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Multiple & Second Offers


BryanS

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So I am in the process of buying a house. My real estate agent, and the listing agent, have spoken to each other. Both are very nice, coordinal. The property I am interested in has been on the market for a while, it is also a foreclosure. No offers on the property. I put my offer in. Then, out of the blue, not even 24 hours later, we get a one liner from the listing agent, in email:

"Multiple offers. Please submit highest and best offer."

That is all. Nothing more. The listing agent won't answer her phone.

What are the chances of this really happening? And why it is, every time I go to buy a house, out of the blue - after there being no offers for weeks and weeks - a second offer comes in right after mine. You'd think the odds of lightening striking twice in the same place were greater than the disturbing frequency at which this happens.

Realtors are licensed, right? There is a code of ethics, right? What do they consider an offer? If another person simply emails the listing agent with "Would you entertain X dollars" - is that really counted as an offer? If it is, it is not a serious one. Are they using flimsy email or phone offers against serious offers (proof of funds, earnest money down)? If you are a realtor - do you engage in such practice? If you do, you should be tied to a breaking wheel.

What would you do in this situation? Do you call their bluff and not increase your offer? Do you demand proof of the other offers? Do you cave and just raise your offer to your maximum?

What do you do? What do you do?

Edited by BryanS
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So I am in the process of buying a house. My real estate agent, and the listing agent, have spoken to each other. Both are very nice, coordinal. The property I am interested in has been on the market for a while, it is also a foreclosure. No offers on the property. I put my offer in. Then, out of the blue, not even 24 hours later, we get a one liner from the listing agent, in email:

"Multiple offers. Please submit highest and best offer."

That is all. Nothing more. The listing agent won't answer her phone.

What are the chances of this really happening? And why it is, every time I go to buy a house, out of the blue - after there being no offers for weeks and weeks - a second offer comes in right after mine. You'd think the odds of lightening striking twice in the same place were greater than the disturbing frequency at which this happens.

Realtors are licensed, right? There is a code of ethics, right? What do they consider an offer? If another person simply emails the listing agent with "Would you entertain X dollars" - is that really counted as an offer? If it is, it is not a serious one. Are they using flimsy email or phone offers against serious offers (proof of funds, earnest money down)? If you are a realtor - do you engage in such practice? If you do, you should be tied to a breaking wheel.

What would you do in this situation? Do you call their bluff and not increase your offer? Do you demand proof of the other offers? Do you cave and just raise your offer to your maximum?

What do you do? What do you do?

Wow. Well, I was a real estate agent in another life in another state. I do know that a CONTRACE has to be submitted before the agent has a bona fide OFFER. If there is no CONTRACT, then no offer. I would be surprised if, like you say, out of the blue, someone gets mutiple offers on a foreclosure. What does your agent say? No way would I give my highest and best offer. No way. If you aren't happy with your realtor, get another agent. SERIOUSLY. No need for the breaking wheel. Really!

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Bryan, the other agent is B.S.ing you. Tell them THAT is the offer. I would even throw in a couple of allowances that they need to give, but it is a foreclosure, so there won't be any concessions on their part. All you can hope for is that the bank is desperate to unload the property.

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that's why they are Musicmen.

Oh no, not you too :)

Seriously though, In my experience, Realtors who work exclusively with Bank Owned properties can sometimes have an ego problem.

I submitted an offer on a Bank Owned property today. I left a voicemail for the listing agent at 11am, and emailed a contract at 2pm. I haven't heard a peep from them yet.

flipper

edit: I guess I can give my opinion on your actual question too :) I think you should stick to your guns and call their bluff.

Edited by flipper
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What would you do in this situation? Do you call their bluff and not increase your offer? Do you demand proof of the other offers? Do you cave and just raise your offer to your maximum?

What do you do? What do you do?

I've only ever not run into this in one transaction. Whether dealing with a seller's agent or the seller themselves, there's always another offer <_< , often made in straight-up cash <_< , sometimes attached to a reason that they'd rather deal with you <_< . Odds are that its a smokescreen. If your last bid was a low-ball, adjust it to what you think the house is really worth. If not, don't feel pressured. Its more of a buyer's market than it used to be and there are plenty of fish in the sea.

I had one Realtor attempt a bait-and-switch by telling me that they were going to show me a house, and then telling me when I got there 30 minutes later, that they'd sold it that morning and that I ought to look at their other listings in the neighborhood. Then, when I dealt with another Realtor later on, he called me back and got all pissy, so I threatened to call TREC on his ass and also use my MLS access to compile a list of e-mail addresses of people from his firm and spam them with tales of his misdeeds. That shut him the hell up.

