House offer advice

jtf_ie

Hi All,

I'm looking for advice on how to proceed regarding buying a house.

We currently live in suburban Dublin but will be moving to a larger house in a more rural location.
We don't have our house on the market yet, but are very close to it and houses in the area we are living currently are selling very fast and typically a little above the asking price, while houses in the area we are moving to are typically on the market a while and sell for a bit below their asking price.

We've seen a house we like which is on the market for €415k. During the viewing the estate agent told us there was an offer of €350k and another couple had expressed an interest and said they might offer €390k but don't have their house on the market yet. He also told us that the owner is hoping for closer to the €400k mark.

Now as far as I'm concerned until the €390k offer is made it's fiction, so a few days after the viewing we made an offer of €355k, which as we expected was rejected and he reiterated what he told us during the viewing (expecting an offer of €390k and hoping for €400k). He said he expects the €390k offer might take a couple of weeks.

So we like the house, but are not in a position to rush things. Do we just bide our time and wait for him to contact us again or should we get in with another offer ahead of the other couple (who may never make an offer)?

Thanks in advance!

TRS30

Don't bid against yourself. You are currently the highest bidder. Sit tight and wait for someone to make a higher bid. You need to set your max bid and then don't go over that. Bid with your head not your heart.

Activewearuser

Agents will often do this to get you to put in a better offer. Until the offer comes in from the other party don't offer more. Once you have your offer in they must inform you of any other offers that are made.

However the owner may sit tight until they get the asking price.

mugsymugsy

Another tip would be to ask the agent if he has any properties similar in the 350k bracket or whatever you plan on bidding around. Also let the estate agent that you are looking at other properties with other estate agents.

Don't let them have all the bargaining chips

super_furry

I'd leave it there and ask him to contact me if there's another bid made. Don't bid against yourself.

Mitzy

Doesn't make sense that the other bidder the estate agent mentioned would put in a bid €40k higher than the current bid. Offer €355k & take it from there. As the other's have said don't bid against yourself.
Happened to me back in the last boom - I put in a bid on a house & the estate agent told me a higher bid came in. I told them I was dropping out. All of a sudden the other bid miraculously fell through. EA was ringing me constantly to rebid but I walked away as I felt I couldn't trust him. Best thing I ever did.

antoinolachtnai

Being the highest bidder is never enough to secure a house. Your bid, whatever it is, has to be acceptable to the seller. The seller will have a figure in mind, below which they consider they are better off hanging on to the house. The agent has told you that that figure is around the 400 mark. There was not much point in the short term in having put in an offer that they were not going to accept.

The one thing you can do is ask is 'what they would accept' for it. This puts it back on the estate agent to tell you what you would need to offer for them to take it off the market. Don't expect the agent to give you a straight answer on that. They certainly wouldn't in Dublin (where demand is quite high). But they just might if the number of prospective purchasers is smaller in an urban context.

SteM

Activewearuser wrote: »

.... Once you have your offer in they must inform you of any other offers that are made.

Is this true? I don't believe that it is. They should inform you of other offers but I don't believe that they *must* do this.

CeilingFly

Go on to www.propertypriceregister.ie (official site) and see what similar houses have sold for in the surrounding areas.

With a little searching you should alos be able to find some original details of the sold houses online (usually be searching google images and then clicking in to see the webpage for that image)

Similarly when pricing your house, see what other sold for and that will give you a realistic price to aim for.

jtf_ie

Thanks All,

It seems you're confirming my own thoughts, which is reassuring. I had planned on sitting tight for a while anyway. As I said, we are in no position to put any pressure on the EA when we don't even have our own house on the market. I also assumed it would not be a good idea to bid against myself.

I knew (rather assumed) the 355k offer would not be accepted, but I looked at it as the offer of 350k was the offer to beat and at least I have now formally registerred my interest. The EA said he would keep me informed of any changes.

