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I was recently viewing a property to buy in England, with an asking price of £400k. On the day of the viewing, but before my appointment, the estate agent informed me that two offers had already been made that same day, and both had been accepted. Although he couldn't reveal the amount of these offers for legal reasons, it was "not worth me making an offer below the asking price". So, I make an offer for £407k, and this was accepted. After thinking this through, I am now wondering how likely it is that these two other offers were genuine, and how likely it is these two offers never actually existed, but were made up to encourage me to make an offer over the asking price.

As another anecdote, after a previous viewing at a different property, the estate agent informed me that an offer for the asking price had just been accepted, and asked whether I would like to make an offer to myself. I replied that I was not interested in making an offer, but then only to find out a few days later that an advert for the same property was re-listed at £10k below that original asking price. Yes, I know that often the finances don't work out and the buyer has to back out, but it certainly seems possible that in that case too, this other offer was fake.

So, my questions are (and relating specifically to England, but other comments welcomed):

1) When estate agents state that other offers have recently already been made and accepted, is it common for these to be fake? If anybody has any real insider knowledge about this (e.g. if you are / have been an estate agent yourself), comments would be welcomed on how often estate agents make up other offers when trying to get a buyer to increase their offer.

2) Is it actually defined in law that it is illegal for estate agents to suggest that other offers have been made, when this is completely untrue?

3) If I was suspicious about the estate agent faking an offer, how could I go about finding out the truth? If I were to ask the estate agent, he would certainly say to me that it was not within his capacity to reveal the details of his other clients who made these offers. So it seems difficult to ever know, even if you were very suspicious.

  • I don't know what the practices are in the UK, but in Australia if an offer has been made and accepted, the Real Estate agent is obliged to get the contract signed by both parties ASAP and get a holding deposit from the potential purchaser. If an offer has already been accepted by the vendor the agent should not be fishing for other offers. If the agents says an offer has already been accepted and then asks you to make a higher offer, you should decline and report this agent to the Ombudsman body in your country. – Victor Jan 28 '16 at 1:57
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    In the US as well it makes no sense to accept multiple offers - that isn't possible, so suggesting making a 3rd offer is rather nonsensical. Maybe they meant/said "an offer was received"? Though no matter what country you live in, one thing is a certainty: when money is on the line, people lie. A lot. Right in your face, flat out lies. Most of them will get away with it most of the time, too. "Let the buyer beware" and all that - even if it's flat out illegal it is a fact of life anyway. If you trust people trying to sell you things too much you'll end up the proud owner of a bridge. – BrianH Jan 28 '16 at 2:10
  • I have absolutely no concrete evidence or insider knowledge, but all of my house purchasing experiences match yours - I have been told about the existence of other offers, which have seemed very suspicious / unlikely to be correct. If you can possibly help it you need to detach yourself emotionally / psychologically from the process and consider the facts and evidence dispassionately to come to a rational conclusion as to the value of a fair offer. The estate agents are trying to use as many psych tricks as they can to get you to offer more / sooner / better terms. – Vicky Jan 28 '16 at 9:23
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    @Victor practices are different in the UK. – AakashM Jan 28 '16 at 10:03
  • In the US, particularly when the housing market was really 'hot' (pre-2008), Sellers would accept multiple offers, particularly if the first one has contingencies. If any of the contingencies didn't complete, they then had another buyer ready to go. – mkennedy Jan 28 '16 at 19:18
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A big caution, just because somebody has put down an offer don't try to overbid. That will come back to bite in the future or in the present too. And moreover the internet has loads of buying guides, have a go through them for help.

how likely it is these two offers never actually existed,

That is a common ploy used by estate agents to make buyers outbid each other, so that the agents can make a tidy profit. Remember more the price they get for the seller, more is their commission. So BEWARE. But if you outbid others and then don't want to buy, you can still say no before the contracts are exchanged. So if you want to get back at the estate agent, you can try this.

1) Might be genuine bids, might not be. Only bid what you intend to pay and not what the estate agents want. And one important fact many people forget or don't know is that the estate agent should relay all offers, high or low, to the seller. Most of the agents following the rule book do so, but many don't do so. My friend received all rejected bids he put down for houses in mail, while I received none.

2)Estate agents didn't come under any purview, but mostly self regulated until April 2014. That is why you mostly met the slimy ones as agents. Now the NTSEAT(replacement of OFT) does exist to regulate them, under which they aren't allowed to make misleading statements but you have to take them on that and go through the complaint process. And the ombudsman scheme does exist to compensate you too.

3)There is no sure shot way to do that, unless you know anyone in the agency, with whom you are dealing. But you can take an educated guess i.e. how long has the property been in the market(more than a month or two then chances are the agent is lying), area, area with good schools always have houses in demand etc. Another trick is don't budge with your price. If the agent knows you are a legitimate buyer and keeps on calling you about the property, asking to increase the bid then all so called bids are fake.

I had bid little low on a property and din't budge and the agent kept calling me every other day saying something or else. Finally after 2 weeks he says the seller would accept your bid, but by then I had moved on to another property.

  • Wow, you are saying that in UK, real estate agents are not regulated by any government agency? Regulation doesn't remove slime factor, but it at least offers a framework that should be followed, in theory. – JoeTaxpayer Jan 28 '16 at 14:16
  • @JoeTaxpayer Yes there wasn't a regulatory body to regulate them until April 2014(when I bought my house). Now they do have somebody to regulate researchbriefings.parliament.uk/ResearchBriefing/Summary/…. I will add that to the answer for completeness. – DumbCoder Jan 28 '16 at 14:40
  • It seems somewhat counterproductive to make up fake offers. Yes, they get paid more if they trick someone into making a higher offer. But they don't get paid anything if they trick someone into not bothering to make an offer (that beats two fake non-existent offers). – stannius Feb 4 '16 at 0:36

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