One promised a friend of mine that he'd meet him at midnight on the night that an option expired so as to sign a new contract and take it directly to the owner; my friend got stood up and then had his calls screened for two weeks. The property sold at less than what he'd have paid.

One had an in-house title company staffed by nincompoops that made a glaring clerical error (which was caught by my agent, by chance a HAIFer that I'll recommend to anyone that PMs me). But I'm not sure whether it was actually a clerical error or an attempt by the seller's agent to kill the deal so that they could accept a much higher offer. I'd believe it either way.

One Realtor desperate to get someone to list their property for sale provided a seller I'm negotiating with a sales comp in which I'd been the buyer with a listed sale price 35% higher than actual. ____ing idiot.

One seller was very pleased upon the receipt of a contract, then didn't respond for a week, then asked for 30% more than what had been agreed to by a handshake.

One seller's agent just totally sucked. Not dishonest, just incompetent. I used that one as my own representative and the Realtor accidentally wrote more land into the contract than should've been included. Three months later, I closed on a 30-day contract. Long story short, her error effectively cost the seller $40,000 in land and a 90-year-old oak tree. Conflicts of interest kick ass.

I don't react well to people negotiating in bad faith. FWIW, the deals usually don't go down and they leave the table scared ____less or I end up outwitting them. A good Realtor is smart enough that they don't have to be a douchebag.

Edited by TheNiche
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What would you do in this situation? Do you call their bluff and not increase your offer? Do you demand proof of the other offers? Do you cave and just raise your offer to your maximum?

I would just leave my offer be. If I get it, then great. If I don't get it, well that's great too 'cause there's plenty more available properties out there.

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Thanks for the responses so far... Here is an update...

The listing agent calls my agent at noon today: "We needed your highest & best YESTERDAY..."

My agent: "We could have done that - had you returned our repeated phone calls and emails. We need to know the nature of this urgency and your deadline."

Listing agent: "We will make a decision today or Monday, close of business. We need your response, now."

...so my agent calls me, relaying all this information... I digest all of this...

I slightly increased my (lowball) offer so that I can be the slightly "higher" lowball offer, should someone try to lowball this weekend, however:

1.) If they apply what I think is a lowball offer for the place, I have them slightly beat.

2.) I know FHA won't work (due to needed repairs that the bank will not do)

3.) A higher offer, once that person sees the inspection report and thousands and thousands required to fix the place up, may just walk away... That would mean my offer would have to be rejected, and then the place would have to come back on the market for me to have a second chance. Fine with me.

That's the bet.

5:00 p.m. Monday is the deadline. We'll have to see if mine will hold through the weekend. If not - that is OK... because as has been said "there are always more fish in the sea."

If I do lose, I'd like to know what price "won." We'll see...

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Ok I have a good bit of the same experience, we submit an offer and all of a sudden from another galaxy the property has multiple offers on it. Quite honestly I think they are all BS and those agents are dishonest and plain out liars however how do you catch them in the act? Don't feed bad though I am an agent myself and I run into this stuff all the time.

I think we actually discussed this in a prior thread as well but if I were you I would call the bluff unless you really want the property and think you have found a great deal or a must have acquisition.

Good luck and let us know how it turns out,

Scharpe St Guy

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Another update... Drum roll please!

YOU HAVE ALL been rejected! Apparently, there were several bidders.

The bank has indicated that it does not want to take a loss on the loan. Therefore, on Monday, you may resubmit a new offer - but you must start your bidding at 5K below our asking price.

Given the condition of the property, 1.) they (the bank and listing agent) are crazy and 2.) If anyone believes that submitting a bid at their suggest price point is a good idea, is also crazy.

I'll wait it out a week and see what happens... Not going to follow the lemmings off the cliff.

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Ok I have a good bit of the same experience, we submit an offer and all of a sudden from another galaxy the property has multiple offers on it. Quite honestly I think they are all BS and those agents are dishonest and plain out liars however how do you catch them in the act? Don't feed bad though I am an agent myself and I run into this stuff all the time.

I think we actually discussed this in a prior thread as well but if I were you I would call the bluff unless you really want the property and think you have found a great deal or a must have acquisition.

Good luck and let us know how it turns out,

Scharpe St Guy

Are you a listing agent? or a buyer's agent? If you are a listing agent... for the properties that you sell... have you ever considered, as an offer, anything other than a submitted contract? A phone call, email, etc...

