Full & Final Bids or 'Sealed Bids'

Conrad83

I have been bidding on a property for approx 9 weeks, for approx 7 weeks there was only 2 of us bidding and now the EA & vendor have requested our full and final bids or 'sealed bids' as they have called them.

At the point the EA suggested going down the route of sealed bids the other bidder had just bid above me (or so the EA says) and when the EA advised him that the next step may be a request for sealed bids he apparently withdrew his bid (which was only €500) and said he will wait and see how things pan out, so now as it stands my bid is the highest.

My question is is there any drawbacks to proceeding at this stage and pushing on with full and final bids? It seems to have scared the other party off and just wondering am I missing something, of course the EA could have invented the last bid for all I know as there was a period of a week and a half afer Christmas where the other bidder was nowehere to be found and not returning any of the EA calls (he has done this a few times in the bidding process, game playing perhaps).

Another thing to note is that only now has the EA asked me for proof of mortgage approval even though I have been bidding so long, do EA's not usually request proof in the early stages rather than the final stages?

JohnFalstaff

Sounds like a nightmare to be honest. If your bid is the highest what point is there in going in with another full and final bid - would you not just be bidding against yourself?

Tell the EA that your current offer is your final offer and that after a week you will withdraw the bid and move on.

There is also the chance that if the other bidder actually exists, their mortgage wasn't fully approved and they had to withdraw - hence the EA only now asking you for proof of mortgage approval. If the EA is insisting on proof have the bank draw up a letter that indicates mortgage approval for the amount you have already bid, not a higher amount.
Good luck!

kippy

Conrad83 wrote: »

I have been bidding on a property for approx 9 weeks, for approx 7 weeks there was only 2 of us bidding and now the EA & vendor have requested our full and final bids or 'sealed bids' as they have called them.

At the point the EA suggested going down the route of sealed bids the other bidder had just bid above me (or so the EA says) and when the EA advised him that the next step may be a request for sealed bids he apparently withdrew his bid (which was only €500) and said he will wait and see how things pan out, so now as it stands my bid is the highest.

My question is is there any drawbacks to proceeding at this stage and pushing on with full and final bids? It seems to have scared the other party off and just wondering am I missing something, of course the EA could have invented the last bid for all I know as there was a period of a week and a half afer Christmas where the other bidder was nowehere to be found and not returning any of the EA calls (he has done this a few times in the bidding process, game playing perhaps).

Another thing to note is that only now has the EA asked me for proof of mortgage approval even though I have been bidding so long, do EA's not usually request proof in the early stages rather than the final stages?

The EA should have asked for proof of AIP before he accepted a bid from either party - what's the point otherwise?

I'd agree with JohnFalStaff the remainder of the advice.

Conrad83

JohnFalstaff wrote: »

Sounds like a nightmare to be honest. If your bid is the highest what point is there in going in with another full and final bid - would you not just be bidding against yourself?

Tell the EA that your current offer is your final offer and that after a week you will withdraw the bid and move on.

There is also the chance that if the other bidder actually exists, their mortgage wasn't fully approved and they had to withdraw - hence the EA only now asking you for proof of mortgage approval. If the EA is insisting on proof have the bank draw up a letter that indicates mortgage approval for the amount you have already bid, not a higher amount.
Good luck!

It has been a nightmare from start to finish but I am hoping it will all be worth it, if not well I will have learnt something I guess!

Well the EA doesn't know that my last bid was actually my final bid and that I have no more to bid! It is so hard to trust them and I am not sure if I believe his story about the other bidder making a bid above mine last week and then withdrawing when he thought it may go to full and final bids, he had only bid €500 above me, not as if he had bid €5k.

In regards to the bank letter I am mortgage approved for about 80% and the remainder is cash savings so I will tell the EA that it's part cash and part mortgage approval.

Conrad83

kippy wrote: »

The EA should have asked for proof of AIP before he accepted a bid from either party - what's the point otherwise?

I'd agree with JohnFalStaff the remainder of the advice.

Would think the same myself but he hasn't once asked me if I am mortgage approved, unless he knows he has a buyer in the other bidder, I could guess all day long!

ted1

If the other bidder is a messer and avoiding calls etc, there's a high probability any sale that is agreed will fall through. If i was selling I'd have no time for messers and wouldn't entertain them

listermint

ted1 wrote: »

If the other bidder is a messer and avoiding calls etc, there's a high probability any sale that is agreed will fall through. If i was selling I'd have no time for messers and wouldn't entertain them

Could be the owner pressing for more tbf. EA can't move without their say so.

Conrad83

listermint wrote: »

Could be the owner pressing for more tbf. EA can't move without their say so.

