Can an agent falsely but legally claim that there's another bidder?

yes

but there's no way to find out if there's actually a contract out, is there?

no...but as it has been pointed out here numerous times, you should bid based on your assessment of value to you--if someone else thinks its worth more, let them have it. and, if it turns out that they don't exist or have "fallen through," then you may perhaps want to lower your bid.

"Can the agent legally make this up just to make the property look like it has multiple admirers?"

In order for the answer to this question to even matter, you have to believe that the agent (i) cares about the legality of his/her conduct and/or (ii) believes that there is some chance of actually being caught if lying. I would answer 'no' and 'no' to those questions, or, more accurately, 'issue doesn't cross their mind' and 'no'. In the real world, the textbook legal answer doesn't matter because someone would really have to screw up to get caught, which is why the behavior you are concerned about is as natural to brokers as breathing.

agreed--couldn't bother to write all that.

I don't know about the legality of the practice, but apparently it is done all the time. I agree whole heartedly with cc's response. Remember, something/anything is only worth what someone else is willing to pay.

I'm absolutely sure this has happened to us several times. We don't have a buyers broker & a couple of times when we went back for second looks on places there were suddenly other bids on the property, once there was an accepted offer. We never bid on them, but several months later those apartments are still on the market & have even since been reduced. Only a desperate buyer will believe that crap right now. Don't fall for it.

i seem to be agreeing with you a lot recently. I must be getting cranky in my old age. or you are mellowing.

You never know if they are just stoking a bidding war - you against yourself.

Thanks for the responses! We have a maximum number in our minds and we're not going over that NO MATTER WHAT.

But your best bid, and put an expiration date on your offer. And good luck.

Yeah, I just assume that the other bidders don't exist. I had one agent tell me that every apartment in a building had just received high offers -- including the apartments she didn't represent. I just smiled, nodded, and made a fair offer on the apartment. (Oddly, none of the other offers she told me about were accepted...go figure.)

That's why it's so important to remember that there's always another apartment -- particularly in this market. If the offer you make is strong, they'll either take it or not. But I refused to get into any sort of bidding war -- against myself or against anyone else.

LOL , I meant PUT your best bid not BUT.

Good for you; stick to that number! Someone on SE once sagely advised: Never fall in love with an apartment until it is yours.

not sure i agree about the expiration date. seems unnecessary. you're not committed in any way. if after a reasonable period of time has elapsed with no response, I would still remain pleasant and ask when you can expect a response. depending on the answer is how to proceed.

CC
Yes and no,it doesn't have to be a short expiration but an expiration particularly when there are other offers (whether real or not) currently on the table.
No need to kosher someone else's purchase.

agree that an expiration on bid is good-prevents your being used as a shill
and love the "lower the bid" if the better bid doesn't trade
great to deal the billshitters a bit of pain when they come crawling back

First I would never be biddig oN just one. And unless you are desperate for this unit, i'd go back with a 10% lower bid and an expiration date of 2 days. Who needs weeks to decide to sell? You call brokers bluff, if no other bid you saved 10%, if the other bidder is real you shouldn't be competing with her anyway.

I wish there were some honest brokers out there. I had the same thing happen to me when I bought my apartment. Seller's broker told me that, after her client accepted my offer, someone offered more for the apartment (hoping I'd be stupid enough to raise my offer--which I didn't). I held firm (I doubt there was another offer). I was working without a broker. Question: have there been instances when both buyer's and seller's broker lie about another offer to get the buyer to raise his/her offer?

OP, I think realtors often consider this just another negotiation strategy.
I think an agent once pulled this on me. How do I know?

1. Why would the agent wait until I made the offer to tell me about the contract?

2. I ended up withdrawing my offer, and the apt remained on the market for a long time and eventually was taken off the market. An unlikely progression, had there actually been a contract out w/ a buyer eager to pay more.

I made an offer once & was told that someone outbidded me & I could make another offer if I wanted to. I said NO & then the seller's broker asked me if I would like to be the back up offer. I said, "Yeah but at 5% off my original offer." I never heard from them again but I'm not sorry I made that contingency. If I were going to be "2nd" in line, I wanted a discount for waiting.

we are supposed to present all offers to the seller, not just the best. if you like the apartment, put your offer foward, then you will find out if for sure there is another bidder or not

Well if there really is another offer, why would they need a 'backup offer' It all sounds like b#llshit to me.

just illustrating that it is a way to try and find out if there is really another offer on the apartment or not.

All I know is that I am SO disgusted by the so called 'NYC Real Estate Professionals' that I've met so far that I'm thinking about getting my own real estate license so I can search for my own condo b/c that is ultimately the only thing they have that I don't...a data base that includes all of the properties for sale in Manhattan. That data base is in no way worth 6% of the seller's purchase price--not even close.

>>not sure i agree about the expiration date. seems unnecessary. you're not committed in any way.<<

An expiration date ensures the seller doesn't just drag the process out, using your bid to entice other higher offers.

