Should You Call a Seller’s Bluff If They Say Another Offer Is Coming in on a House You Want to Buy?
The Lighter Side of Real Estate • July 16, 2023
It’s not uncommon for home buyers to feel they’re being lied to when they’re told there’s another offer coming in on a house they want to buy, no matter what the current real estate market is like.
But considering you’ve probably been hearing that houses are taking longer to sell, prices are coming down, and there are fewer buyers to compete with, it might seem even more suspicious if you’re told there’s another offer on a house you want to buy right now.
All of that is true in many areas, so an offer mysteriously coming in on a house you want to buy is even more unbelievable when the one you have your eyes on has been on the market for some time. It’s like, how in the world did someone else randomly decide to make an offer on this house when it’s been on the market 87 days? Where have they been? Why now? Do they even really exist, or is the seller bluffing?
If you find yourself in that position, it’s natural to be skeptical. It’s always possible that a seller (or their agent) is bluffing, and a little skepticism isn’t the worst thing in the world, especially when you’re deciding on how much to offer on what is typically the largest purchase most people make in their lives.
But the reality is, it’s not uncommon for another offer (or several others!) to come in at the same time you decide to make an offer on a house, even if it’s been on the market for a while.
Unfortunately, it’s almost impossible to ask for — and actually get — “proof” of another offer. You just have to trust what you’re being told, and your gut.
Here’s Why It’s Probably Not a Bluff
Fortunately, there are a few reasons why the seller and their agent probably aren’t bluffing…
- An agent could get in trouble for lying. Between the National Association of Realtors Code of Ethics (which most agents adhere to), as well as state and national real estate rules and regulations established to protect the consumer, most agents wouldn’t risk losing their license by lying about the existence of another offer.
- It could hurt their reputation. Besides legal trouble, most agents wouldn’t want to damage their reputation — which could cost them future clients and business — for the sake of creating urgency on one listing.
- It could hurt their seller. If they bluff it might cause a buyer to disappear either because they simply want to test and see if there truly is another offer, or just don’t want to get involved in a bidding war. If the buyer doesn’t come in with an offer and the seller’s agent has to push for them to submit one because the other offer didn’t come in, or never truly existed, they have lost leverage and negotiating power.
- Sometimes it isn’t so much a lie, as it is a heads up. A lot of times there may not actually be an offer in writing, but the listing agent knows there’s another buyer interested in making one. There’s nothing wrong with the listing agent letting other interested parties know there’s another offer potentially coming in, or already received, in order to make sure everyone who’s interested has a fair chance at making an offer before they accept one.
- A property you like is likely to appeal to another buyer. No matter how few buyers are in the market, there’s always a chance there’s at least another buyer actively looking for a house in your area and price range. And if you like a house, there’s a good chance anyone else in the price range will see the value in it as well.
Here Are Your Options for Dealing With a Potential “Phantom” Offer
First and foremost, if you’re being told there’s another offer on a house you want to make an offer on, your agent will likely ask the listing agent how they’ll handle the process. The listing agent will guide them by telling them whether they want you to submit your “best and final” offer right up front, or if they want an initial offer and plan on coming back to everyone with a chance to improve it or negotiate further.
Ask your agent how he or she feels about the existence of another offer. Your agent should have a good understanding of the current market activity, and a sense about whether they can trust what the other agent is saying, based upon their experience in the field.
Depending upon how you and your agent feel after assessing, you can:
- Call their bluff and not submit an offer. If you’re really confident that there truly isn’t another offer, you could tell them you’ve decided not to make an offer and hope that they change their tune and more or less beg you to come in with an offer. But this is extremely risky, because if there is another offer, you’re not going to even be in consideration and could lose out on having a shot at getting it. It could be really disappointing to see the house sold to someone else, especially if it’s for less than you were willing to pay for it.
- Make an offer as if there isn’t another one. If you’re not entirely convinced that there’s another offer, you can always make an offer that you’d ideally make if there wasn’t another offer coming in. In other words, make an offer that isn’t your highest or best terms and try to get the best deal possible. The downside to doing this is it could hurt your chances by making you look less serious or as strong as the other buyer if another one exists, even if you do eventually improve your price and terms.
- Submit a strong offer you feel good about, whether you get the house or not. Your best (and safest) bet is to just make the strongest offer you feel comfortable making. Make an offer that you’d feel happy having paid to get the house if they accept your offer, and wouldn’t regret if another buyer did exist and their offer ended up being chosen over yours. This way you’re in the mix and will feel like you’ve at least given it your best shot.
The Takeaway:
When you’re told there’s another offer coming in on a house you’re interested in buying that’s been on the market for a while, it’s easy to wonder if it’s true, or a bluff. But it’s even more difficult to believe in the current market where houses are supposedly taking longer to sell, prices are coming down, and there are fewer buyers to compete with in many areas!
Unfortunately, it’s almost impossible to get “proof” of another offer. You just have to trust your gut, and what you’re being told. Fortunately, it’s risky for a seller or their agent to lie about the existence of another offer, so it’s probably not a bluff.
While you can call their bluff and either not make an offer at all, or make one that isn’t your strongest or best, your safest bet is to make the strongest offer you feel comfortable making.