I've had a look at propertypriceregister.ie and as I mentioned houses in the area are typically selling for a bit below their asking price which, I assume, is why the EA is saying they are holding out for 400k. Its hard to compare prices with other properties though because its a rural area, so all one-off builds and not a huge volume.

Unless something changes in the mean time, I'll wait until we have our own house on the market and an offer accepted. Then maybe call the EA again and ask him what offer it would take to have the house taken off the market.

Assuming he tells me a figure (say 400k), should I go straight in at that figure or should I chance a little below it (say 390k)?

Thanks again for all the replies... much appreciated.

antoinolachtnai

If he answers you and seriously says that he would accept 400k, I would either accept it or say it is a bit more than you would be in a position to pay for it. If he then says 'well, what would you be prepared to offer' then you might say 390. But if he says they won't let it go for any less than 400, then I wouldn't bother offering him 390. Say that 'maybe we will talk the week after next'. By then, maybe you will be a bit more flexible or maybe he will be. As long as the lines of communications are kept open you might find your way to a deal.

SteM

I dislike the term 'bidding against yourself' in this context. This is not an auction, it's a sale and the seller does not have to sell unless they receive an offer that they are happy with. In this case they want close to 400k and you've offered 355k. If you were in a position to up your offer it would not be bidding against yourself, it would be offering a price closer to what the seller might accept. The seller might not be interested in selling at 35k-45k below what they are looking for, they might just withdraw the property from sale. They (and the EA) will have looked at the PPR too and seen that property is selling for more than the offer price and may hold out, totally depends on their circumstance but in this market I would think that people selling for less than current market value are few and far between.

judeboy101

Offer 380k, with the caveat that every day it isn't accepted, the offer goes down by 1k. Did this in a busy restaurant in america once, put 20 in singles on table and told waitress this was her tip, with the caveat that for every thing wrong with our meal or her service, she lost a dollar. She earned a $20 dollar tip on $40 of food, we got extra chips, free desserts and no waiting.

antoinolachtnai

This might be fun to try as a vulture capitalist in a big recession-ridden city, but I wouldn't do it in a rural location where I was planning to settle down and live!

jtf_ie

SteM wrote: »

I dislike the term 'bidding against yourself' in this context. This is not an auction, it's a sale and the seller does not have to sell unless they receive an offer that they are happy with. In this case they want close to 400k and you've offered 355k. If you were in a position to up your offer it would not be bidding against yourself, it would be offering a price closer to what the seller might accept. The seller might not be interested in selling at 35k-45k below what they are looking for, they might just withdraw the property from sale. They (and the EA) will have looked at the PPR too and seen that property is selling for more than the offer price and may hold out, totally depends on their circumstance but in this market I would think that people selling for less than current market value are few and far between.

Thanks SteM.
You have to remember though, that this is a rural setting so its much harder for an agent to value a house. They don't have any other houses that are the same in the same location that they can compare against. A mile or two up or down the same road can make a huge difference in desireability. So the agents tend to value at the upper end in the hope of making the property apear more valueable. In the end its the buyers that determine the market value and not the estate agents.
Looking at the PPR its clear that almost all of the houses being sold in the area are still selling below their asking price.

Thanks for your thoughts regarding "bidding against myself". Its certainly food for thought.

antoinolachtnai

The market, consisting of willing buyers and and willing sellers together, determine the market value, not the buyer alone, or the seller alone.

davo10

Bear in mind op, right now your are the least appealing of buyers after cash buyers, first time buyers, buyers who have no property to sell but do require a mortgage. You haven't put your property on the market yet so I wouldn't be expecting your bid to be accepted any time soon. Unfortunately the EA will consider you the equivalent of a tyre kicker on a garage forecourt so put you house on the market and get some bids on it, you will then experience the situation from the sellers/EAs perspective, you would be unlikely to accept a bid on your house from a buyer in the same position as you yourself are in. You will be more appealing if you can tell the seller/EA that you are sale agreed on your property and will be in a position to complete a purchase in a relatively short time period.

