What can be done to make the bidding on a second hand home more transparent

gazumped27

I have been recently in an active bidding process for a second hand house in Dublin 2, the offers went way over the asking price set by the agent and it felt like it was back to the old days where agents were making up offers to make us as potential buyers bid against ourselves...

Is there anything out there that can make this whole drawn out back and forth more transparent and trustworthy?

LincolnHawk

Don't bid more than you think it's worth

Graham

Surely if somebody else bought it for more than you were willing to pay, that's fairly conclusive proof of another bidder.

Estate agents are 0bliged to record all offers, if I recall correctly you can complain to the PRSA if you have cause.

riclad

The house price register shows how much the house was sold for,check houses in the local area .
i understand it may take time for the house to be listed on the website after its sold.
its a free market , in urban area,s you are paying as much to live in cabra ,or rathmines Ie for the location, rather than the cost of building a house.
We simply have a low supply of houses for sale,
not many 2 0r 3bed units have been built since 2008.

Sleeper12

gazumped27 wrote:

Is there anything out there that can make this whole drawn out back and forth more transparent and trustworthy?

Sellers and estate agents don't want it transparent nor should they IMO. It would be like saying that you can't bluff in poker.

LuckyLloyd

Graham wrote: »

Surely if somebody else bought it for more than you were willing to pay, that's fairly conclusive proof of another bidder.

Estate agents are 0bliged to record all offers, if I recall correctly you can complain to the PRSA if you have cause.

This is a slightly different point to the question asked. Recording all offers is one thing, having to publish them within a strict SLA (24 hours) another. If we're all sure the almighty free market is functioning efficiently there should be no opposition to the latter

Graham

LuckyLloyd wrote: »

This is a slightly different point to the question asked. Recording all offers is one thing, having to publish them within a strict SLA (24 hours) another. If we're all sure the almighty free market is functioning efficiently there should be no opposition to the latter

You could publish signed notarised photographs of the counter-bidders holding certificates with their offer amount embossed in gold leaf across the front with the pope as a witness.

50% of potential buyers would still convince themselves there was something underhand every single time they were outbid.

LuckyLloyd

Graham wrote: »

You could publish singed notarised photographs of the counter-bidders holding certificates with their offer amount embossed in gold leaf across the front with the pope as a witness.

50% of potential buyers would still convince themselves there was something underhand every single time they were outbid.

I agree with your general perception of people overthinking the bidding process and, in the majority of cases, failing to simply accept that they got out bid and it was a simple issue of money rather than under handed EAs or voodoo magic that prevented them getting the property.

However, at the same time there should be no reason not to make the process as transparent as possible. We register the prices publicly, why not the bids to that point?

Graham

LuckyLloyd wrote: »

We register the prices publicly, why not the bids to that point?

Nope, I got nothing.

Given I can find no reason to object (yet), that probably means I'd probably support the idea

LincolnHawk

I wouldn't want all my bids published publicly...especially for the 20 houses I got outbid on.
The PPR is enough

davo10

LincolnHawk wrote: »

I wouldn't want all my bids published publicly...especially for the 20 houses I got outbid on.
The PPR is enough

Have to agree, there is no way I would want my bid to be made public. That is no one else's business apart from the vendors and mine. Besides which, all that would happen is that aliases, auctioneers or solicitors would be used to make bids on behalf of the bidder.

LuckyLloyd

A name on the bid is not required here. The point is that all actual tangible bids are publicly viewable to interested parties during the selling process. That doesn't impinge upon any free working of the market. It just allows everyone to know if they're wasting their time or not, and should see sales close quicker with no negative feelings towards Estate Agents, etc.

Rew

The only way would be to have to legally place all bids though a 3rd party (solicitor). The EA cant easily have a friend ring up and place a bid as they can now and if the 3rd party had to have proof of funds to place bids you wouldn't get people bidding houses up with money they don't have. On the down side it would be more costs for the buyer and make the process a little more complex.

Cant see any reform of anything in property sector anytime soon.

LuckyLloyd

Rew wrote: »

The only way would be to have to legally place all bids though a 3rd party (solicitor). The EA cant easily have a friend ring up and place a bid as they can now and if the 3rd party had to have proof of funds to place bids you wouldn't get people bidding houses up with money they don't have. On the down side it would be more costs for the buyer and make the process a little more complex.

Cant see any reform of anything in property sector anytime soon.

That allied to a mandatory portal where all such bids are registered within a tight SLA would solve the issue.

