In the Toronto Real Estate Market, buyers are often in Bidding Wars. It’s not unusual for another offer to appear as soon as I register my buyer’s offer on a property.
I’m often asked if these other offers are real or if they are phantom offers. It’s a valid question. There’s no way to really tell, but here’s what how I try to find out if they are and one explanation why it can happen.
First, let me say that most agents wouldn’t make a phantom offer, because of the liability. There’s just not enough to justify losing their license, being in a lawsuit, and/or getting a large fine just to get a higher selling price (and more commission) on one deal. It just isn’t worth it…
In an effort to get the most information possible I ask two questions and rely on one of the rules of the Toronto Real Estate Board. I always ask if the listing agent has their own offer and I often ask which brokerages the other offers are from. I also rely on the rule that states (and I am paraphrasing) – Anyone who registers an offer on a property must be told how many other offers are currently on that property and must be told if any other offers come in. Although these answers won’t really tell me if there are any phantom offers, they do help.
One of the reasons why other offers seem to appear after an offer is registered is because agents (and sometimes software) contacts every agent who showed the property and let’s them know that there’s a registered offer. This often pressures potential buyers that were “sitting on the fence” to make an offer so that they don’t miss out on the house/condo. It happens more often that than you think!