Most buyers are suspicious of competing offers
According to a new survey, the majority of buyers are concerned about transparency in the homebuying process.
Key points:
- A new survey from real estate software company Beagel.io found that 80% of buyers had suspicions about fake offers on a home.
- Most buyers said they want to know how many offers are made on a home, and they would like to get offer alerts in real time.
- According to the NAR Code of Ethics, this information can only be shared if a seller gives permission to do so.
Have you ever felt like your clients were bidding against an imaginary buyer?
It turns out that the majority of home shoppers have this concern. According to a recently published homebuyer survey from real estate software platform Beagel.io, 80% of the 600 homebuyers who participated said they've had this suspicion.
Transparency is a top concern
A fundamental issue for buyers is a perceived lack of transparency in the homebuying process. The survey respondents expressed a desire to get more concrete and accurate information both during their home search and while in the offer process.
"The results of this survey reveal a compelling narrative, unveiling a clear and growing demand among homebuyers for a more modernized and transparent home-buying process," Beagel researchers said in the report.
Other priorities for buyers:
97% of homebuyers want to know a home's offer history before making their offer
95% of buyers believe the offer history is important to know before even viewing a home
Nearly 77% of those surveyed said they would have greater faith in the homebuying process if they were notified in real time when offers were put in on a home
Buyers fearful of fake offers
The possibility of a listing agent conjuring up phony offers to pressure buyers into making their highest and best offer quickly was a major concern for the homebuyers surveyed.
"A significant 80% of respondents acknowledge having suspicions of bidding against imaginary buyers, revealing a prevalent concern within the homebuyer community. This finding sheds light on the challenges buyers face in discerning genuine offers in a competitive market," the report read.
Merely having a suspicion of being in a multiple offer situation has a psychological effect on buyers, who sometimes end up offering a higher price than originally intended.
"The impact of suspicions on decision-making is substantial, with 85.9% of those who experienced suspicions admitting that it influenced them to make a higher offer," the report said. "This suggests that addressing concerns related to transparency can have a direct impact on buyer behavior."
What do agents have to disclose?
Confidentiality and proper disclosure comes into play when discussing multiple offer situations. And it's important to get the approval of the seller to share any information on competing offers.
In the official NAR code of ethics, the organization says that agents "in response to inquiries from buyers or cooperating brokers shall, with the sellers' approval, disclose the existence of offers on the property." Additionally, agents will have to disclose that offers were made by licensed agents or a cooperating broker.
In other words, buyers can only get access to offer information if a seller gives their agent permission to share it.