We can't see any reform because the reality is so many people are delighted with prices being forced up the extra couple of grand on average.

Graham

LuckyLloyd wrote: »

TWe can't see any reform because the reality is so many people are delighted with prices being forced up the extra couple of grand on average.

I can almost guarantee that at least 50% of people involved in a property transaction are not delighted with prices increasing a couple of grand.

Sebastian Dangerfield

From my experience, peoples frustration is stemming from what they see as artificially low asking prices. People I have spoken to say there must be something underhand about a house that was listed at 350k being sold for 450k or more.

The fact is that the house was never going to sell for 350k in the first place, but at that price viewings were full and the early bidding moved quickly, which is the reason the EA listed it lower in the first place.

LuckyLloyd

Graham wrote: »

I can almost guarantee that at least 50% of people involved in a property transaction are not delighted with prices increasing a couple of grand.

Sure, but buyers are in the market temporarily, and most leave when they've completed their purchase grumbling about the whole process. Estate Agents are the constant, and they aren't going to push for transparency in this area.

minikin

Every bidder must submit a refundable deposit of 10k, this gives them a bidder i.d. number.
All bids (and bidder numbers) are published live on a secure webpage (which can only be viewed when logged in using bidder number).

Takes the estate agent chancery out of the equation.

Unsuccessful bidders receive deposit back immediately upon the property going sale agreed.
Removes tyre kickers / fake bids from the equation.

qrx

What about the Scottish approach? All interested parties submit their best and final offer. Bids are sealed so you cannot "up" your competitors.

Cuddlesworth

Sebastian Dangerfield wrote: »

From my experience, peoples frustration is stemming from what they see as artificially low asking prices. People I have spoken to say there must be something underhand about a house that was listed at 350k being sold for 450k or more.

The fact is that the house was never going to sell for 350k in the first place, but at that price viewings were full and the early bidding moved quickly, which is the reason the EA listed it lower in the first place.

Or that the agent is simply trying to get the house to the price that the vendors will sell at. Lots of people ignore this.

Graham

I can't help but think this is trying to fix a largely non-existent problem.

"estate agent is doing something dodgy"

"why"

"somebody outbid me"

mmmmmm k

Gator88

Selling tactics seem to have changed in the last year or two. I've viewed plenty of properties both commercial and residential and offered the asking price only to be told that the seller won't accept the asking price! I am a cash buyer so that isn't the issue.

I believe the asking price is being put out as a feeler. I believe we are at the same stage we were at around 2003/2007. The agent doesn't really know the value but sets a price anyway. If the price over it's a matter of waiting a few months and prices will have caught up to the asking price

qrx

Graham wrote: »

I can't help but think this is trying to fix a largely non-existent problem.

"estate agent is doing something dodgy"

"why"

"somebody outbid me"

mmmmmm k

And when you offer the asking and no one outbids you? Because this is what is happening to me on a regular basis. I call that an intentionally dishonest valuation. They take your offer and use it as a base. People walking through the door get told there is an offer in for the asking price. Even though at this stage I've been well and truly pissed off and am long gone from that property. I understand, the EA carries out the vendors commands. I don't care who is to blame the EA or the vendor, whoever it is it is a crafty attempt at inflating prices and it should be stamped out. Anyone who argues otherwise clearly has a vested interest.

1641

I think a large part of the problem is that buyers interacting with the Estate Agent develop an expectation of him/her being some sort of mutual broker between them and the buyer - like a marriage matchmaker in Lisdoonvarna. This is despite them knowing rationally that Estate Agents are professional salespeople commissioned by the seller to act on their behalf.

As for fake bids - I suspect that they are a lot less common than some imagine. But where they happen it is more likely to be someone acting on behalf of the vendor than the EA.

Graham

qrx wrote: »

And when you offer the asking and no one outbids you? Because this is what is happening to me on a regular basis. I call that an intentionally dishonest valuation. They take your offer and use it as a base. People walking through the door get told there is an offer in for the asking price. Even though at this stage I've been well and truly pissed off and am long gone from that property. I understand, the EA carries out the vendors commands. I don't care who is to blame the EA or the vendor, whoever it is it is a crafty attempt at inflating prices and it should be stamped out. Anyone who argues otherwise clearly has a vested interest.

You are probably right about the starting price but a 'more transparent' bidding process isn't going to change that.

btw, it's entirely likely you will find people disagreeing with you without having a vested interest.

jamesthepeach

I even hate the ppr.
I don't like my nosey neighbors knowing how much I paid for or sold my house for.

qrx

Graham wrote: »

You are probably right about the starting price but a 'more transparent' bidding process isn't going to change that.

btw, it's entirely likely you will find people disagreeing with you without having a vested interest.