jtf_ie

davo10 wrote: »

Bear in mind op, right now your are the least appealing of buyers after cash buyers, first time buyers, buyers who have no property to sell but do require a mortgage. You haven't put your property on the market yet so I wouldn't be expecting your bid to be accepted any time soon. Unfortunately the EA will consider you the equivalent of a tyre kicker on a garage forecourt so put you house on the market and get some bids on it, you will then experience the situation from the sellers/EAs perspective, you would be unlikely to accept a bid on your house from a buyer in the same position as you yourself are in. You will be more appealing if you can tell the seller/EA that you are sale agreed on your property and will be in a position to complete a purchase in a relatively short time period.

Thanks. Yes I'm fully aware of that. Our house is about to go on the market and the same EA we are using sale agreed an almost identical house 4 doors down from ours in 3 weeks with 3 underbidders looking for similar property (or so he says). Houses seem to go sale agreed in our estate as soon as the for sale sign goes up. So once we get it on the market it should move quickly. Decluttering is a total pain in the ass though! 😫

davo10

jtf_ie wrote: »

Thanks. Yes I'm fully aware of that. Our house is about to go on the market and the same EA we are using sale agreed an almost identical house 4 doors down from ours in 3 weeks with 3 underbidders looking for similar property (or so he says). Houses seem to go sale agreed in our estate as soon as the for sale sign goes up. So once we get it on the market it should move quickly. Decluttering is a total pain in the ass though! 😫

It's only when you move house that you realise the amount of stuff you accumulate. I'm in the process of moving myself, a skip is required. Good luck.

pocketse

I was in a relatively similar position to yourself and am just coming out the other side of it. I never intended moving from my current house and was just about to start a big building job on it when the neighbours objected to my plans. Like yourself, houses in my estate were getting really good prices and it turned out i had quite a bit of equity in my house. I had a look online and found a house that i absolutely loved and decided to go for it. In hindsight i made a number of big mistakes.

Heres a few.

I was in your position, hadn't put my own house on the market and made a bid on the new house. I went straight in at the asking price as I felt I wasn't the most desirable buyer and I wanted it to be a serious offer. I let the estate agent know I was selling my house and offered it to her company to sell in the belief that the added business would stand to me. It didn't really, all it did was weaken my bidding position as the estate agent knew what it would take for me to be in a position to buy the new house and as a result when i received well above what i expected she knew that too.

I made it clear in the beginning that i was only going to move if i got this house. This was a huge mistake. Never let it be known how keen you are. Look at other houses in the area from the same estate agent, even if you have no interest in them.

The estate agent wants the best price possible for the house. They don't care about your story or your personal circumstances. They're ideal scenario is for two or more parties to be interested in the property so a bidding war starts and drives the price up. I can't tell you the amount of "other people interested in making a bid but just want to discuss with their architect/bank/whatever" I had. Really its just stalling until they have what they need to get a bidding war going. Don't rush in and outbid yourself. Be patient and don't seem too eager. Whatever is going to happen is going to happen and in this market you don't hold any of the cards unfortunately. Some class of bidding will take place, right now you're setting the level at which it will start from.

I ended up getting a fantastic price for my own house, much more than i expected, and was delighted that the estate agent used all these tactics.

When the bidding eventually started on the other house I never loathed anyone as much in my life.

Best of luck with it and i hope it all works out.

davo10

pocketse wrote: »

The estate agent wants the best price possible for the house. They don't care about your story or your personal circumstances. They're ideal scenario is for two or more parties to be interested in the property so a bidding war starts and drives the price up. I can't tell you the amount of "other people interested in making a bid but just want to discuss with their architect/bank/whatever" I had. Really its just stalling until they have what they need to get a bidding war going.