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The 10 Best Markets for First-Time Buyers This Spring For a while, buying your first home hasn’t just felt hard. It may have felt out of reach. Not because you weren’t ready . Not because you weren’t trying . But because every time you ran the numbers, they didn’t work . That’s why so many first-time buyers stepped back. But after years of sitting on the outside looking in, this Spring could give buyers like you an opening again – especially in some markets. Metros Where Buyers May Have an Easier Time Breaking into the Market Zillow just released a list of the top 50 metros for first-time buyers this Spring. And here’s a quick snapshot of the top 10 (see chart below): According to Zillow, in these top-ranked markets, median-income households can afford 68% of all homes for sale . Let that sink in. Not long ago, it felt like you could barely afford anything. Now, you may actually have some options again. That doesn’t mean every home is suddenly going to fit your budget. But it does mean the door that felt closed for so many buyers is starting to crack back open. And in a number of cities, first-time buyers may finally be getting a shot at buying . Why This Is Starting To Open Up These cities are rising to the top not because of any one big change, but from a few smaller ones finally lining up. As Orphe Divounguy, Senior Economist at Zillow, explains: “ First-time buyers are finally seeing some light at the end of the tunnel. Affordability is still a challenge, but rising incomes, stabilizing prices and improving inventory are creating real opportunities in parts of the country. In the strongest markets for first-time buyers, they'll find more choices, less competition and a clearer path to homeownership than they've had in years .” Basically, three big things are working in your favor: More homes are hitting the market. Realtor.com says inventory is up 8.1% compared to last year. That gives you more choices, less pressure, and more chances to find a place that fits your budget. Price growth is moderating, so homes aren’t moving further out of reach as quickly. Some may even be falling back within your target price point. Incomes are rising. If you make more money, that can offset some of the affordability challenges too. And even though mortgage rates have been higher lately, that combination can still make a difference. As Mark Fleming, Chief Economist at First American , explains : “Income growth has outpaced house price growth for 19 straight months, boosting house-buying power even as mortgage rates remain elevated.” How To Find the Opportunities in Your Local Market But what if your city didn’t make the top 10 list, or even the top 50 markets? Here’s what you really need to remember. There’s going to be opportunities in every market, if you know where to look. Even in the same city, two buyers can have completely different experiences. And a big part of that is who they choose as their partner. The right agent knows how to find pockets of opportunity in any market. That could mean: A neighborhood where prices haven’t climbed as quickly A part of town with more inventory, or A new build community offering incentives so builders can sell their inventory So, even if your city didn’t make the list, that’s okay. There’s still an opening for you, you just need your agent to help you find it. Bottom Line For a long time, first-time buyers have felt stuck, waiting for their turn to buy. But for some buyers, this Spring might be the first time in a while where things start to feel more within reach again. Want to see which neighborhoods could give you the best shot at buying right now? Let’s talk.
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3 Must-Do’s for First-Time Home Buyers Buying your first home is exciting, but it can also be a little nerve-wrecking because it’s something you’ve never done before. And trying to think of everything you need to do can feel like a lot. But here’s the key. You don’t have to figure everything out on your own. And you don’t have to do it all at once. Just tackle it one thing at a time. Here’s a simple list of 3 main things you should focus on to help you get started. 1. Assemble Your Team: Don’t Do This Alone Buying a home is a team sport. And having the right professionals by your side can make a world of difference. Here’s who you need to find: A local real estate agent is your guide from the first showing to closing day. They’ll make sure you understand all the details along the way, so you feel confident in your decision. A trusted lender will walk you through loan options, monthly payments, and what’s realistic for your situation. That information is something you’re going to want early on. 2. Prep Your Finances: Set the Foundation First This is what determines what you can afford, how competitive you’ll be, and how confident you’ll feel when it’s time to make an offer. Here’s how to get ready: Check your credit score. Your credit score impacts the loan options you’ll qualify for and even the mortgage rate you’ll get. Knowing this number early gives you time to work on raising your score, if you want to. Save for your down payment and closing costs. Most buyers focus on the down payment , but closing costs matter too. Having savings set aside for both helps you avoid last-minute stress and surprises. Look into assistance programs. Many first-time buyers qualify for programs that’ll give their homebuying savings a boost. This can make buying possible sooner than you expect. Talk to a lender about mortgage options. Fixed-rate, adjustable-rate, FHA, VA , and conventional loans all work differently. Understanding the options helps you choose what fits your goals best. Get pre-approved. A pre-approval tells you what a lender would be willing to give you for your home loan. This’ll help you figure out your price range and set you up to move fast when the right home comes along. Figure out your budget. Your mortgage is just one part of homeownership. Budgeting for your utilities, home insurance , and everyday expenses and maintenance will help make sure your payment feels comfortable, not stressful. 3. Gather Your Documents: Save Time (and Stress) When you’re officially ready to kick off the buying process, lenders are going to need to verify your income, assets, and financial history. Having these documents ready-to-go upfront can speed up the process and reduce back-and-forth. Here’s what Bankrate says you need to prep: W-2s and tax documents (past 2 years). These show income stability and help lenders verify your earnings over time. Recent pay stubs (generally the past 1–2 months). Pay stubs confirm your current income and employment status. Bank statements (past 2–3 months). These show your savings, spending patterns, and where your down payment funds are coming from. Investment account statements (past 2-3 months). If you’re using investments as part of your financial picture, lenders may ask for these as well. Copy of your driver’s license. This verifies your identity and is required for loan processing. Residential history (past 2 years). Lenders use this to confirm stability and background information. Statements for any outstanding debts (past 2 months). Student loans, auto loans, and credit cards affect your debt-to-income ratio, so lenders will want to know about them. Proof of supplemental income. Bonuses, commissions, side work, or child support may count toward your income if documented properly. Note: the exact time frames and list of documents may vary lender to lender. This is just a general rule of thumb to help you get the ball rolling. Bottom Line Buying your first home doesn’t mean you have to have everything figured out. It just requires a plan. If you start with your finances, organize your documents, and surround yourself with the right people, you’ll be in great shape when the time comes to make a move. And if you want more information on anything in this list or just need help getting started, don’t hesitate to reach out.