I think a closed system is the answer, not a transparent one. Bids are sealed, you don't get to see what other people are bidding. You put your bid in as what you can or are willing to pay for that house and that is it. With multiple bids, the highest bidder wins unless the vendor has any other requirements such as needing a cash buyer. In that case only cash buyers should be invited to bid as it serves no purpose whatsoever to put in a bid that will not be considered.

Edit: I should also mention, offers should be done through solicitors.

If you think about it, this limits the estate agents role to purely advertising and viewing your home. Which is all they should be doing.

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This post has been deleted.

jamesthepeach

....... wrote: »

Why?

Im struggling to know what difference it makes to anything?

They still wouldnt know if you got a mortgage, paid in case etc.... theyd only know the value of a property at a point in time.

Because I thing some things are private.

Cuddlesworth

qrx wrote: »

And when you offer the asking and no one outbids you? Because this is what is happening to me on a regular basis. I call that an intentionally dishonest valuation. They take your offer and use it as a base. People walking through the door get told there is an offer in for the asking price. Even though at this stage I've been well and truly pissed off and am long gone from that property. I understand, the EA carries out the vendors commands. I don't care who is to blame the EA or the vendor, whoever it is it is a crafty attempt at inflating prices and it should be stamped out. Anyone who argues otherwise clearly has a vested interest.

Same here, I've seen plenty of properties and have put a bid in under asking on a couple. They seem to think that I am bidding against myself and that I should raise it to above asking. But people need to understand, that's not the estate agent or the market. It's simply the seller deciding that their house is worth a certain amount and only selling at that amount. Well in reality, as house is worth what people are willing to pay for it, but also what people are willing to accept for it.

Also at least 3 I have seen are up to appease banks/solicitors. I have left spite bids in on them in case the estate agent ever gets asked was there a offer in.

mloc123

Cuddlesworth wrote: »

Same here, I've seen plenty of properties and have put a bid in under asking on a couple. They seem to think that I am bidding against myself and that I should raise it to above asking. But people need to understand, that's not the estate agent or the market. It's simply the seller deciding that their house is worth a certain amount and only selling at that amount. Well in reality, as house is worth what people are willing to pay for it, but also what people are willing to accept for it.

Also at least 3 I have seen are up to appease banks/solicitors. I have left spite bids in on them in case the estate agent ever gets asked was there a offer in.

That is the thing. People see a house sitting for a while and assume that a low ball bid will buy it, but a seller isn't obliged to take the highest or only bid. Anyone selling a house will have a price in mind and they will not sell it for less than that.

As for ghost bidders etc.. Set a price on every house you view. Bid to that price, don't get annoyed with the estate agent if somebody else has set a higher limit in their head.

Transparent bidding isn't going to get you a house you were out bid on... regardless of how the bidding ends up at the final price, that final price is what somebody else was willing to pay. Your aren't bidding against the estate agent, you are bidding against the other people interested.

davo10

What a strange thread this is. Sealed bids? How would you feel if it turned out that your sealed bid was €30k above the next highest sealed bid? €10k deposit when bidding? That would prohibit most people from bidding on more than one property at a time.

I don't think most of you grasp this concept, the selling price is dictated by the market, not the vendor, nor the EA. if a vendor puts a property on the market at €100k, then if no one is interested in it, the property might sell for 80, if a few bidders get stuck in, it might sell for €200k, the market therefore sets the price. The advertised price is nothing more than a guess by the EA.

qrx

davo10 wrote: »

What a strange thread this is. Sealed bids? How would you feel if it turned out that your sealed bid was €30k above the next highest sealed bid? €10k deposit when bidding? That would prohibit most people from bidding on more than one property at a time.

I don't think most of you grasp this concept, the selling price is dictated by the market, not the vendor, nor the EA. if a vendor puts a property on the market at €100k, then if no one is interested in it, the property might sell for 80, if a few bidders get stuck in, it might sell for €200k, the market therefore sets the price. The advertised price is nothing more than a guess by the EA.

It's not some hair brained idea, it's how it works Scotland. You also carry out inspections etc prior to bidding, you are not taking a wild guess at the properties value, rather it is an informed bid based on the advice of professionals. Of course what you can afford and what you are willing to pay is also a factor in the equation, so if you bid 30K more it's because that's what you can afford and are willing to pay. so the market still dictates, just in a more formal and professional way.

