Is Your Listing Agent Lying?

So today I got asked a question buyers always ask: We are interested in buying a home, and we want to make a bid -- but the listing agent says that there's another bidder. Is she lying?

The answer is: you will never know. Despite what the Freakonomics guys say, a listing agent wants to sell a home for the highest price possible. One tried-and-true strategy for doing that is to pit potential buyers against each other.

Unfortunately, another tried-and-true strategy is to create a shadow bidder, so that the potential buyer gets played -- actually, gets defrauded -- into bidding against herself.

An honest agent won't flat-out lie. Instead, he'll use a phrase like "there's a lot of interest on this property" or, (if it's true) say, "I just had someone back for a second showing."

But you have no way of knowing if the agent you're dealing with is honest or not, so you should control the only bidder you can control -- you.

Do your homework (I'd advise, with the help of a buyer's agent) and figure out what properties are worth in your area. Then, decide when you see a home what it's worth to you. Make up your mind whether you'll pay asking price, or you'll go above, or you need to get the property for a little bit under.

Then, stick to your guns; this way you'll sidestep a bidding war. If the other bidder is real, you'll probably lose the property. But remember, you wouldn't have wanted to pay what the winning bidder paid anyway. And you won't have gotten "carried away" into paying more than you intended just to beat out somebody else. Take comfort in a maxim I tell all my real estate clients: there's always another house.

Comments

[MH51]

Sadly I don't believe anyone in real estate anymore. My husband and I believe they all lie and lie about everything! It's a gamble every step of the way. So like Allison said, decide what you want to pay after you do your homework and stick to it.

I just completed a class to get my license. Not to be a realtor but to sell and buy my own house. The things we were taught in class would make your head roll. And coming from a sales and negotiations background these people couldn't sell their way out of a box. Honestly they just throw stuff out there and hope something sticks. I think they have been fat, dumb and lazy for far too long while counting their money. Now they have to work for it and don't have a single clue. It was pathetic what I saw. Eye opening but sad.

[WOLFWARRIOR]

And double check the appraisal on the house !!!

I have a fake appraisal in my hands right now from countrywide/landsafe ...

It's easy for a company to rig it higher or lower ....

So CHECK the appraisal out ....

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