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Are you a listing agent? or a buyer's agent? If you are a listing agent... for the properties that you sell... have you ever considered, as an offer, anything other than a submitted contract? A phone call, email, etc...

As a general rule, buyers, sellers, and agents frown upon non-standard contracts. The standard ones are pretty much airtight when properly used and are more familiar to everybody involved.

Verbal agreements are essentially worthless in the State of Texas.

E-mail works as a form of conveyance if you attach a contract as a file, but its no good as an offer, itself.

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All my comment says about me is that you pissed me off.

Now what is it that you have against Realtors. Maybe you couldn't cut it in the biz, so now you have a resentment against the profession. Or maybe your mother was a Realtor and she was away all the time and you still have childhood issues to deal with.

Any way, I think someone who would insult the whole profession like that is a JERK. You sir, are an ass.

CyKat, who knows quite a few good Realtors, you jerk.

Read of my experiences, above. I've found one (1) good Realtor. The rest were boobs or shysters, all incompetent. There is merit in making fun of the profession, and the good ones are really more the exception than the rule.

And CyKat, I don't know where you're coming from with this kind of an uncharacteristically emotional response, but would it be going out on a limb to say that you are or are related to a Realtor?

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Related to one, and I do agree, many are as you describe, but not most.

I suppose musicman would also say that most african americans are robbers and crooks. To me, both statements are equally absurd.

That musicman guy is really a peice of work. I'll bet I could pick his profession apart too. I'm sure what ever it is, framer, sheetrocker, wrecker driver, cabbie, Wal-mart greeter, car wash attendant, I'm sure there's a few crooks doing what he does.

CyKat

LOL I'm a peice of work? that hole you're digging is getting deeper.

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Related to one, and I do agree, many are as you describe, but not most.

I suppose musicman would also say that most african americans are robbers and crooks. To me, both statements are equally absurd.

That musicman guy is really a peice of work. I'll bet I could pick his profession apart too. I'm sure what ever it is, framer, sheetrocker, wrecker driver, cabbie, Wal-mart greeter, car wash attendant, I'm sure there's a few crooks doing what he does.

CyKat

I'd beg to differ. Given my many experiences as a client (john) to Realtors, I'd submit to you that majority (>50%) are shysters or nincompoops. Easily. And I do believe that these qualities are befitting of the term "Musicmen".

I'm not sure what that has to do with racial stereotypes.

EDIT: WOW...I think Editor played a little trick on Musicman. I put the term *ealtwhores in quotes above, and it turned into "Musicmen". Not my intention, but good one, Wayne.

Edited by TheNiche
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Are you a listing agent? or a buyer's agent? If you are a listing agent... for the properties that you sell... have you ever considered, as an offer, anything other than a submitted contract? A phone call, email, etc...

Both Listing Agent and Buyers Agent and quite often with my own properties (investments). And yes I actually do entertain verbal/email offers however once we come to a meeting of the minds I make it clear that it needs to be written and executed post haste or other offers will be entertained.

All the best,

Scharpe St Guy

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Not sure what's going on in this case, but it really is not uncommon for multiple parties to be interested in the same property at the same time. I have had a listing on the market since last September and at it's current asking price since January. We have had a fair amount of showings, but no offers up until last week, when we received four within a couple of days. Yes, FOUR offers. This is not in a hot location inside, or even near, the loop. Many people would consider this a less-than-desirable area, and it is mainly filled with first-time buyers. We had three offers in writing and one verbal/email. In the end, my seller accepted the verbal/email offer and the buyers agent put it in writing for signature. We did not use the multiple offers to try and solicit higher bids from anyone, but we did make everyone aware of the offers. In fact, no one submitted a new offer when they learned of the other offers. I'm actually not fond of multiple offers unless it is a HOT property. I think multiple offers scare many buyers away, and you might end up with an unsold property in the end.

Now that I think about it, I had 3 offers on a Med Center listing last year. I wasn't surprised though. It was a great price for the area. A contract was accepted at full price, but the buyers backed out after about 3 weeks. They were soon to be wed, and I was told that they just got nervous about all of the decisions that they were having to make at one time. We ended up with another contract on the property within 2 hours. This one also at full price, and it closed as scheduled. The third offer was pretty much a joke, as that buyer was just looking for a bargain.