Cows Go µ

Before I started bidding on my house I would have thought that everyone was exaggerating about there being fake bids but now I wouldn't be surprised.

I had seen a house a few months ago. It had already been on the market a few months. Before going to see it I asked if there had been any bids (it was just mentioned in passing) and the girl went and checked the file and confirmed that there was one bid a while back but way under asking price so not accepted.

When I went to view the house, I was with my mum and it was a lot smaller than it looked in the pictures and there is a lot more work needed than the pictures showed. I was talking to my mum and said we could probably bid under the asking and it might be considered. The value I said was under the asking but still way over what had previously been bid. The estate agent (different person who I had spoken to on the phone) overheard us and said that someone had already bid that and it had been rejected. Even though his colleague had previously contradicted this.

I eventually got my deposit together and my approval in principle so I put a bid in. It was under the asking but the property had been on the market ages with no interest so I thought even if they don't accept it, they might so it's worth a shot.

I heard nothing back for a week so I called to see if there was a response. The person said no update then called me back the next day to say there was another bidder. I upped my bid as I was still within budget.

Again another week drags by with no response then when I ask for an update, again the next day there is a new bid. This has happened 3 times now.

Maybe there is another bidder but the fact that it sat there for months and months with no interest and now there are 2 of us bidding and the only time the other side bids is when we ask for an update is just odd.

And I know everyone says that the market is going up so I shouldn't be expecting to get the house under asking but the house is in the back end of nowhere, it's absolutely tiny (I can only fit in it because it's just me and 2 dogs) and it needs a lot of work done as there is damp in the house. If I had bid too low and the seller didn't want to go for it that would be fine, I'd just prefer to be told that.

Graham

Cows Go µ wrote: »

Maybe there is another bidder but the fact that it sat there for months and months with no interest and now there are 2 of us bidding and the only time the other side bids is when we ask for an update is just odd.

Sounds quite plausible.

Lowball offer is put on the long finger.
You make another lowball offer.
Lowballer 1 counters.......

qrx

Graham wrote: »

Sounds quite plausible.

Lowball offer is put on the long finger.
You make another lowball offer.
Lowballer 1 counters.......

It's simple to work out. Is the EA coming back to you asking for an update when it's left on the long finger? If they are not then you can be sure they are not doing the same for lowballer 1.

Graham

qrx wrote: »

It's simple to work out. Is the EA coming back to you asking for an update when it's left on the long finger? If they are not then you can be sure they are not doing the same for lowballer 1.

I'd imagine it's generally the estate agent/seller that puts the lowball offers on the long finger.

qrx

Graham wrote: »

I'd imagine it's generally the estate agent/seller that puts the lowball offers on the long finger.

But everytime they ask for an update there is a new offer. Meaning the EA is going to lowballer 1 and asking whats the story are you still interested. A genuine bidding war would be a back and forth between both lowballers. A phony one would be one sided.

Graham

qrx wrote: »

But everytime they ask for an update there is a new offer. Meaning the EA is going to lowballer 1 and asking whats the story are you still interested. A genuine bidding war would be a back and forth between both lowballers. A phony one would be one sided.

It is quite likely that an EA/seller would allow a couple of low-ballers to drag on rather than coming out with a straight 'no', only taking action when pushed.

Cows Go µ

Cows Go µ wrote: »

Again another week drags by with no response then when I ask for an update, again the next day there is a new bid. This has happened 3 times now.

Maybe there is another bidder but the fact that it sat there for months and months with no interest and now there are 2 of us bidding and the only time the other side bids is when we ask for an update is just odd.

I realise this is difficult to do but the only course of action in a situation like this is to time limit your offer.

"I'm looking at a few properties at the moment, I can bid €XXX on this house but I'm making a decision on the 20th, so the vendor will need to accept it by then or I'll be buying elsewhere".

I am not for a moment saying this is guaranteed to work but if you genuinely believe you are the only bidder and are being messed around, this is your only real course of action. The worst thing you can do is bid against yourself.

spaceHopper

In France, the asking price is binding, if you get an offer of the asking you must take it. That would put a stop to a lot of nonsense.

Michael D Not Higgins

spaceHopper wrote: »

In France, the asking price is binding, if you get an offer of the asking you must take it. That would put a stop to a lot of nonsense.

You'll just end up with the opposite problem, where prices are far in excess of market value and everyone is still expected to guess what price the vendor will accept.

qrx

spaceHopper wrote: »

In France, the asking price is binding, if you get an offer of the asking you must take it. That would put a stop to a lot of nonsense.

