Bidding advice

RojaStar

First time to post so apologies if these questions are annoying.

I've been looking for a house for quite a while now and have been outbid on a few at this stage. I'm buying by myself and looking at houses in the €200 - 250k range. Houses I've been bidding on have been going for €40k over asking price and I'm getting really frustrated at this stage.

A house I looked at and liked is on the market at 250k. There was an offer of 193k on it, after having been on the market for a few weeks. I figured the vendor wasn't going to accept an offer €50k below asking price so I went straight in at €213k as I just can't deal with faffing around for weeks only for it to get really competitive. Am I mad? I'm starting to regret it now! There's huge variation in prices on that road and surrounds and I personally think the house is worth at least that much despite thinking they are being really optimistic with the asking price.

Should I put a time limit on my offer? Or just sit and wait?

ETA: when I spoke to the EA on the phone he said that it was a bold move! (trying to blow out the competition). Was trying to figure out if he meant stupid or not .

Pac2015

RojaStar wrote: »

First time to post so apologies if these questions are annoying.

I've been looking for a house for quite a while now and have been outbid on a few at this stage. I'm buying by myself and looking at houses in the €200 - 250k range. Houses I've been bidding on have been going for €40k over asking price and I'm getting really frustrated at this stage.

A house I looked at and liked is on the market at 250k. There was an offer of 193k on it, after having been on the market for a few weeks. I figured the vendor wasn't going to accept an offer €50k below asking price so I went straight in at €213k as I just can't deal with faffing around for weeks only for it to get really competitive. Am I mad? I'm starting to regret it now! There's huge variation in prices on that road and surrounds and I personally think the house is worth at least that much despite thinking they are being really optimistic with the asking price.

Should I put a time limit on my offer? Or just sit and wait?

ETA: when I spoke to the EA on the phone he said that it was a bold move! (trying to blow out the competition). Was trying to figure out if he meant stupid or not .

The EA probably means it was a bold move because most people only go up in 500's or 1000 at a time where as you have done up 20K, what you can do in that case is if you plan to make an offer of 20K above the previous person say to the EA that is based on no more viewings and the house going sale agreed to you chances are the EA wont agree to that but you can chance your arm.
For future though just go up in 1-3K per time so realistically you should have offered maybe 196K those people did that as they know what their limit is and are starting low.

For bidding know your max that you can go to and set a time limit on your offer say a week and also don't get into bidding wars if the EA keeps coming back saying someone else has offered X amount more then you then walk away its not the house for you.
Buying and finding the right house takes time there will always be people making silly bids but they are the ones who wont be able to afford repayments.

Be strict and have a plan, so offer stands for a week, no bidding wars, have a check list of things you want in a house and an area and see does the house etc fit that.
Be sensible and bid 1-3K per time and think about when you look at a house and it needs extensive work will you have the money to do the work or will you be living in a house that needs work for years cause you cant afford it.

Best of luck

MarkAnthony

Ask 15 people for opinions of bidding - get 16 opinions.

I did what you did - pushed other bidders out, got a really nice house. Occational pangs over the 10K, delighted with the house, ended up with very nice vendors who left us loads of stuff so it all worked out.

Pac2015

MarkAnthony wrote: »

Ask 15 people for opinions of bidding - get 16 opinions.

I did what you did - pushed other bidders out, got a really nice house. Occational pangs over the 10K, delighted with the house, ended up with very nice vendors who left us loads of stuff so it all worked out.

You had a good result and one of the lucky ones which is great for you, we were house viewing this time last year and it was like a rat race people trying to outbid each other, sneaky tactics by EA and people trying to put you off putting an offer in we just walked away as we got bored with the whole process and the way people were acting so have decided to wait until next year to try buy again as we will be able to afford a better house.

P. Breathnach

I have been there. Viewed a property on which there was a very low bid. I bid a good deal more (I can't remember precise figures, but it was in the same general area as yours, something like €20k). That's when the serious bidding contest developed.

