Can estate agents use "ghost bidders" to drive up price of house?

[mercman]

The IAVI have looked for regulation for decades

Mr.Man, whilst I don't like arguing with you about this, but they have done absolutely nothing to change the Public perception of Estate Agents and the Public perception of same. Furthermore if they have over 95% support for change, why haven't they gone about introducing self regulation. This could have saved an awful amount of time and more important court cases and legal fees been incurred. In reality I do not think inwardly the IAVI members want change but they know it will happen and they will then come out pleading crocodile tears for any changes.

It is very hard for the Public to trust anybody that is selling something they do not even own.

 

[MrMan]

MrMan, we went really low with our initial bid so we were still willing to go up - again, if you happen to read my input properly, you'd see that we did not know whether there was a ghost bidder or a real one -the house is really great as is the location so another person interested in it wouldn't be a surprise. Yes, the market is full of cheap houses but we found one we liked and which suited us and went for it - not blindly, we set ourselves a limit which we did not even come close to and we were willing to pull out should the other side go any higher.

I read your post properly, it was straight forward enough. The problem with 'ghost bidders' is that whenever someone suspects that there is one it is almost impossible to change their mind. My viewpoint remains the same though as regards my previous post.

 

[MrMan]

Mr.Man, whilst I don't like arguing with you about this, but they have done absolutely nothing to change the Public perception of Estate Agents and the Public perception of same. Furthermore if they have over 95% support for change, why haven't they gone about introducing self regulation. This could have saved an awful amount of time and more important court cases and legal fees been incurred. In reality I do not think inwardly the IAVI members want change but they know it will happen and they will then come out pleading crocodile tears for any changes.

It is very hard for the Public to trust anybody that is selling something they do not even own.

I agree regarding the public perception, they have done nothing to alter this, rather they have tried to justify practices. The NRA (national realtors assc) in the US has had major results with regard to public perception of the profession, and it wasn't rocket science.
The IAVI is self regulating but that isn't really enough as self regulation can't provide the transparency that people want/need.
I am a member and fellow members that I have talked to (granted in similar age bracket,early 30's) crave a more stringent approach to membership and licensing. There are many areas that need to be overhauled or tightened up that are not an infringement on work practices and can only benefit the industry in the long run.
Anyway thats off topic, I still think the ghost bidder is not nearly as prevelant as many believe.

 

[crabbybear]

Can you not get your solicitor to request details from the auctioneer on a bid that outbids yours ? I think so.

 

[Lobby]

Can you not get your solicitor to request details from the auctioneer on a bid that outbids yours ? I think so.

No, I don't believe you can. And in any event, it wouldn't be a problem to fake a "genuine bid" by using a friend and their phone number.

I haven't yet seen a proper transparent system that can satisfy people that ghost bids are not used.

In an auction scnario, the auctioneer (and the vendor) can bid on a property only if it is below the reserve price AND if it has been clearly stated before the auction that this can happen.

 

[Complainer]

I haven't yet seen a proper transparent system that can satisfy people that ghost bids are not used.

Check out the Scottish system, where bids are binding and verifiable. So the buyer can't change their mind on a whim and walk away from their bid.

This is a double-edged sword - is it really what buyers want?

 

[Lobby]

Check out the Scottish system, where bids are binding and verifiable. So the buyer can't change their mind on a whim and walk away from their bid.

This is a double-edged sword - is it really what buyers want?

How can a bid be considered binding and yet achieve the sellers expected price? e.g. property on offer for 200K - I bid 20K - maybe I'm thinking about this the wrong way, but I can't see how you can make bids legally binding

 

[csirl]

How can a bid be considered binding and yet achieve the sellers expected price? e.g. property on offer for 200K - I bid 20K - maybe I'm thinking about this the wrong way, but I can't see how you can make bids legally binding

They have a reserve price - both bidder and seller must complete the transaction if the bid is above the reserve price.

