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Ask Curbed: Am I Bidding Against a Phantom Offer?

Today's pickle involves a home buyer who was about to scoop up a languishing property on the cheap only to be told that another bidder had just come in surprisingly high. He suspects the other bidder is a figment of the seller's imagination. So what next? The full story follows:

I believe that I may be the victim of a "Phantom Offer" on a place that I have expressed interest in buying. While this apartment has been sitting on the market for months (and reduced three times) when I expressed interest through my broker, I was told that there was already an offer 'above asking price.' My broker and I were surprised why someone would go over-asking when it has been sitting on the market for so long and we were told that it was because the person 'had fallen in love with the place.' My fear is that the seller is using this offer to drive up the price of the unit back to where they see fit.

Is there anyway to check the validity of such an offer? It seems to me I have two choices:

a. Beat the offer that was supposedly made
b. Walk away (if I am subsequently approached with the seller saying that are willing to negotiate, then I know it was a phantom offer)

As neither option seems entirely appealing, I would appreciate any assistance.

Ruminations and revelations in the comments, please.