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Wow. Well, I was a real estate agent in another life in another state. I do know that a CONTRACE has to be submitted before the agent has a bona fide OFFER. If there is no CONTRACT, then no offer. I would be surprised if, like you say, out of the blue, someone gets mutiple offers on a foreclosure. What does your agent say? No way would I give my highest and best offer. No way. If you aren't happy with your realtor, get another agent. SERIOUSLY. No need for the breaking wheel. Really!

I had a client looking at this foreclosure property and got the same stupid highest and best offer. I told my client to think about it a little and see what he really wanted to do. I said this could be a ploy or maybe not, you never really know. In the end we decided to stay pat and about 3 weeks later we got a message saying someone else beat us. So, in this case I guess there really was an offer.

I need to add that the Realtor reping the bank was a piece of work. He had instructions 7 pages long on how the offer had to be perfect blah blah blah. Anyway, we go to show the house and there is not a lock box on it as mentioned in the NLS comments and from the showing service. It was a really interesting deal to say the least.

Edited by jscarbor
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I had a client looking at this foreclosure property and got the same stupid highest and best offer. I told my client to think about it a little and see what he really wanted to do. I said this could be a ploy or maybe not, you never really know. In the end we decided to stay pat and about 3 weeks later we got a message saying someone else beat us. So, in this case I guess there really was an offer.

I need to add that the Realtor reping the bank was a piece of work. He had instructions 7 pages long on how the offer had to be perfect blah blah blah. Anyway, we go to show the house and there is not a lock box on it as mentioned in the NLS comments and from the showing service. It was a really interesting deal to say the least.

Just to pile on, we had the same experience early last year. Found a foreclosure with a lot of potential. Found a agent who told us the "best offer" stuff. We did.

Four weeks later it sold to someone else.

Promptly, we found another one in the area (not as large or as nice) submitted an offer and the listing agents drug that transaction out for 3 months trying to get better offers. We didn't get much of a discount off the listed price (4%) but the wife is happy.

Welcome to foreclosure world!

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  • 2 weeks later...

When we bought our house, we first put in a serious offer on another house. We had exactly the same problems as you. They said they were entertaining a higher offer but wouldn't give our realtor any details so we could counter offer, were evasive and then finally stopped answering voice mails. Our realtor found out that their realtor was notorious for only selling to her own clients, so that she could get the full 6% fee. We never knew whether the sellers had even been told of our offer.

If you are really serious about the house, it was suggested to us that we could go there, knock on the door and politely strike up a conversation: "I noticed you were selling your house? Wow, beautiful area, I love your yard, you must have had so many offers?" to get the real story.

(*edit: whoops, forgot it was a foreclosure..*)

Then again, when we bought this house, there were 4 other offers. We never doubted that there were, the realtors and sellers story never changed and they never asked for a counter-offer. We did have to pay asking price but no more (and it was totally worth it :-)

Edited by Import
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Texas real estate brokers are required to deal with everyone (buyer and seller) in a FAIR and HONEST manner. At the same time, a selling broker has a fiduciary duty to his client to act in seller's best interest.

If mutilple offers exist, it is well within a selling brokers rights to leverage them for their clients benefit. In fact, not doing so may be a violation of their fiduciary duty. On the other hand, manufacturing bogus offers in an effort to extract a higher price from a buyer clearly is dishonest and could result in loss of the broker's license.

bpe3

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Texas real estate brokers are required to deal with everyone (buyer and seller) in a FAIR and HONEST manner. At the same time, a selling broker has a fiduciary duty to his client to act in seller's best interest.

If mutilple offers exist, it is well within a selling brokers rights to leverage them for their clients benefit. In fact, not doing so may be a violation of their fiduciary duty. On the other hand, manufacturing bogus offers in an effort to extract a higher price from a buyer clearly is dishonest and could result in loss of the broker's license.

bpe3

It strikes me as though you're more involved in large commercial real estate transactions wherein every party to the transaction is a professional than in the buying and selling of homes where the principals in the deal are typically ignorant of real estate practices and law.

Commercial deals are watched by enough sharp eyes that brokers that play dirty pool stand a decent chance at getting caught, and the deals are big enough that the legal liabilities could be overwhelming. Moreover, that there are relatively fewer brokers and principals in the market means that a damaged reputation can really destroy a business.

Residential deals and quite a few small commercial transactions aren't at all transparent, the principals are typically ignorant of the process, the agents themselves are often very inexperienced (i.e. technically working for a broker, but not being one yet), and there are many thousands of agents out there amongst tens of thousands of home buyers, creating an environment of anonymity in which a bad reputation doesn't necessarily prevent an agent from drumming up new business.