This happened to us--as I mentioned in an earlier post on a different thread, we put in an offer and then were told by the seller's agent that a more desirable (cash) offer had come to the table. We stuck to our offer and refused to budge (I'm fairly certain the agent was lying about the other offer). So the sell-side just sat around twiddling their thumbs, clearly trying to use our solid offer to garner other bids. We ultimately walked away from the deal. The apartment then lingered on the market, the stock market tanked, and the apartment eventually traded for a price significantly lower than our original bid.

The sellers' own greed ultimately got the best of them and lost them a decent deal.

Article 12 Section 441-c (a)
New York State Real Estate License Law

"The Department of State may revoke the license of a real estate broker or salesperson or suspend same, for such period as the department may deem proper, or in lieu thereof may impose a fine not exceeding $1,000 payable to the Department of State......if such licensee has been guilty of fraud or fraudulent practices, or for dishonest or misleading advertising, or has demonstrated untrustworthiness...."

Deliberately misleading statements about nonexistent bogus competitive offers clearly demonstrates "untrustworthiness" and is probably fraudulent.

What we need now is a good sting operation...any volunteers? Anyone from NYDoS reading?

i can't argue that it is shady, but putting an offer foward despite what may be a bogus (or real) offer will call that agent on it...and then you will know where you stand

quit while you're ahead. we liked you this morning. stop.

what i have i said that you dont like?

i can't argue that it is shady?

why put an offer forward based on that?

perhaps i misunderstood your point?

I'll take part in the sting! I would luv to bust one of these shady people & with hidden cameras being so tiny now, it could be easily done :)

columbia county....you're just snarky/mean....sorry but it's true

thanks for the personal attack...and that makes you?

it is shady for a seller's broker to falsely claim there is another offer. but as a buyer's broker, if my client likes a property enough to want to put an offer in in the first place my suggestion would be to put that offer in anyway, at whatever price they want. this will at least potentially uncover any potential malfeascance by the selling broker

To me, there's a big distinction between the words "another offer" -- which I would use if I had anything at all to my seller in writing, even if it was a complete lowball piece of cr*p --

and "contract out" -- which in this market means, "somebody met our price and we accepted it, but there's a 1 out of 3 chance that a) they don't get financing, or b) bid on more than one thing at once and won't marry us or c) decide after sleeping on it that their job is shaky."

But no, I don't just bandy those words about. I think it's pretty obviously a fraudulent misrepresentation to do so.

It's worth noting, though, that market psychology is so skittish that those words (which helped a lot in the bull market) don't help, they actually hurt. So the better play for a seller's agent in this market would be to conceal the existence of an offer, because it's only likely to make potential bidder #2 think "screw it, I'm not getting involved in a war over real estate in THIS market."

The only counterexample I have to this rule is the UWS, where I rep'd buyers who lost a three-way bidding war to an above-ask, all-cash buyer. Seller knew there was a lack of inventory in their niche, and they played it.

ali r.
{downtown broker}

i had a similar thing done to me after i put in the offer and the seller and seller's broker could not provide the Offering Plan and the financials quickly. they wanted me to sign the contract before due diligence. the broker threatened with other offers and contracts out. i ended up getting the apartment.

that broker said "I'm the only broker in this building". Less than 1 year after i moved in, i got my RE license. in the past 6 years, she had 1 sale as opposed to my 10.

"Deliberately misleading statements about nonexistent bogus competitive offers clearly demonstrates "untrustworthiness" and is probably fraudulent."

The brokers owe their allegiance to the seller, not the buyer, so misleading the buyer doesn't violate their duty. Got it now?

Police can lie to a criminal suspect in the interests of justice.

Lying is the American way. Lying is constitutional. Lying is deemed good.

Just tell the agent who you are working with that you don't want to see any units that have contracts that are currently "out". Let them know that if they lie, they owe you $1,000 on the spot. Make sure they have $1,000 in their pocket everytime you hit the bricks to start looking. If they show up without the grand, tell them to go to the bank before you start looking.

"The brokers owe their allegiance to the seller, not the buyer, so misleading the buyer doesn't violate their duty. Got it now?"

drdrd....I am afraid I don't "got it now". An obligation of allegiance to a client does not justify breaking the law of the State of New York. But please feel free to contact the Manhattan attorney generals office if you would like to discuss some of your past business practices.....

patient09, why would you work with a buyer's broker that you had so little confidence in that you would consider a tactic like that? i would think two people could find a better way to work together. if your buyer's broker did even one thing you felt was dishonest (like lying) why would you consider continuing to work with them? there is no contract.

because you never know, set the ground rules before you start. ex. I just rented a vacation home in southeast for November. We agree on price, all in, yes. contract comes with a nonrefundable service fee and compliance fee. next.

but as so many on this board love to point out, you don't need a buyers broker in manhattan. why use one if you have so little confidence in them?