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

Zulu

Consider entering your "sealed bid" as the very first one you made pre the other bidder.
If they've been scared off, you've just made a saving.
If they are still in the game, and already know your current bid (which is your maximum) they can only outbid you, so you're sunk eitherway.

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tayto lover

Did another bidder exist at all?
Have you already been bidding against yourself?

Conrad83

Zulu wrote: »

Consider entering your "sealed bid" as the very first one you made pre the other bidder.
If they've been scared off, you've just made a saving.
If they are still in the game, and already know your current bid (which is your maximum) they can only outbid you, so you're sunk eitherway.

This is what I plan on doing, my final bid was my final bid I just didn't have the opportunity to tell the EA this before it went to sealed bids.

It could also be possible that the other guy is gone and didn't make another bid like the EA said he did and he is just trying to squeeze more out of me!

listermint

tayto lover wrote: »

Did another bidder exist at all?
Have you already been bidding against yourself?

This could also be the case.

Conrad83

tayto lover wrote: »

Did another bidder exist at all?
Have you already been bidding against yourself?

How will I ever find this out? The other bidder made a bid just before Christmas, I then went back with another bid 48 hours later, all the bids have been made in 1/2 days. Then I heard nothing for over a week after Christmas, EA not returning my calls/emails etc, when I finally spoke with him he advised the other bidder was 'away', then next time I spoke with him 9 days after my last bid he had just 30 mins previously received a bid from other bidder €500 above mine.

I do suspect that the other bidder made their last bid before Christmas and nothing has been heard since and that is why only now it is going to full and final, sounds shady but how can you ever know in these situations? As it has been just myself and this other bidder since mid November I would think/hope the EA hasn't been inventing bids this long!!!

tayto lover

Conrad83 wrote: »

How will I ever find this out? The other bidder made a bid just before Christmas, I then went back with another bid 48 hours later, all the bids have been made in 1/2 days. Then I heard nothing for over a week after Christmas, EA not returning my calls/emails etc, when I finally spoke with him he advised the other bidder was 'away', then next time I spoke with him 9 days after my last bid he had just 30 mins previously received a bid from other bidder €500 above mine.

I do suspect that the other bidder made their last bid before Christmas and nothing has been heard since and that is why only now it is going to full and final, sounds shady but how can you ever know in these situations? As it has been just myself and this other bidder since mid November I would think/hope the EA hasn't been inventing bids this long!!!

I don't know how you'd prove if the EA was doing shady dealings BUT it wouldn't surprise me in the least. I wouldn't trust them as far as i'd throw them.

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listermint

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They are legally required to record each bid now - but I dont know how you could access that information.

Yes that part always alluded me.

tayto lover

listermint wrote: »

Yes that part always alluded me.

How does a bidder know if a second bidder exists at all?
Surely he is entitled to know some details so that he is clear in his mind that he is not bidding against himself. He has to have some protection.

What's to stop an AE claiming that he has a telephone bid from a Mr.John Smith in London, who may not exist at all?

I would like to see the regulations around the subject.

Askthe EA

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listermint wrote: »

Yes that part always alluded me.

tayto lover wrote: »

How does a bidder know if a second bidder exists at all?
Surely he is entitled to know some details so that he is clear in his mind that he is not bidding against himself. He has to have some protection.

What's to stop an AE claiming that he has a telephone bid from a Mr.John Smith in London, who may not exist at all?

I would like to see the regulations around the subject.

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Conrad83

Askthe EA wrote: »

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Thanks for that, seems pointless when you say it like that that an EA would invent bids although I do believe the most recent bid in my case may have been invented as I find it odd how the other party would 'withdraw' his latest bid of €500 (higher than mine) to 'wait and see how things would pan out and if bidding would continue or it was final bids were going to be requested'. Not sure why someone who was bidding on a property with 1 other person for almost 2 months would withdraw his bid at this stage, yet the EA tells me he is still in it, I suspect the EA is saying this to me to squeeze more money out of me or maybe as a previous poster said the other party doesn't or can't provide evidence of funds, all speculation but only time will tell I'm sure.

Askthe EA

Conrad83 wrote: »

Thanks for that, seems pointless when you say it like that that an EA would invent bids although I do believe the most recent bid in my case may have been invented as I find it odd how the other party would 'withdraw' his latest bid of €500 (higher than mine) to 'wait and see how things would pan out and if bidding would continue or it was final bids were going to be requested'. Not sure why someone who was bidding on a property with 1 other person for almost 2 months would withdraw his bid at this stage, yet the EA tells me he is still in it, I suspect the EA is saying this to me to squeeze more money out of me or maybe as a previous poster said the other party doesn't or can't provide evidence of funds, all speculation but only time will tell I'm sure.

Who knows. People are weird. ;-) Also, of course the EA could be acting the maggot.

