a tactic(not what I care for nor condone) that some sellers/listing agents use. I have been involved with three such scenarios in the past ten weeks when I was representing the buyer. The key is to educate the buyer ahead of time about this possibility and for the buyer not to get emotionally involved with a house they don't even own yet. In each of the three instances where my buyers were told of multiple offers, they were asked to resubmit their offer with their highest and best offer. Two of my buyers did not resubmit a higher offer. We told the listing agent that our original offer would not be changed and that if they were outbid then so be it. Both of these offers were accepted within 24 hours. With my third client, we told the listing agent that we were not interested in getting in to a bidding war and we withdrew our original offer. Two days later we got a call from the listing agent asking us to resubmit our original offer as the "other two offers" fell through. We did resubmit, but at a price 25k less than our original offer. My clients ended up getting the house for 15k less than their original offer.
In all three scenarios my clients were willing to play hardball, knowing that there might really be legitimate multiple offers. However, they were not emotionally attached to the house before they bought it and they knew that there were many other options out there. My bottom line with my clients isto suggest they offer what they believe is fair market value for the house based on real comps, without taking into consideration whether or not there are multiple offers.
Wonderful advice!
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