Bidding process

trobbin

So my colleague has been in a bidding process a about 4/5weeks. He was told other people on a chain, and he would have an advantage as he was ready to go.

So the highest bid was 350k from someone on a chain. My friend bids 355k (ready to go) and asks for quick response. It drags on for 11 days and 3 other bidders outbid each other up to 361k.

EA told colleague it didn't seem enough as house price was being split 6ways (parent died kids selling). So colleague was confident.

On the 12 morning, which was Friday. EA calls friend and says you're at 355k people that need to sell are now at 365k but they haven't gone sale agreed. I'm going to ask the sellers to make a decision, do you wanna offer more? Colleague says I don't think I should ATM as I'm ready, and they haven't even gone sale agreed, plus 10k between six, isn't a huge amount.

EA says ok. Then calls late Friday and says "sorry bad news, they're taking the higher offer, the people are nearly sale agreed"? Colleague asked about bidding more, saying will they go with me if I match the 365k as I'm ready to go. EA says no, they are going to stick with their decision.

Now I think something strange is going on here, does anyone agree?

He told me he and wife didn't even have chance to bid higher, as wife and him where both in work and couldn't discuss it late on the Friday when EA called. He said he was willing to go 370k but felt confident at that 355k price with feedback from EA. he also thought he would still be able to bid but EA closed the door?

I spoke to his missus and him and she said EA slipped up a few weeks ago saying one of the other serious interested people where on a chain, and he was also selling their property? I thought, that's dodgy?

Would these owners not want the extra 5k? Do EA's regularly do this?

Thoughts please

astrofool

Depends on the vendor, some people once they agree on a deal will stick with it, essentially what your colleague want to do now is to gazump the winning bidder. It sounds like your colleague overestimated the strength of their chainless bid vs. a higher bid with a chain, and is now looking to get back into the bidding having missed their chance.

trobbin

astrofool wrote: »

Depends on the vendor, some people once they agree on a deal will stick with it, essentially what your colleague want to do now is to gazump the winning bidder. It sounds like your colleague overestimated the strength of their chainless bid vs. a higher bid with a chain, and is now looking to get back into the bidding having missed their chance.

I agree they overestimated their chances. But from what I'm told and what I said in post, I don't think they realised door would just close suddenly, especially to someone who has yet to go sale agreed? They just thought they would have option to bid higher if needed as being the people ready to go.

Does it not sound a little strange? Is that normal practice?

Ayuntamiento

Sounds normal to me. From my 2yrs of searching for a house I realised that the EA has a lot of sway with the vendor's final decision. If the EA doesn't like the vibe they get from you, they'll advise the vendor that you're not a safe bet.

I think the EA didn't get the sense that your friend wanted the place as much as the other bidders because he didn't put his money where his mouth was.
The other bidder probably came across as enthusiastic and motivated to get the sale over the line.
The EA's worst nightmare is that he goes sale agreed with a luke-warm bidder like your friend, and then your friend starts trying to negotiate the price down after a survey/ultimately pulls out.

If the house was perfect for him, then your friend really shot himself in the foot for the sake of 10k. If he's currently renting then he'll probably end up putting that 10k into his landlord's pocket over the next few months while he tries to find a new place.

trobbin

Ayuntamiento wrote: »

Sounds normal to me. From my 2yrs of searching for a house I realised that the EA has a lot of sway with the vendor's final decision. If the EA doesn't like the vibe they get from you, they'll advise the vendor that you're not a safe bet.

I think the EA didn't get the sense that your friend wanted the place as much as the other bidders because he didn't put his money where his mouth was.
The other bidder probably came across as enthusiastic and motivated to get the sale over the line.
The EA's worst nightmare is that he goes sale agreed with a luke-warm bidder like your friend, and then your friend starts trying to negotiate the price down after a survey/ultimately pulls out.

If the house was perfect for him, then your friend really shot himself in the foot for the sake of 10k. If he's currently renting then he'll probably end up putting that 10k into his landlord's pocket over the next few months while he tries to find a new place.

I'm not sure it's normal, he tells me he wasn't asked to increase until the day it went, while the others had 11days? But what I found really strange was that the others aren't gone sale agreed on their own house? So how can this deal be closed?

I don't think it's the case the it was some perfect house, and he was hardly getting it cheap, but he feels the EA prefers the others, not because of his actions but because the EA is also selling the other property.

Ayuntamiento

Well you already have your theory. Not sure what anybody else here can really add....

trobbin

Ayuntamiento wrote: »

Well you already have your theory. Not sure what anybody else here can really add....

Well I'm fairly sceptical about these things. So I'm just trying to understand more about how these transactions work. That's all I'm trying to ask.

You say it sounds normal, but as far as I know bridging loans are illegal, so how is it that these people needed to sell to buy, haven't gone sale agreed, but yet closed the other deal. To the point where the EA, says they won't even listen to my friends offer of 5k more?

