Negotiations

caroline456

Hi. We're looking to buy house as a first time buyer. We found one, that, isn't perfect and, as it's being rented, looks very dirty, but we know the house is a very good built so we thought it could be ok for couple of years. It's quite new so the changes would be mostly cosmetic.

To cut the story short, the asking price was 145k. We put an offer of 110, then we raised it to 120. Then the Estate Agent (EA) came back to us and said that 125 might be accepted. The EA also said there were another viewings next day. So we put an offer of 123 thousand. There was no reply, so three days later I called the EA (last Thursday) to find out what the seller said and the EA said that he hadn't heard back from the seller and that the viewings were postponed until Tuesday week - 29th October. So I said to the EA that we were gonna leave the offer of 123k on the table and if there's any news to let us know. The next day - Friday I got a phone call from the EA claiming that they had viewings on Friday morning and that the viewer offered 125k on the house. He asked me if we wanted to offer maybe 126k and that the seller is waiting on our answer before he says anything. The EA expressed his deep hopes that he could get the house for us at 126k.

At the end of the day we thought 125k would be a good deal on the house, anything over that figure would be too much, considering the location and a very small garden. So at 126k it still would be a good price. What bothers me is the EA and his phone call last Friday, because that other guy seems to be a phantom bidder to me. The house had been two months on the market and we were first to view it and suddenly, just when we negotiate on the house, two other bidders stepped in??? The EA asked me first time did we want to put an offer of 125k and I think he wants to achieve the price of 130k for the house. We don't think the house is worth that much. And at the moment it seems to me that the EA is pushing us to bid more in order to achieve a better price for the seller.

So what would you do? We really like the house, however, there are houses coming on the market every day and I think the prices will drop further next year (we're quite far from Dublin), on other side we pay awful lot of money for rent where this could be the payment towards our mortgage. Every advice will be much appreciated.

L1011

Tell him the 123 stands for a limited time (as in a few days, max) and to get back to you if the other bidder pulls out before then. If the bidder is fake, they'll get back to you; otherwise you actually have been outbid.

You need to make sure to not fall in love with a specific house or else you'll end up finding yourself paying what you're told to pay for it.

The_Conductor

If the other bid is genuine- he'll get back to the other bidder after you up your bid to 126-advising they up theirs to 127- and so on- until someone blinks. Thats if its genuine. Is it genuine? Who knows? If the property is in a desireable location- it could very well have another interested party. If its in the arse end of nowhere- its likely its a phantom bidder.

Your call- but I'd echo the sentiments above- and put a time limit on the 123k that you have on the table at the moment.

caroline456

The location is not desirable but it's not too bad either. It only suits us for one specific reason, otherwise we would never ever consider this location. The houses from that location are advertised on daft for more than a year.

I'm not in love with the house, I actually don't like it much, we only considered it because there were few positives to the house. Something is telling me the other bidder is rather fake because he appeared out of nowhere and the minute he saw the house he knew he wanted it despite the fact that the house had been on the market for two months without any movement. The well-priced houses in desirable locations are selling within two weeks from posting on the daft in the current market.

Santa Cruz

This is the problem with buying houses in Ireland. There is so much scope for skulduggery, phantom bidders etc. I think that the best thing is to decide what is your max bid and stick to it.
If there is another bidder that wants to go higher so be it. Move on to the next one.

ted1

The commission on 5k isn't that much. I would suspect there is another bidder, it's not worth the EA time dragging up the bids by such small amounts

The_Conductor

Santa Cruz wrote: »

This is the problem with buying houses in Ireland. There is so much scope for skulduggery, phantom bidders etc. I think that the best thing is to decide what is your max bid and stick to it.
If there is another bidder that wants to go higher so be it. Move on to the next one.

Sellers are as much to blame as anyone else- in this respect- you can be certain they want as much as they are going to get- but the extraordinary lengths they go to to try and wring the last cent from potential buyers- is eyewatering.

drunkmonkey

I'd walk away and retract the offer, everything you've said seems to say you don't really like it and it's location.
Get a house somewhere you and other people want unless this is an investment property you intend to rent out.
There's houses out there just be patient and ready to swoop when a house you really want comes along.
At the price your looking at rent is about the same as a mortgage so take your time and choose wisely.

mrs vimes

caroline456 wrote: »

The EA expressed his deep hopes that he could get the house for us at 126k.

And at the moment it seems to me that the EA is pushing us to bid more in order to achieve a better price for the seller.

The EA is not trying to get the house for you at all, he is of course trying to achieve the best price for the seller. He is employed by the seller and paid by the seller and you should be under no illusions that he wishes to do you any favours at all. He is not on your side.

caroline456

I know he's trying to get the best deal for the seller. I think it's their policy - and they're very proud of it - to achieve the best possible deal for the sellers.
In the light of this policy I think he could make up the fake bidder if he sees we're interested in the house but we might seem to him that we could get a bit of a push in order to offer a bit more. Some EA are honest with the sellers and some do different tactics to attract the sellers who, at the end, pay them their commission.

No, i don't like the house that much but I thought it could bear very small risk in comparison to the more desirable locations that are more risky to sell/rent.

We put an offer on a different house in a desirable location and it was a very generous offer. The seller refused it and the house is still being advertised without any change. You'd think the hardest part is to get the mortgage. But the sellers are still living in their own bubbles dreaming of earning big profit and squeezing the most out of those lucky ones who do get the mortgage approval.

I'm quite determined to leave the offer on the table at 123, however I had hoped this whole house purchase dream could have been sorted and we could start paying off the mortgage rather than rent. You'd think there are so many houses out there, but it's very hard to get the one that could tick your boxes and you wouldn't find yourself regreting your decision couple of months after you buy it...:(

You've helped me a lot guys. Thank you. If I have any news I'll post it here. It'll be quite interesting to see was it a fake or a real bidder.