Real Estate

Multiple Offer / Bidding War scheme - buyer beware!

  • Last Updated:
  • Oct 21st, 2020 6:55 am
Sr. Member
Mar 10, 2004
601 posts
189 upvotes
anon4sale wrote: too funny, you are both entitled to your opinion and to believe what you like. I am just putting this out there for those who are not realtors so they can use their own judgement.
No doubt there are bad agents out there. Just make sure you interview multiple agents before signing. Just from recent experience i can say that all the seller agents we interviewed seemed honest. I do think it s tougher on buyers. Hard to gauge market value especially when bully bids are being accepted for an underpriced property.
Deal Expert
User avatar
Feb 11, 2009
17576 posts
4531 upvotes
Toronto
I'm not surprised to hear stuff like this. I've had a few instances where I'm told "Oh theres a higher offer...you'll need to increase your bid if you want the unit"... I always tend to get my clients to drop out of the bidding war when a price becomes too heated in my opinion...the buyers may get emotionally attached and I take it upon myself to draw the line haha.
In these cases they'll tell you theres a higher offer...but a week later and its still listed, now just at a higher price....ok...so much for the higher offer.

I've also constantly run in to situations where my clients have made offers on the property, but despite being the highest offer they don't get the unit simply because it wasn't "high enough". Those are the kind of things that get on my nerve...wastes my time, the buyers time, and i guess even the sellers own time.
Seller: Lists under market value
Buyer: Offers market value
Seller: No I want more than market value.
Real Estate Agent, MAcc, CPA, CA
Deal Addict
Nov 24, 2013
1116 posts
555 upvotes
Toronto
Not surprised this happens. Someone always finds a way to game the system.
Deal Addict
Mar 22, 2010
2878 posts
795 upvotes
Sometime I wonder, would it create a chaos if it's completely open bid with minimum price point?

Take an art auction for example
[OP]
Newbie
Oct 17, 2020
6 posts
8 upvotes
Toronto
deal_with_singh wrote: I'm not surprised to hear stuff like this. I've had a few instances where I'm told "Oh theres a higher offer...you'll need to increase your bid if you want the unit"... I always tend to get my clients to drop out of the bidding war when a price becomes too heated in my opinion...the buyers may get emotionally attached and I take it upon myself to draw the line haha.
In these cases they'll tell you theres a higher offer...but a week later and its still listed, now just at a higher price....ok...so much for the higher offer.

I've also constantly run in to situations where my clients have made offers on the property, but despite being the highest offer they don't get the unit simply because it wasn't "high enough". Those are the kind of things that get on my nerve...wastes my time, the buyers time, and i guess even the sellers own time.
Seller: Lists under market value
Buyer: Offers market value
Seller: No I want more than market value.
I like your sincerity, you are the kind of agent everyone wants to work with.
Sr. Member
Aug 17, 2005
531 posts
53 upvotes
Had nearly the same thing happen to us. House listed for what I thought was fair market value based on comps. Seller was the listing agent selling his own home. Offers were on a specific date, we did our due diligence, got a home inspection before hand, financing in order. Seller/Agent was convinced the house would go way over asking.

We submitted an intent to offer to the brokerage 5 minutes before the deadline. Were told nobody else had filed. Okay, no big deal, it is not required my agent said.

7pm is offer presentation, we don't hear anything about an other offers.. submit at 6:55. At 7pm agent says competing offer has come in. They will assess.

10 minutes later I get a call from my agent saying "He wants you to come up in price" We had a no condition, firm offer at FULL ASK. I told my agent that I suspect the offer is fake. Rescind the offer and offer 50k less.

He says let me get the offer details and do some digging..

He gets the form, realizes the agent's son has submitted the offer on behalf of TWO OTHER REALTORS.

My agent is livid, the seller is nonchalant, says nothing is amiss. We present the offer of 50k under asking, were told to resubmit the full price offer. We declined.

Reported his ass to RECO where I bet absolutely nothing happens to this scumbag.
[OP]
Newbie
Oct 17, 2020
6 posts
8 upvotes
Toronto
PwA wrote: Had nearly the same thing happen to us. House listed for what I thought was fair market value based on comps. Seller was the listing agent selling his own home. Offers were on a specific date, we did our due diligence, got a home inspection before hand, financing in order. Seller/Agent was convinced the house would go way over asking.

We submitted an intent to offer to the brokerage 5 minutes before the deadline. Were told nobody else had filed. Okay, no big deal, it is not required my agent said.

7pm is offer presentation, we don't hear anything about an other offers.. submit at 6:55. At 7pm agent says competing offer has come in. They will assess.

10 minutes later I get a call from my agent saying "He wants you to come up in price" We had a no condition, firm offer at FULL ASK. I told my agent that I suspect the offer is fake. Rescind the offer and offer 50k less.

He says let me get the offer details and do some digging..

He gets the form, realizes the agent's son has submitted the offer on behalf of TWO OTHER REALTORS.

My agent is livid, the seller is nonchalant, says nothing is amiss. We present the offer of 50k under asking, were told to resubmit the full price offer. We declined.

