The Toronto Star recently ran an article on the prevalence of “phantom offers” in the bidding process.  Unethical seller’s agents can create a manufactured bidding war by convincing a prospective buyer that another offer has come in.  In reality, no other offer has come in and the seller’s real estate agent is simply trying to get the buyer to panic and raise the original offer.

Don’t fall for it.

The problem, of course, is how to detect when a seller’s agent is making up an offer. One tip is to consider the timing of the new offer. If the seller’s agent tells you there is a new offer immediatly after you have communicated your final offer, that may be cause for suspicion. 

Another tip is to ensure that you are represented by an experienced and professional buyer’s agent.  Such an agent will be more likely to know about unethical agents in the community and will have the necessary experience to detect when a new offer is suspicious.  A competent buyer’s agent will also know whether the new offer is out of tune with the actual market value of the house.

The most important tip is not to panic. Don’t be rushed or pressured into increasing your offer on the spot to an amount you are not comfortable paying.

If you valid grounds to believe you have been the victim of unethical bidding tactics, you can contact your local real estate board and register a complaint.