Don't bother setting a time limit. EAs, rightly, don't take them seriously.

I suspect the other bid was an optimistic low-ball offer. They are common enough. Very often EAs don't even mention them because they are not taken seriously by vendors, and they can affect other potential buyers' perception of value (which is just what has happened in your case).

If the place is worth €213k to you, wait it out. If somebody tops your bid, then you have some thinking to do.

But don't stop looking at other properties.

RojaStar

Thanks guys, really appreciate all of your opinions.

I'm just going to leave the offer out there for the moment. My gut instinct was that if I went in with a more realistic (but still miles off asking) offer it might get the ball rolling and show if there is any real interest. No word yet anyway!

P. Breathnach

You might find it difficult, but don't call the EA for at least a week.

If you have an irresistible curiosity, get a friend to phone and express an interest in the property.

RojaStar

The EA actually left me a voicemail this evening saying that the underbidder has gone to €220k.

In a way I'm glad now that we weren't messing around going up in 3s and 5s for a few weeks. My original thinking was aimed at avoiding that! Will probably make another offer on Mon or Tues.

gaius c

P. Breathnach wrote: »

Don't bother setting a time limit. EAs, rightly, don't take them seriously.

Very much this. They are professional negotiators and if you lay down a "gamey" challenge to them, they will feel honour-bound to reciprocate in kind.

Also by trying to play games, you show more of your hand than you realise. Keep it business-like and always be calm when interacting with them. That will spook them a lot more.

Best approach if you're the high bidder with a stubborn vendor holding out for more is to find another property worth bidding on.

April 73

You need to set a limit on this house. In a matter of days it's gone from €193k to €220k, the underbidder just added €7k to your bid & you're thinking you'll up it again. Be careful you don't overpay.
The seller must be thrilled with the bids.

MarkAnthony

Set your limit and stick to it. You'll get there in the end.

You may just have a vendor who was willing to undervalue and play around that. Also bear in mind the EA may also be taking the mickey.

waxon-waxoff

No two properties are identical so neither is the bidding process. Ive been bidding on some stuff lately. There were some places where no bid was received after a week or two and id put in a bid about 90% of asking. Once the ball starts rolling the other bidders come out of hiding and it all heats up very fast. Its not that there is no interest, its just that people wait for others to show their cards.

P. Breathnach

RojaStar wrote: »

The EA actually left me a voicemail this evening saying that the underbidder has gone to €220k.

In a way I'm glad now that we weren't messing around going up in 3s and 5s for a few weeks. My original thinking was aimed at avoiding that! Will probably make another offer on Mon or Tues.

Coincidentally, this still resembles the pattern I experienced:
Bidder A: lowball bid
Bidder B: big jump to get closer to realistic market level
Bidder A: Biggish jump.

I was bidder B. I trusted that the EA was not playing silly buggers. My read on A's bidding pattern was that he had gone quickly from hopeful low bid to his max, so I added just €2k. Bidder A disappeared.

Just in case the EA is playing you, it's best not to react too quickly. You might seem like easy prey. If you bid again on Monday morning, that's tantamount to an immediate response, because it's first thing on the next working day. What I did at that point in my bidding contest was to tell the EA (by email, because that's how I like to do things) that I needed to think and review my situation. I made my next bid two days later.

But as waxon-waxoff says, no two situations are the same.

Fkall

April 73 wrote: »

You need to set a limit on this house. In a matter of days it's gone from €193k to €220k, the underbidder just added €7k to your bid & you're thinking you'll up it again. Be careful you don't overpay.
The seller must be thrilled with the bids.

Vendors are not normally thrilled with offers €30k below the asking.

April 73

At the rate the bids are going up it'll only be a day or two til they're at asking price! :-)

It's a fair point though. Bids of €193k or even €213k on a house that's marketed at €250k are going nowhere. Not every house is achieving asking price out there though, so it's possible a deal could be concluded below the asking price.