Broker Tactics

Sounds like a familiar scenario, but sometimes there really are buyers out there like that. So what happened? Were you able to get an accepted offer?

Don't believe the crap. Ever since the market started slowing down, brokers have had to exaggerate the amount of interest they've been seeing.

True story: A friend of mine went to see an apartment on the UES about 2 weeks ago. It was a private showing, not an open house. He wanted my opinion of the apartment, so I called up the same broker to set up an appointment for myself a few days later. The broker didn't know that I was only looking at the apartment for my friend and thought that I was an unrelated buyer. When I got to the showing, the broker told me that he had already received an offer for the unit (not true, my friend had just seen the unit, not made an offer) and that if I was interested, I would have to make a decision quickly. First mistake - if there really was an offer on the table, why would it matter if I decided or not? Second mistake - the day after I saw the apartment and was told that there was already an offer submitted, the dumb-a$$ broker called my friend to tell him that lots of other buyers had expressed interest (not true, it just me) and that my friend needed to act quickly if he wanted the apartment.

So my friend and I caught a broker in a lie as he tried to play us against each other. We had a great laugh. I was gonna reveal the broker's name but it would be too easy for him to figure out who we are. But I will tell you that he works for one of the larger, more visible brokerage companies. Perhaps urbandigs knows him? :)

Bottom line, don't believe anything coming out of a broker's mouth. Not even "hello." This is not the first time I've caught a broker in a lie before. The amount of shenanigans going on out there is disgusting.

iMom,

I'm no fan of broker tactics myself, but how on earth did you know that you and your friend were the only two people involved in the viewing? I've been through similar episodes, and no matter how many times I convince myself that the broker is inventing fake interest and bidders, I realize that there's no way I can prove it. It's aggravating. Some clever soul should start up a subscription-based online business that pays off doormen to count the actual number of visitors to open houses. I would gladly pay a few bucks a month for such information.

East Cider: Because the broker told me that there was already a bid submitted, but later told my friend (who saw the apartment first) that there was only "lots of interest" NOT that a bid was submitted. This means that the broker was counting on my friend submitting a bid before he actually did, but was already representing to me that a bid was in hand.

It's the same as when a broker tells you that a unit has multiple buyers. You then walk away from the deal and 2 months later, the property is still on the market and has been price-chopped. You then know that the broker was b-sh!tting you.

I asked someone else about this (OK, it was urbandigs) and he says that usually the offers are real. I will say in my one experience where I put in an offer, the other offer claimed to be "just below ask". Our offer was well below ask but what I learned later is that the property went for ask by the original bidder. It made me wonder if the seller's broker told the other bidder that they had another offer, just to get the price to ask. How dodge-y is that? For this reason, I've decided not to make any offers unless I mean it. Plus putting in an insincere competing bid just begs for a bidding war when the broker wants it, and not necessarily when the buyer wants it.

In any case, we can't change what the brokers do and we just have to bid what we think is appropriate.

I am looking in Brooklyn and recently place an offer. I was the first to make an offer and they wanted to continue the show the apartment. I told the selling broker thats fine but when you come back to me in a week or two that my offer may be reduced. I am not worried about lossing this deal as many more will come my way. I am planning on reducing my offer if in deed I am the highest bidder. You have to give them the same tatics it is the only way to shake them out. On the other note I will put around 40 to 50 percent down when I intent to buy this will get me to a conforming loan limit and a significanly lower rate on my mortgage vs a JUMBO Mortgage

psmooth- on ur plan to reduce ur offer if u are highest bidder.. how does that work? isn't ur bid firm once accepted?

Until a contract is signed by both parties, nothing is locked in. Ethics and fair-dealing may be factors to consider, but generally, there is nothing legally binding until a contract is signed. There is a risk for sellers when they wait to accept an offer and delay the contract process from moving along to signeing: that risk is that the offer may change or evaporate. Yes, after accepting an offer a seller may continue showing the unit until the contract is actually signed by BOTH parties. That's perfectly permissible, but the downside is that the buyer is not bound.