"Multiple Offers" are Realtors Blowing Smoke?

[Jim Zatko]

I live in Michigan just north of the state line from Toledo, OH. I just flipped and am currently renting out a house in Toledo. And I'm looking for another house to flip. I found one here in Michigan on the MLS in a little town called Summerfield. There isn't a lot of investor completion in this town. Anyway... This house has been on the market for about 10 days or so. I walk through and make an offer yesterday. AS SOON as my realtor contacts the agent to submit an offer, my realtor calls me back and says, "there are 2 other offers that just came in, you need to submit your best and highest offer". Why didn't the agent tell my realtor when she called to see the house? It just seems to me like these realtors, just say things like that to try to make a fake bidding war. It's kind of laughable. I re-cruunched the numbers and offered $2,000 higher. It's still a really good deal. I was just curious if you guys run into "phantom bidders" or houses that have been on the marked for weeks, and all of the sudden have multiple offers when you make an offer?

[Mike Sattem]

Hi Jim,

I am a Realtor and an investor and have been in this situation on both sides. I am sure it changes from state to state, but in my locale making any kind of misrepresentation such as a fake multiple offer situation, could result in a fine or loss of license. However, on my personal residence, when I wrote an offer and was told there were multiple offers, I decided to increase my sales price, only to find out that the "other offers" were $20,000 less than my original offer. Long story short I gave the sellers an extra $5K because I got scared. So, trust your Realtor when they say there are multiple offers, but definitely stick to your initial valuation, and do not let your desire to "buy this house" get in the way.