That certainly seems to be the case. I don't necessarily subscribe to it. I have experienced it good and bad. I think there are some highly qualified BB's out there. It is just an extradinarily small subset of the broker universe IMO.

on the occasions that i have worked as a buyer's broker my clients have either been out-of-town types who actually do need help, usually due to time restraint and/or lack of any kind of neighborhood knowledge, etc. or with people who i have a good relationship with, in other words, they trusted and liked me well enough to believe i would do a good and honest job for them. i just don't get why someone who uses this board would use anyone as a buyers broker without enough due diligence or a personal relationship with them

east: I agree. My past bad experiences were many moons ago. I am now spending time with someone I have a high degree of confidence in. My first advice comments 2 hours ago were comments to others.

Imo we really just need FSBO to be easier. You may remember I posted that I'm trying to buy & would like to arrange a private sale. If SE (or another site like it) could set up a whole FSBO section for people willing to do their own legwork it could cut out this middleman.

Of course there will still be plenty of people who just want to have the work done for them so there will be work for the brokers, but the problem now is that there are no real options for the rest of us.

Band together people! That's how things change.

fair enough. again, my experience as a buyer's broker is limited to those who have already decided they want to do business with me or those who know they need someone's help, and i do my best to convince them i am the person for the job. i have experienced the lack of trust big time on the rental side however, when people respond to advertising (especially craigslist).

If an agent/broker misrepresents reality to a customer, that's against the law. Period. Licensees owe fair and honest dealing to customers, and fiduciary responsibility to clients.

Re: are there honest brokers, of course there are. I never lie about anything. Some people get really mad at me for that. F*** 'em.

What I'm finding these days, weirdly, is that it's the FSBOs who have been misrepresenting facts. Why do you think they're doing that? They're not evil brokers.

See, this is a tough business, people. If you ever own real estate that you need to get rid of yesterday, and it's not selling, then you will understand the pressures that make people lie. I consider it part of my job to shove reality under people's noses whether they like it or not. I do not get fan mail for this, but I was a journalist for over 20 years and I don't know any other way to roll.

I know a couple of FSBO sellers who are just *desperat*e to sell. They're realistic and doing everything right, I'm taking my clients in there, but in this market, if your apartment has a flaw that can't be easily fixed--a quirky layout, light but no view, outdated kitchen--the thing just tends to sit. Because there's better stuff out there right now. The only way to move that apartment is to discount that price even more than the general market, and most sellers cannot bear to do that.

dragonfly, I hear you. I actually agree with you. But there is a reason why states, all states, license real estate agents. Because that way they can take your license away if you break the law. If you as a FSBO violate the law--lead disclosure, fair housing law--you too can be held accountable, including fines and jail time. Exceedingly rare, but if it gets to the point that there are virtually no real estate agents, and it might, then I think it's going be the wild west out there for awhile.

I refuse to incriminate myself. What I was attempting to say is that when you sit down at a poker table to play cards, do you trust the other players & what they tell you? I don't.

that's one hell of an analogy. true but sad.

if you bother to have a buyer's broker though, you should trust them. if not, why do you have one to start with?

agreed..great analogy..i tend to block out any info offered by anyone who has an interest in making me buy or pay up for anything...and they may well be honest etc..but i find it not worth the time considering whether they are or not

and even a good buyer's broker will tend to parrot the seller's...i ask not to hear..my offer will be my offer regardless of whatevr stories on contracts, cash or whatever..once bought a place that had a better (also all cash)...very entertaining the response when I asked what happened to the other offer

be your own advocate..

like the idea of an fsbo site for buyers and sellers

might have to be a paysite as no re businesses would advertise

when i buy next (6mos to ayear from now prob) i might adevertise my parameters and solicit fsbo sellers---rtransaction costs (esp 6% commish,mtg recording/mansion taxes, and title ins) are so oppressive anyway...if the 6% can be eliminated it makes purchasing much easier

fluter, you make many valid points. Unfortunately it doesn't seem that the *ability* for the DoS to take bad brokers licenses has any impact because there are blatantly bad brokers swarming in the houses. I've met them.

Personally (I'm the buyer) I am willing to do my own due diligence & would walk away from any FSBO deal in which I thought the seller was bullshitting me. I'm far from desperate & am looking in a higher price range where comps are pretty easy to come by. A good RE attorney can be incredibly helpful (reading minutes, floorplans, drawing contracts, etc) & I'm happy to pay for their services. I'm not a cheapskate (not why I want to cut out brokers) as much as a renegade fighter for ethical business practices. At least lawyers really DO have to worry about being disbarred if they f up.

pa56 - Call their bluff by telling the broker that you have selected 2 apartments and will be purchasing the one that agrees on the lowest price. You would now like the seller to submit their lowest and final price to you and you will make your decision.

If you can walk away from this it is easy to turn the tables on them.

Eastside, please let me clarify, again; my comments about not trusting a realtor was meant to refer to the seller's broker; if I had a buyer's broker I'd trust them or kiss them bye bye.