I ended up getting a fantastic price for my own house, much more than i expected, and was delighted that the estate agent used all these tactics.

When the bidding eventually started on the other house I never loathed anyone as much in my life.

Can you in any way comprehend the irony of this? The EA gets 1%, the seller gets 99%.

CeilingFly

davo10 wrote: »

Can you in any way comprehend the irony of this? The EA gets 1%, the seller gets 99%.

Seller only gets 98.5% if they don't have a mortgage.

If seller has 70% mortgage left, ea gets 1.5%, seller gets 28.5% less legal fees and bank gets balance

For the op - ignore the offer on the property and think what price you think is good for you and seller. Go in 5k under that and it gives you wriggle room.

I would get your own property on the market immediately as we're into summer and market always slows down and unless you have sale agreed you may find the property you like stays on the market until they see you have sale agreed.

wordofwarning

OP don't forget your bank has to appraise the property. They will not give you a massive mortgage on a property they see as €50k less than what you value it. The seller will not likely want to wait several months for the €390k to put their property on the market and gauge interest.

893bet

judeboy101 wrote: »

Offer 380k, with the caveat that every day it isn't accepted, the offer goes down by 1k. Did this in a busy restaurant in america once, put 20 in singles on table and told waitress this was her tip, with the caveat that for every thing wrong with our meal or her service, she lost a dollar. She earned a $20 dollar tip on $40 of food, we got extra chips, free desserts and no waiting.

I would be ashamed to of my life to say that to a waitress. Stinks of hubris.

"Stop one of chips has a black mark. That's gonna cost you a dollar"

Cringe.

EmoCourt

judeboy101 wrote: »

Did this in a busy restaurant in america once, put 20 in singles on table and told waitress this was her tip, with the caveat that for every thing wrong with our meal or her service, she lost a dollar. She earned a $20 dollar tip on $40 of food, we got extra chips, free desserts and no waiting.

Youuuuu

TWAT!

CeilingFly

893bet wrote: »

I would be ashamed to of my life to say that to a waitress. Stinks of hubris.

"Stop one of chips has a black mark. That's gonna cost you a dollar"

Cringe.

EmoCourt wrote: »

Youuuuu

TWAT!

I think that poster was watching "Third rock from the sun"

https://youtu.be/TVD5wvJ1ru4

Its an urban myth usually rehashed by those who think they are more important than they are.

jtf_ie

Thanks all for the advice so far.

Things have changed a little since my last post.
Our current house is now sale agreed and we are mortgage approved.

As a reminder, the property we are interested in buying is in a rural area where houses are going for a little under their asking price.
The house is on for €415k.
It's on the market for a few months and there was an old offer of €350k. We put a cheeky offer of €355k on a few weeks ago to register our interest and it was expectedly rejected.
We were told that there was another couple who expressed an interest and said they might offer €390k but don't have their house on the market yet and that the vendors are hoping for closer to €400k.

We went back last weekend for a second viewing of the property we want to buy. We asked about the couple who indicated they might offer €390k and were told that they still don't have their house on the market and could be a while away from it yet. I'm not even 100% convinced that the other couple even exist although we've been told about them by 2 different people at the agency.

Now that we are sale agreed and mortgage approved, I'd like to go in with a more realistic offer, but not sure what to offer.

My gut is saying €380k, but my fear is that they say we'll still wait for the other couple's €390k and we're no better off.
Another option is to get in at €390k ahead of the other couple and force the agent to speed things up a bit.

Any advice is greatly appreciated!

Graham

jtf_ie wrote: »

My gut is saying €380k, but my fear is that they say we'll still wait for the other couple's €390k and we're no better off.

You'd be no worse off either so I can't see any reason not to go in at €380k. You can always re-think if they turn your offer down.

jtf_ie

Hi All,

Just a quick update... had an offer of €399k accepted over the weekend.
Very happy with that!

Thanks for all the advice, it definitely helped in the negotiating.