Reported his ass to RECO where I bet absolutely nothing happens to this scumbag.
Wow, just another example. Sorry you had to go through that, sounds very stressful. I just don't know what can be done to further crack down on this fraud, seems form 801 just sits and collects dust after a sale.
Deal Guru
Feb 29, 2008
12555 posts
7763 upvotes
deal_with_singh wrote: I'm not surprised to hear stuff like this. I've had a few instances where I'm told "Oh theres a higher offer...you'll need to increase your bid if you want the unit"... I always tend to get my clients to drop out of the bidding war when a price becomes too heated in my opinion...the buyers may get emotionally attached and I take it upon myself to draw the line haha.
In these cases they'll tell you theres a higher offer...but a week later and its still listed, now just at a higher price....ok...so much for the higher offer.

I've also constantly run in to situations where my clients have made offers on the property, but despite being the highest offer they don't get the unit simply because it wasn't "high enough". Those are the kind of things that get on my nerve...wastes my time, the buyers time, and i guess even the sellers own time.
Seller: Lists under market value
Buyer: Offers market value
Seller: No I want more than market value.
Yea, this crap needs to really get cleaned up. I recall buying a condo in 2015 because I refused to be part of the ridiculous bidding wars for houses back then. It was nuts.
Newbie
Nov 22, 2009
64 posts
58 upvotes
Vancouver
PwA wrote: Had nearly the same thing happen to us. House listed for what I thought was fair market value based on comps. Seller was the listing agent selling his own home. Offers were on a specific date, we did our due diligence, got a home inspection before hand, financing in order. Seller/Agent was convinced the house would go way over asking.

We submitted an intent to offer to the brokerage 5 minutes before the deadline. Were told nobody else had filed. Okay, no big deal, it is not required my agent said.

7pm is offer presentation, we don't hear anything about an other offers.. submit at 6:55. At 7pm agent says competing offer has come in. They will assess.

10 minutes later I get a call from my agent saying "He wants you to come up in price" We had a no condition, firm offer at FULL ASK. I told my agent that I suspect the offer is fake. Rescind the offer and offer 50k less.

He says let me get the offer details and do some digging..

He gets the form, realizes the agent's son has submitted the offer on behalf of TWO OTHER REALTORS.

My agent is livid, the seller is nonchalant, says nothing is amiss. We present the offer of 50k under asking, were told to resubmit the full price offer. We declined.

Reported his ass to RECO where I bet absolutely nothing happens to this scumbag.
wow good for you @PwA for being very smart and avoiding the overpayment
Good lesson for us all! Thanks
Jr. Member
User avatar
Jun 3, 2019
172 posts
137 upvotes
GTA
anon4sale wrote: The government /CREA cracked down on these ghost bids and created a registration system but I have no idea how this was supposed to curtail shady activity.

Caveat emptor.
I know for a fact that this happens more often than people think. I went through over a hundred disciplinary case actions until I found one where an agent was caught doing this (although not to the extent of what OP describes). I redacted the name which should allow me to share it here, but this information is available to the general public. I didn't post this in an attempt to defend our industry, as I've said earlier these type of agents have no place working in this field. Props to OP for bringing it to attention.

Case Summary Discipline XXXXXXX-XXXXXXXX.JPG
Realtor® & Mortgage Agent
Member
Jul 2, 2018
252 posts
238 upvotes
GTA
On the part of the Agent trying to get your business, they are probably BS'ing to convince you that they will get you top dollar. Unless there is a large group involved, it would be easy to trace back if the same Realtor and buyer were bidding on all of your listings every week. I wouldn't say it's impossible that there is a group of 20-25 friends doing this, but more than likely it's just a way to get your business because there are already 10+ offers coming in on every property anyway so there's really not much of a need for fake offers. In the past, this was definitely more of a thing.

Now having said that, when a Realtor is selling their own home or selling for a close friend or family, it's not crazy to think that they would ask a Realtor friend to also submit an offer to help create the illusion of competition.

The whole process is stupid and shitty, a lot of aspects of this industry need to be revamped. 99% of my transactions are buyer side, so the past few months have been a nightmare dealing with these bidding wars. Even off-market wholesale deals have bidding wars, 32 unit buildings have bidding wars, it doesn't stop anywhere.

As an aside, I recently submitted an offer on a property and was told there are no competing offers, after calling and texting repeatedly to ask for an update I eventually got a message around midnight saying sorry we accepted another offer. I was obviously upset as we weren't told about this other offer during the many phonecalls I had with the listing agent. Things got worse when we found out it actually sold for way less than what we had offered. We'll see where this goes with RECO, but most likely just an apology and some dumb mandatory course.
Realtor + Investor
Deal Fanatic
User avatar
Sep 8, 2007
8718 posts
9525 upvotes
Way Out of GTA
trebmember wrote: I know for a fact that this happens more often than people think. I went through over a hundred disciplinary case actions until I found one where an agent was caught doing this (although not to the extent of what OP describes). I redacted the name which should allow me to share it here, but this information is available to the general public. I didn't post this in an attempt to defend our industry, as I've said earlier these type of agents have no place working in this field. Props to OP for bringing it to attention.


Case Summary Discipline XXXXXXX-XXXXXXXX.JPG
$12k is chump change. That agent should have to make the difference up between price paid and FMV at the time to the buyer and at a minimum a license suspension.
"It is in times of great fear or greed that the most opportunity exists."

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