I'm making an offer on a home...Can a Realtor tell me there is another offer if there truly isn't?

Question

I'm about to make an offer on a home. However, the realtor has told me that there is another person making an offer and that ours are about equal.

Would be be allowed to tell me this if it weren't true? For example, do you think he is trying to get me to pay more so he gets extra commission?

Answer 1

I have been in Real Estate for 30 years and most of the answers above are pure wrong and or misinformed. To keep it short.... if there is more than one offer, they are all presented to the seller at the same time. Even if the listing agent is aware of the strong possibility of another offer, the agent must disclose this to the seller. The seller has the right to have all material information at his disposal when considering an offer(s). The seller has the right to reject all or counter one. Usually they counter only one. Keeps the complications down. The seller can actually counter all with the written cravaet they reserve the right to accept any accepted counter and reject the rest.

There is some opinions that realtors try to raise prices to raise their commission. This notion is pretty much crap. In my 30 years I have known thousands of agents and brokers and have never known even one to take this viewpoint. If in fact your agent is trying to get you to raise your offer, the chances are about 999 to 1000 he/she is trying to get you the property.

If you are still confused you can email me.

Answer 2

There is typically an agreement in place that splits commission between the listing agent and selling agent for every home. The percentage for the commission usually adds up to around 5%. If the listing is exclusive, the same firm would get the full commission.
The potential gain in commission for an extra $2000 in a formal offer would be about $100.. really not a big deal considering the value of the entire transaction. In this instance, there is much more for them to lose than gain by lying, so, I would assume they are being honest.
The important question that should be asked is... who your Realtor is representing? Are they a buyers agent, a sellers agent, or both? I would stay away from one that represents both sides in the sale, there is too much of a potential conflict of interest. It is perfectly legal (in most places) for them to do this, however, if the question is asked, they are legally bound to answer honestly. They must disclose their loyalty if they are directly asked. It is a big investment, so I suggest finding a Realtor that will be on your side exclusively. They will be in a position to earn their commission by working for it. Drive them crazy with questions and requests. There is very little they wont do to make things work in your favor.
Ultimately, the final decision comes down to the home seller.. they can accept or deny any bid. There is often more that goes into the equation than just money. For instance, I was the middle bidder on my home and the sellers liked dogs. I have 2 dogs, and my buyers agent told the sellers that I was looking to move into a more dog friendly environment. That is what made the difference. The high bidder had a local reputation for fixing up places and selling them quickly. The sellers were more inclined to sell their former home to someone that would enjoy it.
Good luck :)

Answer 3

This agent works for the seller and not you, I would place a clause in the contract that I want to be there when the offer is made also that I get first right of refusal. This clause will give you the right to top the final offer or reject the offer.

There could be another offer, but when you see the owners while you and the Realtor is there you might ask the owners if they offer they received before is being considered with this offer? If they say yes then you Will know they have another offer, if they say no then you will know they have no other offer to consider.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 4

I really doubt that any motivation would be extra commission, the difference between a few thousand dollars in an offer is not enough to put credibility on the line.

I contact the listing agent when I am sending an offer, it is something most do out of courtesy. That agent can take the offers to the seller for review, they decide which is the best offer.

There may be components of the first offer that the owners aren't interested in. Unless you are in love with the house, make your offer and see what happens.

Good luck!

Answer 5

If you have a buyer's agency agreement with the realtor you're dealing with, all parties need to be aware of that fact. In that case, your buyer's agent has an obligation to pass on any information they are aware of to you.

If you don't have a buyer's agency agreement with the realtor you're working with, then he or she is actually working for the SELLER. As such, they are barred from telling you that.

Once an offer has been presented, it must be resolved before another can be presented. If the seller counters the first offer on the table, any waiting offer has to be kept from the seller's knowledge. If the seller rejects the offer without a counter, the waiting offer may be presented immediately.

Answer 6

The seller has to sign a disclosure form for the list agent to release this information. They can't tell you how much. If you catch them in a lie, you may be able to sue.

Answer 7

They are not supposed to but who knows.