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It strikes me as though you're more involved in large commercial real estate transactions wherein every party to the transaction is a professional than in the buying and selling of homes where the principals in the deal are typically ignorant of real estate practices and law.

Commercial deals are watched by enough sharp eyes that brokers that play dirty pool stand a decent chance at getting caught, and the deals are big enough that the legal liabilities could be overwhelming. Moreover, that there are relatively fewer brokers and principals in the market means that a damaged reputation can really destroy a business.

Residential deals and quite a few small commercial transactions aren't at all transparent, the principals are typically ignorant of the process, the agents themselves are often very inexperienced (i.e. technically working for a broker, but not being one yet), and there are many thousands of agents out there amongst tens of thousands of home buyers, creating an environment of anonymity in which a bad reputation doesn't necessarily prevent an agent from drumming up new business.

Thank you for everyone's opinion on this. The rules described by bpe3 do apply to residential agents as well as commercial.

There are certainly agents who have questionable ethics, but I don't think the percentage is as high as a lot of the Realtor haters on HAIF would have you believe. Those that have dealt with one or two bad agents are not in as good a position to know as those of us who deal with several different Agents on a weekly basis. Most that I deal with are competent & try to do a good job for their clients, although I too have had to deal with my share of grade A loons. I don't need to hear any of you folks agent horror stories, as I said before, I deal with several a week and there are days when I want to throttle one or two. Believe me, nothing is more frustrating for a lot of us Agents than having to manage the other agent on "the other side of the transaction" to make sure they are carrying their end of the deal. It does happen more than it should.

I would be the first to support raising the bar on what it takes to get licensed, but that is another subject and I would rather avoid jmifd's & musicman's "realt***" tirades so lets just by pass that one. One of the positive side effects of the housing slowdown is it will "thin the herd" a bit and those that perform marginally will ultimately get out of it.

As for the original topic of multiple offers, it happens all the time. Selling a house is like looking for a job. How many of us have been in a position of job hunting, sent out tons of resumes, etc., it seems like nothing happens and about the time you find and accept a job, you get all these other call backs and offers.

Same thing happens with offers. I have one listing off of fashionable Canino Road in the $150's. It was listed with another agent for 6 months, I had it for a few months with nothing, then all of the sudden I got 3 offers in at once. I was sure the agents all thought I was lying. I guess 2 of them figured out it was true though. I had a buyer that wanted a foreclosure at 2400 McCue, and there were a lot of multiple offer situations on the low-priced foreclosure ones. We ended up with one at the Reata that we lost the initial offer on, then the one that got it couldn't get their financing. This came on the heels of 4 attempts to get a foreclosure at 2400 McCue, one offer at full price was outbid, the last two were at $5,000 above list price and we didn't get them. I listed Greaser's house and we had multiple offers on that one too.

It seems like for all the talk of a slow down, if it is a really good house, and/or a really well priced foreclosure, the multiple offer thing can definitely happen.

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Thank you for everyone's opinion on this. The rules described by bpe3 do apply to residential agents as well as commercial.

That there is a speed limit doesn't necessarily follow that I'll abide by it. It comes down to my perception of enforcement efforts, and how likely I am to get caught. Also, while I may break the speed limit, that doesn't mean that I'm a murderer. Many Realtors are the same way; they'll break little rules and not big ones. Doesn't mean that minor offenses are without consequence.

I think that before the crappy Realtors get out of the profession, the first response is that they'll resort to even more questionable tactics out of desperation. I'd be especially careful if I were buying or selling a home in this environment.

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That there is a speed limit doesn't necessarily follow that I'll abide by it. It comes down to my perception of enforcement efforts, and how likely I am to get caught. Also, while I may break the speed limit, that doesn't mean that I'm a murderer. Many Realtors are the same way; they'll break little rules and not big ones. Doesn't mean that minor offenses are without consequence.

I think that before the crappy Realtors get out of the profession, the first response is that they'll resort to even more questionable tactics out of desperation. I'd be especially careful if I were buying or selling a home in this environment.

I'm sure there will be at least a little of that, but I think you give the Realtors that are crappy more credit than I do. It seems like the ones that are crappy are crappy because, well, they are stupid. Again, I have dealt with a lot of Agents and most that I have dealt with are not that way, but when you do get one, they aren't that hard to spot. (At least for me). If they are truly crappy chances are they are not cunning enough to pull off too big of a scam of any sort. Pulling off questionable tactics would take some actual effort, and some initiative and creativity that many simply do not have.

Of course there will be some....

Edited by rps324
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