Estate agent Query

[scribe]

I went with my son to view a house yesterday that he was interested buying .He is a first time buyer 'no chain'.Today my son put in an offer with the estate agent who told him someone had already put in a lower offer than the asking price ,my son offered the asking price,the agents then told my son that they would allow both parties, my son and the others to put in a bid for the house of what they think the house is worth, via post closing at 12.00 tomorrow. This seems very unethical to me as there is nothing to say there is another party involved which would mean my son is basically bidding against himself which makes my blood boil.If this is the case is there any way an estate agent has to prove or show other parties are involved with the sale of a property.

 

[Public Advice]

Hi



The estate agent may be a member of the NAEA. Their website address is www.naea.co.uk. If they are members you can voice your concern to them. If they are not members they have to be regulated by the Property ombudsman’s scheme as a minimum. You can also voice your concerns here and by threatening the estate agents of your intentions; they may stop playing these silly games.


Worst case – you can always look for something else. Its now a buyers market and no longer a seller market.



The fact is there are very few buyers on the market who can actually get the finance to buy a property. Good luck.

Public Advice - Josh

 

[tony84]

Ive known this to happen before.
Im not sure whether its allowed or not though.

 

[toddle2u]

Nothing illegal (maybe unethical) at all in this as it goes on all the time. 2 people interested in a property the Agent has a duty of care to their client to get the possible price so they ask the potential purchasers to offer full and final sealed bids. Can't see a problem with it myself

 

[internetspaceships]

This is how estate agents operate I'm afraid. Wait did I just migrate to a forum offering people advice on buying houses now?

 

[Rhodes100]

Why do you think that the other party would want to get involved in a bidding war, and would be happy with this scenario?

The most important point in negotiating to buy anything is to not get a personal attachment to it. You see it all the time on ebay, where the item often gets sold for much more than you could buy it for elsewhere.

Personally I would withdraw the offer, which at the moment is the highest offer, when the sellers get to hear about it they may want to reconsider whether they wanted to accept it.

If someone else wants to offer more than the market value of the property then good luck to them.

 

[Jamesbtown]

That is very good advice. Why not also either just knock at the vendor's door and explain that you have made an offer and that it will be removed as you think that the agent is messing you about? Alternatively send a letter to the vendor.
Often the agent is working in conflict with the needs of the vendor and is just trying to be clever.
Also do not fall for the agent's ploy of saying that it is better that you use their solicitor and in-house mortgage adviser as it will help you close the deal.

 

[scribe]

Nothing illegal (maybe unethical) at all in this as it goes on all the time. 2 people interested in a property the Agent has a duty of care to their client to get the possible price so they ask the potential purchasers to offer full and final sealed bids. Can't see a problem with it myself

What i find wrong with it, is that you only have the word of the agent that there are /is another party interested as there is no way of proving otherwise so you could end up bidding against yourself .I have heard today my sons offer was accepted he increased his offer by 6k still very suspicious about it.

 

[deniser]

Agents aren't interested in getting the purchase price up for their own benefit for two reasons:

1. their commission is at best only a percentage so they are not going to risk annoying scarce buyers for the sake of a few pounds

2. the property may then be downvalued by the mortgage valuer anyway so there is no point inflating it artificially and then potentially annoying the seller as well

If they have asked you to go to sealed bids it is probably genuine that two people are interested in the property. Just put in a written bid for the amount you are willing to pay but don't forget to go up by about £1.05 or so on the rounded price as the other person will probably go up 1p. ie don't bid £100,000 or even £100,000.01 but bid something like £100,001.05.

Don't forget also that this is a buyer's market and don't be tempted to pay more. Be prepared to walk away; something better will always come up.

Also, it is not just the price of the property that is relevant. Explain your status in your bid letter eg. whether you are buying in cash, whether you have a mortgage offer in principle, the amount of deposit you have available. The seller is not necessarily going to accept the highest price - unless that has been made a condition of the sealed bids - but the one who is most likely to be able to proceed with the purchase.

 

[Rob S]

Good response from Deniesr

Please note that the agent is probably acting on the Vendor's instructions.

Agents often get the blame for "bad practice" when it is often the Vendor (ie owner).

Nothing illegal or even immoral about asking for sealed bids. It saves a lot of "tooing and froing" when you have two people interested in one property.

It is a very difficult market and this makes valuing a property hard especially when you have two people wanting the same house/flat. I know of one house that was valued last year by three agents at £400k. Three people wanting it - it eventually went for £475k.