Similarly in the USA, if the EA gets you an offer that is considered reasonable and you refuse they can charge you their fee and terminate the contract. Of course you can negotiate this out of the contract when signing up with an EA but the point is there is at least something being done about these shenanigans.

1641

qrx wrote: »

Similarly in the USA, if the EA gets you an offer that is considered reasonable and you refuse they can charge you their fee and terminate the contract. Of course you can negotiate this out of the contract when signing up with an EA but the point is there is at least something being done about these shenanigans.

Does this change much really? Take a house listed here for €350k that eventually sells for, say, €400k after bidding stops. If we had the US rules you describe, I could instruct the EA to offer the same house for sale at €450k. Buyers would similarly adjust to the new rules and kick off bidding around €350k.The house eventually sells for €400k - As before, what the highest willing buyer was prepared to pay. Or am I missing something?

davo10

qrx wrote: »

It's not some hair brained idea, it's how it works Scotland. You also carry out inspections etc prior to bidding, you are not taking a wild guess at the properties value, rather it is an informed bid based on the advice of professionals. Of course what you can afford and what you are willing to pay is also a factor in the equation, so if you bid 30K more it's because that's what you can afford and are willing to pay. so the market still dictates, just in a more formal and professional way.

And if the vendor declines? How is that any better than the current system? Surely you are not implying that the vendor must accept what you the buyer believes the property to be worth?

I'm struggling to see how any alternative bidding methods make any difference to the fact that a vendor is not compelled to sell to any bidder, and the highest bid usually gets the property.

Sarn

qrx wrote: »

What about the Scottish approach? All interested parties submit their best and final offer. Bids are sealed so you cannot "up" your competitors.

This has happened on a couple of properties we went for. It is something that we are trying to avoid as we don't want to significantly overpay.

1641

Sarn wrote: »

This has happened on a couple of properties we went for. It is something that we are trying to avoid as we don't want to significantly overpay.

I have heard of it happening here in the latter stages of a sales process.It seems to have been there were 2-3 bidders, each slowly and marginally upping the ante on each other. At least they all presumably knew where the ballpark was at that stage. Still must be difficult to make the call though.

Is it happening more widely than this, Sarn?

wordofwarning

A lot of people don't seem to realise estate agents are now regulated. They have to keep extensive records of bids, etc. They are randomly audited by the PRSA to make sure everything is kosher. You can ask for a case of phantom bids to be investigated. An estate agent can lose their license ie their livelihood if they are not paying by the rulebook.

I was speaking to an estate agent who listed a property at 700k. Bidding starting at 600k and closed at 730k. Im sure most of the bidders were screaming phantom bidders and Im sure they will be until they see 730k on the PPR.

Sarn

1641 wrote: »

I have heard of it happening here in the latter stages of a sales process.It seems to have been there were 2-3 bidders, each slowly and marginally upping the ante on each other. At least they all presumably knew where the ballpark was at that stage. Still must be difficult to make the call though.

Is it happening more widely than this, Sarn?

I only know of three, but that was from a small sample size. In all cases it was towards the end of the process when there was a feeling that it was coming to the end. It's one way to squeeze a bit more out of the bidders.

qrx

davo10 wrote: »

And if the vendor declines? How is that any better than the current system? Surely you are not implying that the vendor must accept what you the buyer believes the property to be worth?

I'm struggling to see how any alternative bidding methods make any difference to the fact that a vendor is not compelled to sell to any bidder, and the highest bid usually gets the property.

They have to outright reject your offer. What we have here is they hang onto your offer and use it as leverage to inflate any further bids. Also everything is via solicitors, there are laws governing the whole process.

And the seller does not accept what the buyer says the price is. The seller sets an asking price and unlike here the asking price is exactly what it says. Only bids on or in excess will be considered.

davo10

qrx wrote: »

They have to outright reject your offer. What we have here is they hang onto your offer and use it as leverage to inflate any further bids. Also everything is via solicitors, there are laws governing the whole process.

And the seller does not accept what the buyer says the price is. The seller sets an asking price and unlike here the asking price is exactly what it says. Only bids on or in excess will be considered.

So what you seem to be saying is bids below the asking price will not be considered and bids at/above the asking price must be accepted? Surely not, that would be restricting property prices, no developer would ever build a house without setting a sky high price, no house seller would put their house on the market without doing the same. If anything, given the demand, prices would increase the same way rents increased in anticipation of rent restrictions.