Surely if you where selling that house you'd wanna know about that bid. Especially considering my friend is ready to go, as opposed to the others. But bid nit being entertained?

Scraggs

trobbin wrote: »

Well I'm fairly sceptical about these things. So I'm just trying to understand more about how these transactions work. That's all I'm trying to ask.

You say it sounds normal, but as far as I know bridging loans are illegal, so how is it that these people needed to sell to buy, haven't gone sale agreed, but yet closed the other deal. To the point where the EA, says they won't even listen to my friends offer of 5k more?

Surely if you where selling that house you'd wanna know about that bid. Especially considering my friend is ready to go, as opposed to the others. But bid nit being entertained?

Well tbh you can't really speculate on the other party's financial situation and how can you be sure their house hasn't now gone sale agreed (and if they are even depending on the money from it) I would agree with what others have said about them showing they wanted it more, the agent did say they were going to make a decision and at that stage your colleague declined in offering more. With 6 family members looking for a cut I can see why they went for the higher offer even if potentially it could take longer to close.

trobbin

Scraggs wrote: »

Well tbh you can't really speculate on the other party's financial situation and how can you be sure their house hasn't now gone sale agreed (and if they are even depending on the money from it) I would agree with what others have said about them showing they wanted it more, the agent did say they were going to make a decision and at that stage your colleague declined in offering more. With 6 family members looking for a cut I can see why they went for the higher offer even if potentially it could take longer to close.

Information was given from EA. He said they needed to sell and also said they where close to being sale agreed, on their own house. So that's where that comes from.

Samuel T. Cogley

To be frank the EA thinks you're colleague is at best - being canny, at worst a messer. He tried to leverage his potion and it back-fired perfectly reasonable on all sides including your friend. As has been pointed out this is getting in the area of guzumping, however gunundering (where the buyer will pull a late stage fast one) is also possible and I suspect that's the EA/vendors fear.

As to normal or not, IMHO perfectly normal.

Paddytheman

To simplify, please correct me if I'm wrong:

Your friend offered 355, other party 365.
EA called saying he wants to close, any increase.
Your friend says no and they sell to highest bidder.

Is that it or did I miss something? Your friend thought they should have gotten another crack at it even though they wouldn't match the top bid?

Rackstar

What's the issue? The higher offer was accepted and then your friend tried to gazump with matching the offer and not being in a chain.

trobbin

Paddytheman wrote: »

To simplify, please correct me if I'm wrong:

Your friend offered 355, other party 365.
EA called saying he wants to close, any increase.
Your friend says no and they sell to highest bidder.

Is that it or did I miss something? Your friend thought they should have gotten another crack at it even though they wouldn't match the top bid?

I suppose when it's put like that. But I'm informed that it wasn't made fully clear it was being closed.

I'm also told that it was mentioned that they preferred the ready to go offer. So he thought it was all still open.

But yes you're correct.

But the main question was, how can they go sale agreed, when they haven't went sale agreed on their current house? EA had given this information over phone. I was just wondering is this how it works, as he said when he got the call saying "they're gonna go with the higher offer" friend says " ok, so can I offer more" EA, " no"

Maybe I don't know everything

Danbo!

trobbin wrote: »

I suppose when it's put like that. But I'm informed that it wasn't made fully clear it was being closed.

I was in bidding wars on 6 houses before I "won". I was never informed a sale was being closed no matter how many bids I had put in on a house, as soon as I said no to bidding higher than the current bid, that was the last I heard of it.

davindub

trobbin wrote: »

I suppose when it's put like that. But I'm informed that it wasn't made fully clear it was being closed.

I'm also told that it was mentioned that they preferred the ready to go offer. So he thought it was all still open.

But yes you're correct.

But the main question was, how can they go sale agreed, when they haven't went sale agreed on their current house? EA had given this information over phone. I was just wondering is this how it works, as he said when he got the call saying "they're gonna go with the higher offer" friend says " ok, so can I offer more" EA, " no"

Maybe I don't know everything

Some EA's when they say they will close, they do. Yes legally they can still take offers and accept but its bad practice. You can imagine how you would re-act if offered the chance to go sale agreed and then have another offer presented to you.

A bridging loan may be unnecessary anyway, the house is more than likely being sold before probate is complete which can take quite a while, they can send in a letter to speed up the process with a buyer in place but still takes a while to complete.

Chalk it down to experience, there will be other opportunities.

Samuel T. Cogley

trobbin wrote: »

But the main question was, how can they go sale agreed, when they haven't went sale agreed on their current house? EA had given this information over phone. I was just wondering is this how it works, as he said when he got the call saying "they're gonna go with the higher offer" friend says " ok, so can I offer more" EA, " no"

On the first point they will pay the booking deposit and await their house going sale agreed. This is how a chain gets formed, there will be parties lagging slightly - a judgement call is made.

On the second point, yes that's exactly how it works, they'll be told it's sale agreed and no more bids are being considered.