The thing about ghost bidders is that ghost cash isnt much use to most people. If you like a house, bid what you think is a fair and reasonable price. Even if the ghost bidders beat you, I think the seller would still prefer real cash to ghost cash.

 

[Lobby]

Just found this on Scottish Law:

"It is worth noting that written acceptance of a written offer for property purchase is a legally binding contract."

However, prior to the making of a written offer and the acceptance by the vendor then there's nothing in there to prevent ghost bidding.

The above law just prevents gazumping - an entirely different (and one time genuine problem) in Ireland.

 

[MrMan]

They have a reserve price - both bidder and seller must complete the transaction if the bid is above the reserve price.

The thing about ghost bidders is that ghost cash isnt much use to most people. If you like a house, bid what you think is a fair and reasonable price. Even if the ghost bidders beat you, I think the seller would still prefer real cash to ghost cash.

This is the approach to use. People get hung up on rival bids etc, but the only prices you should be aware of is the price you can afford and the price you think a house is worth.
People jump in and out of negotiations whether through tactics or not and it can lead to sometimes confusing bidding situations. Just like all things 'ghostly' there is usually a plausible explanation behind them.

 

[Green]

Mr.Man, whilst I don't like arguing with you about this, but they have done absolutely nothing to change the Public perception of Estate Agents and the Public perception of same. Furthermore if they have over 95% support for change, why haven't they gone about introducing self regulation. This could have saved an awful amount of time and more important court cases and legal fees been incurred. In reality I do not think inwardly the IAVI members want change but they know it will happen and they will then come out pleading crocodile tears for any changes.

It is very hard for the Public to trust anybody that is selling something they do not even own.

I would agree with this 100%..

 

[csirl]

Just found this on Scottish Law:

"It is worth noting that written acceptance of a written offer for property purchase is a legally binding contract."

However, prior to the making of a written offer and the acceptance by the vendor then there's nothing in there to prevent ghost bidding.

The above law just prevents gazumping - an entirely different (and one time genuine problem) in Ireland.

In Scotland there is a time limit on the bidding. Seller sets a deadline for the submission of written legally binding bids - often submitted in sealed envelopes. All bids opened at the same time after the deadline. Highest bid is legally required to complete. Eliminates ghost bidding because a ghost cannot submit a legally binding bid.

 

[shutter]

Just before the last budget, we went to view a house that has been reduced from 350K to 320K. EA spoke about the value for money this house was and how an offer of 280K had been rejected. This was followed by a little tale about how the vendor was under no pressure to sell, but she had a feeling that 300K would secure and advised us to place a quick offer to avoid getting into a "potential bidding war" with the other buyer. The house was too over looked so we passed, but was interesting to watch the asking proce on Daft drop below 275K before it went Sale Agreed. Recently went to view a second house with the same EA - in 9 months, the Sales pitch except the reason why the Vendor was in no rush to sell, was word for word to what I was given for the previous house, including the rejected 280K offer. Asking price now @ 280K and the "other bidder" appears to have lost interest - I think I will wait a little while longer

 

[MrMan]

Just before the last budget, we went to view a house that has been reduced from 350K to 320K. EA spoke about the value for money this house was and how an offer of 280K had been rejected. This was followed by a little tale about how the vendor was under no pressure to sell, but she had a feeling that 300K would secure and advised us to place a quick offer to avoid getting into a "potential bidding war" with the other buyer. The house was too over looked so we passed, but was interesting to watch the asking proce on Daft drop below 275K before it went Sale Agreed. Recently went to view a second house with the same EA - in 9 months, the Sales pitch except the reason why the Vendor was in no rush to sell, was word for word to what I was given for the previous house, including the rejected 280K offer. Asking price now @ 280K and the "other bidder" appears to have lost interest - I think I will wait a little while longer

While he may have been pulling your leg, never underestimate the power of a vendor to reject a seemingly reasonable offer. It is amazing how the mindset changes when ones goes from purchaser to vendor. A house that needs work suddenly has character etc. An EA has a job to do, that generally doesn't include giving purchasers the inside track on how to get the property for as little as possible, the sooner peopple realise this the better.

