Advice on bidding on house with multiple offers already..

stickman22

Hi, we went to view a house yesterday, we like the house & it is the best we'll get in our area with our budget. While we were there 2 offers were made current price 227k (asking price was 210k). We are not sure how to proceed, we are in the middle of the mortgage application at the moment however we have been given a sanction in principle letter & the max value house we can bid on is 236k. We are clueless have never put a bid on a house before, do we say 228? We don't want to get into a bidding war but we want the house.. What is the smart way to proceed? My wife is worried it's already gone sale agreed seeing as there was so much interest

davo10

stickman22 wrote: »

Hi, we went to view a house yesterday, we like the house & it is the best we'll get in our area with our budget. While we were there 2 offers were made current price 227k (asking price was 210k). We are not sure how to proceed, we are in the middle of the mortgage application at the moment however we have been given a sanction in principle letter & the max value house we can bid on is 236k. We are clueless have never put a bid on a house before, do we say 228? We don't want to get into a bidding war but we want the house.. What is the smart way to proceed? My wife is worried it's already gone sale agreed seeing as there was so much interest

If 2 offers were made "while you were there", €236 is not going to do it and as you don't even have mortgage approval you will be behind cash buyers and those that do have approval.

maximum12

stickman22 wrote: »

We are clueless have never put a bid on a house before, do we say 228?

yeah that's all there is to it really.

As you're already close to your budget just go up in 1k increments.

stickman22

Thanks, we were just surprised that it jumped up from 210 to 227k, we are thinking maybe the offers made at 227 may not be mortgaged approved either & that it might just be hiking up the asking price? When do we make an offer, do we bide our time for a couple of days & let the bidding die down or do we put the offer in tomorrow morning?

Atlantic Dawn

How long is the house for sale? If it's on the market months the odds that 2 bids came in while you were viewing would be similar to me winning the Euro Millions and The Lotto next week.

stickman22

It went on the market Wednesday, viewings Friday & Saturday

Water John

The asking or value price may have been low to attract wider interest. Strange if 2 bid the same offer. It would normally go up by 5,2 or 1K on each bid.
How did it get to that in 2 days. EA would need to give a plausible story.
If you are bidding and believe his/her story your bid should be 228K considering your limit.

stickman22

It had been showing on Friday, when we went to view the EA said current offer 214k, when we were leaving she said 2 other couples who were also viewing had bid & offer stood at 224, I rang her mobile that evening to express an interest & she said the offer was now 227, similar properties in the area would usually go for beteen 215-220k...

Sleeper12

Usually with several bids the estate agent suggests final bids in an envelope by a certain date.

stickman22

Ok, so we have time to put in an offer so. Also the bank said we can look at properties max value 236k (that is including deposit) we would also have an additional 20k savings left after that but we really don't want to have to dig into them. What is the best way to proceed now, should we bid or hold off a few days?

Water John

Haven't come across that, Sleeper. Towards the end of bidding usually only 2/3 bidders in it. The EA would then close it out between them, over 2 days.
Maybe since their is very little in the commission on a few K some EA's do that. Not in my area and i would see it as poor form and not fulfilling their job.
Thought bank would only say the max loan they would give you, based on your income. don't think your own extra funds has any thing to do with them.

davo10

Sleeper12 wrote: »

Usually with several bids the estate agent suggests final bids in an envelope by a certain date.

Not 2 days after the house went on the market.

ThisRegard

stickman22 wrote: »

Thanks, we were just surprised that it jumped up from 210 to 227k, we are thinking maybe the offers made at 227 may not be mortgaged approved either & that it might just be hiking up the asking price? When do we make an offer, do we bide our time for a couple of days & let the bidding die down or do we put the offer in tomorrow morning?

The estate agent would likely not take into account the bids for which there's no evidence of funds or mortgage approval.

davo10

stickman22 wrote: »

Ok, so we have time to put in an offer so. Also the bank said we can look at properties max value 236k (that is including deposit) we would also have an additional 20k savings left after that but we really don't want to have to dig into them. What is the best way to proceed now, should we bid or hold off a few days?

Write this one off op, 2 offers were placed at viewing 2 days after it went on the market, top bid is only a few k under your max, this one is not for you. Keep looking.

stickman22

Davo we would have an additional 20k in savings which we could dig into, we really don't want to though...

athtrasna

stickman22 wrote: »

Davo we would have an additional 20k in savings which we could dig into, we really don't want to though...

Do you want the house?

stickman22

Ath trasna yes we want it, originally it was an area we wouldn't have considered but the areas where we want are way out of our budget, it is the best we can get without having to downsize to a 2 bed so yes we want it & want to bid smartly but we havn't a clue as how to proceed safely & not getting into a bidding war...