April 73

It's not always done to get a couple of quid extra on the commission.
I think it's sometimes part of getting people to bid up to a price at which the seller will commit to selling.
The EA sometimes has a job to do to persuade reluctant sellers who want a certain price to commit to the sale.
The EA doesn't get paid at all without matching a willing buyer to a willing seller at a mutually agreeable price.

athtrasna

Back in the last boom we were in a similar situation. It was then I realised (at 200k over the asking price) that this vendor was out for every last cent and would be the type to take every light bulb with her. So we pulled out.

Found out afterwards that the EA never told the other party, they bid 70K over our previous bid, with no other bidder. So €69,999.99 more than they needed to. Pretty sure they're still in negative equity if they haven't lost the house by now.

the_syco

Conrad83 wrote: »

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

€30k ago in €500 increments? I doubt the other guy exists, and the EA is doing a fabulous job of squeezing every euro out of you until you can't go any higher (and thus the other guy magically pulled out when you wouldn't).

Conrad83

the_syco wrote: »

€30k ago in €500 increments? I doubt the other guy exists, and the EA is doing a fabulous job of squeezing every euro out of you until you can't go any higher (and thus the other guy magically pulled out when you wouldn't).

The other guy is apparently still in it according to the EA. So hard to know what to do, so much at stake! Sorry typo, €20k ago the seller was happy with the price.

Considering now calling his bluff and offering 5k or so less than my last bid (current highest) this is a big gamble of course and would depend on when the other guy really did pull out, if he has at all!

Conrad83

Conrad83 wrote: »

This is possible but the EA did tell me €30k ago that the seller was happy with the price, it just continued on between the 2 of us for so long as we were making €500 bids and it is only now at market value. The EA had put it on thr market at a ridiculously low price in the first place.

If you have been going for seven weeks at 500 Eur increments, its no wonder the EA and vendor have moved to sealed bids. If the increments had been in 5k you would have been at this stage in 10 days or less and heading to close the deal.

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Askthe EA

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It is not disingenuous. It doesnt matter what the property sale price is. The EA only gets a percentage of a percentage. Using the (accurate) figures I gave it doesnt matter if the property is 100k or 1mill the EAs cut of €20k is still €60 before tax (@1.5%).

Using your figures, would an EA risk his career for 3.5K a year? I doubt it, I certainly wouldnt. Also, on high value properties such as million plus houses, the fees tend to be lower again (.75% - 1%) therefore a 20K bump is now only worth €30 - €40 before tax.

In relation to your point about underbidders not being contactable, their name, address,email and telephone number must be recorded. I agree with you that the transparency isnt there but unless we go to a public auction style system it never will be.

Your point regarding a minimum acceptable price is valid however but, from my opinion and experience working in 3 separate EAs I have NEVER seen it happen. Not saying it doesnt, but its not as likely as people think.

Ultimately, an EA does not reach into your pocket and take your money. If you are not willing or uncomfortable to proceed at whatever level you are at, walk away.

Conrad83

Askthe EA wrote: »

Every bid must be recorded by both soft copy and hard copy and kept for (6 years, I think). You are not entitled to see them but if you have concerns you may contact the PSRA who can demand to see the files and can contact the bidders to confirm their validity. The PSRA have recently begun spot checking EAs throughout the country for compliance.

Look, Ive said it here before and I'll say it again. There are very, very few EAs who will risk their license and by extension career by creating phantom bidders. It just doesn't happen in the 3 EA I have worked in and certainly not in a reputable office. A small guy on his own might be tempted I guess.

Look at it like this.... If a property is selling for 200k the fee is likely to be between €2k and €3k (1 - 1.5%). That fee goes to the office and depending on his salary agreements the agent will see a percentage of this only.

Am I going to risk my career to create a phantom bidder? Lets look at it and see. Lets say the sales fee is 1.5%. I make 20% commission and create a phantom bidder of €20K above the legitimate bid. 1.5% of €20k = €300. 20% of this is €60 Thats €60 before tax.

No, no I am not going to risk my career for €35

Does anyone know how long it takes the PSRA to investigate a complaint? And should I advise the EA at this stage that I am taking the matter further? He may see this as a threat or sour grapes but he can't penalise me as I have been acting in good faith whereas I suspect he hasn't and there have been a lot of red flags through the process, I have evertithing documented and in writing should I go down the road of making a complaint.

Askthe EA

Conrad83 wrote: »

Does anyone know how long it takes the PSRA to investigate a complaint? And should I advise the EA at this stage that I am taking the matter further? He may see this as a threat or sour grapes but he can't penalise me as I have been acting in good faith whereas I suspect he hasn't and there have been a lot of red flags through the process, I have evertithing documented and in writing should I go down the road of making a complaint.

Not a clue. Ive never been complained! Give the PSRA a call and see what they say.

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