Phantom Bidding? Give it a rest!
I'm not sure who to blame for the latest rant about phantom bids. Is it Michael Manley, Owner/Broker of Prudential Properties who ran unsuccessfully for President of the Toronto Real Estate Board (TREB) last year, or The Toronto Star? Regardless, yesterday's article on the subject was another case of a reporter or an unsuccessful candidate making something out of nothing.
A phantom bid occurs when (I presume) an agent takes it upon him/herself to lie about an offer that doesn't really exist thereby potentially driving up the price of the real offer. RISKY indeed. This could back fire big time. Ask experienced agents how many times an existing offer is withdrawn because they are now in competition. Many buyers simply refuse to compete and choose to back off instead.
Besides, as I've mentioned before here in this blog, it would be very easy to confirm the existence of an offer if something was smelly and suspicious. Highly skilled agents have a nose for this kind of skulduggery.
The article stated that "many agents agree (the practice of phantom offers) is widespread in Toronto" and yet in all my years of selling houses in the city, I've never met one of these agents. Come to think of it, I've never encountered a phantom offer. What's all this fuss about?
TREB concluded after studying the issue that this kind of unethical activity is governed by the Real Estate Council of Ontario (RECO) and no further action was required. It seems to me this is true. We are governed pretty strictly by RECO and they'd pursue this with enthusiasm I'm sure.
Manley on the other hand wants an online registration system. However, as TREB president Maureen O'Neill points out, this would be "cumbersome and unworkable. For instance, it wouldn't allow for last-minute bids" and believe me folks, last minute bids not only happen frequently, they're often the highest offer. I don't feel like sitting in front of an eager Seller and saying, "sorry, we can't look at this offer because it wasn't listed on the TREB online registration system that we set up to prevent phony bids that are so rare, few of us have seen them". Nope. That's not a chat I'm going to have anytime soon.
I'd be more inclined to pay heed to this complaint if Manley and his brokerage were bigger players in the local market. As it is, compared with RE/MAX and others, his share of the market is pretty tiny.
Come to think of it, I'd like to hear what the other companies have to say about this. Duncan Fremlin RE/MAX Hallmark Ltd.
Toronto Star Article that revived this topic string; http://www.thestar.com/article/459084