Walter2016

As above, write it off. 10% jump in value is not warranted.

There will be others - just as good and possibly better.

Remember this is the biggest purchase of your life and you need to separate feelings from reality.

Think what type of holidays and extras 20k would get you!

Walter2016

Also check www.propertypriceregister.ie and find out what has sold in the same area and the precise price.

It can also give an idea of how many properties in the area comes onto the market.

Water John

Agree with Athrasna, you bid what the house is worth to you. Yes, I know you'd like to get the house and keep your 20K but that may not be the choice.

GeorgeOrwell

I think it's best to let this one go and look at other places.

Remember:
1. Stamp duty is an additional 1% of the price you pay
2. There'll be legal fees

You're immediately looking at paying an additional €5,000 (ish) on top of the price you pay.

Then there are moving costs and the inevitable repairs and unexpected purchases.

So, be careful about going to your absolute maximum.

Sleepy

If you're prepared to pay 236k for the house, I'd bid that as a first and final offer. A 9k increment may put off the other buyers if they're near the top of their approval at that level and it's a specific enough figure that it telegraphs the "final" part of that statement.. It may not be enough, but I'd say it's your best chance of scaring them off and avoiding a bidding war. Entering the fray with a 1k increment is unlikely to work when your max budget is so close to the current price imo.

Make sure the house is actually worth that much to you though!

maximum12

Sleepy wrote: »

If you're prepared to pay 236k for the house, I'd bid that as a first and final offer. A 9k increment may put off the other buyers if they're near the top of their approval at that level and it's a specific enough figure that it telegraphs the "final" part of that statement.. It may not be enough, but I'd say it's your best chance of scaring them off and avoiding a bidding war. Entering the fray with a 1k increment is unlikely to work when your max budget is so close to the current price imo.

Make sure the house is actually worth that much to you though!

Never say final offer. All you're doing is sharing information and reducing your options.

Sleepy

But they'd be sharing the right information if it's the maximum they're prepared to pay.

riclad

Say you are willing to pay 236k ,and can afford to pay that .
Theres no harm in saying ,this is my final offer .
it may be accepted , you have nothing to lose .
if someone bids 240k ,well at least you tried .

SarahMollie

People way over think bidding. Theres no amount of thinking about it thats going to guarantee you success if it turns out that someone who also wants it happens to have a bigger budget.

You can bid or not bid. If you bid and don't get it, then are you really any worse off? At least then you know you've tried. To state the obvious, if you don't bid then you definitely won't get it. I don't understand the logic of posters here telling you to leave it without even trying. You can keep viewing other houses until you know more anyway so you won't loose out.

If you want to be tactical, the only thing that stands out to me as a possible tactic is to go in at €236k in a kind of "going for broke" approach. Theory behind this aproach is that its a big jump is a serious statement of intent (which the vendor and EA will like) and also hopefully a suckerpunch to the other bidders. I know when I was looking someone did this to me and it stopped me in my tracks.

I get that you don't want to spend more than you need to but by the sounds of things, a house thats attracting lots of bids in just a few days is probably worth it. Also, if you try and save yourself a few €k by trying to be cute with small bids, and end up losing out on the house, will that cost you more in rent etc in the long run?

riclad

are You borrowing 210k ?
The seller might look at bidders in terms of how much you are borrowing.
vs joe bloggs who may offer 225k but is not borrowing any money.
or is just borrowing 80k.

Paddytheman

riclad wrote: »

are You borrowing 210k ?
The seller might look at bidders in terms of how much you are borrowing.
vs joe bloggs who may offer 225k but is not borrowing any money.
or is just borrowing 80k.

How does what your borrowing affect the buyers decision if your offering to pay them X amount? Seen this mentioned before but dont understand..

GeorgeOrwell

Paddytheman wrote: »

How does what your borrowing affect the buyers decision if your offering to pay them X amount? Seen this mentioned before but dont understand..

Someone who is borrowing a greater percentage of the price of the house might be considered by the vendor to be a bigger risk.

Say the house is on the market for €300k.

Person A has €290,000 in the bank from the sale of their current home. They can transfer all of it into your bank account tomorrow.

Person B has €50,000 in the bank and mortgage approval up to €250,000.

Many vendors would go with person A even though they are giving you a smaller amount of money - there's much less risk of something going wrong and making the sale fall through. A cash buyer will almost always beat a buyer with a mortgage.

riclad

Banks make mistakes ,they lose documents etc which can delay a sale going through.

stickman22

I think the posters who said to let this house go are right, our mortgage application is still going through & the house has risen to 239 which is above what we are willing to pay, our max is 237... hopefully something else suitable comes onto the market that we can afford..