 

[mercman]

An EA has a job to do,

Correct and Agreed. But they hold no divine right to think that any person contemplating purchasing a home, drives around in a Banana Boat. This kind of treatment has left the entire EA business in the state it is in now. Whilst the market will eventually recover, the attitude of the public concerning the Estate Agents will not unless corrective measures and actions are taken.

 

[Bronte]

The thing about ghost bidders is that ghost cash isnt much use to most people. If you like a house, bid what you think is a fair and reasonable price. Even if the ghost bidders beat you, I think the seller would still prefer real cash to ghost cash.

So right, why can't people get that it doesn't matter what the estate agent says. You bid what you the buyer wants to bid and if you don't get it for that price you walk away, there will always be another house.

Mercman I think you'll find that bankers, developers and politicians in bed with them are far more dishonest than estate agents and can do a lot more damage.

No estate agent has forced anyone to buy a house, people have to look out for themselves. We do not live in a nanny state.

 

[Green]

This kind of treatment has left the entire EA business in the state it is in now. Whilst the market will eventually recover, the attitude of the public concerning the Estate Agents will not unless corrective measures and actions are taken.

Mercman I think you'll find that bankers, developers and politicians in bed with them are far more dishonest than estate agents and can do a lot more damage.

I would agree with most of both points, what we have had is a perfect storm of professionals and politicians over the last 50 years who have conspired against people buying houses. The whole planning and development process has been geared towards profit from those involved and buyers end up in areas with poor services and no transport links..Often those who make decisions, local county councillors have no real expertise in these decisions. It is no wonder that European Environmental Agency cites Dublin to developing European countries as the example not to follow when developing a city. On this issue, this State has failed, and failed very badly to protect people.

 

[mercman]

Mercman I think you'll find that bankers, developers and politicians in bed with them are far more dishonest than estate agents and can do a lot more damage.

No estate agent has forced anyone to buy a house, people have to look out for themselves. We do not live in a nanny state.

But I do think that Bankers especially will become accountable at the end of all this turmoil. And if they are not the people should act with their own intuition and use their feet and walk away from the Institutions that have left every Joe carry the can for their careless actions.

Regarding you comments you are correct about the Estate Agents. But there have been cases whence some were taken to Court for malpractice. and there would be many more cases if their Governing body chose to regulate themselves rather than spouting off stupid comments that the majority of them are in favour of regulation.

 

[Green]

And there would be many more cases if their Governing body chose to regulate themselves rather than spouting off stupid comments that the majority of them are in favour of regulation.

I agree. Its one thing saying you want regulation its another thing actually doing it.

 

[Bronte]

But I do think that Bankers especially will become accountable at the end of all this turmoil. And if they are not the people should act with their own intuition and use their feet and walk away from the Institutions that have left every Joe carry the can for their careless actions.

.

Bankers will never be accountable, they are Gods, we've been here before and nothing has changed.

Unfortunately we cannot exist without banks so it's not a case of walking away. As far as I'm concerned it's a cartel. Who allowed that.

You can though walk away from an estate agent as there is a competative market and choice.

It was the policitians who decided to allow crazy planning decisions, to allow development without services in the middle of nowhere in many cases, to pander to the developers through tax incentives and not requiring them to put in infrastucture, it was the bankers who funded this merry go round. It was the bankers who gave people 100% mortages over mad terms of 30 to 40 years in order for the developers sell off property at vastly inflated prices so the developers could repay the banks, and the politicians got the brown envelopes from the developers. Meanwhile the bankers with a cosy ear with the government made sure the regulator had no power. None of this has changed. The only people in jail are small time debtors, no banker, regulator, developer or politician has been brought to brook and none will. Meantime ordinary Irish people in serious debt are in terrible stress, losing jobs and commiting sucide.

And still no estate agent who maybe pretended there was a ghost bidder, ever forced anyone to purchase a property.